Page Range | 81737-82035 | |
FR Document |
Page and Subject | |
---|---|
80 FR 81871 - Sunshine Act Meetings: January 2016 | |
80 FR 81816 - Sunshine Act Meetings | |
80 FR 81738 - Share Insurance and Appendix | |
80 FR 81744 - Control Policy: End-User and End-Use Base | |
80 FR 81738 - Capital Maintenance | |
80 FR 81744 - The Commerce Control List | |
80 FR 81738 - Direct Single Family Housing Loans and Grants | |
80 FR 81738 - Biotechnology Risk Assessment Research Grants Program | |
80 FR 81738 - Special Research Grants Program | |
80 FR 81737 - Construction and Repair | |
80 FR 81737 - Electric System Construction Policies and Procedures | |
80 FR 81737 - Dairy Products | |
80 FR 81737 - Dairy Promotion Program | |
80 FR 81737 - Walnuts Grown in California | |
80 FR 81737 - Common Crop Insurance Regulations | |
80 FR 81862 - Section 512 Study: Notice and Request for Public Comment | |
80 FR 81818 - Environmental Impact Statements; Notice of Availability | |
80 FR 81856 - Notice of Availability of the Final White-Tailed Deer Management Plan and Environmental Impact Statement, Fire Island National Seashore, New York | |
80 FR 81767 - Medicare Program; End-Stage Renal Disease Prospective Payment System, and Quality Incentive Program; Correction | |
80 FR 81798 - Fisheries of the Exclusive Economic Zone off Alaska; Fixed-Gear Commercial Halibut and Sablefish Fisheries; Bering Sea and Aleutian Islands Crab Rationalization Program; Cost Recovery Authorized Payment Methods | |
80 FR 81837 - Privacy Act of 1974; Systems of Records-Republication of HUD's Routine Use Inventory Notice | |
80 FR 81879 - Fortress Investment Group LLC-Continuance in Control Exemption-Ohio River Partners LLC | |
80 FR 81878 - Ohio River Partners LLC-Acquisition and Operation Exemption-Hannibal Development, LLC | |
80 FR 81879 - Roanoke Southern, LLC-Acquisition and Operation Exemption-Norfolk Southern Railway Company | |
80 FR 81880 - Prompt Payment Interest Rate; Contract Disputes Act | |
80 FR 81818 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
80 FR 81882 - Proposed Information Collection (Transfer of Scholastic Credit (Schools) (FL-315)) Activity: Comment Request | |
80 FR 81883 - Agency Information Collection: Collection (Requirement To Present Certain Health Information for a Service Dog | |
80 FR 81811 - Proposed Collection: Comment Request | |
80 FR 81875 - Request for Information for the 2016 Trafficking in Persons Report | |
80 FR 81810 - Procurement List; Addition | |
80 FR 81810 - Procurement List; Proposed Deletions | |
80 FR 81813 - Agency Information Collection Activities: Proposed Collection; Comment Request; Fast Track Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery | |
80 FR 81808 - Magnuson-Stevens Act Provisions; Fisheries Off West Coast States; Pacific Coast Groundfish Fishery; Trawl Rationalization Program; 2016 Cost Recovery | |
80 FR 81812 - Negotiation of a Reciprocal Defense Procurement Memorandum of Understanding With the Ministry of Defense of Japan | |
80 FR 81805 - 2016 Rate Changes for the Basetime, Overtime, Holiday, and Laboratory Services Rates | |
80 FR 81807 - National Estuarine Research Reserve System | |
80 FR 81833 - National Institute on Alcohol Abuse and Alcoholism; Notice of Meeting | |
80 FR 81830 - Proposed Collection; 60 Day Comment Request; The Framingham Heart Study (NHLBI) | |
80 FR 81832 - National Institute on Drug Abuse; Notice of Closed Meeting | |
80 FR 81834 - National Institute on Drug Abuse; Notice of Meeting | |
80 FR 81835 - National Cancer Institute; Amended Notice of Meeting | |
80 FR 81834 - National Cancer Institute; Notice of Closed Meetings | |
80 FR 81813 - Judicial Proceedings Since Fiscal Year 2012 Amendments Panel (Judicial Proceedings Panel); Notice of Federal Advisory Committee Meeting | |
80 FR 81815 - National Advisory Committee on Institutional Quality and Integrity | |
80 FR 81872 - Entergy Operations, Inc.; Vermont Yankee Nuclear Power Station | |
80 FR 81824 - Request for Information: Certification Frequency and Requirements for the Reporting of Quality Measures Under CMS Programs | |
80 FR 81879 - Release of Waybill Data | |
80 FR 81836 - Notice To Announce Commission of a Surgeon General's Report on Substance Use, Addiction, and Health | |
80 FR 81806 - Pacific Fishery Management Council; Public Meetings and Hearings | |
80 FR 81759 - Service Academies | |
80 FR 81871 - Notice of Permits Issued Under the Antarctic Conservation Act of 1978 | |
80 FR 81819 - Request for Applications for Funding for the 12/09/2015 Funded Priorities List | |
80 FR 81857 - Hearings of the Judicial Conference Advisory Committee on the Federal Rules of Bankruptcy Procedure | |
80 FR 81836 - Center for Mental Health Services; Notice of Meeting | |
80 FR 81817 - Combined Notice of Filings | |
80 FR 81829 - Public Notification of Emerging Postmarket Medical Device Signals (“Emerging Signals”); Draft Guidance for Industry and Food and Drug Administration Staff; Availability | |
80 FR 81816 - Arkansas River Power Authority; Notice of Filing | |
80 FR 81816 - Enbridge Energy, Limited Partnership; Notice of Filing of Supplement to Facilities Surcharge Settlement | |
80 FR 81818 - Martha Coakley, Massachusetts Attorney General; Connecticut Public Utilities Regulatory Authority; Massachusetts Department of Public Utilities; New Hampshire Public Utilities Commission; Connecticut Office of Consumer Counsel; Maine Office of the Public Advocate; George Jepsen, Connecticut Attorney General; New Hampshire Office of Consumer Advocate; Rhode Island Division of Public Utilities and Carriers; Vermont Department of Public Service; Massachusetts Municipal Wholesale Electric Company; Associated Industries of Massachusetts; The Energy Consortium; Power Options, Inc.; and the Industrial Energy Consumer Group, v. Bangor Hydro-Electric Company; Central Maine Power Company; New England Power Company d/b/a National Grid; New Hampshire Transmission LLC d/b/a NextEra; NSTAR Electric and Gas Corporation; Northeast Utilities Service Company; The United Illuminating Company; Unitil Energy Systems, Inc. and Fitchburg Gas and Electric Light Company; Vermont Transco, LLC; | |
80 FR 81817 - Combined Notice of Filings #1 | |
80 FR 81809 - Submission for OMB Review; Comment Request | |
80 FR 81824 - Patient Safety Organizations: Voluntary Relinquishment from the Texas Patient Safety Organization, Inc. | |
80 FR 81880 - Submission for OMB Review; Comment Request | |
80 FR 81882 - Submission for OMB Review; Comment Request | |
80 FR 81832 - National Institute of Allergy and Infectious Diseases; Closed Meeting | |
80 FR 81835 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of Closed Meetings | |
80 FR 81833 - National Center for Complementary & Integrative Health; Notice of Closed Meeting | |
80 FR 81857 - Notice of Lodging of Proposed Consent Decrees Under the Clean Water Act | |
80 FR 81785 - Appliance Standards and Rulemaking Federal Advisory Committee: Notice of Open Meetings for the Central Air Conditioners and Heat Pumps Working Group To Negotiate a Notice of Proposed Rulemaking (NOPR) for Energy Conservation Standards | |
80 FR 81792 - Airworthiness Directives; Airbus Airplanes | |
80 FR 81773 - Magnuson-Stevens Act Provisions; Fisheries Off West Coast States; Pacific Coast Groundfish Fishery; 2015-2016 Biennial Specifications and Management Measures; Inseason Adjustments | |
80 FR 81752 - Cyber-Related Sanctions Regulations | |
80 FR 81828 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
80 FR 81788 - Airworthiness Directives; The Boeing Company Airplanes | |
80 FR 81795 - Airworthiness Directives; The Boeing Company Airplanes | |
80 FR 81786 - Airworthiness Directives; Airbus Airplanes | |
80 FR 81770 - Atlantic Highly Migratory Species; North Atlantic Swordfish Fishery | |
80 FR 81769 - Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions | |
80 FR 81947 - Transfer Agent Regulations | |
80 FR 81871 - Notice of Intent To Grant an Exclusive License | |
80 FR 81744 - Five-Year Review of the Oil Pipeline Index | |
80 FR 81840 - Affirmatively Furthering Fair Housing Assessment Tool: Announcement of Final Approved Document | |
80 FR 81899 - Retention of EB-1, EB-2, and EB-3 Immigrant Workers and Program Improvements Affecting High-Skilled Nonimmigrant Workers | |
80 FR 81738 - Airworthiness Directives; The Boeing Company Airplanes | |
80 FR 82005 - Exemption of Organic Products From Assessment Under a Commodity Promotion Law | |
80 FR 81896 - Federal Acquisition Regulation; Federal Acquisition Circular 2005-86; Small Entity Compliance Guide | |
80 FR 81894 - Federal Acquisition Regulation; Trade Agreements Thresholds | |
80 FR 81892 - Federal Acquisition Regulation; New Designated Countries-Montenegro and New Zealand | |
80 FR 81888 - Federal Acquisition Regulation; Sole Source Contracts for Women-Owned Small Businesses | |
80 FR 81887 - Federal Acquisition Regulation; Definition of “Multiple-Award Contract” | |
80 FR 81885 - Federal Acquisition Regulation; Federal Acquisition Circular 2005-86; Introduction | |
80 FR 81868 - Report on the Selection of Eligible Countries for Fiscal Year 2016 | |
80 FR 81742 - Airworthiness Directives; Airbus Helicopters (Previously Eurocopter France) |
Agricultural Marketing Service
Commodity Credit Corporation
Farm Service Agency
Food Safety and Inspection Service
National Institute of Food and Agriculture
Rural Business-Cooperative Service
Rural Housing Service
Rural Utilities Service
Industry and Security Bureau
National Oceanic and Atmospheric Administration
Army Department
Defense Acquisition Regulations System
Federal Energy Regulatory Commission
Agency for Healthcare Research and Quality
Centers for Medicare & Medicaid Services
Food and Drug Administration
National Institutes of Health
Substance Abuse and Mental Health Services Administration
National Park Service
Copyright Office, Library of Congress
Federal Aviation Administration
Surface Transportation Board
Fiscal Service
Foreign Assets Control Office
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.thefederalregister.org and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions.
In Title 7 of the Code of Federal Regulations, Parts 400 to 699, revised as of January 1, 2015, on page 278, in § 457.137, under the subheading “12. Settlement of Claim”, in the second paragraph (4) under paragraph (b), remove the term “4450,000” and add the term “450,000” in its place.
In Title 7 of the Code of Federal Regulations, Parts 900 to 999, revised as of January 1, 2015, on page 512, in § 984.450, at the end of paragraph (b), add the word “walnuts” followed by a period.
In Title 7 of the Code of Federal Regulations, Parts 1000 to 1199, revised as of January 1, 2015, on page 204, in § 1150.153, in paragraph (c)(2)(i), remove the term “State or regional”.
In Title 7 of the Code of Federal Regulations, Parts 1200 to 1599, revised as of January 1, 2015, on page 690, in § 1430.202, the definition of “Department or USDA” is reinstated to read as follows:
In Title 7 of the Code of Federal Regulations, Parts 1600 to 1759, revised as of January 1, 2015, on page 252, in § 1726.14, the definition of “minor error or irregularity” is reinstated to read as follows:
In Title 7 of the Code of Federal Regulations, Parts 1760 to 1939, revised as of January 1, 2015, on page 579, in part 1924, subpart A, exhibit J, under Part B, remove the first paragraph C.1. under IV. Accessory Structures and Related Facilities.
In Title 7 of the Code of Federal Regulations, Parts 1760 to 1939, revised as of January 1, 2015, on page 525, in part 1924, in § 1924.5, paragraph (g)(4) is reinstated to read as follows:
(g) * * *
(4) Releases requested by the borrower or the buyer will be processed in accordance with applicable release
In Title 7 of the Code of Federal Regulations, Part 2000 to End, revised as of January 1, 2015, on page 209, in § 3400.4, in paragraph (c)(14), remove the term “engaged by Director” and add the term “engaged by the Director” in its place.
In Title 7 of the Code of Federal Regulations, Part 2000 to End, revised as of January 1, 2015, on page 307, in § 3415.5, in paragraph (a), remove the term “upon which the Administrator” and add in its place the term “upon which the Director or Administrator”.
In Title 7 of the Code of Federal Regulations, Part 2000 to End, revised as of January 1, 2015, on page 406, in § 3550.150, remove the third sentence.
In Title 12 of the Code of Federal Regulations, Parts 300 to 499, revised as of January 1, 2015, on page 406, in § 325.203, in paragraph (b)(3), the following phrase is added to the last sentence: “nonmember bank or state savings association becomes a covered bank.”
In Title 12 of the Code of Federal Regulations, Parts 600 to 899, revised as of January 1, 2015, on page 876, in subpart B, remove § 745.14.
Federal Aviation Administration (FAA), DOT.
Final rule.
We are adopting a new airworthiness directive (AD) for all The Boeing Company Model 767-200, -300, and -300F series airplanes. This AD was prompted by a finding that certain barrel nuts installed at the vertical fin may be subject to stress corrosion and cracking. This AD requires either repetitive inspections of vertical fin barrel nuts for corrosion or a magnetic check to identify certain barrel nuts, and corrective actions if necessary. We are issuing this AD to detect and correct corroded and loose barrel nuts that attach the vertical fin to body section 48; this condition could result in reduced structural integrity of the vertical fin attachment joint, loss of the vertical fin, and consequent loss of controllability of the airplane.
This AD is effective February 4, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of February 4, 2016.
For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
You may examine the AD docket on the Internet at
Wayne Lockett, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6447; fax: 425-917-6590; email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all The Boeing Company Model 767-200, -300, and -300F series airplanes. The NPRM published in the
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (80 FR 19248, April 10, 2015) and the FAA's response to each comment.
Boeing and Air New Zealand requested that additional clarification be added to paragraph (c) of the proposed AD (80 FR 19248, April 10, 2015). Boeing stated that this addition will add clarity because there is an existing AD (AD 2003-10-11, Amendment 39-13156 (68 FR 28703, May 27, 2003)) of a similar subject that covers only Boeing Model 767 airplanes, line numbers 1 through 574 inclusive. Boeing requested we clarify that Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014, addresses only Boeing Model 767 airplanes with line numbers 575 through 681 inclusive. Air New Zealand asked whether the NPRM would supersede AD 2003-10-11.
We agree to provide clarification. Only Model 767 airplanes with line numbers 575 through 681 inclusive are affected by this AD. Some proposed requirements overlap with the requirements of AD 2003-10-11, Amendment 39-13156 (68 FR 28703, May 27, 2003). We have therefore revised the applicability of this AD to specify airplanes identified in Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014, which limits the applicability to line numbers 575 through 681 inclusive.
Boeing stated that operators may have already replaced discovered H-11 barrel nuts with Inconel alternatives. Boeing requested that we revise the NPRM (80 FR 19248, April 10, 2015) to specify the “Compliance Time Exceptions” noted in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014. Those “exceptions” would specify that no further action is required at the vertical stabilizer attachment point, provided the following conditions are met:
• The vertical stabilizer attachment barrel nut has been inspected;
• No H-11 steel barrel nut was found during the inspection; and
• Any replacement barrel nut is either a drawing configuration barrel nut made from an alternative material to H-11 steel; or a barrel nut made from alternative material to H-11 steel approved by the FAA or by a Boeing Company Authorized Representative.
We do not agree with the request because paragraph (g) of this AD already makes reference to paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014, which lists the compliance time exceptions. We have not changed this AD regarding this issue.
United Parcel Service (UPS) requested that we provide terminating action similar to that provided in paragraph (i) of AD 2013-18-02, Amendment 39-17575 (78 FR 57049, September 17, 2013).
We agree with the commenter's request. The NPRM (80 FR 19248, April 10, 2015) is not clear whether the repetitive inspections are terminated by replacement with an Inconel barrel nut or by a finding of no H-11 steel barrel nut installed. Replacing a barrel nut at an attachment point location with a new Inconel barrel nut in accordance with Part 5 of Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014, terminates the inspections and replacement required by paragraph (g) of this AD for that attachment point location only. In addition, if no H-11 steel barrel nut is found installed at an attachment point location, the repetitive inspections and replacement required by paragraph (g) of this AD are terminated for that attachment location only. We have added a new paragraph (h) to this AD to clarify the terminating action and redesignated the subsequent paragraphs accordingly.
UPS requested that we provide clarification of paragraph (g)(1)(ii)(B) of the proposed AD (80 FR 19248, April 10, 2015). UPS stated that its interpretation of paragraph (g)(1)(ii)(B) of the proposed AD is that replacement of only H-11 steel barrel nuts is required, although it appears that all barrel nuts are to be replaced, even if the installed barrel nuts are Inconel or other approved barrel nuts.
We agree that clarification is necessary. Operators are required to do all actions specified in either paragraph (g)(1) or (g)(2) of this AD. Paragraph (g)(1) of this AD is only an internal and external detailed inspection of the barrel nuts and does not provide a method for determination of the material of the barrel nuts. Paragraph (g)(2) of this AD provides the method to determine if the material of the barrel nuts is H-11 steel.
Therefore, if operators have chosen to do the internal and external inspections along with the torque check specified in paragraph (g)(1) of this AD, and have not chosen to do the magnetic check specified in paragraph (g)(2) of this AD, then they have not determined the material of the barrel nuts. For airplanes on which the material of the barrel nuts has not been determined, the requirement is to replace all barrel nuts, as required by paragraph (g)(1)(ii)(B) of this AD.
Operators choosing to do the magnetic check specified in paragraph (g)(2) of this AD would have determined the material of the barrel nuts, and may replace only H-11 steel barrel nuts, as required by paragraph (g)(2)(i)(B)(
Operators are not permitted to mix actions from paragraphs (g)(1) and (g)(2) of this AD. Operators may, however, submit requests for approval of an alternative method of compliance (AMOC) to the requirements of paragraph (g) of this AD along with justification of an equivalent level of safety. We have not changed this AD regarding this issue.
UPS requested that we provide an exception to the initial inspection thresholds of the “last Torque Check Inspection” specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014. The specified compliance time is the later of 24 months after issuance of the service information or 36 months after the last torque check inspection specified in Task 53-734-00, “Internal, Special Detailed, Vertical Stabilizer Attach Bolt, of Section 2, “Structural Maintenance Requirements,” of the Boeing Model 767 Maintenance Planning Document. The commenter understands that the most recent accomplishment of Task 53-734-00 must be done prior to the effective date of this AD. The commenter added that if the initial inspection required by paragraph (g)(1) or (g)(2) of the proposed AD (80 FR 19248, April 10, 2015) is
We agree with the commenter's request and rationale regarding providing an exception to the specified initial inspection threshold. We have redesignated paragraph (h) of the proposed AD (80 FR 19248, April 10, 2015) as paragraph (i)(1) of this AD and added new paragraph (i)(2) to this AD to provide a compliance time exception to address the issue described by the commenter. If the most recent accomplishment of Task 53-734-00 occurs after the effective date of this AD, then operators still have to comply with the requirements of paragraph (g)(1) or (g)(2) of this AD.
Aviation Partners Boeing stated that accomplishing the supplemental type certificate (STC) ST01920SE (
We agree with the commenter's statement. We have redesignated paragraph (c) of the proposed AD (80 FR 19248, April 10, 2015) as paragraph (c)(1) of this AD, and added new paragraph (c)(2) to this AD to state that installation of STC ST01920SE (
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Αre consistent with the intent that was proposed in the NPRM (80 FR 19248, April 10, 2015) for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM (80 FR 19248, April 10, 2015).
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
Boeing has issued Alert Service Bulletin 767-53A0261, dated August 12, 2014. The service information describes procedures for repetitive internal and external detailed inspections of the barrel nut holes and sealant for cracked/damaged sealant, corrosion, or a cracked/broken barrel nut, and replacement of the barrel nut with a new Inconel barrel nut if necessary. The service information also describes procedures for repetitive torque checks on each affected vertical fin attachment bolt, or, alternatively, a magnetic check to identify H-11 steel barrel nuts, and replacement with a new Inconel barrel nut if necessary.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 38 airplanes of U.S. registry. We estimate the following costs to comply with this AD:
We estimate that replacing any barrel nut would take 1 work-hour, at an average labor rate of $85 per work-hour. We have received no definitive data that would enable us to provide cost estimates for the cost of replacement parts. We have no way of determining the number of aircraft that might need these replacements.
According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all available costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective February 4, 2016.
None.
(1) This AD applies to The Boeing Company Model 767-200, -300, -300F series airplanes, certificated in any category, as identified in Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014.
(2) Installation of Supplemental Type Certificate (STC) ST01920SE (
Air Transport Association (ATA) of America Code 53, Fuselage.
This AD was prompted by a finding that certain barrel nuts installed at the vertical fin may be subject to stress corrosion and cracking. We are issuing this AD to detect and correct corroded and loose barrel nuts that attach the vertical fin to body section 48; this condition could result in reduced structural integrity of the vertical fin attachment joint, loss of the vertical fin, and consequent loss of controllability of the airplane.
Comply with this AD within the compliance times specified, unless already done.
For airplanes identified in Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014: Do the actions specified in paragraph (g)(1) or (g)(2) of this AD, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014. Signs of corrosion include, but are not limited to, sealant cracks, sealant bulging, powder residue, and cracked barrel nuts.
(1) At the applicable time specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014, except as provided by paragraph (i) of this AD: Do internal and external detailed inspections of the barrel nuts and sealant for signs of corrosion, and do a torque check of the vertical stabilizer attachment bolts for loose barrel nuts.
(i) If corrosion or any loose barrel nut is found at any attachment point location, before further flight, replace the barrel nut with a new Inconel barrel nut.
(ii) If no corrosion or loose barrel nut is found at any attachment point location, do the actions specified in paragraphs (g)(1)(ii)(A) and (g)(1)(ii)(B) of this AD.
(A) Repeat the inspections and torque check thereafter at intervals not to exceed 18 months until the replacement specified in paragraph (g)(1)(ii)(B) of this AD is done at that attachment point location.
(B) Within 36 months after the effective date of this AD, replace all barrel nuts with new Inconel barrel nuts.
(2) At the applicable time specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014, except as provided by paragraph (i) of this AD: Do a magnetic check to identify H-11 steel barrel nuts.
(i) If any H-11 steel barrel nut is found at any attachment point location, before further flight, do an internal and external detailed inspection of the barrel nut holes and sealant for signs of corrosion, and do a torque check of the vertical stabilizer attachment bolts for loose barrel nuts.
(A) If corrosion or any loose barrel nut is found, before further flight, replace the barrel nut with a new Inconel barrel nut.
(B) If no corrosion or loose barrel nut is found, do the actions specified in paragraphs (g)(2)(i)(B)(
(
(
(ii) If no H-11 steel barrel nut is found at all attachment point locations, no further work is required by this paragraph.
(1) Replacing a barrel nut at an attachment point location with a new Inconel barrel nut, in accordance with Part 5 of Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014, terminates the inspections and replacement required by paragraph (g) of this AD for that attachment point location only.
(2) If no H-11 steel barrel nut is found installed at an attachment point location, the repetitive inspections and replacement required by paragraph (g) of this AD are terminated for that attachment location only.
(1) Where Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014, specifies a compliance time “after the Original Issue date of this Service Bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.
(2) Where Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014, specifies a compliance time after the “last Torque Check Inspection” in accordance with Task 53-734-00, “Internal, Special Detailed, Vertical Stabilizer Attach Bolt, of Section 2, Structural Maintenance Requirements,” of the Boeing Model 767 Maintenance Planning Document, that compliance time only applies if the most recent accomplishment of Task 53-734-00 occurred on or before the effective date of this AD.
As of the effective date of this AD, no person may install an H-11 steel barrel nut on the vertical stabilizer of any airplane.
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (l)(1) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle
(4) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (k)(4)(i) and (k)(4)(ii) apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
(1) For more information about this AD, contact Wayne Lockett, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6447; fax: 425-917-6590; email:
(2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Boeing Alert Service Bulletin 767-53A0261, dated August 12, 2014.
(ii) Reserved.
(3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
(4) You may view this service information at FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule.
We are superseding airworthiness directive (AD) 2002-13-11 for Eurocopter France (now Airbus Helicopters) Model EC120B helicopters. AD 2002-13-11 required installing front and side covers on the cabin floor to protect the yaw control at both the pilot and co-pilot stations. Since we issued AD 2002-13-11, we have determined that the required actions should apply only to the cabin's right-hand pilot station. This AD retains the requirements of AD 2002-13-11 but for only the pilot station. These actions are intended to prevent an object from sliding between the canopy and the cabin floor, loss of yaw control, and subsequent loss of helicopter control.
This AD is effective February 4, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of February 4, 2016.
For service information identified in this final rule, contact Airbus Helicopters, Inc., 2701 N. Forum Drive, Grand Prairie, TX 75052; telephone (972) 641-0000 or (800) 232-0323; fax (972) 641-3775; or at
You may examine the AD docket on the Internet at
Robert Grant, Aviation Safety Engineer, Safety Management Group, Rotorcraft Directorate, FAA, 10101 Hillwood Pkwy, Fort Worth, TX 76177; telephone (817) 222-5110; email
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to remove AD 2002-13-11, Amendment 39-12799 (67 FR 45295, July 9, 2002) and add a new AD. AD 2002-13-11 applied to Airbus Model EC120B helicopters, serial numbers 1001 through 1278, and required installing front and side covers to protect the yaw control at the pilot and co-pilot flight control stations. AD 2002-13-11 was prompted by AD No. 2001-386-007(A), dated September 5, 2001, issued by the DGAC, the airworthiness authority for France, to correct an unsafe condition for the Model EC120B helicopter. The DGAC advises of a yaw-control jamming caused by an object that slid between the canopy and the cabin floor.
After we issued AD 2002-13-11 (67 FR 45295, July 9, 2002), we determined that the front and side protections are required only at the pilot station. The NPRM published in the
Since we issued the NPRM, we discovered it contains a typographical error in the date of the service information. Also, the FAA Southwest Regional Office has relocated and a group email address has been established for requesting an FAA Alternate Method of Compliance for a helicopter of foreign design. We have
We gave the public the opportunity to participate in developing this AD, but we received no comments on the NPRM (80 FR 27605, May 14, 2015).
These helicopters have been approved by the aviation authority of France and are approved for operation in the United States. Pursuant to our bilateral agreement with France, the DGAC, its technical representative, has notified us of the unsafe condition described in the DGAC AD. We are issuing this AD because we evaluated all information provided by the DGAC and determined the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed, except for the minor editorial changes described previously. These changes are consistent with the intent of the proposals in the NPRM (80 FR 27605, May 14, 2015) and will not increase the economic burden on any operator nor increase the scope of this AD.
We reviewed Eurocopter Alert Service Bulletin No. 67A005, Revision 0, dated August 1, 2001 (ASB), which specifies installing a front and side protection on the cabin floor to protect the yaw control. The DGAC classified this ASB as mandatory and issued AD No. 2001-386-007(A), dated September 5, 2001, and AD 2001-386-007(A)R1, dated February 6, 2002, to ensure the continued airworthiness of these helicopters in France.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD affects 37 helicopters of U.S. Registry and that labor costs average $85 a work-hour. Required parts cost about $584 and it takes about 2 work-hours to accomplish the required actions. Based on these figures, we estimate that the total cost of this AD is $754 per helicopter and $27,898 for the U.S. fleet.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on helicopters identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866;
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD applies to Model EC120B helicopters, serial numbers 1001 through 1278, inclusive, certificated in any category.
This AD defines the unsafe condition as an object sliding between the canopy and the cabin floor. This condition could result in loss of yaw control and subsequent loss of control of the helicopter.
This AD supersedes AD 2002-13-11, Amendment 39-12799 (67 FR 45295, July 9, 2002).
This AD becomes effective February 4, 2016.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
Within 90 days, install front and side covers (protections) to protect the yaw control in accordance with the Accomplishment Instructions, paragraph 2.B., of Eurocopter Alert Service Bulletin No. 67A005, Revision 0, dated August 1, 2001, except the correct reference to the Aircraft Maintenance Manual in subparagraph 2.B.2 of the ASB is 20-10-00, 3-8.
(1) The Manager, Safety Management Group, FAA, may approve AMOCs for this AD. Send your proposal to: Robert Grant, Aviation Safety Engineer, Safety Management Group, Rotorcraft Directorate, FAA, 10101 Hillwood Pkwy, Fort Worth, TX 76177; telephone (817) 222-5110; email
(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office, before operating any aircraft complying with this AD through an AMOC.
The subject of this AD is addressed in the Direction General De L'Aviation Civile (DGAC) AD No. 67A005, Revision 1, dated February 6, 2002. You may view the DGAC AD on the Internet at
Joint Aircraft Service Component (JASC) Code: 2500, Cabin Equipment/Furnishings.
(1) The Director of the Federal Register approved the incorporation by reference of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Eurocopter Alert Service Bulletin No. 67A005, Revision 0, dated August 1, 2001.
(ii) Reserved.
(3) For service information identified in this AD, contact Airbus Helicopters, Inc., 2701 N. Forum Drive, Grand Prairie, TX 75052; telephone (972) 641-0000 or (800) 232-0323; fax (972) 641-3775; or at
(4) You may view this service information at FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy, Room 6N-321, Fort Worth, TX 76177. For information on the availability of this material at the FAA, call (817) 222-5110.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call (202) 741-6030, or go to:
In Title 15 of the Code of Federal Regulations, Parts 300 to 799, revised as of January 1, 2015, on page 414, in supplement no. 4 to part 744, remove the entry for “Sergey Grinenko” from “GREECE” and add it in alphabetical order under “GERMANY”.
In Title 15 of the Code of Federal Regulations, Parts 300 to 799, revised as of January 1, 2015, on page 999, in Supplement 1 to Part 774, in Category 9, Export Control Classification Number (ECCN) 9E003, in the Items section, remove the second introductory text of paragraph f.1.
Federal Energy Regulatory Commission, DOE.
Order establishing index level.
The Federal Energy Regulatory Commission (Commission) issues this Final Order concluding its five-year review of the index level used to determine annual changes to oil pipeline rate ceilings. The Commission establishes an index level of Producer Price Index for Finished Goods plus 1.23 percent (PPI-FG+1.23) for the five-year period commencing July 1, 2016.
December 31, 2015.
1. On June 30, 2015, the Commission issued a Notice of Inquiry initiating its five-year review to establish the oil pipeline index level for the July 1, 2016 to June 30, 2021 time period.
2. For the reasons discussed below, the Commission adopts an index level of the PPI-FG+1.23 percent. The departure from the June 2015 NOI results from (a) the use of FERC Form No. 6 page 700 (page 700) data that directly measures changing pipeline costs as opposed to the estimates previously used to calculate the index level
3. The Energy Policy Act of 1992 (EPAct 1992) required the Commission to establish a “simplified and generally applicable” ratemaking methodology
4. In Order No. 561, the Commission committed to review the index level every five years to ensure that it adequately reflects changes to industry costs.
5. In Order No. 561 and each successive index review, the Commission has calculated the index level based upon a methodology developed by Dr. Alfred E. Kahn.
6. The Commission initiated this proceeding on June 30, 2015, with the issuance of a Notice of Inquiry initiating its five-year review to establish the oil pipeline index level for the July 1, 2016 to June 30, 2021 time period.
7. Initial Comments filed in response to the June 2015 NOI and technical conference were due on August 24, 2015, and reply comments were due on September 21, 2015. Comments were filed by the Association for Oil Pipelines (AOPL),
8. The commenters raised a number of issues related to the index range proposed by the Commission in the June 2015 NOI and possible alternatives for calculating the index level. The commenters advocated varying index levels, including AOPL's proposal of PPI-FG+2.47, APV Shippers' proposal of PPI-FG+0.5, and Liquids Shippers' proposal of PPI-FG+0.23.
9. The Commission adopts an index level of PPI-FG+1.23 percent for the five-year period commencing July 1, 2016. The Commission adopts APV Shippers' proposal to use page 700 data that directly measures changing pipeline costs as opposed to the previously used Form No. 6 accounting data. The Commission rejects other modifications proposed by industry comments, including: (a) Various manual data trimming methodologies, (b) the consideration of the middle 80 percent in addition to the middle 50 percent of the cost changes in the data set, (c) separate index levels for product and crude pipelines, and (d) Liquids Shippers' proposals to temporarily set the index level at PPI-FG while initiating a proceeding to revise the Commission's indexing regulations.
10. APV Shippers propose calculating the index level based upon page 700 total cost-of-service data as opposed to the Form No. 6 accounting data used in the June 2015 NOI and prior five-year review proceedings.
11. AOPL opposes the use of page 700 data to calculate the index. Among other assertions, AOPL argues that page 700 data should not be used because the page 700 total cost-of-service incorporates returns on equity (ROEs) that may be volatile due to industry-wide fluctuations in the equity
12. The Commission will update its calculation of the five-year oil pipeline index to use page 700 data to measure changing barrel-mile costs. Page 700 provides a summarized total cost-of-service and a pipeline's interstate barrel-miles. Page 700 did not exist when the Kahn Methodology was first developed in Order No. 561, and, as a result, the Commission estimated pipeline total cost changes using accounting data from elsewhere on Form No. 6. Now that page 700 is available, the Commission concludes that page 700 data provides a superior data source for use in the Kahn Methodology.
13. Using page 700 data provides four primary benefits. First, the index is meant to reflect changes to recoverable pipeline costs, and, thus, the calculation of the index should use data that is consistent with the Commission's cost-of-service methodology.
14. Second, using page 700 data eliminates the need to use proxies to measure capital costs and income tax costs. Because direct measures of these costs were not available when the index was first established,
15. Third, using page 700 data eliminates the need for an “operating ratio” to estimate each pipeline's annual cost changes. When using Form No. 6 accounting data, the operating ratio is necessary because a pipeline's annual total cost change cannot be calculated by simply adding (a) the annual change in operating costs to (b) the annual change in net carrier property (the proxy used for capital costs). This is because a one-year change to net carrier property is a change in the net investment in the pipeline, not the pipeline's annual capital cost consisting of the pipeline's yearly debt payments and yearly return to investors. Thus, a pipeline's annual total cost change is estimated based on a ratio of operating expenses to operating revenue, which assumes that the residual revenues equate to a pipeline's annual capital costs.
Total Cost Changes = Operating Costs Changes * Operating Ratio + (Net Carrier Property Changes * (1 − Operating Ratio)).
Operating Ratio = ((Operating Expense at Year 1/Operating Revenue at Year 1) + (Operating Expense at Year 5/Operating Revenue at Year 5))/2. If the operating ratio is greater than one, then it is assigned the value of 1 in the Kahn Methodology calculations. Applying the ratio, Total Cost Changes = (1 − operating ratio) * net plant + operating ratio * operating expenses.
16. Fourth, page 700 contains cost and barrel-mile data exclusively related to interstate pipeline operations, as opposed to the combined intrastate and interstate data used in prior five-year reviews. These interstate and intrastate costs do not necessarily apply to the same facilities.
17. The Commission is also not persuaded by AOPL's arguments against using page 700 data. The Commission disagrees with AOPL's argument that page 700 data should not be used because it incorporates ROEs that may be volatile on an industry-wide basis due to fluctuations in the equity markets. The index is designed to capture changing capital costs, of which financing costs are an important component. To the extent that industry-wide equity costs change with market conditions, those changes should be captured by the index. Furthermore, the record does not support AOPL's claim that ROEs were erratic on an industry-wide basis during the 2009-2014 period. AOPL's own calculations show that the average ROEs in the middle 50 percent stayed within a roughly 100 basis point range throughout the 2009-2014 period.
18. The Commission is also not persuaded by AOPL's argument that page 700 contains various allocations
19. APV Shippers, Liquids Shippers, CAPP, and Suncor advocate various forms of manual data trimming in addition to the statistical data trimming to the middle 50 percent. The manual data trimming proposals assume two broad forms: (1) Removing from the data set pipelines that underwent expansions between 2009 and 2014 and (2) removing from the data set pipelines that appeared to report flawed or anomalous data.
20. Several shipper commenters advocate removing pipelines from the data set that underwent expansions, arguing that the expansions distorted index calculation. APV Shippers and CAPP propose to remove from the data set the pipelines that filed petitions for declaratory order seeking approval for committed shipper rates.
21. AOPL opposed these proposals asserting, among other arguments, that (a) this manual data trimming lacks methodological integrity and (b) statistically trimming of the data set (such as data trimming via the middle 50 percent or middle 80 percent) more appropriately addresses anomalous cost changes.
22. The Commission declines to adopt the various proposals to manually remove from the data set pipelines making capital expansions during the 2009 to 2014 period. In the 2010 Index Review, Commission rejected a similar proposal.
23. As the Commission explained in the 2010 Index Review, statistically trimming the data set to the middle 50 percent already removes anomalous cost/barrel-mile changes.
24. As the Commission also explained in 2010, it is both subjective and arbitrary to state which circumstances render a pipeline's 2009 barrel-mile costs non-comparable to its 2014 costs.
25. Furthermore, the Commission emphasizes that the index properly reflects capital cost changes. Consistent with the EPAct 1992's mandate of general applicability, capital costs changes have always been part of the index calculation.
26. The Commission rejects other arguments raised in support of manually removing pipelines undergoing expansions from the data set. The Commission rejects CAPP and APV Shippers' argument that such manual data trimming is necessary to avoid double recovery.
27. The Commission adopts the same rationale that the Commission articulated in the 2010 Index Order and rejects APV Shippers' argument that because the Commission removes costs associated with Ultra Low Sulfur Diesel (ULSD) surcharges from the index calculation, it must also remove costs associated with committed shipper rates and cost-of-service filings.
28. The Commission also rejects CAPP's contention that the contractual rates are “cross-contaminating” the calculation of the index.
29. The Commission dismisses Liquids Shippers' proposal to remove from the data set pipelines with rate base changes of 25 percent between 2013-2014. Liquids Shippers' argument that these expansions are “non-recurring” is unsupported—unlike non-recurring costs in a rate case, capital investments represent a long term change in the pipeline's cost level. The proposal also errs by focusing solely on expansions without also considering other cost changes (increases or decreases) which may be “non-recurring.” Moreover, Liquids Shippers' proposal is internally inconsistent. First, Liquids Shippers' proposal focuses solely on rate base increases while ignoring commensurate rate base decreases. Second, although Liquids Shippers argue that new 2014 expansions could be skewing the 2014 costs per barrel-mile upward while throughput is ramped up, the Liquids Shippers make no similar adjustments for 2008-2009 expansions which could be having a similar upward effect on 2009 costs per barrel-mile (thereby, minimizing the change between 2009 and 2014).
30. The Commission also rejects Liquids Shippers' assertion that Enbridge Energy, Limited Partnership (Enbridge Lakehead) distorts the index calculation. As shown in Attachment A, Enbridge Lakehead is not included in the middle 50 percent of page 700 per barrel-mile cost change data adopted herein. Further, to the extent that Enbridge Lakehead heavily influenced the calculations in the June 2015 NOI, this resulted from the Kahn Methodology's longstanding (and unchallenged) use of a weighted average based upon pipeline barrel-miles.
31. APV Shippers propose additional manual trimming adjustments to the data set in order to remove pipelines which they state reported 2009 data that was “non-comparable” to the pipeline's 2014 data. Toward this objective, APV Shippers propose that the Commission remove the following from the data set:
• Four pipelines that began or ceased operations during 2009 or 2014 because these pipelines' page 700 may include a full year's rate base, but only a partial year's operating costs.
• Ten pipelines with significant divestitures or acquisitions between 2009 and 2014.
• Four pipelines with other operational changes or data reporting anomalies on page 700.
• Eleven pipelines that APV Shippers assert report a combination intrastate and interstate barrel-mile data on page 700.
32. AOPL opposes these proposed adjustments, claiming that such manual data trimming is prone to bias and error. AOPL states that statistical data trimming using the middle 50 percent or middle 80 percent provides a more appropriate resolution for these issues.
33. The Commission declines to adopt APV Shippers' manual data trimming proposal. As previously explained, the Commission trims the data set to the middle 50 percent to address any potential distortions caused either by (a) outlying data or (b) spurious data.
34. Any potential improvement from manual data trimming is outweighed by the increase in the potential for error or manipulation. Manual data trimming requires a pipeline-by-pipeline analysis of page 700 data and subjective decisions involving that data. Fully validating APV Shippers' proposal would require the Commission and industry participants to evaluate the specific circumstances for nearly 130 pipelines.
35. Illustrating the difficulty of such a process, APV Shippers concede that their manual data trimming methodology does not remove from the data set all pipelines reporting “non-comparable” data. When AOPL presented evidence that the six pipelines with the lowest per barrel-mile cost remaining in APV Shippers' data set should have been removed under the “non-comparability” standard, the APV Shippers conceded that these six pipelines “likely had sufficient reason to be excluded.”
36. APV Shippers have failed to demonstrate that manual data trimming should be incorporated into the Kahn Methodology. As the Commission explained both in the 2010 Index Review and this proceeding, to manually trim the data set solely based upon one factor (such as large rate base changes) is biased and has the potential to distort the index calculation.
37. Further, contrary to APV Shippers' arguments, manual data
38. Likewise, the Commission rejects APV Shippers' analogy of manual data trimming to the Kahn Methodology's traditional treatment of mergers. Historically, when two pipelines have combined, the Commission has added separate costs the pipelines reported on Form No. 6 in the first year of the data set (
39. The Commission also rejects APV Shippers' analogy to the Kahn Methodology's full utilization of the data on Form No. 6 in order to correct missing or erroneous data. As APV Shippers note, when data has been missing or erroneous in one portion of a pipeline's Form No. 6, the Commission has sometimes substituted data from elsewhere on the Form No. 6.
40. AOPL urges the Commission to determine the index using an average of applying the Kahn Methodology to the (a) middle 50 percent and (b) middle 80 percent. In the June 2015 NOI, the Commission trimmed the data set to the middle 50 percent, which removes the 25 percent of pipelines with the greatest cost increases and the 25 percent of pipelines with the greatest cost decreases. AOPL states that the Commission should also consider the middle 80 percent because: (a) The accuracy of the middle 80 percent data is supported by its conformity to a lognormal distribution and (b) using the middle 80 percent accounts for more barrel-miles.
41. CAPP,
42. The Commission rejects AOPL's proposal to calculate the index based upon both the middle 80 percent and the middle 50 percent.
43. The record in this proceeding does not provide a basis for altering that position. We are not persuaded by AOPL's argument that the middle 80 percent should be considered merely because it conforms to a lognormal distribution. Conformity with a particular statistical distribution may generally support the accuracy of the middle 80 percent data. However, by definition, costs at the top (or bottom) of the middle 80 percent deviate significantly from the cost experience of other pipelines.
44. Similarly, the Commission rejects AOPL's argument that the middle 80 percent should be used merely because it contains more barrel-miles. The Kahn Methodology aims to capture the central tendency of the data set so that the index is not distorted by outlying costs. Pipelines in the middle 80 percent, as opposed to the middle 50 percent, are more likely to have outlying cost changes which could result from idiosyncratic factors particular to that pipeline.
45. APV Shippers state that if the Commission declines to adjust the data set for large capital expenditures and other erroneous data, the Commission should establish separate indices for crude and product pipelines. APV Shippers state that, using page 700 data without data trimming, the middle 50 percent of crude pipelines had an index differential of PPI-FG+3.36 percent and the middle 50 percent of petroleum product pipelines showed an index differential of PPI-FG+0.4 percent.
46. The Commission declines to adopt the proposal to use different indices for crude and product pipelines. Contrary to APV Shippers' claim that the differences in the index differentials result from wide-spread crude pipeline expansions, the discrepancy primarily occurs due to (a) the effect of two very large crude pipelines which happen to have above average cost changes and (b) one very large product pipeline which happens to have below average cost changes. Data discrepancies caused by only three pipelines do not justify the claim that crude and product pipelines as a whole are experiencing dramatically different cost changes.
47. Liquids Shippers state that the Commission should temporarily set the index at PPI-FG while undertaking a review of the Commission's oil pipeline regulations. Among other things, the Liquids Shippers complain that oil pipeline indexing increases have exceeded interstate natural gas pipeline rate increases, that the indexing increases have exceeded the consumer price index (CPI), and that certain oil pipelines have been over-recovering. The Liquids Shippers state that the Commission should consider abolishing the indexing methodology, or, to the extent that indexing is retained, change the manner in which the Commission evaluates oil pipeline index filings. In its reply comments, CAPP endorses these proposals. AOPL opposes Liquids Shippers' proposals and disputes their various claims.
48. The Commission declines to adopt the Liquids Shippers' proposal to temporarily set the index at PPI-FG as unsupported. The evidence in this proceeding demonstrates that oil pipeline cost changes between 2009 and 2014 have exceeded PPI-FG. Liquids Shippers provide no compelling reason to depart from the longstanding practice of calculating the index based upon historic pipeline costs.
49. Liquids Shippers' arguments that the Commission should change its regulations governing indexing are beyond the scope of this proceeding. The June 2015 NOI sought comment regarding two narrow issues, (a) the proposed index level and (b) possible changes to the Kahn Methodology used to calculate the index level.
50. Further, Liquids Shippers' comments have not persuaded us to reexamine the Commission-approved indexing methodology.
51. The Commission will not adopt the various proposals advanced by Suncor. The Commission's adoption of page 700 data addresses several of these proposals, which were advanced as alternatives should the Commission not adopt page 700 data. In addition, the Commission also will not adopt Suncor's proposed alternative methodology to trim the data set based upon anomalous years (as opposed to trimming pipelines reporting anomalous data) because the justification for this proposal, including the use of broader data set, was based upon the previously used Form No. 6 accounting data, not the page 700 data. Moreover, AOPL has presented evidence that Suncor's proposal included significant computational errors.
52. Based on the foregoing, the Commission calculates the five-year review of the index level used to determine annual changes to oil pipeline rate ceilings for the five-year period commencing July 1, 2016 as follows. First, as shown in Attachment A (Exhibit 13, Exhibit 14) we remove those pipelines that did not provide Form No. 6, page 700 data or provided incomplete data. Second, as shown in Attachment A (Exhibit 15) we look at the data on Form No. 6, page 700 to calculate each pipeline's cost change on a per barrel-mile basis over the prior five-year period (
Consistent with the discussion in this order, the Commission determines that the appropriate oil pricing index for the next five years, July 1, 2016 through June 30, 2021, is PPI-FG+1.23.
By the Commission.
Office of Foreign Assets Control, Treasury.
Final rule.
The Department of the Treasury's Office of Foreign Assets Control (OFAC) is issuing regulations to implement Executive Order 13694 of April 1, 2015 (“Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities”). OFAC intends to supplement this part 578 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance and additional general licenses and statements of licensing policy.
The Department of the Treasury's Office of Foreign Assets Control: Assistant Director for Licensing, tel.: 202-622-2480, Assistant Director for Regulatory Affairs, tel.: 202-622-4855, Assistant
This document and additional information concerning OFAC are available from OFAC's Web site (
On April 1, 2015, the President issued Executive Order 13694 (80 FR 18077, April 2, 2015) (E.O. 13694), invoking the authority of,
The Regulations are being published in abbreviated form at this time for the purpose of providing immediate guidance to the public. OFAC intends to supplement this part 578 with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, including regarding “cyber-enabled” activities, and additional general licenses and statements of licensing policy. The appendix to the Regulations will be removed when OFAC supplements this part with a more comprehensive set of regulations.
Because the Regulations involve a foreign affairs function, the provisions of Executive Order 12866 and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.
The collections of information related to the Regulations are contained in 31 CFR part 501 (the “Reporting, Procedures and Penalties Regulations”). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been approved by the Office of Management and Budget under control number 1505-0164. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.
Administrative practice and procedure, Banking, Banks, Blocking of assets, Brokers, Credit, Critical infrastructure, Cyber, Cybersecurity, Foreign trade, Investments, Loans, Securities, Services, Trade secrets.
For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control adds part 578 to 31 CFR chapter V to read as follows:
3 U.S.C. 301; 31 U.S.C. 321(b); 50 U.S.C. 1601-1651, 1701-1706; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 110-96, 121 Stat. 1011 (50 U.S.C. 1705 note); E.O. 13694, 80 FR 18077, April 2, 2015.
This part is separate from, and independent of, the other parts of this chapter, with the exception of part 501 of this chapter, the recordkeeping and reporting requirements and license application and other procedures of which apply to this part. Actions taken pursuant to part 501 of this chapter with respect to the prohibitions contained in this part are considered actions taken pursuant to this part. Differing foreign policy and national security circumstances may result in differing interpretations of similar language among the parts of this chapter. No license or authorization contained in or issued pursuant to those other parts authorizes any transaction prohibited by this part. No license or authorization contained in or issued pursuant to any other provision of law or regulation authorizes any transaction prohibited by this part. No license or authorization contained in or issued pursuant to this part relieves the involved parties from complying with any other applicable laws or regulations.
This part has been published in abbreviated form for the purpose of providing immediate guidance to the public. OFAC intends to supplement this part with a more comprehensive set of regulations, which may include additional interpretive and definitional guidance, including regarding “cyber-enabled”
All transactions prohibited pursuant to Executive Order 13694 of April 1, 2015, are also prohibited pursuant to this part.
The names of persons designated pursuant to Executive Order 13694, whose property and interests in property therefore are blocked pursuant to this section, are published in the
The International Emergency Economic Powers Act (50 U.S.C. 1701-1706), in Section 203 (50 U.S.C. 1702), authorizes the blocking of property and interests in property of a person during the pendency of an investigation. The names of persons whose property and interests in property are blocked pending investigation pursuant to this section also are published in the
Sections 501.806 and 501.807 of this chapter describe the procedures to be followed by persons seeking, respectively, the unblocking of funds that they believe were blocked due to mistaken identity, or administrative reconsideration of their status as persons whose property and interests in property are blocked pursuant to this section.
(a) Any transfer after the effective date that is in violation of any provision of this part or of any regulation, order, directive, ruling, instruction, or license issued pursuant to this part, and that involves any property or interest in property blocked pursuant to § 578.201, is null and void and shall not be the basis for the assertion or recognition of any interest in or right, remedy, power, or privilege with respect to such property or property interest.
(b) No transfer before the effective date shall be the basis for the assertion or recognition of any right, remedy, power, or privilege with respect to, or any interest in, any property or interest in property blocked pursuant to § 578.201, unless the person who holds or maintains such property, prior to that date, had written notice of the transfer or by any written evidence had recognized such transfer.
(c) Unless otherwise provided, a license or other authorization issued by OFAC before, during, or after a transfer shall validate such transfer or make it enforceable to the same extent that it would be valid or enforceable but for the provisions of this part and any regulation, order, directive, ruling, instruction, or license issued pursuant to this part.
(d) Transfers of property that otherwise would be null and void or unenforceable by virtue of the provisions of this section shall not be deemed to be null and void or unenforceable as to any person with whom such property is or was held or maintained (and as to such person only) in cases in which such person is able to establish to the satisfaction of OFAC each of the following:
(1) Such transfer did not represent a willful violation of the provisions of this part by the person with whom such property is or was held or maintained (and as to such person only);
(2) The person with whom such property is or was held or maintained did not have reasonable cause to know or suspect, in view of all the facts and circumstances known or available to such person, that such transfer required a license or authorization issued pursuant to this part and was not so licensed or authorized, or, if a license or authorization did purport to cover the transfer, that such license or authorization had been obtained by misrepresentation of a third party or withholding of material facts or was otherwise fraudulently obtained; and
(3) The person with whom such property is or was held or maintained filed with OFAC a report setting forth in full the circumstances relating to such transfer promptly upon discovery that:
(i) Such transfer was in violation of the provisions of this part or any regulation, ruling, instruction, license, or other directive or authorization issued pursuant to this part;
(ii) Such transfer was not licensed or authorized by OFAC; or
(iii) If a license did purport to cover the transfer, such license had been obtained by misrepresentation of a third party or withholding of material facts or was otherwise fraudulently obtained.
The filing of a report in accordance with the provisions of paragraph (d)(3) of this section shall not be deemed evidence that the terms of paragraphs (d)(1) and (2) of this section have been satisfied.
(e) Unless licensed pursuant to this part, any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is null and void with respect to any property and interests in property blocked pursuant to § 578.201.
(a) Except as provided in paragraphs (e) or (f) of this section, or as otherwise directed by OFAC, any U.S. person holding funds, such as currency, bank deposits, or liquidated financial obligations, subject to § 578.201 shall hold or place such funds in a blocked interest-bearing account located in the United States.
(b)(1) For purposes of this section, the term
(i) In a federally-insured U.S. bank, thrift institution, or credit union, provided the funds are earning interest at rates that are commercially reasonable; or
(ii) With a broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a
(2) Funds held or placed in a blocked account pursuant to paragraph (a) of this section may not be invested in instruments the maturity of which exceeds 180 days.
(c) For purposes of this section, a rate is commercially reasonable if it is the rate currently offered to other depositors on deposits or instruments of comparable size and maturity.
(d) For purposes of this section, if interest is credited to a separate blocked account or subaccount, the name of the account party on each account must be the same.
(e) Blocked funds held in instruments the maturity of which exceeds 180 days at the time the funds become subject to § 578.201 may continue to be held until maturity in the original instrument, provided any interest, earnings, or other proceeds derived therefrom are paid into a blocked interest-bearing account in accordance with paragraphs (a) or (f) of this section.
(f) Blocked funds held in accounts or instruments outside the United States at the time the funds become subject to § 578.201 may continue to be held in the same type of accounts or instruments, provided the funds earn interest at rates that are commercially reasonable.
(g) This section does not create an affirmative obligation for the holder of blocked tangible property, such as chattels or real estate, or of other blocked property, such as debt or equity
(h) Funds subject to this section may not be held, invested, or reinvested in a manner that provides immediate financial or economic benefit or access to any person whose property and interests in property are blocked pursuant to § 578.201, nor may their holder cooperate in or facilitate the pledging or other attempted use as collateral of blocked funds or other assets.
(a) Except as otherwise authorized, and notwithstanding the existence of any rights or obligations conferred or imposed by any international agreement or contract entered into or any license or permit granted prior to the effective date, all expenses incident to the maintenance of physical property blocked pursuant to § 578.201 shall be the responsibility of the owners or operators of such property, which expenses shall not be met from blocked funds.
(b) Property blocked pursuant to § 578.201 may, in the discretion of OFAC, be sold or liquidated and the net proceeds placed in a blocked interest-bearing account in the name of the owner of the property.
The definitions in this subpart apply throughout the entire part.
The terms
See § 578.406 concerning the blocked status of property and interests in property of an entity that is 50 percent or more owned by persons whose property and interests in property are blocked pursuant to § 578.201.
The term
The term
The term
Except as otherwise provided in this part, the term
(a) Except as otherwise provided in this part, the term
(b) The term
(c) The term
The term
The term
The terms
The term
The term
The term
The term
Unless otherwise specifically provided, any amendment, modification, or revocation of any provision in or appendix to this part or chapter or of any order, regulation, ruling, instruction, or license issued by OFAC does not affect any act done or omitted, or any civil or criminal proceeding commenced or pending, prior to such amendment, modification, or revocation. All penalties, forfeitures, and liabilities under any such order, regulation, ruling, instruction, or license continue and may be enforced as if such amendment, modification, or revocation had not been made.
(a) Whenever a transaction licensed or authorized by or pursuant to this part results in the transfer of property (including any property interest) away from a person whose property and interests in property are blocked pursuant to § 578.201, such property shall no longer be deemed to be property blocked pursuant to § 578.201, unless there exists in the property another interest that is blocked pursuant to § 578.201, the transfer of which has not been effected pursuant to license or other authorization.
(b) Unless otherwise specifically provided in a license or other authorization issued pursuant to this part, if property (including any property interest) is transferred or attempted to be transferred to a person whose property and interests in property are blocked pursuant to § 578.201, such property shall be deemed to be property in which such a person has an interest and therefore blocked.
Any transaction ordinarily incident to a licensed transaction and necessary to give effect thereto is also authorized, except:
(a) An ordinarily incident transaction, not explicitly authorized within the terms of the license, by or with a person whose property and interests in property are blocked pursuant to § 578.201; or
(b) An ordinarily incident transaction, not explicitly authorized within the terms of the license, involving a debit to a blocked account or a transfer of blocked property.
A setoff against blocked property (including a blocked account), whether by a U.S. bank or other U.S. person, is a prohibited transfer under § 578.201 if effected after the effective date.
Persons whose property and interests in property are blocked pursuant to § 578.201 have an interest in all property and interests in property of an entity in which such blocked persons own, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest. The property and interests in property of such an entity, therefore, are blocked, and such an entity is a person whose property and interests in property are blocked pursuant to § 578.201, regardless of whether the name of the entity is incorporated into OFAC's Specially Designated Nationals and Blocked Persons List (SDN List).
For provisions relating to licensing procedures, see part 501, subpart E of this chapter. Licensing actions taken pursuant to part 501 of this chapter with respect to the prohibitions contained in this part are considered actions taken pursuant to this part. General licenses and statements of licensing policy relating to this part also may be available through the Cyber-Related sanctions page on OFAC's Web site:
OFAC reserves the right to exclude any person, property, transaction, or class thereof from the operation of any license or from the privileges conferred by any license. OFAC also reserves the right to restrict the applicability of any license to particular persons, property, transactions, or classes thereof. Such actions are binding upon actual or constructive notice of the exclusions or restrictions.
Any payment of funds or transfer of credit in which a person whose property and interests in property are blocked pursuant to § 578.201 has any interest that comes within the possession or control of a U.S. financial institution must be blocked in an account on the books of that financial institution. A transfer of funds or credit by a U.S. financial institution between blocked accounts in its branches or offices is authorized, provided that no transfer is made from an account within the
(a) A U.S. financial institution is authorized to debit any blocked account held at that financial institution in payment or reimbursement for normal service charges owed it by the owner of that blocked account.
(b) As used in this section, the term
(a) The provision of the following legal services to or on behalf of persons whose property and interests in property are blocked pursuant to § 578.201 or any further Executive orders relating to the national emergency declared in Executive Order 13694 of April 1, 2015, is authorized, provided that receipt of payment of professional fees and reimbursement of incurred expenses must be specifically licensed, authorized pursuant to § 578.507, which authorizes certain payments for legal services from funds originating outside the United States, or otherwise authorized pursuant to this part:
(1) Provision of legal advice and counseling on the requirements of and compliance with the laws of the United States or any jurisdiction within the United States, provided that such advice and counseling are not provided to facilitate transactions in violation of this part;
(2) Representation of persons named as defendants in or otherwise made parties to legal, arbitration, or administrative proceedings before any U.S. federal, state, or local court or agency;
(3) Initiation and conduct of legal, arbitration, or administrative proceedings before any U.S. federal, state, or local court or agency;
(4) Representation of persons before any U.S. federal, state, or local court or agency with respect to the imposition, administration, or enforcement of U.S. sanctions against such persons; and
(5) Provision of legal services in any other context in which prevailing U.S. law requires access to legal counsel at public expense.
(b) The provision of any other legal services to persons whose property and interests in property are blocked pursuant to § 578.201 or any further Executive orders relating to the national emergency declared in Executive Order 13694 of April 1, 2015, not otherwise authorized in this part, requires the issuance of a specific license.
(c) Entry into a settlement agreement or the enforcement of any lien, judgment, arbitral award, decree, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to § 578.201 or any further Executive orders relating to the national emergency declared in Executive Order 13694 of April 1, 2015, is prohibited unless licensed pursuant to this part.
U.S. persons seeking administrative reconsideration or judicial review of their designation or the blocking of their property and interests in property may apply for a specific license from OFAC to authorize the release of a limited amount of blocked funds for the payment of legal fees where alternative funding sources are not available. For more information, see OFAC's
(a) Receipts of payment of professional fees and reimbursement of incurred expenses for the provision of legal services authorized pursuant to § 578.506(a) to or on behalf of any person whose property and interests in property are blocked pursuant to § 578.201 or any further Executive orders relating to the national emergency declared in Executive Order 13694, of April 1, 2015, are authorized from funds originating outside the United States, provided that the funds received by U.S. persons as payment of professional fees and reimbursement of incurred expenses for the provision of legal services authorized pursuant to § 578.506(a) do not originate from:
(1) A source within the United States;
(2) Any source, wherever located, within the possession or control of a U.S. person; or
(3) Any individual or entity, other than the person on whose behalf the legal services authorized pursuant to § 578.506(a) are to be provided, whose property and interests in property are blocked pursuant to any part of this chapter or any Executive order.
This paragraph authorizes the blocked person on whose behalf the legal services authorized pursuant to § 578.506(a) are to be provided to make payments for authorized legal services using funds originating outside the United States that were not previously blocked. Nothing in this paragraph authorizes payments for legal services using funds in which any other person whose property and interests in property are blocked pursuant to § 578.201, any other part of this chapter, or any Executive order has an interest.
(b)
(i) The individual or entity from whom the funds originated and the amount of funds received; and
(ii) If applicable:
(A) The names of any individuals or entities providing related services to the U.S. person receiving payment in connection with authorized legal services, such as private investigators or expert witnesses;
(B) A general description of the services provided; and
(C) The amount of funds paid in connection with such services.
(2) The reports, which must reference this section, are to be mailed to: Licensing Division, Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW., Annex, Washington, DC 20220.
U.S. persons who receive payments in connection with legal services authorized pursuant to § 578.506(a) do not need to obtain specific authorization to contract for related services that are ordinarily incident to the provision of those legal services, such as those provided by private investigators or expert witnesses, or to pay for such services. Additionally, U.S. persons do not need to obtain specific authorization to provide related services that are ordinarily incident to the provision of legal services authorized pursuant to § 578.506(a).
The provision of nonscheduled emergency medical services in the United States to persons whose property and interests in property are blocked pursuant to § 578.201 or any further Executive orders relating to the national emergency declared in Executive Order 13694 of April 1, 2015 and all receipt of payment for such services are authorized.
Any action that the Secretary of the Treasury is authorized to take pursuant to Executive Order 13694 of April 1, 2015, and any further Executive orders relating to the national emergency declared therein, may be taken by the Director of OFAC or by any other person to whom the Secretary of the Treasury has delegated authority so to act.
For approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) of information collections relating to recordkeeping and reporting requirements, licensing procedures (including those pursuant to statements of licensing policy), and other procedures, see § 501.901 of this chapter. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701
I, BARACK OBAMA, President of the United States of America, find that the increasing prevalence and severity of malicious cyber-enabled activities originating from, or directed by persons located, in whole or in substantial part, outside the United States constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. I hereby declare a national emergency to deal with this threat.
Accordingly, I hereby order:
(i) any person determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State, to be responsible for or complicit in, or to have engaged in, directly or indirectly, cyber-enabled activities originating from, or directed by persons located, in whole or in substantial part, outside the United States that are reasonably likely to result in, or have materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States and that have the purpose or effect of:
(A) harming, or otherwise significantly compromising the provision of services by, a computer or network of computers that support one or more entities in a critical infrastructure sector;
(B) significantly compromising the provision of services by one or more entities in a critical infrastructure sector;
(C) causing a significant disruption to the availability of a computer or network of computers; or
(D) causing a significant misappropriation of funds or economic resources, trade secrets, personal identifiers, or financial information for commercial or competitive advantage or private financial gain; or
(ii) any person determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State:
(A) to be responsible for or complicit in, or to have engaged in, the receipt or use for commercial or competitive advantage or private financial gain, or by a commercial entity, outside the United States of trade secrets misappropriated through cyber-enabled means, knowing they have been misappropriated, where the misappropriation of such trade secrets is reasonably likely to result in, or has materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States;
(B) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, any activity described in subsections (a)(i) or (a)(ii)(A) of this section or any person whose property and interests in property are blocked pursuant to this order;
(C) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order; or
(D) to have attempted to engage in any of the activities described in subsections (a)(i) and (a)(ii)(A)-(C) of this section.
(b) The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.
(a) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and
(b) the receipt of any contribution or provision of funds, goods, or services from any such person.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
(a) the term “person” means an individual or entity;
(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States;
(d) the term “critical infrastructure sector” means any of the designated critical infrastructure sectors identified in Presidential Policy Directive 21; and
(e) the term “misappropriation” includes any taking or obtaining by improper means, without permission or consent, or under false pretenses.
Dated: December 16, 2015.
Office of the Under Secretary of Defense for Personnel and Readiness, DoD.
Final rule.
This rule establishes policy, assigns responsibilities, and prescribes procedures for DoD oversight of the Service academies (referred to in this rule as “the academies”). It implements the United States Code for the establishment and operation of the United States Military Academy, the United States Naval Academy, and the United States Air Force Academy.
Lt. Col. Keithen Washington, 703 695-5529.
a. Purpose. This rule provides required updates to DoD policy and procedures because some policy changes and court decisions have had a great impact on the eligibility of potential applicants' entry into a military academy. All language addressing homosexuality, homosexual acts, homosexual statements and homosexual marriage has been removed in accordance with the December 22, 2010 repeal of Don't Ask, Don't Tell policy, which opened military service to homosexuals, and the subsequent United States v. Windsor decision (570 U.S. 12, 133 S. Ct. 2675 (2013), 1 U.S.C. 7; 28 U.S.C. 1738c) which found section 3 of the Defense of Marriage Act (DOMA) unconstitutional. By removing all references to homosexual conduct, acts or marriage as grounds for discharge, otherwise qualified applicants are now free to apply and enroll in a military academy without prejudice or fear of reprisal regardless of their sexual orientation. This rule is required immediately to remove any legal and policy restrictions which would prevent a potential applicant from entry into a military academy based solely on their sexual orientation.
Additionally, the academies must attract, recruit and retain high achieving citizens who are pursuing undergraduate degrees critical to the DoD's national security mission. A highly qualified and diverse pool of citizens is needed to replenish and fortify DoD's workforce. The academies finance higher education and provide opportunities to individuals who may not otherwise have the means nor the opportunity to pursue. Furthermore, because the Military Services provide critical national security, providing them with a skilled and talented workforce is vitally necessary to defend the United States. Updating these policies and procedures is vital to the DoD meeting its mission to man an all-volunteer force with qualified citizens.
b. Succinct statement of legal authority for the regulatory action.
10 U.S.C. Chapters 403, 603, and 903.
The academies annually provide newly commissioned officers to each Service who have been immersed in the history, traditions, and professional values of the Military Services and developed to be leaders of character, dedicated to a career of professional excellence in service to the Nation. The accession of these officers generates a core group of innovative leaders capable of thinking critically who will exert positive peer influence to convey and sustain these traditions, attitudes, values, and beliefs essential to the long-term readiness and success of the Military Services.
Administrative costs are negligible and the benefits would be clear, concise rules that enable the Secretary of Defense to ensure that the Service Academies operate efficiently and meet the needs of the armed forces.
This rule is part of DoD's retrospective plan, completed in August 2011, under Executive Order 13563, “Improving Regulation and Regulatory Review,” DoD's full plan and updates can be accessed at:
Notice and comment are not required for this rule under the Administrative Procedure Act because, as the rule establishes policy, assigns responsibility, and prescribes procedures for DoD oversight of the academies, it directly relates to a military function of the United States (See 5 U.S.C. 553(a)(1)). However, DoD previously published a proposed rule on October 18, 2007 (72 FR 59053-59064), but that version was never finalized. One public comment was received that was provided as a means for improvement.
(1) Language addressing foreign students has been included and/or clarified.
(2) Language addressing homosexuality, homosexual acts, homosexual statements and homosexual marriage has been removed.
(3) For additional understanding and clarity, added a definition for excess leave.
(4) Reworded some language for clarity based on additional internal comments received.
Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB).
It has been determined that 32 CFR part 217 does not contain a Federal mandate that may result in expenditure by State, local and tribal governments, in aggregate, or by the private sector, of $100 million or more in any one year.
It has been certified that 32 CFR part 217 is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities.
This rule does not add any new information or reporting requirements. Existing collections approved under OMB Control Number 0701-0026, “Nomination for Appointment to the United States Military Academy, Naval Academy, and Air Force Academy,” will be used. The Department will continue to review its processes to identify additional collection instruments and consider how these collection tools may be improved and make revisions accordingly. We welcome your comments on how you think we can improve on our information collection activities that are expiring and scheduled for extension and/or revision.
It has been determined that 32 CFR part 217 does not have federalism implications, as set forth in Executive Order 13132. This rule does not have substantial direct effects on:
(1) The States;
(2) The relationship between the National Government and the States; or
(3) The distribution of power and responsibilities among the various levels of Government.
Colleges and universities, Education.
Accordingly 32 CFR part 217 is added to read as follows:
10 U.S.C. Chapters 403, 603, and 903.
This part establishes policy, assigns responsibilities, and prescribes procedures for DoD oversight of the Service academies (referred to in this part as “the academies”).
This part applies to Office of the Secretary of Defense, the Military Departments, the Office of the Chairman of the Joint Chiefs of Staff and the Joint Staff, the combatant commands, the Office of the Inspector General of the Department of Defense (IG DoD), the Defense Agencies, the DoD Field Activities, and all other organizational entities within the DoD (referred to collectively in this part as the “DoD Components”).
These terms and their definitions are for the purposes of this part.
It is DoD policy, pursuant to 10 U.S.C. chapters 403, 603, and 903 and consistent with this part, that:
(a) The academies provide, each year, newly commissioned officers to each Service that have been immersed in the history, traditions, and professional values of the Military Services and developed to be leaders of character, dedicated to a career of professional excellence in service to the Nation.
(b) The accession of those officers generates a core group of innovative leaders capable of thinking critically who will exert positive peer influence to convey and sustain these traditions, attitudes, values, and beliefs essential to the long-term readiness and success of the Military Services.
(c) Active duty service is the primary means of reimbursement for education.
(d) Cadets and midshipmen disenrolling or those disenrolled after the beginning of the third academic year from a Service academy normally will be called to active duty in enlisted status, if fit for service.
(a) The Under Secretary of Defense for Personnel and Readiness (USD(P&R)):
(1) Serves as the DoD focal point for matters affecting the academies.
(2) Provides DoD oversight and management of the academies.
(b) Under the authority, direction, and control of the USD(P&R), the ASD(M&RA):
(1) Serves as the OUSD(P&R) focal point for matters affecting the academies and resolves matters of conflict that may arise among the Military Departments.
(2) Assesses and monitors academy operations to ensure cost-effective employment of resources in the accomplishment of the academies' mission.
(3) Develops policy and provides guidance for DoD oversight and management of the academies.
(4) Develops overall DoD policy and provides guidance for the conduct and administration of a uniform academy disenrollment policy.
(5) Approves or disapproves requests to exceed the foreign student limitation from a single country provision in § 217.6(d)(2).
(6) Approves or disapproves requests to release a cadet or midshipman prior to the completion of 2 years of active service.
(c) Under the authority, direction, and control of the USD(P&R), the Assistant Secretary of Defense for Health Affairs (ASD(HA)) establishes medical standards for applicants to the academies that are applied through the DoD Medical Examination Review Board, according to DoD Directive 5154.25E, “DoD Medical Examination Review Board” (available at
(d) The Under Secretary of Defense for Policy (USD(P)):
(1) Oversees the management of admission vacancies for foreign students.
(2) Designates countries from which foreign students may be selected.
(3) Issues implementing guidance as necessary, including waiver of tuition or fees reimbursement either wholly or partially for management of admission vacancies for foreign students.
(e) The USD(C)/CFO establishes and publishes the tuition rate for foreign students.
(f) Under the authority, direction, and control of the USD(C)/CFO and with the coordination of the superintendents of the academies, the Director, Defense Finance and Accounting Service (DFAS), is responsible for billing and collecting reimbursements due to the academies for foreign students, except when those reimbursements have been waived by the USD(P).
(g) The IG DoD evaluates programs, as set forth in DoD Directive 5106.01, “Inspector General of the Department of Defense” (available at
(h) The Secretaries of the Military Departments:
(1) Establish and maintain a military academy pursuant to 10 U.S.C. chapters 33, 47, 61, 403, 603, and 903 and 10 U.S.C. 702 and 2005 and this part. 10 U.S.C. chapter 47 is also known and referred to in this part as “The Uniform Code of Military Justice (UCMJ),” as amended.
(2) Ensure appropriate oversight and management of the academies.
(3) Develop quantified performance goals and measures, linked with the schools' mission statements to annually evaluate the performance of the academies and preparatory schools.
(4) Prescribe a written agreement when providing an academy appointment to U.S. candidates who agree to conditions in § 217.6(f) and are otherwise qualified.
(5) Prescribe regulations on:
(i) A breach of a cadet's or midshipman's “agreement to serve” for the purpose of ordering that individual to active duty.
(ii) Procedures for determining whether such a breach has occurred.
(iii) Standards for determining the period of time for which a person may be ordered to serve on active duty according to § 217.6(j). (See also 10 U.S.C. 4348(c), 6959(c), and 9348(c).
(6) Work with the Director, DFAS, to establish and maintain jointly developed, uniform accounting procedures for determining the cost of education at their respective academies. These procedures must be consistent with Chapter 6 of Volume 11A of DoD 7000.14-R, “Department of Defense Financial Management Regulation” (available at
(i) Establish an accounts receivable for the cost of education when a cadet or midshipman disenrolls or is disenrolled from an academy.
(ii) Reduce the accounts receivable proportionately to the period of active duty served by the disenrolled cadets or midshipmen.
(7) Prescribe the repayment procedures of an individual's outstanding debt so that the total amount due—based on 37 U.S.C. 303a, monthly repayment schedules, repayment method, and other information—clearly will be explained in writing to the debtor.
(8) Ensure that proper credit management and debt collection procedures are followed pursuant to chapters 28-32 of Volume 5, and chapters 38 and 50 of Volume 7A of DoD 7000.14-R (available at
(9) Develop an organizational capability to collect, maintain, and submit information on resources in support of an academy, the academy preparatory school, and any other associated training programs.
(a)
(b)
(2) Incumbents of dean, director of admissions, and permanent professorships held by military personnel will be appointed by the President of the United States by and with the advice and consent of the Senate. The superintendent and the commandant will be detailed to those positions by the President.
(3) The immediate governance of the academies is by their superintendents, who also will serve as the commanding officers of the academies and their military posts.
(4) The superintendent is responsible for the day-to-day operation of the academy as well as the welfare of cadets or midshipmen and staff.
(5) The dean of the faculty of the academy directs and manages the development and execution of an undergraduate curriculum that recognizes the requirement for graduates to understand technology, while gaining a sound historical perspective and an understanding of different cultures. The curriculum will be broadly based in the physical and social sciences, the study of languages and cultures in areas in which the DoD is engaged, and the arts and humanities.
(6) The commandant directs and manages military education and training programs and exercises command over cadets or midshipmen, as established by law and determined by the superintendent.
(7) The director of athletics directs and manages the intercollegiate athletic programs and other physical fitness programs, as determined by the superintendent. Intercollegiate athletic programs will be in full compliance with all applicable National Collegiate Athletics Association rules and requirements while maintaining the professional and ethical values of the Services.
(8) The academic faculty will consist of civilian and military members in proportions determined by the Secretary of the Military Department concerned. Faculty members will possess a mix of operational experience, academic expertise, and teaching ability. They:
(i) Exemplify the highest standards of ethical and moral conduct and performance established by the Secretaries of the Military Departments concerned, and the superintendents concerned, consistent with this part.
(ii) Participate in the full spectrum of academy programs and activities and the development of their curriculum.
(iii) Actively participate in the professional, moral, and ethical development of cadets and midshipmen as role models, mentors, and through the enforcement of standards of behavior and conduct.
(9) Service members will conduct themselves in accordance with the requirement of exemplary conduct as specified in 10 U.S.C. 3583, 5947, and 8583.
(10) The superintendent will ensure that noninstructional staff consists of the minimum number of people consistent with effective achievement of the objectives of the academy and its military post.
(11) Compensation and benefits for civilian faculty members will be sufficiently competitive to achieve academic excellence at pay levels determined by the Secretary of the Military Department concerned.
(12) Additional guidance about organization of the academies is in 10 U.S.C. chapters 403, 603, and 903.
(c)
(2) U.S. cadets and midshipmen will be appointed by the President alone. An appointment is conditional until the cadet or midshipman is admitted.
(3) Appointments will be offered on a competitive basis to nominated
(4) Those selected for appointment must have demonstrated, through evaluations prescribed by the Secretary of the Military Department concerned:
(i) High standards of moral character, personal conduct, and integrity.
(ii) The potential to successfully complete the program of instruction.
(iii) An acceptable level of physical fitness.
(iv) Medical qualification for appointments to the academies and for commissioning as required in 10 U.S.C. chapter 33 and further delineated through examination procedures defined in DoD Directive 5154.25E and medical standards defined in DoD Instruction 6130.03, “Physical Standards for Appointment, Enlistment, or Induction in the Military Services” (available at
(5) Specific eligibility criteria also guide selection:
(i)
(ii)
(iii)
(iv)
(v)
(6) The academies will work to ensure timely medical evaluations of applicants. Issues relating to the administrative management of those evaluations that are not resolved to the satisfaction of the academies and the activity performing the evaluation will be forwarded to the ASD(M&RA) for resolution.
(7) To be admitted to an academy, U.S. appointees must take and subscribe to an oath prescribed by law or by the Secretary of the Military Department concerned. If a U.S. candidate for admission refuses to take and subscribe to the prescribed oath, the appointment is terminated.
(d)
(i) Although not eligible for a formal appointment, foreign students admitted to the academies for a course of study will be called cadets and midshipmen, will be accountable to policies and procedures that govern attendance, and are entitled to the equivalent pay and allowances of a cadet or midshipmen appointed from the United States, and from the same appropriation.
(ii) Foreign students will not take the oath addressed in paragraph (c)(7) of this section, are at no time considered to be serving in any status in the Military Services, and will not be eligible for nor offered a commission in the Military Services upon satisfactory completion of their academy course of study nor eligible to be called to active duty if disenrolled.
(2) Not more than three foreign students from a single country may be enrolled at a single academy without ASD(M&RA) approval. Requests for such approval will be submitted by the Secretary of the Military Department concerned, through the USD(P) to the ASD(M&RA). The enrollment restriction does not apply to students participating in exchange programs of up to two semesters' duration.
(3) By the end of May of each year, the USD(C)/CFO will establish the tuition rate for the succeeding school year and publish that rate to the Secretaries of the Military Departments, the USD(P), and the ASD(M&RA).
(4) By the end of June of each year, the USD(P) will publish a list of countries eligible to send students to the academies during the subsequent academic year, specifying reimbursement requirements. That list will be provided to the Secretaries of the Military Departments, the ASD(M&RA), and the responsible U.S. Defense Attaché Offices (USDAOs) or the American embassies, if no servicing USDAO exists.
(5) By the end of August of each year, the superintendent of each academy will extend application invitations, through applicable USDAOs (or the American embassies), to each eligible country. Those invitations will describe admissions procedures and define the country's official sponsorship responsibilities.
(6) The superintendent will manage the selection and notification of candidates and, with the assistance of the applicable USDAO or American embassy, obtain written acknowledgment from the sending government of sponsorship responsibilities and their agreement to reimburse tuition costs, when applicable.
(7) Questions on enrollment or reimbursement will be forwarded to the ASD(M&RA), for resolution with the USD(P).
(e)
(2) The normal course of instruction at an academy is 4 years, with selected promising cadets or midshipmen pursuing longer terms when required to meet academy educational or other graduation requirements. The Secretaries of the Military Departments will arrange the course of instruction so that cadets or midshipmen are not required to attend classes on Sunday.
(3) Besides academic preparation, each academy will provide for development of military and leadership skills and physical fitness.
(4) The practice of hazing is prohibited by Department policy and law (see 10 U.S.C. 4352, 6964, and 9352).
(5) An important component in the growth of cadets or midshipmen is the leadership development system. Its purpose is to motivate graduates to seek leadership responsibilities and enable them to think clearly, decide wisely, and act decisively under pressure and in a variety of leadership situations. The leadership development system will be based on:
(i) Positive leadership, equal opportunity, and respect for one another's values, beliefs, and personal dignity.
(ii) Elimination of dysfunctional stress. The Secretaries of the Military Departments concerned and superintendents determine knowledge requirements and procedures for the development and indoctrination of cadets and midshipmen. Memorization
(iii) Emphasis on proper bearing, fitness, and posture. These are important to effective leadership and contribute to overall well-being. Exaggerated forms of posture, speech, or movement generally do not constitute proper military bearing. Establishment of such requirements will be closely monitored by the academies and used only with the knowledge and approval of the superintendents.
(iv) Positive role models; opportunities to learn, practice, and receive feedback; and access to support. Direct support to leadership development will be provided by concurrent and relevant coursework, athletic competition, and hands-on experience to show the relationship between theories of leadership in the classroom and practice of leadership outside the classroom.
(6) The highest ethical and moral standards are expected of the officer corps. The honor systems of the academies will support that expectation by enforcing adherence to standards of behavior embodied in the honor codes or concepts of the academies. Violations of honor standards may constitute a basis for disenrollment.
(f)
(2) Cadet and midshipman pay is prescribed by 37 U.S.C. 203(c).
(3) Cadets and midshipmen will meet medical accession standards outlined in paragraph (c)(4)(iv) of this section.
(4) As a condition for providing education at an academy, the Secretary of the Military Department concerned will require that each U.S. cadet or midshipman enter into a written agreement in which he or she agrees:
(i) To complete the course of instruction for graduation specified in the agreement to accept an appointment as a commissioned officer, if tendered, and to serve on active duty for a period specified in the agreement if called to active duty or, at the option of the Secretary of the Military Department concerned, to reimburse the United States for the amount specified by the Secretary of Military Department concerned, as prescribed in this section.
(ii) That if such cadet or midshipman fails to complete the educational requirements specified in the agreement, such person, if so ordered by the Secretary of the Military Department concerned, will serve on active duty for a period specified in the agreement.
(iii) That if such person fails to complete the period of active duty specified in the agreement, he or she will reimburse the United States for the amount specified by the Secretary of the Military Department concerned in accordance with the requirements of 10 U.S.C. 2005 and 37 U.S.C. 303a.
(iv) To such other terms and conditions as the Secretary of the Military Department concerned may prescribe to protect U.S. interests.
(5) An obligation to repay the United States under this section is, for all purposes, a debt owed the United States. A discharge in bankruptcy under Title 11 U.S.C. does not discharge a person from such debt if the discharge order is entered less than 5 years after:
(i) The date of the termination of the agreement or contract on which the debt is based; or
(ii) In the absence of such agreement or contract, the date of the termination of the service on which the debt is based.
(6) The sustainment of high performance standards ensures that cadets and midshipmen who are unwilling or unable to successfully complete the program of instruction at the academy are identified quickly. As defined by the Military Department concerned, cadets or midshipmen who are identified as “deficient” in conduct, studies, or physical fitness, and disenrolled from any academy may not, unless recommended by an academic or academy board, be returned or reappointed to an academy. Those cadets or midshipmen selected for return will be reappointed consistent with the criteria prescribed by the board.
(i) Individuals failing to complete the required course of academy instruction (including disenrollment for academics, conduct, honor code violations, or physical deficiency) will be disenrolled.
(ii) If an appointment is terminated before graduation due to a U.S. cadet's or midshipman's breaching his or her agreement, or if a U.S. cadet or midshipman refuses to accept a commission following graduation, the 8 year MSO will be fulfilled by the period for which the member is ordered to serve on active duty or in the Reserve Component in an applicable enlisted status. He or she may be ordered to active duty for a period not to exceed 4 years under 10 U.S.C. 4348(b), 6959(b), or 9348(b). Policies that apply to U.S. cadets or midshipmen disenrolled from an academy who entered the academy directly from civilian status are:
(A) Fourth and Third Classmen (First and Second Years). A fourth or third classman disenrolled will retain their MSO in accordance with 10 U.S.C. chapter 47 and DoD Instruction 1304.25 but have no active duty service obligation (ADSO).
(B) Second Classmen (Third Year). A second classman resigning before the start of the second class academic year or disenrolled for cause resulting from actions that occurred only before the start of the second class academic year will be discharged as if he or she were a third classman.
(C) Second or First Classmen (Third and Fourth or Subsequent Years). Any second or first classman who is disenrolled and who is not suited for enlisted Military Service for reasons of demonstrated unsuitability, unfitness, or physical disqualification, will be discharged in accordance with the current Military Service regulations that implement this part, to include monetary recoupment. Other second or first class cadets and midshipmen disenrolled after the beginning of the second class academic year, but before completing the course of instruction, may be transferred to the Reserve Component in an enlisted status and ordered to active duty for not less than 2 years, but not more than 4 years and incur an MSO, in accordance with 10 U.S.C. 4348(b), 6959(b), or 9348(b).
(D) First Classman (Declining Appointment). Any first classman completing the course of instruction and declining to accept an appointment as a commissioned officer may be transferred to the respective Reserve Component in an enlisted status and ordered to active duty for 4 years and incurs a MSO in accordance with 10 U.S.C. 4348(b), 6959(b), and 9348(b) and DoD Directive 1235.10, “Activation, Mobilization, and Demobilization of the Ready Reserve” (available at
(iii) The disposition of cadets and midshipmen entering an academy from the Regular or Reserve Component of any Military Service (except those who enter an academy by way of its preparatory school from civilian status) and then not completing the program will be determined in accordance with 10 U.S.C. 516:
(A) Fourth and Third Classmen (First and Second Years). If disenrolled during the fourth or third class year, the cadet's or midshipman's Military Service commitment will be equal to the time
(B) Second Classmen (Third Year). If disenrolled before the beginning of the second class academic year, the cadet's or midshipman's Military Service commitment will be the same as in paragraph (f)(6)(iii)(C) of this section.
(C) Second or First Classmen (Third and Fourth or Subsequent Years). If first and second classmen are disenrolled for issues occurring after the beginning of the second class academic year, their Military Service commitment will be the same as in paragraphs (f)(6)(ii)(C) and (D) of this section, as appropriate, or will be equal to the time not served on the original enlistment contract (with all service as a cadet or midshipman counted as service under that contract), whichever period is longer.
(D) Disenrolled Cadets or Midshipmen not Suited for Enlisted Military Service. A cadet or midshipman who entered into an academy from the Regular or Reserve Component of a Military Service who is subsequently disenrolled from an academy and is not suited for enlisted Military Service because of demonstrated unsuitability, unfitness, or physical disqualification, will be discharged in accordance with DoD Instruction 1332.14, “Enlisted Administrative Separations” (available at
(E) Military Grade of Disenrolled Cadets or Midshipmen Transferred to the Reserve Component or Active Duty. Whether transferred to the Reserve Component or reverted back to active duty status, the disenrolled cadets and midshipmen retain their prior enlisted grade. However, in no case will the cadet or midshipman be transferred to the Reserve Component in a grade lower than would a similarly situated cadet or midshipman who entered the academy from a civilian status.
(iv) The disposition of U.S. cadets and midshipmen entering an academy by way of its preparatory school from civilian status and then not completing the program will be managed in accordance with paragraph (f)(6)(ii) through (iv) of this section.
(v) A cadet or midshipman tendering a resignation will be required to state a reason for this action. A resignation may be accepted when in the interest of the Military Service. Accepting the resignation will not in and of itself constitute a determination of the U.S. cadet's or midshipman's qualification for enlisted Military Service.
(vi) U.S. cadets or midshipmen who are not ordered to active duty due to their misconduct or unsuitability, or because their petition for relief from an active duty obligation was approved by the Secretary of the Military Department concerned, must reimburse the United States in accordance with the requirements of 10 U.S.C. 2005 and 37 U.S.C. 303a for education costs commensurate with time spent at the academy. The Secretary of the Military Department concerned may remit or cancel any part of the indebtedness of a cadet or midshipman to the United States. There may be circumstances when neither Active Duty nor reimbursement is appropriate. The Secretaries of the Military Departments will carefully review the circumstances to determine whether waiving Active Duty or reimbursement is consistent with existing statutory requirements, personnel policies or management objectives, equity and good conscience, and is in the best interest of the United States. Such circumstances may include, but are not limited to, a cadet's or midshipman's death, illness, injury, or other impairment that is not the result of the cadet's or midshipman's misconduct; or needs of the Service.
(vii) Change in Status Notification. When a U.S. cadet or midshipman is disenrolled from an academy and discharged from the Service concerned, the Selective Service System will be notified by the Military Department of the individual's status change.
(viii) Dependency Disenrollment or Resignation. U.S. cadets or midshipman who resign or are disenrolled for violation of the dependency policy may request transfer to the Reserve Officer Training Corps (ROTC). Approval and method of transfer is at the discretion of the Secretary of the Military Departments concerned. Cadets and midshipmen who are approved to transfer to ROTC, graduate, receive a commission, and fulfill their Active Duty Service Obligation (ADSO) are not subject to reimbursement as outlined in this section.
(ix) Disenrollment of cadets and midshipmen for medical disqualification.
(A) Persons separated for being medically disqualified from further Military Service will be separated and will not be obligated for further Military Service or for reimbursing education costs in accordance paragraph (f)(6)(vi) of this section.
(B) Persons separated for reasons in addition to being medically disqualified from further Military Service may be obligated for reimbursing education costs at the discretion of the Military Department concerned.
(C) Cadets and midshipmen who become medically disqualified for appointment (including pregnancy) as a commissioned officer during their senior year, who otherwise would be qualified to complete the course of instruction and be appointed as a commissioned officer, and who are capable of completing the academic course of instruction with their peers, may be permitted by the Secretary of the Military Department concerned to complete the academic course of instruction with award of an academic credential determined by the Secretary of the Military Department concerned.
(D) Pursuant to 10 U.S.C. 1217, when the Secretary of the Military Department concerned determines that a U.S. cadet or midshipman is medically disqualified for appointment as a commissioned officer due to injury, illness, or disease aggravated or incurred in the line of duty while entitled to cadet or midshipman pay, the Secretary may retire the cadet or midshipman with retired pay in accordance with 10 U.S.C. chapter 61.
(g)
(2) Graduation leave will be administered in accordance with 10 U.S.C. 702.
(3) Officers appointed from cadet or midshipman status will not be voluntarily released from active duty principally to pursue a professional sports activity with the potential of public affairs or recruiting benefit to the DoD during the initial 2 years of active commissioned service. A waiver to release a cadet or midshipman prior to the completion of 2 years of active service must be approved by the ASD(M&RA). Exceptional personnel with unique talents and abilities may be authorized excess leave or be released from active duty and transferred to the Selective Reserve after completing 2 years of active commissioned service
(i)
(ii)
(A) Remain subject to recall to active duty.
(B) Be in good standing, to include meeting all physical fitness requirements and standards.
(C) Have secured an actual contract or binding commitment with a professional team or organization guaranteeing the opportunity to pursue an activity with potential recruiting benefits as described.
(D) Acknowledge that time served in excess leave will not be used to satisfy an existing ADSO.
(iii)
(A) Have served 24 months of the original ADSO.
(B) Be in good standing, to include meeting all physical fitness requirements and standards.
(C) Have secured an actual contract or binding commitment with a professional sports team or organization guaranteeing the opportunity to pursue an activity with potential recruiting benefits as described.
(D) Be assigned to a Selected Reserve unit and meet normal retention requirements based on minimum participation standards in accordance with 10 U.S.C. 10147 and 10148, and be subject to immediate involuntary recall for any reason to complete the period of active duty from which early release was granted.
(E) Acknowledge that the officer is subject to monetary repayment of educational benefits at a prorated share based on the period of unfulfilled ADSO, and that such recoupment is in addition to the two-for-one Selected Reserve obligation required in paragraph (g)(3)(iii)(F) of this section. Officers subject to recoupment under the provisions of 10 U.S.C. 2005 for receipt of advanced education assistance must reimburse the United States a pro-rata share of the cost of their advanced education assistance based on the period of unfulfilled active duty service.
(F) Agree that, in the event that the officer is no longer under a contract or binding agreement with a professional sports team or organization, the officer will either return to active duty to complete the remaining ADSO, or continue in the Selected Reserve for a period of not less than two times the length of their remaining ADSO, as determined by their Service.
(4) At the discretion of the Secretary of the Military Department concerned, first class cadets or midshipmen not medically qualified for commissioning may be placed on limited duty status, as defined by the Military Department concerned, for up to 1 year until medical commissioning requirements of this section and the Military Service are met. If all requirements are met, the cadet or midshipmen may be commissioned. If these requirements are not met, the cadet or midshipmen will be disenrolled subject to recoupment as discussed in paragraph (f)(6)(ii)(C) and (f)(6)(ix) of this section.
(h)
(i) Each school's programs of instruction will focus on academic preparation and on those areas of personal and physical preparation that reflect the mission of both the academy and the Service concerned.
(ii) The core of the academy preparatory schools' mission statement will be “To motivate, prepare, and evaluate selected candidates in an academic, military, moral, and physical environment, to perform successfully at the ___ Academy.”
(2) Faculty members will possess academic expertise and teaching prowess. They will exemplify high standards of conduct and performance. Faculty members will be expected to participate in the full spectrum of the school's programs, to include providing leadership, exemplary conduct and moral behavior for cadet candidates and midshipmen candidates to emulate, as well as involvement in the development of curricular and extracurricular activities. Curriculum design will recognize academic preparation as the priority; associated programs will capitalize on economies and efficiencies.
(3) Preparatory school programs will provide tailored individual instruction to strengthen candidate abilities and to correct deficiencies in academic areas emphasized by the academies. Additionally, preparatory school programs will provide supplementary instruction in military orientation, physical development, athletics, leadership, character development, and other specific areas of interest determined by the Secretary of the Military Department concerned.
(i)
(2) Preparatory schools will establish quantified performance goals and measures, linked with the schools' mission statements to annually evaluate the performance of the preparatory schools. At a minimum, the metrics will include:
(i)
(ii)
(3) Boards of Visitors of the academies are established and procedures prescribed by 10 U.S.C. chapters 403, 603, and 903 to inquire into the efficiency and effectiveness of academy operations. The designated federal officer for each Board of Visitors will provide the ASD(M&RA) a copy of each report required by 10 U.S.C. chapter 47 within 60 days of the report's submission to the President.
(4) Oversight by the IG DoD will be provided in accordance with DoD Directive 5106.01 and the Inspector General Act of 1978. When required, the ASD(M&RA) recommends to the IG DoD any areas of academy operations that merit specific review during the subsequent fiscal year.
(5) Annual meetings of the superintendents will be hosted by the academies on a rotating basis and include the commandants, the deans, the directors of admissions and athletics, and others designated by the superintendents. Meeting attendees will discuss performance measures and other matters of collective interest. Meeting attendees will identify plans to address areas requiring corrective action. Following the meeting, the host superintendent will provide the ASD(M&RA) a summary of issues and actions discussed and each Service academy will provide an assessment of their respective service academy and preparatory school.
(j)
(2) Once all requirements for inter-Service appointments have been met, endorsements from the losing academy will contain the applicants' current academic transcripts, order of merit standing, record of physical fitness and, if applicable, results of the gaining Service's testing for flight training or other qualification. Applications supported by the losing Military Department will be forwarded to the gaining Military Department no later than November of the calendar year before graduation. The gaining Secretary of the Military Department concerned will act on applications no later than the end of December of the year prior to commissioning and will immediately notify the losing Secretary of the Military Department concerned of decisions. Affected cadets or midshipmen will be quickly notified of the disposition of applications.
(3) Those selected for transfer will be integrated within active duty lists of the gaining Military Service. When seniority on that list relies on academy class standing, they will be initially integrated immediately following the cadet or midshipman holding equal numerical class standing at the academy of the gaining Military Department.
(a)
(1)
(2)
(3)
(b)
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule, correction.
This document corrects technical and typographical errors that appeared in the final rule published in the
This correction is effective on December 31, 2015.
CMS ESRD Payment mailbox at
In FR Doc. 2015-27928 of November 6, 2015 (80 FR 68967) (hereinafter referred to as the CY 2016 ESRD PPS final rule) there are technical and typographical errors that are discussed in the “Summary of Errors,” and further identified and corrected in the “Correction of Errors” section below. The provisions in this correction notice are effective as if they had been included in the CY 2016 ESRD PPS final rule published in the
On page 68968, in the
On page 68976, we made a typographic error by including the words “case-mix” in the beginning of sentence.” On page 68986, under the heading “Body Surface Area (BSA)”, we made a typographical error in the value 1.020. We inadvertently inserted the letter “I” instead of the number “1” in that value.
On page 69044, we made a technical error in the title of Table 17—“Estimated Numerical Values for the Performance Standards for the PY 2018 ESRD QIP Clinical Measures Using the Most Recently Available Data,” by indicating that the values were estimates instead of finalized numerical values. In addition, there were errors in the achievement threshold, benchmark, and performance standard values presented in Table 17 “for Payment Year 2018 of the End-Stage Renal Disease Quality Incentive Program. Specifically, the numerical values published for the Kt/V Adult Hemodialysis, Kt/V Pediatric Hemodialysis, Standardized Readmission Ratio clinical measures, and ICH CAHPS were incorrect because we inadvertently placed the numbers in the incorrect columns.
On page 69069, in footnote 15 regarding the responsibilities of various staff, we found an error in the hyperlink to a document posted by the Bureau of Labor & Statistics.
Finally, on page 69073, after “e. Alternatives Considered,” we inadvertenly did not include the subtitle “1. CY 2016 End-Stage Renal Disease” to delineate the analysis of alternatives policies considered for the ESRD PPS.
Under 5 U.S.C. 553(b) of the Administrative Procedure Act (APA), the agency is required to publish a notice of the proposed rule in the
In our view, this correcting document does not constitute rulemaking that would be subject to these requirements. This correcting document is simply correcting technical and typographical errors in the preamble and does not make substantive changes to the policies or payment methodologies that were adopted in the final rule, and therefore, it is unnecessary to follow the notice and comment procedure in this instance.
Even if this were a rulemaking to which the notice and comment and delayed effective date requirements applied, we find that there is good cause to waive such requirements. Undertaking further notice and comment procedures to incorporate the corrections in this document into the CY 2016 ESRD PPS final rule or delaying the effective date would be contrary to the public interest because it is in the public's interest for dialysis facilities to receive appropriate payments in as timely a manner as possible, and to ensure that the CY 2016 ESRD PPS final rule accurately reflects our policies as of the date they take effect and are applicable. Further, such procedures would be unnecessary, because we are not altering the payment methodologies or policies, but rather, we are simply correctly implementing the policies that we previously proposed, received comment on, and subsequently finalized. This correcting document is intended solely to ensure that the CY 2016 ESRD PPS final rule accurately reflects these payment methodologies and policies. For these reasons, we believe we have good cause to waive the notice and comment and effective date requirements.
In FR Doc. 2015-27928 of November 6, 2015 (80 FR 68968), make the following corrections:
1. On page 68968, first column, under section
a. In line 1, the email address “CMS ESRD [email protected]” is corrected to read “[email protected]”.
b. In lines 3 and 4, the telephone number “410-786-7342” is corrected to read “410-786-7942”.
2. On page 68976, first column, first full paragraph, line 21, remove the word “case-mix”.
3. On page 68986, second column, first paragraph under the heading “Body Surface Area (BSA),” line 5, the figure “l.020” is corrected to read “1.020”.
4. On page 69044, Table 17 is corrected to read as follows:
11. On page 69069, third column, bottom of the page, footnote 15, the reference to “
12. On page 69073, second column under the heading “e. Alternatives Considered” add the sub-heading “1. CY 2016 End-Stage Renal Disease”.
Federal Communications Commission.
Final rule; announcement of effective date.
In this document, the Commission announces that the Office of Management and Budget (OMB) approved, on an emergency basis, a revision to an approved information collection to implement new collection requirements contained in the
The amendments adding 47 CFR 1.2205(c) and 1.2205(d), published at 79 FR 48442, August 15, 2014, are effective on December 31, 2015.
Contact Cathy Williams,
This document announces that, on December 10, 2015, OMB approved, on an emergency basis, a revision to an approved information collection to implement new information collection requirements under 47 CFR 1.2205(c) and 1.2205(d), published at 79 FR 48442 on August 15, 2014. The OMB Control Number is 3060-0995. The Commission publishes this document as an announcement of the effective date of the rules and requirements. If you have any comments on the burden estimates listed below, or how the Commission can improve the collections and reduce any burdens caused thereby, please contact Cathy Williams, Federal Communications Commission, Room 1-C823, 445 12th Street SW., Washington, DC 20554. Please include the OMB Control Number, 3060-0995, in your correspondence. The Commission will also accept your comments via the Internet if you send them to
To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the Commission is notifying the public that it received emergency approval from OMB on December 10, 2015 for the revised information collection requirements contained in the information collection 3060-0995, Section 1.2105(c), Bidding Application and Certification Procedures; Sections 1.2105(c) and Section 1.2205, Prohibition of Certain Communications.
Under 5 CFR 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.
No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060-0995. The foregoing document is required by the Paperwork Reduction Act of 1995, Pub. L. 104-13, October 1, 1995, and 44 U.S.C. 3507.
The total annual reporting burdens and costs for the respondents are as follows:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; Swordfish General Commercial permit retention limit inseason adjustment for Northwest Atlantic, Gulf of Mexico, and U.S. Caribbean regions.
NMFS is adjusting the Swordfish (SWO) General Commercial permit retention limits for the Northwest Atlantic, Gulf of Mexico, and U.S. Caribbean regions for January through June of the 2016 fishing year, unless otherwise noticed. The SWO General Commercial permit retention limits in each of these regions are increased from the default limits to six SWO per vessel per trip. The SWO General Commercial permit retention limit in the Florida SWO Management Area will remain unchanged at the default limit of zero SWO per vessel per trip. This adjustment applies to SWO General Commercial permitted vessels and Highly Migratory Species (HMS) Charter/Headboat permitted vessels when on a non for-hire trip. This action is based upon consideration of the applicable inseason regional retention limit adjustment criteria.
The adjusted SWO General Commercial permit retention limits in the Northwest Atlantic, Gulf of Mexico, and U.S. Caribbean regions are effective January 1, 2016, through June 30, 2016.
Rick Pearson or Randy Blankinship, 727-824-5399.
Regulations implemented under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971
The 2016 adjusted North Atlantic SWO quota is expected to be 3,359.4 mt dw (equivalent to the 2015 adjusted quota). From the adjusted quota, 50 mt dw would be allocated to the reserve category for inseason adjustments and research, and 300 mt dw would be allocated to the incidental category, which includes recreational landings and landings by incidental SWO permit holders, per § 635.27(c)(1)(i). This would result in an allocation of 3,009.4 mt dw for the directed fishery, which would be split equally (1,504.7 mt dw) between two seasons in 2016 (January through June, and July through December).
The 2016 North Atlantic SWO fishing year, which is managed on a calendar-year basis and divided into two equal semi-annual quotas, will begin on January 1, 2016. Landings attributable to the SWO General Commercial permit are counted against the applicable semi-annual directed fishery quota. Regional default retention limits for this permit have been established and are automatically effective from January 1 through December 31 each year, unless changed based on the inseason regional retention limit adjustment criteria at § 635.24(b)(4)(iv). The default retention limits established for the SWO General Commercial permit are: (1) Northwest
Under § 635.24(b)(4)(iii), NMFS may increase or decrease the SWO General Commercial permit vessel retention limit in any region within a range from zero to a maximum of six SWO per vessel per trip. Any adjustments to the retention limits must be based upon a consideration of the relevant criteria provided in § 635.24(b)(4)(iv), which include: The usefulness of information obtained from biological sampling and monitoring of the North Atlantic SWO stock; the estimated ability of vessels participating in the fishery to land the amount of SWO quota available before the end of the fishing year; the estimated amounts by which quotas for other categories of the fishery might be exceeded; effects of the adjustment on accomplishing the objectives of the fishery management plan and its amendments; variations in seasonal distribution, abundance, or migration patterns of SWO; effects of catch rates in one region precluding vessels in another region from having a reasonable opportunity to harvest a portion of the overall SWO quota; and, review of dealer reports, landing trends, and the availability of SWO on the fishing grounds.
NMFS has considered these criteria as discussed below and their applicability to the SWO General Commercial permit retention limit in all regions for January through June of the 2016 North Atlantic SWO fishing year. During 2014, with application of the default SWO General Commercial permit retention limits, total annual directed SWO fishery landings were approximately 1,303 mt dw (39 percent of the 3,303-mt dw total annual adjusted directed fishery quota). This year, through June 30, 2015, with application of the default retention limits, directed SWO landings were 493 mt dw (32.8 percent of the 1,505 mt dw Jan. to June semi-annual adjusted directed sub-quota). On July 28, 2015, NMFS adjusted SWO General Commercial permit retention limits in the Northwest Atlantic, Gulf of Mexico, and U.S. Caribbean regions from default levels to six SWO per vessel per trip (80 FR 44884). Through November 30, 2015, directed SWO landings for the July through December semi-annual period were approximately 541.5 mt dw (36.0 percent of the adjusted directed sub-quota). Total annual directed SWO landings, through November 30, 2015, were approximately 1,034.5 mt dw, or 34 percent of the 3,010 mt dw annual adjusted directed SWO quota.
Given that SWO directed landings fell well below the available 2014 annual quota, and that 2015 landings continue to be below the available 2015 directed SWO quota, and considering the regulatory criteria, NMFS has determined that the SWO General Commercial permit vessel retention limit in the Northwest Atlantic, Gulf of Mexico, and U.S. Caribbean regions applicable to persons issued a SWO General Commercial permit or HMS Charter/Headboat permit (when on a non for-hire trip) should be increased from the default levels that would otherwise automatically become effective on January 1, 2016.
A principal consideration is the objective of providing opportunities to harvest the full North Atlantic directed SWO quota without exceeding it based upon the 2006 Consolidated HMS FMP goal: “Consistent with other objectives of this FMP, to manage Atlantic HMS fisheries for continuing optimum yield so as to provide the greatest overall benefit to the Nation, particularly with respect to food production, providing recreational opportunities, preserving traditional fisheries, and taking into account the protection of marine ecosystems.” At the same time, it is also important for NMFS to continue to provide protection to important SWO juvenile areas and migratory corridors.
After considering all of the relevant criteria, NMFS has determined that increases from the default limits are warranted. With respect to the regulatory criteria, NMFS has examined dealer reports and landing trends, and determined that the information obtained from biological sampling and monitoring of the North Atlantic SWO stock is useful. Recently implemented electronic dealer reporting provides accurate and timely monitoring of landings. This information indicates that sufficient directed SWO quota will be available during 2016 if recent SWO landing trends continue. Regarding the regulatory criterion that NMFS consider “the estimated ability of vessels participating in the fishery to land the amount of SWO quota available before the end of the fishing year,” the directed SWO quota has not been harvested for several years and, based upon these landing trends, is not likely to be harvested or exceeded in 2016. Based upon recent landings rates from dealer reports, an increase in the vessel retention limit for SWO General Commercial permit holders is not likely to cause quotas for other categories of the fishery to be exceeded. Similarly, regarding the criteria that NMFS consider the estimated amounts by which quotas for other categories of the fishery might be exceeded and the effects of catch rates in one region precluding vessels in another region from having a reasonable opportunity to harvest a portion of the overall SWO quota, NMFS expects there to be sufficient SWO quota for 2016, and thus increased catch rates in these three regions are not expected to preclude vessels in any of the other regions from having a reasonable opportunity to harvest a portion of the overall SWO quota. Landings by vessels issued this permit (and Charter/Headboat permitted vessels on a non for-hire trip) are counted against the adjusted directed SWO quota. As indicated above, this quota has not been exceeded for several years and, based upon recent landing trends, is not likely to be exceeded in 2016.
With regard to SWO abundance, the 2015 report by ICCAT's Standing Committee on Research and Statistics indicated that the North Atlantic SWO stock is not overfished (B
Based upon landings over the last several years, it is highly unlikely that either of the two semi-annual directed SWO subquotas will be filled with the default retention limits of three SWO per vessel per trip (Northwest Atlantic and Gulf of Mexico), and two SWO per vessel per trip (U.S. Caribbean). For the entire 2014 fishing year, 39 percent of the total adjusted directed SWO quota was filled. Landings of SWO in 2015 are expected to be lower than in 2014.
Increasing the SWO General Commercial permit retention limit to six fish per vessel per trip will increase the likelihood that directed SWO landings will approach, but not exceed, the total annual directed SWO quota. Increasing opportunity beginning on January 1, 2016, is also important because of the migratory nature and seasonal distribution of SWO, one of the regulatory criteria to be considered when changing the retention limit inseason (variations in seasonal
Based upon these considerations, NMFS has determined that a six-fish per vessel per trip SWO General Commercial permit retention limit is warranted in the Northwest Atlantic, Gulf of Mexico, and U.S. Caribbean regions from January 1, 2016 through June 30, 2016, for SWO General Commercial permitted vessels and HMS Charter/Headboat permitted vessels when on a non for-hire trip. This will provide a reasonable opportunity to harvest the U.S. quota of SWO without exceeding it, while maintaining an equitable distribution of fishing opportunities; help achieve optimum yield in the SWO fishery; allow for the collection of data for stock monitoring purposes; and be consistent with the objectives of the 2006 Consolidated HMS FMP, as amended. With regard to the objectives of the FMP, this adjustment provides the greatest overall benefit to the Nation, particularly with respect to food production, by increasing commercial SWO fishing opportunities without exceeding the available quota. It helps to preserve a very traditional SWO handgear fishery (rod and reel, handline, harpoon, bandit gear, and greenstick) which, in New England, dates back to the 1880's. Although this action does not specifically provide recreational fishing opportunities, it will have a minimal impact on this sector because recreational landings are counted against a separate incidental SWO quota. Finally, as discussed in the next paragraph, this action takes into account the protection of marine ecosystems by maintaining a zero-fish retention limit in the Florida Swordfish Management Area. Therefore, NMFS increases the SWO General Commercial permit retention limits from the default levels to six SWO per vessel per trip in these three regions, effective from January 1, 2016 through June 30, 2016, unless otherwise noticed.
NMFS has determined that the retention limit will remain at zero SWO per vessel per trip in the Florida SWO Management Area at this time. As described in Amendment 8 to the 2006 Consolidated HMS FMP, the area off the southeastern coast of Florida, particularly the Florida Straits, contains oceanographic features that make the area biologically unique. It provides important juvenile SWO habitat, and is essentially a narrow migratory corridor containing high concentrations of SWO located in close proximity to high concentrations of people who may fish for them. Public comment on Amendment 8, including from the Florida Fish and Wildlife Conservation Commission, indicated concern about the resultant high potential for the improper rapid growth of a commercial fishery, increased catches of undersized SWO, the potential for larger numbers of fishermen in the area, and the potential for crowding of fishermen, which could lead to gear and user conflicts. These concerns remain valid. NMFS will continue to collect information to evaluate the appropriateness of the retention limit in the Florida SWO Management Area and other regional retention limits.
These adjustments are consistent with the 2006 Consolidated HMS FMP as amended, ATCA, and the Magnuson-Stevens Act, and are not expected to negatively impact stock health.
NMFS will continue to monitor the SWO fishery closely in 2016 through mandatory landings and catch reports. Dealers are required to submit landing reports and negative reports (if no SWO were purchased) on a weekly basis.
Depending upon the level of fishing effort and catch rates of SWO, NMFS may determine that additional retention limit adjustments or closures are necessary to ensure that available quota is not exceeded or to enhance fishing opportunities. Subsequent actions, if any, will be published in the
The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:
The regulations implementing the 2006 Consolidated HMS FMP, as amended, provide for inseason retention limit adjustments to respond to changes in SWO landings, the availability of SWO on the fishing grounds, the migratory nature of this species, and regional variations in the fishery. Based on available SWO quota, stock abundance, fishery performance in recent years, and the availability of SWO on the fishing grounds, among other considerations, adjustment to the SWO General Commercial permit retention limits from the default levels is warranted. Analysis of available data shows that adjustment to the SWO daily retention limit from the default level would result in minimal risks of exceeding the ICCAT-allocated quota. NMFS provides notification of retention limit adjustments by publishing the notice in the
This action is being taken under 50 CFR 635.24(b)(4) and is exempt from review under Executive Order 12866.
16 U.S.C. 971
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule; inseason adjustments to biennial groundfish management measures.
This final rule announces inseason changes to management measures in the Pacific Coast groundfish fisheries. This action, which is authorized by the Pacific Coast Groundfish Fishery Management Plan (PCGFMP), is intended to allow fisheries to access more abundant groundfish stocks while protecting overfished and depleted stocks. This document also announces a prohibition on the use of midwater trawl gear in the Shorebased Individual Fishing Quota (IFQ) Program shoreward of the boundary line approximating the 150 fm (274 m) depth contour via automatic action, with actual notice (by phone and email) to participants, at noon local time, November 26, 2015 in order to reduce the risk of exceeding the canary rockfish annual catch limit (ACL).
This final rule is effective January 1, 2016. The depth restrictions for midwater trawl gear were made through automatic action, and are published in the
Gretchen Hanshew, phone: 206-526-6147, fax: 206-526-6736, or email:
This rule is accessible via the Internet at the Office of the Federal Register Web site at
The Pacific Fishery Management Council (Council)—in coordination with Pacific Coast Treaty Indian Tribes and the States of Washington, Oregon, and California—recommended changes to groundfish management measures at its November 13-19, 2015, meeting. Specifically, the Council recommended a revised schedule of trip limits for big skate in the Shorebased IFQ Program for 2016. This rule revises big skate trip limits consistent with the Council's November recommendations.
Before 2015, big skate was managed as a component stock within the Other Fish complex. The big skate overfishing limit (OFL) estimate, along with the estimated OFLs for the other species in the complex, contributed to the OFL specified in regulation for the Other Fish complex. Species managed in complexes do not have OFLs specified in regulation. The Council recommended, and NMFS approved, the designation of big skate as an ecosystem component species, beginning in 2015 (80 FR 12567, March 10, 2015). As described in the inseason action that implemented trip limits for big skate in 2015 (80 FR 31858, June 4, 2015), new information available during 2015 indicated that harvest of big skate was much higher than anticipated and was approaching or exceeding the 2014 estimated OFL contribution. The Council recommended, and NMFS implemented, trip limits on June 1, 2015, to reduce impacts to big skate in the Shorebased IFQ Program. Trip limits for big skate were further adjusted on August 14, 2015, after review of updated fishery information and best available information regarding discard mortality of big skate (80 FR 50212, August 19, 2015). As part of the ongoing development of the 2017-2018 specifications, the Council is reconsidering whether big skate should be reclassified because the species may not be appropriate as an ecosystem component species.
At its November meeting, the Council considered updated fishery information and further refined big skate trip limits for the second year of the biennial cycle. The Council's Groundfish Management Team (GMT) continued analysis of available fishery data to estimate and project catch of big skate in the Shorebased IFQ Program under different trip limit scenarios. The Council considered an apparent seasonal fluctuation in both frequency and magnitude of big skate landings, with higher catch in the summer and lower catch in the winter. The Council also considered feedback from individuals in the Shorebased IFQ Program regarding catch patterns and targeting practices.
The Council recommended, and NMFS is implementing, the following big skate trip limits in the Shorebased IFQ Program, beginning January 1, 2016: 5,000 lbs/2 months (2,268 kg/2 months) for Period 1; 25,000 pounds/2 months (11,340 kg/2 months) for Period 2; 30,000 pounds/2 months (13,608 kg/2 months) for Period 3; 35,000 pounds/2 months (15,876 kg/2 months) for Period 4; 10,000 pounds/2 months (4,536 kg/2 months) for Period 5; and 5,000 pounds/2 months (2,268 kg/2 months) for Period 6. Best estimates indicate that total mortality of big skate through the end of 2016 under this trip limit structure would be 450 mt, 91 mt lower than the estimated 2016 OFL of 541 mt and 44 mt lower than the estimated 2016 ABC of 494 mt.
Subsequent to the November Council meeting, higher than anticipated catch of canary rockfish occurred in the Shorebased IFQ Program. NMFS took automatic action to impose a depth restriction for vessels using midwater trawl gear in the Shorebased IFQ Program, applicable at noon local time, November 26, 2015. This rule serves as notification of the November 26, 2015 automatic action.
The Shorebased IFQ Program may be restricted or closed, as determined necessary by the Regional Administrator, as a result of projected overages within the Shorebased IFQ Program, the Mothership Coop Program, or the Catcher/Processor Coop Program. As of November 24, 2015, the Shorebased IFQ Program was projected to exceed the total quota pounds available to the sector (2015 allocation, plus surplus carryover from 2014) if
The Shorebased IFQ Program has a 2015 allocation of 43.26 mt of canary rockfish (with surplus carryover pounds from 2014: 47.28 mt). Higher than anticipated catch of canary rockfish occurred in the Shorebased IFQ Program by vessels using midwater trawl gear, exceeding the 2015 Shorebased IFQ Program allocation. Midwater trawl gear has been responsible for an increasing proportion of the annual canary rockfish landings in the Shorebased IFQ Program and data from the Northwest Fisheries Science Center shelf-slope bottom trawl survey indicates that canary rockfish are distributed overwhelmingly shoreward of the boundary line approximating the 150 fm depth contour.
Therefore, NMFS implemented a depth restriction for vessels using midwater trawl gear in the Shorebased IFQ Program to reduce the risk of exceeding the total amount of canary rockfish available the Shorebased IFQ Program, total trawl allocation, and the canary rockfish ACL, through the end of the year.
Regulatory changes published in this rule also clarify, but do not revise, sablefish trip limits in the limited entry fixed gear and open access fisheries north of 36° N. lat. The 2016 sablefish ACL is higher than in 2015 and the Council recommended and NMFS implemented a schedule of slightly higher trip limits for the second year of the biennial period, as described in the January 6, 2015 proposed rule (80 FR 687) and implemented in Tables 2 North and 2 South, Subpart E and Tables 3 North and 3 South, Subparts F (80 FR 12567, March 10, 2015). Because of the format of these tables, the higher 2016 trip limits were published in the footnotes, anticipating that an inseason for January 1, 2016 would incorporate movement of those trip limits from the footnote to the body of the table. This formatting change does not revise the 2016 sablefish trip limits for non-IFQ fisheries north of 36° N. lat. that were described and implemented through notice and comment rulemaking. Accordingly, this rule modifies Tables 2 North and 2 South, Subpart E and Tables 3 North and 3 South, Subparts F by moving the schedule of 2016 trip limits, unchanged, from footnotes into the body of the tables.
This final rule makes routine inseason adjustments to groundfish fishery management measures, based on the best available information. This document also serves as notice of an automatic action, based on the best available information. Both are consistent with the PCGFMP and its implementing regulations.
This action is taken under the authority of 50 CFR 660.60(c) and (d), and 660.140(a)(3) and is exempt from review under Executive Order 12866.
The aggregate data upon which these actions are based are available for public inspection at the Office of the Administrator, West Coast Region, NMFS, during business hours.
NMFS finds good cause to waive prior public notice and comment on the revisions to groundfish management measures under 5 U.S.C. 553(b) because notice and comment would be impracticable and contrary to the public interest. Also, for the same reasons, NMFS finds good cause to waive the 30-day delay in effectiveness pursuant to 5 U.S.C. 553(d)(3), so that the regulatory changes in this final rule may become effective January 1, 2016.
New analysis regarding projected catch of big skate was presented to the Council at its November 2015 meeting. At that meeting, the Council recommended that these changes to big skate trip limits be implemented January 1, 2016, which is the start of the second year of the biennial cycle and the beginning of a cumulative limit period in the commercial groundfish fishery off the West Coast. These restrictions to the amount of landings must be implemented at the start of a cumulative limit period to allow fishermen in the Shorebased IFQ Program an opportunity to continue harvesting big skate, but at a level that will not exceed the new, lower trip limit that will be imposed in January 2016. The trip limits recommended by the Council and implemented by NMFS in this action are anticipated to keep catch of big skate below its estimated OFL, if implemented on January 1. If the recommended limits are not in place January 1, more restrictive measures may be necessary later in the year to keep catch of big skate below its estimated OFL. There was not sufficient time after the November meeting, when the new information was available, to undergo proposed and final rulemaking before January 1.
The depth restrictions in the Shorebased IFQ Program implemented by the Regional Administrator via actual notice are intended to reduce the risk of exceeding the trawl allocation and the 2015 ACL of canary rockfish. The closed area implemented by this rule needed to be in effect during the remainder of the 2015 fishery to shift midwater trawl effort in the Shorebased IFQ Program into deeper waters where they are less likely to catch canary rockfish. Prior notice and opportunity for public comment on this depth restriction was impracticable because NMFS had insufficient time to provide prior notice and the opportunity for public comment between the time the information about catch of canary rockfish became available and when restrictions were determined to be necessary to reduce the risk of further exceeding the 2015 Shorebased IFQ Program allocation, and also reduce the risk of exceeding the 2015 canary rockfish trawl allocation and the ACL. Failure to respond with a depth restriction in a timely manner to reduce the amount by which the 2015 Shorebased IFQ Program allocation for canary rockfish was exceeded would be contrary to the public interest, as it may have required more restrictive measures, perhaps even closure of the fishery, if higher than anticipated harvest of canary rockfish continued.
For the actions to be implemented in this final rule, affording the time necessary for prior notice and opportunity for public comment would prevent NMFS from managing fisheries using the best available science to prevent overfishing in accordance with the PCGFMP and applicable law.
Delaying these changes would also keep management measures in place that are not based on the best available information. Such delay would impair achievement of the PCGFMP goals and objectives of managing for appropriate harvest levels while providing for year-
Accordingly, for the reasons stated above, NMFS finds good cause to waive prior notice and comment and to waive the delay in effectiveness.
Fisheries, Fishing, and Indian Fisheries.
For the reasons set out in the preamble, 50 CFR part 660 is amended as follows:
16 U.S.C. 1801
Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy.
Notice of public meetings.
The U.S. Department of Energy (DOE) announces public meetings and webinars for the Central Air Conditioners and Heat Pumps Working Group. The Federal Advisory Committee Act requires that agencies publish notice of an advisory committee meeting in the
DOE will host public meetings on the following dates:
The working group will meet on January 12, 2016 only if the term sheet is not completed on January 11, 2016.
The meetings will be held at U.S. Department of Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW., Washington, DC 20585 unless otherwise stated. Individuals will also have the opportunity to participate by webinar. To register for the webinar and receive call-in information, please register at
Members of the public are welcome to observe the business of the meeting and, if time allows, may make oral statements during the specified period for public comment. To attend the meeting and/or to make oral statements regarding any of the items on the agenda, email
Mr. Antonio Bouza, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-4563. Email:
Ms. Johanna H. Jochum, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 287-6307. Email:
On Wednesday, June 17, 2015, the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) met and unanimously passed the recommendation to form a central air conditioners and heat pumps working group to meet and discuss and, if possible, reach consensus on a proposed rule for energy efficiency standards and certain aspects of the test procedure. (Docket No. EERE-2013-BT-NOC-0005, June 17, 2015 Meeting Transcript). The ASRAC Charter required completion of a term sheet by December 31, 2015. 80 FR 40938 (July 14, 2015).
On December 18, 2015, the working group unanimously voted to request ASRAC to extend the term sheet deadline to January 22, 2016. (EERE-2014-BT-STD-0048, December 18, 2015 Public Meeting Transcript). Following that meeting, ASRAC granted the working group an extension until January 19, 2016 so the working group could provide a term sheet to ASRAC by ASRAC's meeting on January 20, 2016. (Docket No. EERE-2013-BT-NOC-0005, December 18, 2015 Meeting Transcript).
DOE will host public meetings and webinars at DOE's Forrestal Building, unless otherwise stated.
The working group will meet on January 12, 2016 only if the term sheet is not completed on January 11, 2016.
Due to the REAL ID Act implemented by the Department of Homeland Security (DHS) recent changes have been made regarding ID requirements for individuals wishing to enter Federal buildings from specific states and U.S. territories. Driver's licenses from the following states or territory will not be accepted for building entry and one of the alternate forms of ID listed below will be required.
DHS has determined that regular driver's licenses (and ID cards) from the following jurisdictions are not acceptable for entry into DOE facilities: Alaska, Louisiana, New York, American Samoa, Maine, Oklahoma, Arizona, Massachusetts, Washington, and Minnesota.
Acceptable alternate forms of Photo-ID include: U.S. Passport or Passport Card; an Enhanced Driver's License or Enhanced ID-Card issued by the states of Minnesota, New York or Washington (Enhanced licenses issued by these states are clearly marked Enhanced or Enhanced Driver's License); A military ID or other Federal government issued Photo-ID card.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for all Airbus Model A300 series airplanes; and Airbus Model A300 B4-600, B4-600R, and F4-600R series airplanes; and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes). This proposed AD was prompted by a report of cracking of the lower tension bolt area at the rib one junction (both sides) of the lower wing. This proposed AD would require repetitive inspections for cracking of the fasteners and of the fitting around the fastener holes at the Frame (FR) 40 lower wing location, and corrective actions if necessary. We are proposing this AD to detect and correct crack initiation of the fittings of the FR40 lower wing locations, which could result in reduced structural integrity of the airplane.
We must receive comments on this proposed AD by February 16, 2016.
You may send comments by any of the following methods:
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•
•
•
For service information identified in this proposed AD, contact Airbus SAS, Airworthiness Office—EAW, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
You may examine the AD docket on the Internet at
Dan Rodina, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-2125; fax 425-227-1149.
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0272, dated December 12, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A300 series airplanes; and Airbus Model A300 B4-600, B4-600R, and F4-600R series airplanes; and Model A300 C4-605R Variant F airplanes (collectively called Model A300-600 series airplanes). The MCAI states:
Following the A300-600 Extended Service Goal (ESG2) exercise, specific inspections for cracks were performed in fittings of frame (FR) 40, in areas not covered by any existing task.
Findings were identified on an A300-600 aeroplane withdrawn from service in the lower tension bolt area at rib one junction (both sides).
This condition, if not detected and corrected, could lead to crack initiation, affecting the structural integrity of the aeroplane.
To address this potential unsafe condition, an inspection programme was developed for the fitting around the fastener holes located at FR40 lower wing junction, left-hand (LH) and right-hand (RH) sides.
For the reasons described above, this [EASA] AD requires repetitive High Frequency Eddy Current (HFEC) inspections and rototest inspections of the fitting around the fastener holes located at FR40 lower wing junction and, depending on findings, accomplishment of a repair.
The corrective actions include a repair using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA).
You may examine the MCAI in the AD docket on the Internet at
We reviewed Airbus Service Bulletins A300-57-0257 and A300-57-6115, both dated April 4, 2014. The service information describes procedures for repetitive inspections for cracking of the fasteners and of the fitting around the fastener holes at the FR40 lower wing location. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation
The FAA worked in conjunction with industry, under the Airworthiness Directive Implementation Aviation Rulemaking Committee (ARC), to enhance the AD system. One enhancement was a new process for annotating which procedures and tests in the service information are required for compliance with an AD. Differentiating these procedures and tests from other tasks in the service information is expected to improve an owner's/operator's understanding of crucial AD requirements and help provide consistent judgment in AD compliance. The procedures and tests identified as Required for Compliance (RC) in any service information have a direct effect on detecting, preventing, resolving, or eliminating an identified unsafe condition.
As specified in a NOTE under the Accomplishment Instructions of the specified service information, procedures and tests that are identified as RC in any service information must be done to comply with the proposed AD. However, procedures and tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an alternative method of compliance (AMOC), provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC will require approval of an AMOC.
We estimate that this proposed AD affects 166 airplanes of U.S. registry.
We also estimate that it would take about 12 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $169,320, or $1,020 per product.
We have received no definitive data that would enable us to provide a cost estimate for the on-condition actions specified in this proposed AD.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by February 16, 2016.
None.
This AD applies to all Airbus airplanes identified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category.
(1) Airbus Model A300 B2-1A, B2-1C, B2K-3C, B2-203, B4-2C, B4-103, and B4-203 airplanes.
(2) Airbus Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, F4-622R, and C4-605R Variant F airplanes.
Air Transport Association (ATA) of America Code 57, Wings.
This AD was prompted by a report of cracking of the lower tension bolt area at rib one junction (both sides) of the lower wing. We are issuing this AD to detect and correct crack initiation of the fittings of the Frame (FR) 40 lower wing locations, which could result in reduced structural integrity of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Within 1,000 flight hours after the effective date of this AD: Do a high frequency eddy current (HFEC) inspection for cracking of fasteners 1 through 3 at the left-hand and right-hand sides of the FR40 lower junction, and of the fitting around the fastener holes, in accordance with the Accomplishment Instructions of Airbus Service Bulletins A300-57-0257 (for Model A300 B2-1A, B2-1C, B2K-3C, B2-203, B4-2C, B4-103, and B4-203 airplanes) or A300-57-6115 (for Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, F4-622R, and C4-605R Variant F airplanes), both dated April 4, 2014, as applicable. If no cracking is found, repeat the HFEC inspection at intervals not to exceed 1,000 flight hours until a rototest inspection required by paragraph (h)(2) of this AD has been done.
Within 36 months after the effective date of this AD: Remove the fasteners and measure the diameter of the fastener holes; and, before further flight, do the applicable actions required by paragraph (h)(1) or (h)(2) of this AD, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A300-57-0257 (for Model A300 B2-1A, B2-1C, B2K-3C, B2-203, B4-2C, B4-103, and B4-203 airplanes) or A300-57-6115 (for Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, F4-622R, and C4-605R Variant F airplanes), as applicable.
(1) If one or more of the hole diameters is outside the tolerance of the nominal diameter, and outside the tolerance of the first and second oversize: Do the applicable corrective actions required by paragraph (i) of this AD.
(2) If all of the hole diameters are within the tolerance of the nominal diameter or the first or second oversize: Do detailed and rototest inspections for cracking of the fastener holes at the left-hand and right-hand sides of the FR40 lower junction, in accordance with the Accomplishment Instructions of Airbus Service Bulletins A300-57-0257 (for Model A300 B2-1A, B2-1C, B2K-3C, B2-203, B4-2C, B4-103, and B4-203 airplanes) or A300-57-6115 (for Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, F4-622R, and C4-605R Variant F airplanes), both dated April 4, 2014, as applicable. If no cracking is found, before further flight, install new fasteners of the same diameter in special clearance fit for fasteners 1 through 3 of the FR40 lower junction, in accordance with the Accomplishment Instructions of Airbus Service Bulletins A300-57-0257 or A300-57-6115, both dated April 4, 2014, as applicable. Repeat the rototest inspection thereafter at intervals not to exceed 7,000 flight cycles. Accomplishment of a rototest inspection required by this paragraph terminates the repetitive HFEC inspections required by paragraph (g) of this AD.
If, during any inspection required by this AD, any crack is found, or one or more of the hole diameters are outside the tolerance of the nominal diameter: Repair before further flight using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA).
The following provisions also apply to this AD:
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) European Aviation Safety Agency (EASA) Airworthiness Directive 2014-0272, dated December 12, 2014, for related information. This MCAI may be found in the AD docket on the Internet at
(2) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAW, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain The Boeing Company Model 777-200 and -300 series airplanes equipped with Pratt and Whitney engines. This proposed AD was prompted by reports of blocked drain lines at the engine forward strut that caused flammable fluid to accumulate in a flammable leakage zone. This proposed AD would require doing the following actions on the left strut and right strut: A one-time cleaning of certain forward strut drain lines; installing new forward strut drain lines and insulation blankets; a leak check of the forward strut drain lines; and repair if any leak is found. This proposed AD would also require revising the maintenance or inspection program, as applicable, to incorporate a certain airworthiness limitation. We are proposing this AD to prevent blockage of forward strut drain lines, which could cause flammable fluids to collect in the forward strut area and potentially cause an uncontrolled fire or cause failure of engine attachment structure and consequent airplane loss.
We must receive comments on this proposed AD by February 16, 2016.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707,
You may examine the AD docket on the Internet at
Kevin Nguyen, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6501; fax: 425-917-6590; email:
We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We received multiple reports of the forward drain lines of the engine struts being blocked with coked particles. Coked particles form when hydraulic fluid is exposed to, and degraded by, the high temperatures of the hot core zone of the engine and the hot pneumatic bleed ducts. In two events, fluids backed up into the electrical (left) side of the disconnect box assembly of the strut system, causing an electrical fault that resulted in a false engine indicating and crew-alerting system (EICAS) message for overheat detection. Flammable fluids collecting in the electrical side of the disconnect box assembly of the strut system can cause an electrical fault for electrical components, and create a potential ignition source for trapped flammable fluids that can lead to a fire.
In three other events, flammable fluids backed up and pooled in the fluid (right) side of the disconnect box assembly of the strut system. Flammable fluids collecting in the disconnect box assembly of the strut system are a fire hazard because that area has no fire detection, containment, or extinguishing capability, and with an ignition source can result in an uncontrolled fire in the strut. Also, flammable fluids pooling in the disconnect box assembly of the strut system can spill over onto the engine and initiate an engine fire in the engine core cavity compartment.
Hydraulic fluid collecting in the disconnect box assembly of the strut system can cause contamination and hydrogen embrittlement of the titanium structure resulting in cracks that can compromise the engine firewall by allowing a fire in the engine area to enter the strut; or by allowing flammable fluids to leak down and initiate an engine fire in the engine core cavity compartment, and also compromise the engine fire extinguishing system. Hydraulic fluid contamination, including contamination caused by hydraulic fluid in its liquid, vapor, and/or solid (
We reviewed the following service information:
• Boeing Special Attention Service Bulletin 777-71-0055, Revision 1, dated April 15, 2015. The service information describes procedures for installing new forward strut drain lines and insulation blankets on the left and right engines.
• Boeing Special Attention Service Bulletin 777-54-0028, Revision 1, dated December 10, 2013. This service information describes procedures for a general visual inspection for hydraulic fluid contamination of the interior of the strut forward dry bay and corrective actions.
• Airworthiness Limitation 54-AWL-01, “Forward Strut Drain Line” as specified in Section D.4, Pratt and Whitney Forward Strut Drain Line, dated March 2014, of the Boeing 777 Maintenance Planning Data (MPD) Document Section 9, Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D622W001-9, dated October 2014. This service information describes an airworthiness limitation task for the functional check of the forward strut drain line.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This proposed AD would require accomplishing the actions specified in the service information described previously. For information on the procedures and compliance times specified in Boeing Special Attention Service Bulletin 777-71-0055, Revision 1, dated April 15, 2015; and Boeing Special Attention Service Bulletin 777-54-0028, Revision 1, dated December 10, 2013: See this service information at
The phrase “corrective actions” is used in this proposed AD. “Corrective actions” are actions that correct or address any condition found. Corrective actions in an AD could include, for example, repairs.
This proposed AD would require revisions to certain operator maintenance documents to include a new airworthiness limitation containing repetitive functional checks of the forward engine strut drain line. Compliance with these actions is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by this AD, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an alternative method of compliance in accordance with the procedures specified in paragraph (k) of this AD. The request should include a description of changes to the required inspections that will ensure the continued operational safety of the airplane.
On September 23, 2014, we issued AD 2014-20-10, Amendment 39-17983 (79 FR 60331, October 7, 2014), for certain The Boeing Company Model 777-200 and -300 series airplanes equipped with Pratt & Whitney engines. AD 2014-20-10 currently requires repetitive general visual inspections of the strut forward dry bay for the presence of hydraulic fluid, and related investigative and corrective actions (including checking drain lines for blockage due to hydraulic fluid coking; cleaning or replacing drain lines to allow drainage) if necessary; and adds airplanes to the applicability. AD 2014-20-10 was prompted by reports of hydraulic fluid contamination (including contamination caused by hydraulic fluid in its liquid, vapor, and/or solid (coked) form) found in the strut forward dry bay.
The actions required by AD 2014-20-10, Amendment 39-17983 (79 FR 60331, October 7, 2014), are intended to detect and correct hydraulic fluid contamination of the strut forward dry bay, which could result in hydrogen embrittlement of the titanium forward engine mount bulkhead fittings, and consequent inability of the fittings to carry engine loads and resulting in engine separation. Hydrogen embrittlement could also cause a through-crack formation across the fittings through which an engine fire could breach into the strut, resulting in an uncontained strut fire.
Accomplishment of the actions specified below terminates the inspections required by paragraph (g) of AD 2014-20-10, Amendment 39-17983 (79 FR 60331, October 7, 2014), at the modified area only; provided the actions are accomplished concurrently, or the actions specified below for Boeing Special Attention Service Bulletin 777-54-0028, Revision 1, dated December 10, 2013, are done after accomplishing the actions specified in paragraphs (g)(1) through (g)(5) of this proposed AD.
• The actions specified in paragraphs (g)(1) through (g)(4) of this proposed AD on the left and right struts, done in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 777-71-0055, Revision 1, dated April 15, 2015; and the revision done as specified in paragraph (g)(5) of this proposed AD.
• A one-time general visual inspection for hydraulic fluid contamination of the interior of the strut forward dry bay, and all applicable related investigative and corrective actions, done in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 777-54-0028, Revision 1, dated December 10, 2013.
On August 14, 2015, we issued AD 2015-17-13, Amendment 39-18246 (80 FR 52948, September 2, 2015) for certain The Boeing Company Model 777-200 and -300 series airplanes equipped with Pratt and Whitney engines. AD 2015-17-13 currently requires repetitive functional checks for blockage of the forward strut drain line, and doing corrective actions (including cleaning or replacing any blocked drain lines) if necessary; and a one-time cleaning of certain forward strut drain lines. AD 2015-17-13 also includes an optional terminating action, which specifies accomplishing the actions in Boeing Special Attention Service Bulletin 777-71-0055, Revision 1, dated April 15, 2015 and incorporating Airworthiness Limitation 54-AWL-01, “Forward Strut Drain Line” into the maintenance or inspection program, as applicable. AD 2015-17-13 was prompted by reports of blocked drain lines at the engine forward strut that caused flammable fluid to accumulate in a flammable leakage zone. The actions required by AD 2015-17-13 are intended to detect and correct blockage of forward strut drain lines, which could cause flammable fluids to collect in the forward strut area and potentially cause an uncontrolled fire or cause failure of engine attachment structure and consequent airplane loss.
Accomplishment of the actions required by paragraph (g) of this proposed AD (doing the actions specified Boeing Special Attention Service Bulletin 777-71-0055, Revision 1, dated April 15, 2015; and incorporating Airworthiness Limitation 54-AWL-01, “Forward Strut Drain Line” as specified in Section D.4, Pratt and Whitney Forward Strut Drain Line, dated March 2014, of the Boeing 777 Maintenance Planning Data (MPD) Document Section 9, Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D622W001-9, dated October 2014, into the maintenance or inspection program, as applicable) would terminate the actions required by paragraph (g) of AD 2015-17-13, Amendment 39-18246 (80 FR 52948, September 2, 2015), at the modified area only.
The FAA worked in conjunction with industry, under the Airworthiness Directive Implementation Aviation Rulemaking Committee (ARC), to enhance the AD system. One enhancement was a new process for annotating which steps in the service information are required for compliance with an AD. Differentiating these steps from other tasks in the service information is expected to improve an owner's/operator's understanding of crucial AD requirements and help provide consistent judgment in AD compliance. The steps identified as Required for Compliance (RC) in any service information identified previously have a direct effect on detecting, preventing, resolving, or eliminating an identified unsafe condition.
For service information that contains steps that are labeled as RC, the following provisions apply: (1) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD, and an AMOC is required for any deviations to RC steps, including substeps and identified figures; and (2) steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
We estimate that this proposed AD affects 54 airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed AD.
According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by February 16, 2016.
This AD affects the ADs specified in paragraphs (b)(1) and (b)(2) of this AD.
(1) AD 2014-20-10, Amendment 39-17983 (79 FR 60331, October 7, 2014).
(2) AD 2015-17-13, Amendment 39-18246 (80 FR 52948, September 2, 2015).
This AD applies to The Boeing Company Model 777-200 and -300 series airplanes, certificated in any category, equipped with Pratt & Whitney engines, as identified in Boeing Special Attention Service Bulletin 777-71-0055, Revision 1, dated April 15, 2015.
Air Transport Association (ATA) of America Code 71, Powerplant.
This AD was prompted by reports of blocked drain lines at the engine forward strut that caused flammable fluid to accumulate in a flammable leakage zone. We are issuing this AD to prevent blockage of forward strut drain lines, which could cause flammable fluids to collect in the forward strut area and potentially cause an uncontrolled fire or cause failure of engine attachment structure and consequent airplane loss.
Comply with this AD within the compliance times specified, unless already done.
Within 4,000 flight cycles or 750 days after the effective date of this AD, whichever occurs later: Accomplish the actions specified in paragraphs (g)(1) through (g)(4) of this AD on the left and right struts, in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 777-71-0055, Revision 1, dated April 15, 2015; and accomplish the revision specified in paragraph (g)(5) of this AD.
(1) Disconnect and remove the forward strut drain lines.
(2) Clean the left system disconnect, the strut forward lower spar, and the forward fireseal pan drain lines.
(3) Install new forward strut drain lines and insulation blankets.
(4) Do a leak check of the forward strut drain lines, for any leak, and repair if any leak is found.
(5) Revise the maintenance or inspection program, as applicable, to incorporate Airworthiness Limitation 54-AWL-01, “Forward Strut Drain Line” as specified in Section D.4, Pratt and Whitney Forward Strut Drain Line, dated March 2014, of the Boeing 777 Maintenance Planning Data (MPD) Document Section 9, Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs), D622W001-9, dated October 2014. The initial compliance time for Airworthiness Limitation 54-AWL-01 is within 2,000 flight cycles or 1,500 days, whichever occurs first, after doing the actions specified in paragraphs (g)(1) through (g)(4) of this AD.
After accomplishing the revision required by paragraph (g)(5) of this AD, no alternative actions (
(1) Accomplishing the actions required by paragraph (g) of this AD terminates the actions required by paragraph (g) of AD 2015-17-13, Amendment 39-18246 (80 FR
(2) Accomplishing the actions specified in paragraphs (i)(2)(i) and (i)(2)(ii) of this AD terminates the inspections required by paragraph (g) of AD 2014-20-10, Amendment 39-17983 (79 FR 60331, October 7, 2014), at the modified area only, provided the actions are accomplished concurrently, or the actions specified in paragraph (i)(2)(ii) of this AD are done after accomplishing the actions specified in paragraph (i)(2)(i) of this AD.
(i) The actions specified in paragraphs (g)(1) through (g)(4) of this AD on the left and right struts are done in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 777-71-0055, Revision 1, dated April 15, 2015; and the revision specified in paragraph (g)(5) of this AD is done.
(ii) A one-time general visual inspection for hydraulic fluid contamination (including contamination caused by hydraulic fluid in its liquid, vapor, and/or solid (coked) form) of the interior of the strut forward dry bay, and all applicable related investigative and corrective actions (including checking drain lines for blockage due to hydraulic fluid coking, and cleaning or replacing drain lines to allow drainage) are done in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 777-54-0028, Revision 1, dated December 10, 2013, except where Boeing Special Attention Service Bulletin 777-54-0028, Revision 1, dated December 10, 2013, specifies to contact Boeing for repair, the repair must be done using a method approved in accordance with the procedures specified in paragraph (k) of this AD.
This paragraph provides credit for actions required by paragraph (g) of this AD, if those actions were performed before the effective date of this AD using Boeing Special Attention Service Bulletin 777-71-0055, dated June 12, 2014, which is not incorporated by reference in this AD.
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (l)(1) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (k)(3)(i) and (k)(3)(ii) apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
(1) For more information about this AD, contact Kevin Nguyen, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6501; fax: 425-917-6590; email:
(2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain Airbus Model A318, A319, A320, and A321 series airplanes. This proposed AD was prompted by a report of cracks found during maintenance inspections on certain lugs of the 10VU rack side fittings in the cockpit. This proposed AD would require repetitive inspections for cracking of the lugs on the 10VU rack side fittings, and repair of any cracking. We are proposing this AD to prevent loss of flight-critical information displayed to the flightcrew during a critical phase of flight, such as an approach or takeoff, which could result in loss of airplane control at an altitude insufficient for recovery.
We must receive comments on this proposed AD by February 16, 2016.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
You may examine the AD docket on the Internet at
Sanjay Ralhan, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1405; fax 425-227-1149.
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2015-0170, dated August 18, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A318, A319, A320, and A321 series airplanes. The MCAI states:
During an unscheduled maintenance operation on an A330 aeroplane, the 10VU rack was removed for access and cracks were discovered on 10VU rack side fittings on lugs 1, 3, and 4. As a similar design is installed on A320 family aeroplanes, a sampling review was done to determine the possible fleet impact. The result showed that several aeroplanes had cracked or broken 10VU rack side fittings.
This condition, if not detected and corrected, could lead to a high vibration level on the primary flight- and navigation displays during critical flight phases (takeoff and landing), possibly creating reading difficulties for the crew.
Prompted by these findings, Airbus developed mod 35869 to reinforce the affected rack fitting lugs. For in-service aeroplanes, Airbus published Service Bulletin (SB) A320-92-1087 to provide inspection and repair instructions.
For the reasons described above, this [EASA] AD requires repetitive detailed inspections (DET) of the affected 10VU rack fitting lugs and, depending on findings, accomplishment of a repair.
You may examine the MCAI in the AD docket on the Internet at
Airbus has issued Service Bulletin A320-92-1087, Revision 02, dated November 25, 2014. The service information describes procedures for repetitive inspections for cracking of the lugs on the 10VU rack side fittings, and repair of any cracking. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.
The FAA worked in conjunction with industry, under the Airworthiness Directive Implementation Aviation Rulemaking Committee (ARC), to enhance the AD system. One enhancement was a new process for annotating which procedures and tests in the service information are required for compliance with an AD. Differentiating these procedures and tests from other tasks in the service information is expected to improve an owner's/operator's understanding of crucial AD requirements and help provide consistent judgment in AD compliance. The procedures and tests identified as RC (required for compliance) in any service information have a direct effect on detecting, preventing, resolving, or eliminating an identified unsafe condition.
As specified in a Note under the Accomplishment Instructions of the specified service information, procedures and tests that are identified as RC in any service information must be done to comply with the proposed AD. However, procedures and tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an alternative method of compliance (AMOC), provided the procedures and tests identified as RC can be done and the airplane can be put back in an airworthy condition. Any substitutions or changes to procedures or tests identified as RC will require approval of an AMOC.
We estimate that this proposed AD affects 959 airplanes of U.S. registry.
We also estimate that it would take about 2 work-hours per product to comply with the basic requirements of this proposed AD, and 1 work-hour per product to report inspection findings. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $244,545, or $255 per product.
In addition, we estimate that any necessary repair would take about 84 work-hours, for a cost of $7,140 per product. We have received no definitive data that would enable us to provide part cost estimates for the on-condition actions specified in this proposed AD. We have no way of determining the number of aircraft that might need these actions.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by February 16, 2016.
None.
This AD applies to the Airbus airplanes identified in paragraphs (c)(1) through (c)(4) of this AD, certificated in any category; except airplanes on which Airbus Modification 35869 has been embodied in production.
(1) Airbus Model A318-111, -112, -121, and -122 airplanes.
(2) Airbus Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.
(3) Airbus Model A320-211, -212, -214, -231, -232, and -233 airplanes.
(4) Airbus Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes.
Air Transport Association (ATA) of America Code 25, Equipment/Furnishings.
This AD was prompted by a report of cracks found during maintenance inspections on certain lugs of the 10VU rack side fittings in the cockpit. We are issuing this AD to prevent loss of flight-critical information displayed to the flightcrew during a critical phase of flight, such as an approach or takeoff, which could result in loss of airplane control at an altitude insufficient for recovery.
Comply with this AD within the compliance times specified, unless already done.
At the later of the times specified in paragraphs (g)(1) and (g)(2) of this AD: Do a detailed inspection for cracking of the lugs on the 10VU rack side fittings in the cockpit, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-92-1087, Revision 02, dated November 25, 2014. If any crack is found, before further flight, repair in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-92-1087, Revision 02, dated November 25, 2014. Repeat the inspection thereafter at intervals not to exceed 20,000 flight cycles or 40,000 flight hours, whichever occurs first. Repair of the 10VU rack lugs does not terminate the repetitive inspections required by this paragraph.
(1) Before the accumulation of 30,000 total flight cycles or 60,000 total flight hours, whichever occurs first since the airplane's first flight.
(2) Within 24 months after the effective date of this AD.
Submit a report of any findings (positive and negative) of any inspection required by paragraph (g) of this AD to Airbus at the address specified in paragraph (j)(2) of this AD, at the applicable time specified in paragraph (h)(1) or (h)(2) of this AD.
(1) If the inspection was done on or after the effective date of this AD: Submit the report within 90 days after the inspection.
(2) If the inspection was done before the effective date of this AD: Submit the report within 90 days after the effective date of this AD.
The following provisions also apply to this AD:
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) European Aviation Safety Agency (EASA) Airworthiness Directive 2015-0170, dated August 18, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(2) For service information identified in this AD, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes. This proposed AD was prompted by reports of heavy corrosion and chrome damage on the forward and aft trunnion pin assemblies of the right and left main landing gears (MLGs). This proposed AD would require repetitive lubrication of the forward and aft trunnion pin assemblies of the right and left MLGs; repetitive inspections of these assemblies for corrosion and chrome damage, and related investigative and corrective actions if necessary; and the installation of new or modified trunnion pin assembly components, which would terminate the repetitive lubrication and repetitive inspections. We are proposing this AD to detect and correct heavy corrosion and chrome damage on the forward and aft trunnion pin assemblies of the right and left MLGs, which could result in cracking of these assemblies and collapse of the MLGs.
We must receive comments on this proposed AD by February 16, 2016.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
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For service information identified in this proposed AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
You may examine the AD docket on the Internet at
Alan Pohl, Aerospace Engineer, Airframe Branch, ANM-120S, FAA Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6450; fax: 425-917-6590; email:
We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We received reports of heavy corrosion and chrome damage of the forward and aft trunnion pin assemblies of the right and left main MLGs on Boeing Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes. Investigation revealed that the lubrication between the forward and aft trunnion pin assemblies and the outer cylinder assembly bushings and the lubrication of the aft trunnion bearing ball was not sufficient to prevent wear and corrosion. It was also determined that the clearances between the forward and aft trunnion pin cross bolt bushings and the cross bolts could affect the rate of wear and corrosion of the MLG trunnion pin assemblies. Corrosion and chrome damage of the forward and aft trunnion pin assemblies of the right and left main MLGs, if not corrected, could result in cracking of these assemblies and collapse of the MLGs.
We reviewed Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. The service information describes procedures for lubricating the forward and aft trunnion pin assemblies on the left and right MLGs, inspecting the forward and aft trunnion pin assemblies
We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This proposed AD would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between this Proposed AD and the Service Information.” For information on the procedures and compliance times, see this service information at
The phrase “related investigative actions” is used in this proposed AD. “Related investigative actions” are follow-on actions that (1) are related to the primary actions, and (2) further investigate the nature of any condition found. Related investigative actions in an AD could include, for example, inspections.
The phrase “corrective actions” is used in this proposed AD. “Corrective actions” are actions that correct or address any condition found. Corrective actions in an AD could include, for example, repairs.
We estimate that this proposed AD affects 1,023 airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed AD.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by February 16, 2016.
None.
This AD applies to certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, certificated in any category, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015.
Air Transport Association (ATA) of America Code 32, Landing Gear.
This AD was prompted by reports of heavy corrosion and chrome damage of the forward and aft trunnion pin assemblies of the right and left main landing gears (MLG). We are issuing this AD to detect and correct heavy corrosion and chrome damage of the forward and aft trunnion pin assemblies of the right and left MLGs, which could result in cracking of these assemblies and collapse of the MLGs.
Comply with this AD within the compliance times specified, unless already done.
For airplanes in Groups 1 and 2, Configuration 1, and airplanes in Group 3, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015: Except as required by paragraph (k) of this AD, at the applicable time specified in Table 1 or Table 2 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, lubricate the forward and aft trunnion pin assemblies of the left and right MLGs, in accordance with Work Package 1 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. Repeat the lubrication thereafter at intervals not to exceed those specified in paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. Accomplishment of paragraph (i) of this AD terminates the repetitive lubrication required by this paragraph.
For airplanes in Groups 1 and 2, Configuration 1, and airplanes in Group 3, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015: Except as required by paragraph (k) of this AD, at the applicable time specified in Table 1 or Table 2 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, do a general visual inspection of the left and right MLGs at the forward and aft trunnion pin locations and the visible surfaces of the forward and aft trunnion pin assemblies for signs of corrosion or chrome plating damage and lubricate the forward and aft trunnion pin assemblies, in accordance with Work Package 2 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. Repeat the general visual inspections thereafter at intervals not to exceed those specified in paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. If any discrepancy is found during any inspection required by this paragraph, before further flight, do all applicable related investigative and corrective actions in accordance with Work Package 2 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737 32-1448, Revision 1, dated May 29, 2015. Accomplishment of the actions required by paragraph (i) of this AD terminates the repetitive inspections required by this paragraph.
For airplanes in Groups 1 and 2, Configuration 1, and airplanes in Group 3, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015: Except as required by paragraph (k) of this AD, at the applicable time specified in Table 1 or Table 2 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, modify and lubricate the left and right MLG trunnion pin assemblies, and do all applicable related investigative and corrective actions, in accordance with Work Package 3 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. Accomplishment of the actions in Work Package 3 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, terminates the repetitive lubrication required by paragraph (g) of this AD and the repetitive inspections required by paragraph (h) of this AD.
For airplanes in Groups 1 and 2, Configuration 2, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015: At the applicable time specified in Table 3, paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, replace the seal, retainer, and support ring assembly with a new seal and retainer configuration, install the forward trunnion pin assembly into the housing assembly, and lubricate the forward and aft trunnion pin assemblies for the left and right MLGs, in accordance with Work Package 4 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015.
Where paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, specifies a compliance time “from the original issue date on this service bulletin,” this AD requires compliance within the specified compliance time “after the effective date of this AD.”
This paragraph provides credit for the requirements of paragraph (g) of this AD, if those actions were performed before the effective date of this AD using Boeing Special Attention Service Bulletin 737-32-1448, dated May 19, 2011, which is not incorporated by reference in this AD.
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (n) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(1) For more information about this AD, contact Alan Pohl, Aerospace Engineer, Airframe Branch, ANM-120S, FAA Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6450; fax: 425-917-6590; email:
(2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS issues a proposed rule to revise the authorized methods for payment of cost recovery fees for the Halibut and Sablefish Individual Fishing Quota Program and the Bering Sea and Aleutian Islands Crab Rationalization Program. This proposed rule is necessary to improve data security procedures and to reduce administrative costs of processing cost recovery fee payments. The proposed rule is intended to promote the goals and objectives of the Magnuson-Stevens Fishery Conservation and Management Act, the Northern Pacific Halibut Act of 1982, the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands, the Fishery Management Plan for Groundfish of the Gulf of Alaska, the Fishery Management Plan for Bering Sea/Aleutian Islands King and Tanner Crabs, and other applicable laws.
Submit comments on or before February 1, 2016.
You may submit comments, identified by NOAA-NMFS-2015-0113, by any of the following methods:
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Electronic copies of the following documents are available from
• The Regulatory Impact Review/Initial Regulatory Flexibility Analysis (RIR/IRFA) (collectively referred to as the “Analysis”) and the Categorical Exclusion prepared for this action.
Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this action may be submitted by mail to NMFS at the above address; by email to
Keeley Kent, 907-586-7228.
NMFS manages the groundfish fisheries in the Federal exclusive economic zone (EEZ) off Alaska under the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands and under the Fishery Management Plan for Groundfish of the Gulf of Alaska. The North Pacific Fishery Management Council (Council) prepared the fishery management plans (FMPs) under the authority of the Magnuson Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801
The International Pacific Halibut Commission (IPHC) and NMFS manage fishing for Pacific halibut through regulations established under the authority of the Northern Pacific Halibut Act of 1982 (Halibut Act). The IPHC promulgates regulations governing the halibut fishery under the Convention between the United States and Canada for the Preservation of the Halibut Fishery of the Northern Pacific Ocean and Bering Sea (Convention). The IPHC's regulations are subject to approval by the Secretary of State with the concurrence of the Secretary of Commerce (Secretary). NMFS publishes the IPHC's regulations as annual management measures pursuant to 50 CFR 300.62. The Halibut Act, at sections 773c(a) and (b), provides the Secretary with general responsibility to carry out the Convention and the Halibut Act. The Halibut Act, at section 773c(c), also provides the Council with authority to develop regulations, including limited access regulations, that are in addition to, and not in conflict with, approved IPHC regulations. Regulations developed by the Council may be implemented by NMFS only after approval by the Secretary. The Council developed the Individual Fishing Quota Program (IFQ Program) for the commercial halibut and sablefish fisheries, codified at 50 CFR part 679, under the authority of section 773 of the Halibut Act and section 303(b) of the Magnuson-Stevens Act.
The king and Tanner crab fisheries in the EEZ of the Bering Sea and Aleutian Islands are managed under the Fishery Management Plan for Bering Sea/Aleutian Islands King and Tanner Crabs (Crab FMP). The Crab FMP was prepared by the Council under the Magnuson-Stevens Act as amended by the Consolidated Appropriations Act of 2004 (Public Law 108-199, section 801). Regulations implementing the Crab FMP, including the Bering Sea and Aleutian Islands Crab Rationalization Program (CR Program), are located at 50 CFR part 680.
This proposed rule would revise authorized payment methods in the cost recovery fee programs for the IFQ Program and the CR Program. The proposed rule would improve data security procedures for protecting financial information submitted to NMFS for payment of cost recovery fees by eliminating manual processing of credit card payments by NMFS and requiring use of the Federal Government's online payment system, pay.gov, for all credit card payments. This proposed rule would also reduce administrative costs for the cost recovery programs by eliminating manual processing of paper check and money order payments and requiring electronic payment of all cost recovery fee payments to NMFS using pay.gov or Fedwire Funds Service (Fedwire) beginning with the cost recovery fee payment due in 2020. Reduced administrative costs to NMFS would result in lower expenses subject to cost recovery fees. Therefore, this action would be expected to reduce fees for
The following sections describe authorities for and operation of cost recovery programs, the cost recovery program for the IFQ Program, the cost recovery program for the CR Program, the current authorized cost recovery fee payment methods, the need for this proposed rule, and the proposed rule to improve administration of the cost recovery programs.
Section 304(d) of the Magnuson-Stevens Act specifies that the Secretary is authorized, and shall collect a fee, to recover the actual costs directly related to the management, data collection, and enforcement of any limited access privilege program (LAPP) and community development quota program (CDQ) that allocates a percentage of the total allowable catch of a fishery to such program. Section 304(d) also specifies that such fee shall not exceed three percent of the ex-vessel value of fish harvested under any such program.
The IFQ Program is a LAPP as defined in section 304(d) of the Magnuson-Stevens Act. NMFS implemented a cost recovery fee program for the IFQ Program in 2000 (65 FR 14919, March 20, 2000). Regulations implementing the IFQ Program cost recovery program are located at § 679.45. The CR Program is also a LAPP as defined in section 304(d) of the Magnuson-Stevens Act. Section 313(j) of the Magnuson-Stevens Act provided supplementary authority to section 304(d) and additional detail for cost recovery provisions specific to the CR Program. NMFS implemented a cost recovery fee program with the final rule to implement the CR Program in 2005 (70 FR 10174, March 2, 2005). Regulations implementing the CR Program cost recovery program are located at § 680.44.
NMFS recovers the incremental costs of managing and enforcing the IFQ Program and CR Program annually through a fee paid by persons who hold a permit granting an exclusive access privilege to a portion of the total allowable catches in IFQ Program and CR Program fisheries. NMFS calculates cost recovery fees for fish that are landed and deducted from the total allowable catch in the fisheries subject to cost recovery.
To calculate the annual cost recovery fee for each permit holder in the IFQ Program and the CR Program, NMFS (1) calculates the ex-vessel value for each landing of a fishery species allocated under the program; (2) calculates the total ex-vessel value of all fish landed under the program by adding together the ex-vessel values of each fishery species under the program; (3) calculates the total program cost by adding together the incremental costs of management, data collection, and enforcement for each fishery under the program that would not have been incurred but for the implementation of the program; (4) calculates a fee percentage (not to exceed three percent of the ex-vessel value of fish harvested under any such program) for the program by dividing total program costs by the total ex-vessel value for all fishery species under the program; and (5) calculates the fee amount that will be assessed for each permit holder by multiplying the fee percentage by the permit holder's total ex-vessel value of landings under the program. The final figure is the annual cost recovery fee owed by each permit holder. The amount of cost recovery fees collected varies annually because total ex-vessel value and total program costs fluctuate from year to year.
The Council recommended the IFQ Program in 1992, and NMFS published a final rule to implement the IFQ Program on November 9, 1993 (58 FR 59375). Fishing under the program began on March 15, 1995. The IFQ Program limits access to the halibut and sablefish fisheries to those persons holding quota shares (QS) in specific regulatory areas. QS equate to individual harvesting privileges that are given effect annually through the issuance of IFQ permits. An annual IFQ permit authorizes the permit holder to harvest a specified amount of IFQ halibut or sablefish in a regulatory area.
The final rule to implement the cost recovery program for the IFQ fishery was published in March 2000 (65 FR 14919, March 20, 2000). Section 679.45 specifies the process that NMFS uses to determine, assess, and collect cost recovery fees for the IFQ Program. As described above in the “Cost Recovery—General” section, NMFS annually calculates the cost recovery fee percentage for halibut and sablefish IFQ permit holders by dividing total program costs for the IFQ Program by the total ex-vessel value of the catch subject to the IFQ cost recovery fee for the current year. The IFQ Program fishing year takes place within a calendar year, generally beginning in March and ending in November. The method used by NMFS to calculate the IFQ cost recovery fee percentage is described at § 679.45(d)(2)(ii). Regulations at § 679.45(d)(1) and (d)(3)(i) require NMFS to publish the IFQ cost recovery fee percentage and the IFQ standard prices used to calculate the total ex-vessel value of IFQ halibut and sablefish landed in the
Each December, NMFS sends IFQ permit holders a bill for the cost recovery fee liability with an itemization of their IFQ halibut and sablefish landings for the year. The IFQ permit holder is responsible for submitting this payment to NMFS on or before the due date of January 31 following the year in which the IFQ halibut and sablefish landings were made.
If an IFQ permit holder who owes a fee fails to submit payment in full by January 31 following the year in which the landings were made, NMFS sends the permit holder an Initial Administrative Determination (IAD) with the amount of fee liability owed. If a permit holder fails to make payment after receiving the IAD, NMFS may disapprove any transfer of IFQ or QS to or from the permit holder until the fee liability is reconciled. If further action is necessary, NMFS may invalidate any IFQ fishing permits held by the permit holder. Additional information on the administration of the IFQ Program cost recovery program is provided in Section 3.5.1.2 of the Analysis.
NMFS published the final rule to implement the CR Program in 2005 (70 FR 10174, March 2, 2005). The CR Program allocates QS for nine crab fisheries under the Crab FMP: Bristol Bay red king crab, Bering Sea
NMFS originally issued QS to eligible harvesters as determined by eligibility criteria and participation in the CR Program fisheries during qualifying years. Additionally, NMFS issued processor quota shares (PQS) to eligible processing entities that met the criteria based on crab processing activities during the qualifying years. Each year, individual QS holders are issued IFQ to harvest a portion of the annual total allowable catch in a CR Program fishery. PQS holders are similarly issued annual individual processing quota (IPQ) that
NMFS issues three classes of IFQ: A shares, B shares, and C shares. Three percent of the total IFQ pool for each fishery is issued as C shares for captains and crew. The remaining IFQ pool is split with 90 percent issued as A shares and 10 percent issued as B shares. Class A shares carry the requirement of matching, on a one-to-one basis, with IPQ. Both Class B and Class C shares do not have a matching requirement and may be delivered to any registered crab receiver (RCR). RCRs include shoreside processors, catcher/processors, entities holding PQS with custom processing agreements with other shoreside processors, and communities holding PQS.
The cost recovery regulations for the CR Program were published in the final rule to implement the CR Program on March 2, 2005 (70 FR 10174). Section 680.44 specifies the process that NMFS uses to determine, assess, and collect cost recovery fees for the CR Program. As described above in the “Cost Recovery—General” section, NMFS annually calculates the cost recovery fee percentage for the CR Program by dividing total program costs for the CR Program by the total ex-vessel value of the catch subject to the CR Program cost recovery fee for the current year. The CR Program cost recovery billing cycle matches that of the crab fishing year—July 1 to June 30. The method used by NMFS to calculate the CR Program cost recovery fee percentage is described at § 680.44(c)(2). As specified in the final rule to implement the CR Program, the CR Program processing sector, specifically RCRs, are responsible for collecting cost recovery fee payments from the harvesters and submitting this payment and their own self-collected fee payments to NMFS by the specified deadline. Catcher/processors, vessels that harvest and process crab, pay the full CR Program cost recovery fee for every pound of crab harvested and processed.
Regulations at § 680.44(c)(1) require NMFS to publish the CR Program cost recovery fee percentage in the
If an RCR owes fees and fails to submit full payment for the previous crab fishing year by July 31, the Regional Administrator may disapprove any transfer of IFQ, IPQ, QS, or PQS to or from the RCR and may withhold issuance of any new CR crab permits, including IFQ, IPQ, or RCR permits for the subsequent crab fishing year. Additional information on the administration of the CR Program cost recovery program is provided in Section 3.5.2.2 of the Analysis.
Cost recovery regulations for the IFQ Program and CR Program (§ 679.45(a)(4)(iv) and § 680.44(a)(4)(iv), respectively) currently allow permit holders to pay their fee in U.S. dollars by personal check drawn on a U.S. bank account, money order, bank-certified check, or credit card. NMFS has established specific procedures for processing payments. IFQ Program and CR Program permit holders may submit cost recovery fee payments either electronically or non-electronically. Electronic payments can be made using credit card or electronic check via the pay.gov web-based system, or by wiring payment directly from the permit holder's financial institution via the Fedwire funds transfer system. Non-electronic payments can be made by submitting a paper form to NMFS with credit card information via mail or facsimile, or by submitting a paper check or money order via mail. This section provides additional detail on each authorized payment method regarding the security of permit holders' financial information and the administrative costs incurred by NMFS to process the payments.
Electronic payments via the pay.gov system and the Fedwire system are the most secure methods of transmitting financial information and result in the lowest administrative costs for NMFS. Permit holders may make electronic cost recovery payments directly through pay.gov. Pay.gov is operated by the U.S. Department of the Treasury (Treasury) and offers the highest level of security for the personal and financial information submitted to pay fees to NMFS. Pay.gov uses the latest industry-standard methods and encryption to safely collect, store, and transmit information that is submitted.
IFQ Program and CR Program permit holders can access pay.gov through the NMFS Alaska Region online system called eFISH. The eFISH system is a web-based application that provides permit holders with access to their NMFS permit accounts (
Through pay.gov, permit holders can make cost recovery payments using a credit card, debit card, or direct debit (electronic check). Due to the transaction fee incurred by the Treasury, there is a payment limit of $24,999.99 on credit card transactions through pay.gov (see notice online at:
Under the current regulations, permit holders may also make cost recovery fee payments through Fedwire. Fedwire is a real-time transfer system that allows financial institutions to electronically transfer funds. Fedwire allows wire transfers of fee payments from any bank or wire transfer service to NMFS to fulfill cost recovery fee obligations. To make a Fedwire payment, a permit holder must provide his or her financial institution the routing number and account information for the Treasury, the beneficiary name and account number for NMFS, and the amount owed. The permit holder's financial institution then initiates the transaction. Payments are made directly to the Federal Reserve Bank, which then notifies NMFS of the payment. Payments are processed individually through Fedwire, which uses a highly secure electronic network. NMFS must log Fedwire payments in the internal cost recovery payment tracking system.
Non-electronic submission of payment information to NMFS via mail or facsimile is less secure and results in higher administrative costs than electronic payments because it results in transmission of permit holders' financial information over the NMFS information network and requires NMFS to manually process payments. Under current regulations, permit
Permit holders may also pay a cost recovery fee with a paper check, money order, or bank-certified check. NMFS processes these payments using a Treasury web-based application (
In 2014 for the IFQ Program, NMFS received 2,038 total cost recovery fee payments from IFQ permit holders, with an average payment size of $2,440 (Table 4 of the Analysis). Of the total payments made, 528 cost recovery fee payments required manual credit card processing (Table 2 of the Analysis), which represented 26 percent of the total cost recovery payments made that year. The number of payments requiring manual credit card processing increased slightly from 2013 to 2014. In 2014, there were 986 payments made by paper check (48 percent of payments) and 19 made by money order (0.9 percent of payments). Overall, manual processing for credit card, paper check, and money order payments was required for 75 percent of cost recovery fee payments made under the IFQ Program for 2014 (1,533 payments); the remaining 25 percent of payments were made electronically primarily via pay.gov (Table 4 of Analysis).
In 2014 for the CR Program, NMFS received 20 total cost recovery fee payments from CR Program permit holders, with an average payment size of $78,310 (Table 5 of the Analysis). There were no cost recovery payments made from 2012 through 2014 by CR Program RCRs that required manual credit card processing (Table 3 of the Analysis). This may be because the CR Program payments are considerably larger than the IFQ Program payments due to the payment liability structure that requires RCRs to submit cost recovery fee payments on behalf of the CR Program harvesting and processing sectors. In 2014, 50 percent of payments (10 payments) were made with paper checks and required manual processing (Table 3 of the Analysis), and the remaining 50 percent of payments (10 payments) were made electronically using pay.gov and Fedwire.
The purpose of this proposed rule is to improve security procedures for protecting financial information and to reduce costs associated with administering the cost recovery programs. The current regulations for the IFQ Program and the CR Program cost recovery programs allow permit holders to submit credit card information for manual credit card processing by NMFS. This results in the possession and electronic transmission of financial information on the NMFS information network, which is a security vulnerability and an administrative cost to both the permit holder and to NMFS. As a result of this security vulnerability, the NMFS Alaska Region has been directed by the NOAA Office of the Chief Information Officer to cease manual processing of credit card payments for cost recovery fees.
This proposed rule would also reduce administrative costs for the IFQ Program and CR Program by eliminating other non-electronic payment methods that require manual processing. As described in the previous section, all manual processing of cost recovery fee payments made by check and money order generates significant costs for the administration of these programs. Eliminating these non-electronic payment methods from authorized payment method options would reduce the staffing burden for processing cost recovery fee payments and further reduce the costs of administering the cost recovery programs. Reduced administrative costs would result in lower overall fee liabilities for the IFQ and CR Programs.
NMFS proposes to revise the authorized cost recovery fee payment methods for the IFQ and CR Programs by revising regulations at § 679.45(a)(4)(ii) through (iv) and § 680.44(a)(4)(iii) and (iv). This proposed rule would eliminate the option for IFQ permit holders and CR Program RCRs to submit credit card payment information by mail or facsimile upon the effective date of the final rule, if approved. NMFS anticipates the final rule, if approved, would be effective prior to the date cost recovery fee payments are due for the 2015/2016 CR Program crab fishing year and the 2016 IFQ Program fishing year. The cost recovery fee payment for the CR Program 2015/2016 crab fishing year would be due on July 31, 2016. The cost recovery fee payment for the 2016 IFQ Program fishing year would be due on January 31, 2017.
This proposed rule would also revise the cost recovery regulations to eliminate paper checks, money orders, and bank-certified checks as authorized payment methods beginning with the cost recovery fee payment that would be due by January 31, 2020 for the IFQ Program and July 31, 2020 for the CR Program. If approved, the final rule would require all permit holders to submit payments through pay.gov or Fedwire beginning with the cost recovery fee payment due for the 2019 fishing year for IFQ Program permit holders and for the 2019/2020 CR Program crab fishing year for CR Program RCRs. To implement this provision, NMFS proposes that all cost recovery fee payments must be made electronically for any payment made on or after the first day of the billing cycle for IFQ Program and CR Program cost recovery fee payments that would be due in 2020. The billing cycle is considered the time period that begins when NMFS calculates cost recovery fees and mails out cost recovery payment notices and ends when the cost recovery fee payment is due. The first day of the 2020 IFQ Program cost recovery billing cycle would be December 1, 2019. The first day of the 2019/2020 CR Program cost recovery billing cycle would be June 1, 2020. NMFS is proposing allowing non-electronic payments via paper check or money order until the 2020 cost recovery fee cycle to provide a transition period for those permit holders who do not make electronic payments to become familiar with, and begin transitioning to, electronic payment methods.
Table 1 contains the anticipated implementation schedule for the proposed rule to revise authorized cost recovery fee payment methods.
NMFS anticipates that this proposed rule would affect 1,533 IFQ Program permit holders and 10 CR Program RCRs who would need to change their payment method. This proposed rule would require the 528 IFQ permit holders who made non-electronic credit card payments in 2014 to change to an alternative payment method upon the effective date of the final rule, if approved. Beginning with the 2020 cost recovery billing cycle, the 1,005 IFQ permit holders and 10 CR Program RCRs who paid by paper check or money order in 2014 would be required to use an alternative payment method.
Under this proposed rule, permit holders paying cost recovery fees would benefit from the increased security of their financial information and a reduction in the total amount of cost recovery fees collected due to the reduced administrative costs of processing fee payments. The actual administrative cost savings of this proposed rule are difficult to predict due to the unknown staff costs required to help permit holders transition to new payment methods and how quickly permit holders may change payment methods prior to the 2020 fee collection cycle. After 2020, NMFS expects the administrative costs of processing payments to decrease as compared to the current costs. The costs to permit holders of changing payment methods are difficult to assess. However, both IFQ Program permit holders and CR Program RCRs are currently required to submit fishery landings information to NMFS using electronic reporting methods; so it is expected that requiring electronic cost recovery fee payments would be a manageable cost for most participants.
NMFS anticipates that this proposed rule would have minimal impacts on net benefits to the Nation. Overall, this action would likely result in a small net benefit from the reduction in the total amount of cost recovery fees collected due to the reduced administrative costs of processing cost recovery fee payments.
Pursuant to section 305(d) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined this proposed rule is consistent with the FMPs, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration of comments received during the public comment period.
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
An IRFA was prepared, as required by section 603 of the Regulatory Flexibility Act. The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. Copies of the IRFA prepared for this proposed rule are available from NMFS (see
The IRFA describes the action, why this action is being proposed, the objectives and legal basis for this proposed rule, the type and number of small entities to which this proposed rule would apply, and the projected reporting, recordkeeping, and other compliance requirements of this proposed rule. It also identifies any overlapping, duplicative, or conflicting Federal rules and describes any significant alternatives to this proposed rule that would accomplish the stated objectives of the Magnuson-Stevens Act and other applicable statues and that would minimize any significant adverse economic impact of this proposed rule on small entities. The description of this proposed rule, its purpose, and its legal basis are described in the preamble and are not repeated here.
The entities directly regulated by this proposed rule are permit holders who make halibut and sablefish landings in the IFQ Program fisheries and RCRs who receive landings of crab in the CR Program fisheries. The universe of entities was defined based on who is directly billed by NMFS for cost recovery fees, and therefore who would be directly impacted by a change in the authorized payment methods. The Small Business Administration defines a small commercial finfish fishing entity as one that has annual gross receipts, from all activities of all affiliates, of less than $20.5 million (79 FR 33647, June 12, 2014). Based upon available data, and more general information concerning the probable economic activity of vessels in the IFQ Program fisheries, no entity could have landed more than $20.5 million in combined gross receipts in 2014. Therefore, all 2,038 IFQ permit holders are classified as small entities. Under the CR Program, 11 RCRs are classified as small entities. Section 4.6 of the IRFA prepared for this proposed rule provides more information on these entities.
This proposed rule would require modifications to the current recordkeeping and reporting requirements for the IFQ Program and CR Program cost recovery programs in the Alaska Cost Recovery and Observer Fee collection (OMB Control Number 0648-0711). Specifically, this proposed rule would eliminate the option for payment by credit card using the paper fee submission form submitted to NMFS by mail or facsimile. Beginning with the 2020 cost recovery fee billing cycle, the paper fee submission form will be eliminated completely for the CR Program as permit holders will be required to submit all cost recovery fee payments electronically through the pay.gov or Fedwire systems. For the IFQ Program, beginning in 2020, the paper fee submission form would be revised to specify that all fee payments must be
The Analysis did not reveal any Federal rules that duplicate, overlap, or conflict with this proposed rule.
The Magnuson-Stevens Act requires that participants in LAPP and CDQ programs pay up to three percent of the ex-vessel value of the fish they are allocated to cover specific costs that are incurred by the management agencies as a direct result of implementing the programs. NMFS has identified this proposed rule as necessary to improve data security procedures for permit holders' financial information and to reduce administrative costs of processing cost recovery payments. There are no alternatives outside those evaluated in the Analysis that, consistent with applicable law, will accomplish the objectives of this rule, and result in lower adverse economic impacts on directly regulated small entities.
NMFS considered eliminating the submission of credit card payment information by phone, in person, facsimile, and mail and retaining the use of paper checks and money orders as authorized payment methods under Alternative 2 in the Analysis. However, Alternative 2 failed to meet the objective of reducing administrative costs associated with administering the cost recovery programs because processing these payments results in a greater staff burden than processing payments made by the pay.gov or Fedwire systems (see Section 3.7 of the Analysis). NMFS also considered Alternative 3, which would have simultaneously implemented both the elimination of credit card payment by phone, in person, facsimile, and mail, and the elimination of paper check and money order payment (see Section 3.8 of the Analysis). However, NMFS rejected Alternative 3 in favor of Alternative 3 Option 1 which accommodated for the transition costs to permit holders in complying with the proposed rule by delaying full implementation of the proposed changes until the applicable cost recovery fee payment due date in 2020. NMFS determined that Alternative 3 Option 1 would provide an opportunity for the permit holders to become familiar with either pay.gov or Fedwire and change to a new payment method. Additionally, Alternative 3 Option 1 would spread out any transition costs for NMFS staff in providing customer service to help permit holders affected by the change (see Section 3.8.1 of the Analysis).
This proposed rule contains collection-of-information requirements subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). NMFS has submitted these requirements to OMB for approval under Control Number 0648-0711. Public reporting burden per response is estimated to average one minute for electronic fee submission and 30 minutes for non-electronic fee submission. Estimates for public reporting burden include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
Public comment is sought regarding whether these proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information, including through the use of automated collection techniques or other forms of information technology. Send comments on these or any other aspects of the collection of information to NMFS at the
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number. All currently approved NOAA collections of information may be viewed at:
Alaska, Fisheries, Reporting and recordkeeping requirements.
Alaska, Fisheries, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, NMFS proposes to amend 50 CFR part 679 and 50 CFR part 680 as follows:
16 U.S.C. 773
(a) * * *
(4) * * *
(ii)
(iii)
(iv)
(B) On or after December 1, 2019, payment must be made electronically in U.S. dollars by automated clearing house, credit card, or electronic check drawn on a U.S. bank account.
16 U.S.C. 1862; Pub. L. 109-241; Pub. L. 109-479.
(a) * * *
(4) * * *
(iii)
(iv)
(B) On or after June 1, 2020, payment must be made electronically in U.S. dollars by automated clearing house, credit card, or electronic check drawn on a U.S. bank account.
Food Safety and Inspection Service, USDA.
Notice.
The Food Safety and Inspection Service (FSIS) is announcing the 2016 rates that it will charge meat and poultry establishments, egg products plants, and importers and exporters for providing voluntary, overtime, and holiday inspection and identification, certification, and laboratory services. The 2016 basetime, overtime, holiday, and laboratory services rates will be applied beginning the first FSIS pay period approximately 30 days after the publication of this notice. This pay period begins on February 7, 2016.
FSIS will charge the rates announced in this notice beginning February 7, 2016.
For further information contact Michael Toner, Director, Budget Division, Office of Management, FSIS, U.S. Department of Agriculture, Room 2159, South Building, 1400 Independence Avenue SW., Washington, DC 20250-3700; Telephone: (202) 690-8398, Fax: (202) 690-4155.
On April 12, 2011, FSIS published a final rule amending its regulations to establish formulas for calculating the rates it charges meat and poultry establishments, egg products plants, and importers and exporters for providing voluntary, overtime, and holiday inspection and identification, certification, and laboratory services (76 FR 20220).
In the final rule, FSIS stated that it would use the formulas to calculate the annual rates, publish the rates in a
This notice announces the 2016 rates, which will be applied starting on February 7, 2016.
The following table lists the 2016 Rates per hour, per employee, by type of service:
The regulations state that FSIS will calculate the rates using formulas that include the Office of Field Operations (OFO) and Office of International Affairs (OIA) inspection program personnel's previous fiscal year's regular direct pay and regular hours (9 CFR 391.2, 391.3, 391.4, 590.126, 590.128, 592.510, 592.520, and 592.530). In 2013, an Agency reorganization eliminated the OIA program office and transferred all of its inspection program personnel to OFO. Therefore, pay and hours of inspection program personnel are identified in the calculations as “OFO inspection program personnel's” pay and hours.
FSIS determined the 2016 rates using the following calculations:
The calculation for the 2016 basetime rate per hour per program employee is:
The calculation for the 2016 overtime rate per hour per program employee is:
The calculation for the 2016 holiday rate per hour per program employee calculation is:
The calculation for the 2016 laboratory services rate per hour per program employee is:
These rates are components of the basetime, overtime, holiday, and laboratory services rates formulas.
The calculation for the 2016 benefits rate per hour per program employee is:
The calculation for the 2016 travel and operating rate per hour per program employee is:
The calculation for the 2016 overhead rate per hour per program employee is:
The 2016 calculation for bad-debt rate per hour per program employee is:
Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this
FSIS also will make copies of this publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations,
No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.
To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at
Send your completed complaint form or letter to USDA by mail, fax, or email:
Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.), should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of availability of reports; public meetings, and hearings.
The Pacific Fishery Management Council (Pacific Council) has begun its annual preseason management process for the 2016 ocean
Written comments on the salmon management alternatives must be received by 11:59 p.m. Pacific Time, April 3, 2016.
Documents will be available from, and written comments should be sent to Ms. Dorothy Lowman, Chair, Pacific Fishery Management Council, 7700 NE Ambassador Place, Suite 101, Portland, OR 97220-1384, telephone: (503) 820-2280 (voice) or (503) 820-2299 (fax). Comments can also be submitted via email at
Mr. Mike Burner, telephone: (503) 820-2414.
All public hearings begin at 7 p.m. at the following locations:
Although nonemergency issues not contained in the STT meeting agendas may come before the STT for discussion, those issues may not be the subject of formal STT action during these meetings. STT action will be restricted to those issues specifically listed in this document and to any issues arising after publication of this document requiring emergency action under Section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the STT's intent to take final action to address the emergency.
These public meetings and hearings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt at (503) 820-2280 (voice), or (503) 820-2299 (fax) at least 5 days prior to the meeting date.
16 U.S.C. 1801
Stewardship Division, Office for Coastal Management, National Ocean Service, National Oceanic and Atmospheric Administration, U.S. Department of Commerce.
Notice of Approval for the Mission-Aransas, Texas National Estuarine Research Reserve Management Plan revision.
Under 15 CFR 921.33(d), notice is hereby given that the Stewardship Division, Office for Coastal Management, National Ocean Service, National Oceanic and Atmospheric Administration, U.S. Department of Commerce approves the Mission-Aransas, Texas National Estuarine Research Reserve Management Plan revision. The Mission-Aransas Reserve revised plan will replace the plan approved in 2006.
The revised management plan outlines the administrative structure; the research/monitoring, stewardship, education, and training programs of the reserve; and the plans for future land acquisition and facility development to support reserve operations.
The Mission-Aransas Reserve takes an integrated approach to management, linking research, education, coastal training, and stewardship functions. The Reserve has outlined how it will manage administration and its core program providing detailed actions that will enable it to accomplish specific
On October 1, 2015, NOAA issued a notice of a thirty day public comment period for the Mission-Aransas Reserve revised plan (80 FR 59138). Responses to the written and oral comments received, and an explanation of how comments were incorporated into the final revised plan, are available in Appendix K to the revised plan (
With the approval of this management plan, the Mission-Aransas Reserve will increase their total acreage from 185,708 acres to 186,189. The change is attributable to the recent acquisitions of several parcels by Reserve partners, totaling 481 acres. All of the proposed additions are owned by existing Reserve partners and will be managed for long-term protection and conservation value. These parcels have high ecological value and will enhance the Reserve's ability to provide increased opportunities for research, education, and stewardship. The revised management plan will serve as the guiding document for the expanded 186,189 acre Mission-Aransas Reserve for the next five years. The 2015-2020 Mission-Aransas, Texas Reserve Management Plan, which contains a more detailed description of the boundary change and acquired parcels, is available at (
The impacts of the revised management plan have not changed and the initial Environmental Impact Statement (EIS) prepared at the time of designation is still valid. NOAA has made the determination that the revision of the management plan will not have a significant effect on the human environment and therefore qualifies for a categorical exclusion under NOAA Administrative Order 216-6. An environmental assessment will not be prepared.
Matt Chasse at (301) 563-1198 or Erica Seiden at (301) 563-1172 of NOAA's National Ocean Service, Stewardship Division, Office for Coastal Management, 1305 East-West Highway, N/ORM5, 10th floor, Silver Spring, MD 20910.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; 2016 cost recovery fee percentages and mothership (MS) pricing.
This action provides participants in the Pacific coast groundfish trawl rationalization program with the 2016 fee percentages and “MS pricing” needed to calculate the required payments for trawl rationalization program cost recovery fees due in 2016. For calendar year 2016, NMFS announces the following fee percentages by sector: 3.0 percent for the Shorebased Individual Fishing Quota (IFQ) Program; 2.5 percent for the MS Coop Program; and 0.7 percent for the Catcher/Processer (C/P) Coop Program. For 2016, the MS pricing to be used as a proxy by the C/P Coop Program is: $0.11/lb for Pacific whiting.
Effective January 1, 2016.
Christopher Biegel, Cost Recovery Program Coordinator, (503) 231-6291, fax (503) 872-2737, email
The Magnuson‐Stevens Fishery Conservation and Management Act (MSA) requires NMFS to collect fees to recover the costs directly related to the management, data collection, and enforcement of a limited access privilege program (LAPP) (16 U.S.C. 1854(d)(2)), also called “cost recovery.” The Pacific coast groundfish trawl rationalization program is a LAPP, implemented in 2011, and consists of three sectors: The Shorebased IFQ Program, the MS Coop Program, and the C/P Coop Program. In accordance with the MSA, and based on a recommended structure and methodology developed in coordination with the Pacific Fishery Management Council, NMFS began collecting mandatory fees of up to three percent of the ex‐vessel value of groundfish from each sector (Shorebased IFQ Program, MS Coop Program, and C/P Coop Program) in 2014. NMFS collects the fees to recover the incremental costs of management, data collection, and enforcement of the trawl rationalization program. Additional background can be found in the cost recovery proposed and final rules, 78 FR 7371 (February 1, 2013) and 78 FR 75268 (December 11, 2013), respectively. The details of cost recovery for the groundfish trawl rationalization program are in regulation at 50 CFR 660.115 (trawl fishery cost recovery program), § 660.140 (Shorebased IFQ Program), § 660.150 (MS Coop Program), and § 660.160 (C/P Coop Program).
By December 31 of each year, NMFS must announce the next year's fee percentages, and the applicable MS pricing for the C/P Coop Program. NMFS calculated the 2016 fee percentages by sector using the best available information. For 2016, the fee percentages by sector, which must not exceed three percent of the ex-vessel value of fish harvested, are:
• 3.0 percent for the Shorebased IFQ Program,
• 2.5 percent for the MS Coop Program
• 0.7 percent for the C/P Coop Program.
To calculate the fee percentages, NMFS used the formula specified in regulation at § 660.115(b)(1), where the fee percentage by sector equals the lower of three percent or direct program costs (DPC) for that sector divided by total ex-vessel value (V) for that sector multiplied by 100 (Fee percentage = the lower of 3% or (DPC/V) × 100).
“DPC,” as defined in the regulations at § 660.115(b)(1)(i), are the actual incremental costs for the previous fiscal year directly related to the management, data collection, and enforcement of each sector (Shorebased IFQ Program, MS Coop Program, and C/P Coop Program). Actual incremental costs means those net costs that would not have been incurred but for the implementation of the trawl rationalization program, including both increased costs for new requirements of the program and reduced costs resulting from any program efficiencies. Similar to
“V”, as specified at § 660.115(b)(1)(ii), is the total ex-vessel value, as defined at § 660.111, for each sector from the previous calendar year. To calculate “V” for use in determining 2016 fee percentages, electronic fish ticket data in the Pacific Fisheries Information Network (PacFIN) are used for the Shorebased IFQ Program. The MS Coop Program and the C/P Coop Program values are calculated using the average price of whiting derived from those reported on the MS Coop Program cost recovery form from calendar year 2014. This average price ($0.11) and the retained catch estimates (weight) from the observer data (as reported in PacFIN from NORPAC) were used to calculate the “V” for the MS and C/P Coop Programs.
Ex-vessel values and amounts landed each year fluctuate, and the amount NMFS collects each year in cost recovery fees also fluctuate accordingly. When the cost recovery fees collected by NMFS are greater or less than the actual net incremental costs incurred for a given year, the fee percentage for the following year will be adjusted accordingly (as specified § 660.115(b)(1)(i)).
It is expected that, in 2015, the Shorebased IFQ Program will have paid $292,051.99 less than the 2014 DPC used to calculate its 2015 fee percentage. As the Shorebased IFQ Program fee percentage for 2016 has already been capped at the maximum 3.0 percent, there will be no fee adjustment for that sector.
It is expected that, in 2015, the MS Coop Program will have paid $82,642.35 less than the 2014 DPC used to calculate its 2015 fee percentage. Therefore, the MS Coop Program DPC used to calculate the 2016 fee percentage will be adjusted upward by $82,642.35.
The adjustment to the C/P Coop program costs used to determine the 2015 fee percentage showed that NMFS anticipated collecting $15,295.71 more than the costs used to determine the 2015 fee, resulting in a fee percentage of negative 0.1. However, because a fee percentage cannot be negative, NMFS set the 2015 C/P Coop program cost recovery fee at 0.0 percent (79 FR 78400) and is now deducting $15,295.71 from the DPC used to calculate the 2016 fee percentage.
The adjustments for the MS Coop and C/P Coop programs are included, and increase or reduce their DPC values which are shown below in the fee percentage calculations for that sector.
MS pricing is the average price per pound that the C/P Coop Program will use to determine their fee amount due (MS pricing multiplied by the value of the aggregate pounds of all groundfish species harvested by the vessel registered to a C/P-endorsed limited entry trawl permit, multiplied by the C/P fee percentage, equals the fee amount due). In past years, MS pricing was based on the average price per pound of Pacific whiting as reported in PacFIN from the Shorebased IFQ Program. In other words, data from the IFQ fishery was used as a proxy for the MS average price per pound to determine the “MS pricing” used in the calculation for the C/P sector's fee amount due. For 2016 MS pricing, NMFS used values derived from those reported on the MS Coop Program cost recovery form from calendar year 2014 as this was determined to be the best information available. NMFS has calculated the 2016 MS pricing to be used as a proxy by the C/P Coop Program as: $0.11/lb for Pacific whiting.
Cost recovery fees are submitted to NMFS by Fish buyers via Pay.gov (
As stated in the preamble to the cost recovery proposed and final rules, in the spring of each year, NMFS will release an annual report documenting the details and data used for the above calculations. The report will include information such as the fee percentage calculation, program costs, and ex-vessel value by sector. The annual report for fishing year 2013 and calculation for 2014 is available at:
The annual report for fishing year 2015 and calculation for 2016 will be made available to the public electronically via the NMFS West Coast Region Groundfish Web site
16 U.S.C. 1801
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Under the provisions of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1801
This information collection request may be viewed at reginfo.gov. Follow the instructions to view Department of Commerce collections currently under review by OMB.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Committee for Purchase From People Who Are Blind or Severely Disabled.
Addition to the Procurement List.
This action adds a product to the Procurement List that will be furnished by nonprofit agency employing persons who are blind or have other severe disabilities.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia 22202-4149.
Barry S. Lineback, Telephone: (703) 603-7740, Fax: (703) 603-0655, or email
On 11/20/2015 (80 FR 72710-72711), the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed addition to the Procurement List.
After consideration of the material presented to it concerning capability of qualified nonprofit agency to furnish the product and impact of the addition on the current or most recent contractors, the Committee has determined that the product listed below is suitable for procurement by the Federal Government under 41 U.S.C. 8501-8506 and 41 CFR 51-2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in any additional reporting, recordkeeping or other compliance requirements for small entities other than the small organization that will furnish the product to the Government.
2. The action will result in authorizing small entities to furnish the product to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501-8506) in connection with the product proposed for addition to the Procurement List.
Accordingly, the following product is added to the Procurement List:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed Deletions From the Procurement List.
The Committee is proposing to delete products from the Procurement List that was previously furnished by nonprofit agencies employing persons who are blind or have other severe disabilities.
Comments Must Be Received on or Before: 1/30/2016.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia 22202-4149.
Barry S. Lineback, Telephone: (703) 603-7740, Fax: (703) 603-0655, or email
This notice is published pursuant to 41 U.S.C. 8503(a)(2) and 41 CFR 51-2.3. Its purpose is to provide interested persons an opportunity to submit comments on the proposed actions.
The following products are proposed for deletion from the Procurement List:
Warrior Transition Command, U.S. Army, DoD.
Notice.
In compliance with the
Consideration will be given to all comments received by February 29, 2016.
You may submit comments, identified by docket number and title, by any of the following methods:
•
•
Any associated form(s) for this collection may be located within this same electronic docket and downloaded for review/testing. Follow the instructions at
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to: LTC Luis A. Fregoso, Warrior Transition Command, 200 Stovall Street, Suite 7S37, Alexandria VA 22332-5000 or
The following information collection requirement is necessary to plan and execute the 2016 Warrior Games. Created in 2010, the Warrior Games showcases the resilient spirit of today's wounded, ill or injured service members from all branches of the military. Wounded, ill and/or injured athletes from the Army, Marine Corps, Navy, Coast Guard, Air Force and Special Operations Command compete in eight sports (archery, cycling, shooting, swimming, track, field, sitting volleyball and wheelchair basketball) in a display of courage and resilience. The 2016 Warrior Games (WG16), to be held June 15 through June 21, 2016 at the U.S. Military Academy (USMA) in West Point, New York, is being organized by the Warrior Transition Command (WTC) of the U.S. Army.
Respondents are individuals that will be participating in the 2016 Warrior Games as: Athletes, non-medical assistants, coaches, volunteers, family members, distinguished visitors and members of the media. All registration forms will be accessed, completed and submitted online.
Department of Defense (DoD).
Request for public comments.
On behalf of the U.S. Government, DoD is contemplating negotiating and concluding a Reciprocal Defense Procurement Memorandum of Understanding with the Ministry of Defense of Japan. DoD is requesting industry feedback regarding its experience in public defense procurements conducted by or on behalf of the Japanese Ministry of Defense or Armed Forces.
Submit written comments to the address shown below on or February 1, 2016.
Submit comments to Defense Procurement and Acquisition Policy, Attn: Ms. Patricia Foley, 3060 Defense Pentagon, Room 5E621, Washington, DC 20301-3060; or by email to
Ms. Patricia Foley, Senior Analyst, Office of the Under Secretary of Defense for Acquisition, Technology and Logistics (OUSD(AT&L)), Defense Procurement and Acquisition Policy, Contract Policy and International Contracting; Room 5E621, 3060 Defense Pentagon, Washington, DC 20301-3060; telephone (703) 693-1145.
DoD has concluded Reciprocal Defense Procurement (RDP) Memorandums of Understanding (MOUs) with 23 “qualifying countries” at the level of the Secretary of Defense and his counterpart. The purpose of RDP MOUs is to promote rationalization, standardization, and interoperability of conventional defense equipment with allies and other friendly governments. These MOUs provide a framework for ongoing communication regarding market access and procurement matters that enhance effective defense cooperation.
RDP MOUs generally include language by which the Parties agree that their defense procurements will be conducted in accordance with certain implementing procedures. These procedures relate to—
• Publication of notices of proposed purchases;
• The content and availability of solicitations for proposed purchases;
• Notification to each unsuccessful offeror;
• Feedback, upon request, to unsuccessful offerors concerning the reasons they were not allowed to participate in a procurement or were not awarded a contract; and
• Provision for the hearing and review of complaints arising in connection with any phase of the procurement process to ensure that, to the extent possible, complaints are equitably and expeditiously resolved.
Based on the MOU, each country affords the other country certain benefits on a reciprocal basis consistent with national laws and regulations. The benefits that the United States accords to the products of qualifying countries include—
• Offers of qualifying country end products are evaluated without applying the price differentials otherwise required by the Buy American statute and the Balance of Payments Program;
• The chemical warfare protection clothing restrictions in 10 U.S.C. 2533a and the specialty metals restriction in 10 U.S.C. 2533b(a)(1) do not apply to products manufactured in a qualifying country; and
• Customs, taxes, and duties are waived for qualifying country end products and components of defense procurements.
If DoD (for the U.S. Government) concludes an RDP MOU with the Ministry of Defense of Japan, then Japan would be listed as one of the “qualifying countries” in the definition of “qualifying country” at DFARS 225.003, and offers of products of Japan or that contain components from Japan would be afforded the benefits available to all qualifying countries. This also means that U.S. products would be exempt from any analogous “Buy Japan” laws or policies applicable to procurements by the Japan Ministry of Defense or Armed Forces.
While DoD is evaluating Japan's laws and regulations in this area, DoD would benefit from U.S. industry's experience in participating in Japan's public defense procurements. DoD is, therefore, asking U.S. firms that have participated
DoD is also interested in comments relating to the degree of reciprocity that exists between the United States and Japan when it comes to the openness of defense procurements to offers of products from the other country.
Department of Defense.
Notice of meeting.
The Department of Defense is publishing this notice to announce the following Federal Advisory Committee meeting of the Judicial Proceedings since Fiscal Year 2012 Amendments Panel (“the Judicial Proceedings Panel” or “the Panel”). The meeting is open to the public.
A meeting of the Judicial Proceedings Panel will be held on Friday, January 15, 2016. The Public Session will begin at 9:00 a.m. and end at 4:45 p.m.
The Holiday Inn Arlington at Ballston, 4610 N. Fairfax Drive, Arlington, Virginia 22203.
Ms. Julie Carson, Judicial Proceedings Panel, One Liberty Center, 875 N. Randolph Street, Suite 150, Arlington, VA 22203. Email:
This public meeting is being held under the provisions of the Federal Advisory Committee Act of 1972 (5 U.S.C., Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.150.
Office of the Secretary of Defense, DoD.
Notice and request for comments.
As part of a Federal Government-wide effort to streamline the process to seek feedback from the
A copy of the draft supporting statement is available at
Consideration will be given to all comments received by February 29, 2016.
Submit comments by one of the following methods:
• Web site:
• Mail: Department of Defense, Office of the Deputy Chief Management Officer, Directorate of Oversight and Compliance, Regulatory and Audit Matters Office, 9010 Defense Pentagon, Washington, DC 20301-9010.
Comments submitted in response to this notice may be made available to the public through
Information Collections Branch, Directives Division, Attn: Mr. Frederick Licari, 4800 Mark Center Drive, Suite 02G09, Alexandria, VA 22350-3100, Phone: 571-372-0493.
The solicitation of feedback will target areas such as: Timeliness, appropriateness, accuracy of information, courtesy, efficiency of service delivery, and resolution of issues with service delivery. Responses will be assessed to plan and inform efforts to improve or maintain the quality of service offered to the public. If this information is not collected, vital feedback from customers and stakeholders on the Agency's services will be unavailable.
The Agency will only submit a collection for approval under this generic clearance if it meets the following conditions:
• The collections are voluntary;
• The collections are low-burden for respondents (based on considerations of total burden hours, total number of respondents, or burden-hours per respondent) and are low-cost for both the respondents and the Federal Government;
• The collections are non-controversial and do not raise issues of concern to other Federal agencies;
• Any collection is targeted to the solicitation of opinions from respondents who have experience with the program or may have experience with the program in the near future;
• Personally identifiable information (PII) is collected only to the extent necessary and is not retained;
• Information gathered will be used only internally for general service improvement and program management purposes and is not intended for release outside of the agency;
• Information gathered will not be used for the purpose of substantially informing influential policy decisions; and
• Information gathered will yield qualitative information; the collections will not be designed or expected to yield statistically reliable results or used as though the results are generalizable to the population of study.
Feedback collected under this generic clearance provides useful information, but it does not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address: The target population to which generalizations will be made, the sampling frame, the sample design (including stratification and clustering), the precision requirements or power calculations that justify the proposed sample size, the expected response rate, methods for assessing potential non-response bias, the protocols for data collection, and any testing procedures that were or will be undertaken prior to fielding the study. Depending on the degree of influence the results are likely to have, such collections may still be eligible for submission for other generic mechanisms that are designed to yield quantitative results.
As a general matter, information collections will not result in any new system of records containing privacy information and will not ask questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.
Below we provide projected
All written comments will be available for public inspection on regulations.gov.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid Office of Management and Budget Control Number.
U.S. Department of Education National Advisory Committee on Institutional Quality and Integrity, Education.
Notice of Membership.
This notice lists the members of the National Advisory Committee on Institutional Quality and Integrity (NACIQI). This notice is required under Section 114(e) (1) of the Higher Education Act of 1965, as amended (HEA).
The NACIQI is established under Section 114 of the HEA and is composed of 18 members appointed—
(A) On the basis of the individual's experience, integrity, impartiality, and good judgment;
(B) From amongst individuals who are representatives of, or knowledgeable concerning, education and training beyond secondary education, representing all sectors and types of institutions of higher education; and,
(C) On the basis of the individual's technical qualifications, professional standing, and demonstrated knowledge in the fields of accreditation and administration of higher education.
The NACIQI meets at least twice a year and provides recommendations to the Secretary of Education pertaining to:
• The establishment and enforcement of the standards of accrediting agencies or associations under subpart 2 of part H of Title IV, HEA.
• The recognition of specific accrediting agencies or associations.
• The preparation and publication of the list of nationally recognized accrediting agencies and associations.
• The eligibility and certification process for institutions of higher education under Title IV of the HEA.
• The relationship between (1) accreditation of institutions of higher education and the certification and eligibility of such institutions and (2) State licensing responsibilities with respect to such institutions.
• Any other advisory functions relating to accreditation and institutional eligibility that the Secretary may prescribe by regulation.
U.S. Department of Education, Office of Postsecondary Education, 1990 K Street NW., Room 8072, Washington, DC 20006.
Jennifer Hong, Executive Director/Designated Federal Official, NACIQI, U.S. Department of Education, 1990 K Street, NW., Room 8073, Washington, DC 20006-8129, telephone: (202) 502-7696, fax: (202) 502-7874, or email
The term of office of each member is six years. Any member appointed to fill a vacancy occurring prior to the expiration of the term for which the member's predecessor was appointed is appointed for the remainder of the term.
The current members of the NACIQI are:
• Susan D. Phillips, Ph.D., NACIQI Chair, Vice President for Strategic Partnerships, University at Albany/SUNY, Albany, New York.
• Simon J. Boehme (Student Member), Mitchell Scholar, Maynooth University, Kennedy Institute for Conflict Intervention, Kalamazoo, Michigan.
• Roberta L. Derlin, Ph.D., Associate Provost Emeritus, New Mexico State University, Albuquerque, New Mexico.
• John Etchemendy, Ph.D., Provost, Stanford University, Stanford, California.
• Frank H. Wu, J.D., Chancellor and Dean, University of California Hastings College of Law, San Francisco, California.
• Federico Zaragoza, Ph.D., Vice Chancellor for Economic and Workforce Development, Alamo Colleges, San Antonio, Texas.
• Kathleen Sullivan Alioto, Ed.D., Strategic Advisor, Fundraiser, and Consultant, New York, New York, San Francisco, California, and Boston, Massachusetts.
• George T. French, Jr., Ph.D., President, Miles College, Fairfield, Alabama.
• Arthur E. Keiser, Ph.D., NACIQI Vice Chair, Chancellor, Keiser University, Fort Lauderdale, Florida.
• William Pepicello, Ph.D., President Emeritus, University of Phoenix, Scottsdale, Arizona.
• Arthur J. Rothkopf, J.D., President Emeritus, Lafayette College, Washington, DC.
• Ralph Wolff, J.D., Independent Consultant, Oakland, California.
• George “Hank” Brown, President Emeritus, University of Colorado, Denver, Colorado.
• Jill Derby, Ph.D., Senior Consultant, Association of Governing Boards of Universities and Colleges, Gardnerville, Nevada.
• Paul J. LeBlanc, Ph.D., President, Southern New Hampshire University, Manchester, New Hampshire.
• Anne D. Neal, J.D., President, American Council of Trustees and Alumni, Washington, DC.
• Richard F. O'Donnell, Founder and CEO, Skills Fund, Austin, Texas.
• Cameron C. Staples, J.D., President and CEO, New England Association of Schools and Colleges, Burlington, Massachusetts.
20 U.S.C. 1011c.
Election Assistance Commission.
Wednesday, January 6, 2016 at 10 a.m.
Ritz-Carlton Pentagon City, 1250 S. Hayes Street, Arlington, VA 22202, Phone: (703) 415-5000.
This meeting will be open to the public.
The Commission will receive a presentation on a recommendation for a Voluntary Voting System Guidelines (VVSG 1.1) transition date and consider the proposal for adoption. The Commission will receive a presentation for discussion on a draft Recommendation of Policy Regarding Employee Participation with Outside Organizations. The Commission may consider other administrative matters.
Bryan Whitener, Telephone: (301) 563-3961.
Take notice that on December 15, 2015, Enbridge Energy, Limited Partnership (Enbridge Energy),with the support of the Canadian Association of Petroleum Producers (CAPP), submitted a Supplement to the Facilities Surcharge Settlement approved by the Commission on June 30, 2004, in Docket No. OR04-2-000, at 107 FERC ¶ 61, 336 (2004).
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214 (2014)) on or before 5:00 p.m. Eastern time on the specified comment date. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on Enbridge Energy.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Take notice that on December 23, 2015, Arkansas River Power Authority submitted its Application for Interconnection and Transmission Service and Request for Expedited Consideration.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and § 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following electric securities filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that on December 23, 2015, the New England Transmission Owners (NETOs) submitted tariff filing per: Refund Report to be effective N/A, pursuant to the Commission's Opinion No. 531-A, issued on October 16, 2014.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant and all the parties in this proceeding.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Section 309(a) of the Clean Air Act requires that EPA make public its comments on EISs issued by other Federal agencies. EPA's comment letters on EISs are available at:
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than January 15, 2016.
A. Federal Reserve Bank of New York (Ivan Hurwitz, Vice President) 33 Liberty Street, New York, New York 10045-0001:
1.
B. Federal Reserve Bank of Cleveland (Nadine Wallman, Vice President) 1455 East Sixth Street, Cleveland, Ohio 44101-2566:
1.
Federal Agency Name: Gulf Coast Ecosystem Restoration Council.
This announcement provides guidance to members of the Gulf Coast Ecosystem Restoration Council (Council) to apply for funding under the Council-Selected Restoration Component of the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act of 2012 (RESTORE Act) (33 U.S.C. 1321(t)(2)) to implement projects and programs approved on the 12/09/2015 Funded Priorities List (FPL) Addendum to the Initial Comprehensive Plan.
The first phase of the process (proposal phase) is complete for the 12/09/2015 FPL. This announcement provides guidance to eligible entities on the necessary steps to complete the second phase of submitting their grant application if a proposal was selected for funding in the 12/09/2015 FPL (available at:
Council members are the only entities eligible to submit applications under this funding announcement and are the only entities eligible to receive Council-Selected Restoration Component funds under grant awards or IAAs.
Through this announcement, member agencies and States of the Gulf Coast Ecosystem Restoration Council (Council) may submit applications to fund projects and programs under the Council-Selected Restoration Component of the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act of 2012 (RESTORE Act) (33 U.S.C. 1321(t)(2)). Council members include the Secretaries of the Departments of Agriculture, the Army, Commerce, the Interior, and Homeland Security, the Administrator of the U.S. Environmental Protection Agency, and the governors of the Gulf Coast States of Alabama, Florida, Louisiana, Mississippi, and Texas. The submission process is composed of two phases: (1) The submission of proposals to the Council for inclusion in a Funded Priorities List (FPL), (proposal phase) and (2) once a project or program has been approved by the Council for inclusion in an FPL, the submission of a grant application in order to receive grant funding (application phase). The first phase (proposal phase) was completed with the approval of an FPL by the Council on December 9, 2015 and publication of the FPL in the
Passed in July 2012, the RESTORE Act dedicates 80 percent of certain Clean Water Act administrative and civil penalties paid by responsible parties in connection with the
In order to carry out certain functions of the RESTORE Act, Congress established the Council, which is comprised of governors from the five affected Gulf Coast States (Alabama, Florida, Louisiana, Mississippi, and Texas); the Secretaries from the U.S. Departments of Agriculture, the Army, Commerce, the Interior, and Homeland Security; and the Administrator of the U.S. Environmental Protection Agency. The Gulf States recommended, and President Obama appointed, the Secretary of Commerce as the Council's initial Chairperson. The Council was tasked with publishing a Comprehensive Plan under which the Council will fund and implement projects and programs to restore and protect the natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches, and coastal wetlands of the Gulf Coast region (known as the Council-Selected Restoration Component of the RESTORE Act). 33 U.S.C. 1321(t)(2).
The Council approved the Initial Comprehensive Plan in August of 2013 (available at:
As additional funds become available in the future, the Council will periodically request proposals from its eleven State and federal members in order to develop additional FPLs. The Council may also carry forward proposals submitted under prior requests for proposals when formulating future FPLs. Council members are the only entities eligible to submit proposals or receive Council-Selected Restoration Component funds under grant awards or IAAs.
Now that the Council has published the initial 12/09/2015 FPL, the Council will accept applications for grant awards from its five Gulf Coast State members or IAAs from its six federal agency members in order to fund each project and program included in the FPL.
The remainder of this Notice of Funding Opportunity details the requirements for grant and IAA applications to carry out the projects and programs in the FPL. Funding to State Council members will be provided through grants. Funding to federal Council members will be provided through IAAs.
33 U.S.C. 1321(t)(2).
The application phase is not competitive. Rather, once a proposal for a project or program has been selected under phase 1 (see section A(1) of this announcement for discussion of the proposal phase) the grants to be awarded (to State Council members) or IAAs are entered into (with federal agency Council members) through the administrative process detailed in this announcement.
All State Council member proposals selected for funding under phase 1 of this announcement must apply for a grant through the Restoration Assistance and Awards Management System (RAAMS) to implement the project or program described in the approved project proposal. All federal agency Council member proposals selected for funding under phase 1 of this announcement must submit an application through RAAMS prior to entering into an IAA to implement a project or program described in the approved project proposal.
Up to $156,553,618 is available to fund grants and IAAs under this announcement. These funds are expected to fund 45 projects and programs. The exact number of grants and IAAs required to fund these 45 projects and programs depends on the State or federal member applicant. The Council may request an applicant split an application into more than one application for administrative efficiency. The amount of each grant or IAA will depend on the exact project(s) or program(s) contained therein. The amount is not to exceed the amount approved in the 12/09/2015 FPL.
The duration of projects and programs under this announcement is anticipated to be three to ten years; however, subject to Council approval projects may have a longer duration. Award start dates will depend on when the applicant submits a complete application.
The funding instrument for awards to Council member States will be a grant. The funding mechanism for Council member federal agencies will be an IAA. Funding for contractual arrangements for services and products for delivery to the Council is not available under this announcement.
Eligible applicants are limited to members of the Council, or their administrative agents, that have had a proposal selected for funding pursuant to phase 1, found in section (A)(1) of this announcement. Council members include: The States of Alabama, Florida, Louisiana, Mississippi, and Texas; the Departments of Agriculture, the Army, Commerce, Homeland Security and the Interior; and the Environmental Protection Agency. No other entity is eligible to apply under this announcement.
None.
Applications are limited to the category 1 restoration activities included in the 12/09/2015 FPL.
Eligible entities can access the link to RAAMS and download application forms and other materials necessary to apply for funding through the RESTORE Council Web site at
Please refer to the
The following application requirements are for grants to Gulf Coast States and IAAs with federal Servicing Agencies. A complete application will include all of the below information, which is entered directly into RAAMS or uploaded as an attachment(s). Application material will include all data from required federal standard forms and may include Council-specific supporting information and schedules.
a. Data from OMB Standard Form (SF) SF-424A “Application for Federal Assistance” and associated forms.
b. Certifications:
i. RESTORE Council Applicant Certifications; and
ii. Appropriate SF-424 Assurances:
(1) For applications involving construction or real property/land acquisition, complete the SF-424D “Assurances—Construction Programs”.
(2) For non-construction applications, complete the SF-424B “Assurances—Non-Construction Programs”.
c. A copy of the applicant's Indirect Cost Rate Agreement (IDCRA), if applicable.
d. Executive Summary.
e. Project/Program Narrative:
i. Description of how the project/program meets statutory requirements and commitments the Council made in the Initial Comprehensive Plan including identification of objectives and goals as well as focus and emphasis areas.
ii. Metrics for gauging the success of the project or program.
iii. Milestones, including activity-based costs and any deliverables for each milestone.
iv. Description of leveraged resources.
f. Observational Data Plan.
g. Preliminary Data Management Plan.
h. Location information and map(s).
i. Budget documentation:
i. This documentation is more detailed than the budget required to be submitted in phase 1.
ii. SF-424 budget information:
(1) For all projects/programs, data equivalent to that provided on the SF-424A “Budget Information—Non-Construction Programs” is required.
(2) For construction projects or real property/land acquisition, data equivalent to that provided on the SF-424C “Budget Information—Construction Programs” is required in addition to the SF-424A data.
(3) Budget data must also be provided by SF-424A and/or SF-424C object classes for leveraged funding that is required to complete the objectives of the project/program (
(4) Where the applicant will “pass through” or otherwise provide funds to one or more subrecipients, a separate detailed budget using object categories from the SF-424A and/or SF-424C, as appropriate, must be provided for each proposed subaward that is known at the time the application is submitted.
(5) Any program income anticipated during the award period should be included in the budget.
iii. Budget Narrative/Justification:
(1) A detailed description of the expenses listed on the budget forms and how they address the proposed work is required.
(2) Item descriptions and justifications must be provided for each applicable object class from the SF-424A and/or C, including salaries, fringe benefits, equipment, supplies, travel, construction, etc.
(3) Applicants who will not be requesting funds for salaries for contributing personnel, must still list those personnel, indicating their estimated time of commitment.
(4) Purchases of equipment greater than $5,000 must include a purchase versus lease justification.
(5) Where the applicant plans to procure goods and services through a contractual or subrecipient relationship, information is required on the proposed method of selection, period of performance scope of work, and method(s) of accountability.
(6) A description of any leveraged funding that is required to complete the objectives of the project/program must be provided, including the source(s), amount of funding and work to be accomplished.
(7) Detailed information must be provided regarding any pre-award costs requested including a justification for each item. Such costs are allowable only to the extent that they would have been allowable if incurred after the grant award date and only with the written approval of the Grants Officer. All costs incurred before the Council awards the grant are at the recipient's risk. Requests for pre-award costs should be kept to a minimum. Generally, the period for such costs should not exceed 90 days prior to the start of the award period.
j. Cash Forecasting. The applicant must forecast cash requirements/draws throughout the life of the award in semi-annual increments.
k. Current and pending support. Applicants must submit a list of all current and pending federal support that includes project title, supporting agency with grant number, dollar value, and duration. Requested values should be listed for pending support.
l. DUNS Number. All applications must have a DUNS (Dun and Bradstreet Data Universal Numbering System) number when applying for federal grants. No application is deemed complete without the DUNS number, and only the Office of Management and Budget (OMB) may grant exceptions.
m. Environmental Compliance Documentation. The Council must comply with the National Environmental Policy Act, Endangered Species Act, National Historic Preservation Act, Magnuson-Stevens Fishery Conservation and Management Act and the Fish and Wildlife Coordination Act, as applicable, before approving funding under the Council-Selected Restoration Component. In addition, the Council must address, as applicable, Executive Order 11988 (“Floodplain Management”), Executive Order 11990 (“Protection of Wetlands”), Executive Order 12898 (“Environmental Justice in Minority Populations and Low Income Populations”) and Executive Order 13653 (“Preparing the United States for the Impacts of Climate Change”). These laws and Executive Orders requirements have been addressed, where applicable, for all activities listed in Category 1 of the FPL. Documentation regarding compliance with the foregoing requirements for each FPL Category 1 activity can be found on the Council Web site (available at
i. Applicants may be required to provide detailed information on the activities to be conducted, locations, sites, species, and habitat to be affected, possible construction activities, and any environmental concerns that may exist (
ii. Applicants may also be required to cooperate with the Council in identifying feasible measures to reduce or avoid any identified adverse environmental impacts of their application. Any failure to do so shall be grounds for deeming an application incomplete. In some cases if additional information is required after an application is submitted, funds may be withheld by the Grants Officer pursuant to a special award condition requiring the recipient to submit additional environmental compliance information sufficient to enable the Council to make an assessment of any impacts that a project may have on the environment.
iii. Applicants also must submit documentation to the Council demonstrating that all applicable permits or authorizations from other state, federal or local agencies have been secured. Funds may be withheld by the Grants Officer pursuant to a special award condition requiring the recipient to submit all required permits and authorizations prior to implementation.
Additional requirement for State applications for grant funding:
Organizational Self-Assessment (OSA). Each non-federal applicant must certify and submit the Council's Organizational Self-Assessment form. The form must be received by the Council no later than the application submission date of the entity's first grant application to the Council. The OSA will be updated annually.
Additional requirements for IAAs with Federal Servicing Agencies:
A completed and approved application will be followed by an IAA. The IAA will contain information indicating whether the above requirements have been met, and if not, the status of any efforts to meet the requirements. Servicing Agencies are also responsible for all applicable federal environmental laws and requirements prior to full disbursement of grant or interagency agreement funding.
All applicants are required to: (i) Be registered in the System for Award Management (SAM) before submitting its application; (ii) provide a valid unique entity identifier in its application; and (iii) continue to maintain an active SAM registration with current information at all times during which it has an active federal award or an application or plan under consideration by a federal awarding agency. The Council will not make an award to an applicant until the applicant has complied with all applicable unique entity-identifier and SAM requirements and, if an applicant has not fully complied with the requirements by the time the Council is ready to make a Federal award, the Council may determine that the applicant is not qualified to receive an award.
Subject to Section D.7 below, applications may be submitted at any time after publication of the initial FPL but no later than December 31, 2016. Applications will be accepted on a rolling basis and are to be submitted through RAAMS.
Applications under this program are not subject to Executive Order 12372, Intergovernmental Review of Federal Programs.
Of the amounts received by an eligible entity in a grant or IAA under this announcement, not more than three percent (3%) may be used for administrative costs. The three percent limit is applied to the total amount of funds received by a recipient under each grant or IAA. The three percent limit does not apply to the administrative costs of subrecipients. All subrecipient costs are subject to the cost principles in federal law and policies on grants. Administrative costs means those indirect costs for administration incurred by the eligible entity that are allocable to activities authorized under the Act. Administrative costs do not include indirect costs that are identified specifically with, or readily assignable to, facilities as defined in 2 CFR 200.414. See the
Fees and profit are disallowed.
Applications will be completed and submitted electronically by way of the Council's Restoration Assistance and Award Management System (RAAMS) (
At the organizational level, the Council will conduct risk assessments of first-time non-federal recipients in order to effectively implement the statutory, regulatory, administrative, and program requirements of a potential federal award. Once an initial assessment has been made, it will be reviewed on an annual basis. As the Council-Selected Restoration Component of the RESTORE Act is a new federal program, all non-federal recipients will be treated as first-time recipients for the initial Council awards.
Upon receipt of an application through RAAMS, the Council will review the application for completeness. Once it has been determined that the application is complete, the staff will review this funding opportunity announcement, the application and supporting documentation, the System for Award Management, and any other information available to determine the following:
• Whether the recipient and any subrecipients are eligible for funding;
• Whether the project or program as described in the application is compliant with the proposal contained in the FPL or the Full SEP, whichever is applicable;
• Whether award activities are eligible and attainable;
• Whether staff time is appropriate to perform proposed tasks;
• Whether best available science is applied;
• Whether the recipient has established a suitable monitoring plan;
• Whether milestones and metrics are feasible, measurable and achievable;
• Whether observational data and management plans are adequate (if applicable);
• Whether environmental compliance requirements have been met;
• Whether budget line items are allowable, allocable, and reasonable;
• Whether any proposed procurement complies with applicable laws and policies;
• Whether budget line items are accurately calculated;
• Whether pre-award costs are requested, and if so, is the documentation sufficient;
• Whether the period of performance requires an adjustment; and
• Whether any special award conditions are needed.
The review and selection process was completed with the approval of an FPL on 12/09/2015 and publication of the FPL in the
The Council is required to review and consider any information about the applicant that is in the designated integrity and performance system accessible through SAM (currently FAPIIS) (see 41 U.S.C. 2313). The applicant may, at its option, review information in the designated integrity and performance systems accessible through SAM and comment on any information about itself that a federal awarding agency previously entered and is currently in the designated integrity and performance system accessible through SAM. Furthermore, the Council consider any comments by the applicant, in addition to the other information in the designated integrity and performance system, in making a judgment about the applicant's integrity, business ethics, and record of performance under federal awards when completing the review of risk posed by applicants as described in 2 CFR 200.205, “Federal awarding agency review of risk posed by applicants.”
Applications will be received on a rolling basis. It is anticipated that awards will be made within 90 days of submission of a complete grant application.
a. For State Council members, official notification of grant funding, signed by the Council Executive Director, is the authorizing document that allows the project or program to begin. Notifications will be issued to the Authorizing Official designated by the Council member for the project or program.
b. For federal Council members, an IAA is the mechanism for transferring funds from the Council to the member agency. IAAs will be executed and finalized in accordance with applicable federal requirements. All federal Council members having proposals selected for funding under phase 1 of this announcement must work with the Council to establish an IAA. Pursuant to 31 CFR 34.803(d), any federal Council member (“Servicing Agency”) must use funds only for the purposes identified in the IAA. All activities under the IAA must meet the eligibility requirements for the Council-Selected Restoration Component as defined in 31 CFR 34.202.
c. The Servicing Agency, and all non-federal entity recipients and subrecipients, must comply and require each of its contractors and subcontractors employed in the completion of the project to comply with all applicable statutes, regulations, Executive Orders (E.O.s), Office of Management and Budget (OMB) circulars, terms and conditions, agreements and approved applications. Any inconsistency or conflict in terms and conditions specified in the IAA will be resolved according to the following order of precedence: Public laws, regulations, applicable notices published in the
The
The Council's
Award recipients are required to submit financial, technical progress, performance and outcome reports. These reports are to be submitted electronically via RAAMS.
• March 31 and September 30, or any portion thereof; or
• June 30 and December 31, or any portion thereof.
As part of the required Data Management Plan (DMP), the recipient will develop a data/information management plan and submit appropriate data and information with progress reports on a yearly basis. Due dates will be included in the award agreement.
Applicants must also comply with the
If the award will include more than $500,000 over the period of performance, applicants must also comply with the post award reporting requirements reflected in 2 CFR part 200 Appendix XII—Award Term and Condition for Recipient Integrity and Performance Matters.
Please refer to the Gulf Coast Ecosystem Restoration Council Recipient Proposal and Award Guide (RPAG), available at
Agency for Healthcare Research and Quality (AHRQ), Department of Health and Human Services (HHS).
Notice of Delisting.
The Patient Safety and Quality Improvement Act of 2005, 42 U.S.C. 299b-21 to b-26, (Patient Safety Act) and the related Patient Safety and Quality Improvement Final Rule, 42 CFR part 3 (Patient Safety Rule), published in the
The directories for both listed and delisted PSOs are ongoing and reviewed weekly by AHRQ. The delisting was effective at 12:00 Midnight ET (2400) on December 15, 2015.
Both directories can be accessed electronically at the following HHS Web site:
Eileen Hogan, Center for Quality Improvement and Patient Safety, AHRQ, 5600 Fishers Lane, Room 06N94B, Rockville, MD 20857; Telephone (toll free): (866) 403-3697; Telephone (local): (301) 427-1111; TTY (toll free): (866) 438-7231; TTY (local): (301) 427-1130; Email:
The Patient Safety Act authorizes the listing of PSOs, which are entities or component organizations whose mission and primary activity are to conduct activities to improve patient safety and the quality of health care delivery.
HHS issued the Patient Safety Rule to implement the Patient Safety Act. AHRQ administers the provisions of the Patient Safety Act and Patient Safety Rule relating to the listing and operation of PSOs. The Patient Safety Rule authorizes AHRQ to list as a PSO an entity that attests that it meets the statutory and regulatory requirements for listing. A PSO can be “delisted” if it is found to no longer meet the requirements of the Patient Safety Act and Patient Safety Rule, when a PSO chooses to voluntarily relinquish its status as a PSO for any reason, or when a PSO's listing expires. Section 3.108(d) of the Patient Safety Rule requires AHRQ to provide public notice when it removes an organization from the list of federally approved PSOs.
AHRQ has accepted a notification from the Texas Patient Safety Organization, Inc., PSO number P0012, to voluntarily relinquish its status as a PSO. Accordingly, the Texas Patient Safety Organization, Inc. was delisted effective at 12:00 Midnight ET (2400) on December 15, 2015. The Texas Patient Safety Organization, Inc. submitted this request for voluntary relinquishment during expedited revocation proceedings for cause.
The Texas Patient Safety Organization, Inc. has patient safety work product (PSWP) in its possession. The PSO has met the requirements of section 3.108(c)(2)(i) of the Patient Safety Rule regarding notification to providers that have reported to the PSO. In addition, according to sections 3.108(c)(2)(ii) and 3.108(b)(3) of the Patient Safety Rule regarding disposition of PSWP, the PSO has 90 days from the effective date of delisting and revocation to complete the disposition of PSWP that is currently in the PSO's possession.
More information on PSOs can be obtained through AHRQ's PSO Web site at
Centers for Medicare & Medicaid Services (CMS), HHS.
Request for information.
This request for information seeks public comment regarding several items related to the certification of health information technology (IT), including electronic health records (EHR) products used for reporting to certain CMS quality reporting programs such as, but not limited to, the Hospital Inpatient Quality Reporting (IQR) Program and the Physician Quality Reporting System (PQRS). In addition, we are requesting feedback on how often to require recertification, the number of clinical quality measures (CQMs) a certified Health IT Module should be required to certify to, and testing of certified Health IT Module(s).
To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on February 1, 2016.
In commenting, refer to file code CMS-3323-NC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one of the ways listed):
1.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
4.
a. For delivery in Washington, DC—Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)
b. For delivery in Baltimore, MD—Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address, call telephone number (410) 786-9994 in advance to schedule your arrival with one of our staff members.
Comments erroneously mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.
Lisa Marie Gomez, 410-786-1175.
Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.
The Health Information Technology for Economic and Clinical Health Act (Title IV of Division B of the American Recovery and Reinvestment Act of 2009 (ARRA) and Title XIII of Division A of the ARRA) authorizes incentive payments under Medicare and Medicaid for the adoption of and meaningful use of certified EHR technology (CEHRT) and downward payment adjustments under Medicare for failure to demonstrate meaningful use. Eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) that seek to qualify for incentive payments or avoid negative payment adjustments under the Medicare and Medicaid EHR Incentive Programs are required to use CEHRT. Some CMS quality reporting programs, such as the Hospital Inpatient Quality Reporting (IQR) Program and Physician Quality Reporting System (PQRS), either require or provide the option to use certified EHR technology, as defined under the EHR Incentive Program, for reporting quality data.
The Office of the National Coordinator for Health Information Technology's (ONC's) “2015 Edition Health Information Technology (Health IT) Certification Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition, and ONC Health IT Certification Program Modifications Final Rule” (80 FR 62601) (2015 Edition final rule), establishes the capabilities and specifies the related standards and implementation specifications that CEHRT needs to include to support the achievement of meaningful use by EPs, eligible hospitals, and CAHs. ONC's Health IT Certification Program provides a process by which Health IT Module(s) can be certified so that they meet the standards, implementation specifications, and certification criteria that have been adopted by the Secretary. CEHRT is defined for the Medicare and Medicaid EHR Incentive Programs in 42 CFR 495.4. The definition establishes the requirements for EHR technology that must be used by providers to meet the MU objectives and measures or to qualify for an incentive payment under Medicaid for adopting, implementing, or upgrading CEHRT. For example, a Health IT Module is presented for certification to a criterion with a percentage-based measure and the Health IT Module can meet the “automated numerator recording” criterion or “automated measure calculation” criterion. The CQM data reported to us must originate from EHR technology that is certified in accordance with the ONC Health IT Certification Program's requirements (77 FR 54053).
As stated in the Medicare and Medicaid Programs; Electronic Health Record Incentive Program—Stage 3 and Modifications to Meaningful Use in 2015 through 2017 final rule (80 FR 62894), in 2017, all EPs, eligible hospitals, and CAHs have two options to report CQM data, either through attestation or use of established methods for electronic reporting where feasible. However, starting in 2018, EPs, eligible hospitals, and CAHs participating in the Medicare EHR Incentive Program must electronically report CQMs using CEHRT where feasible; and attestation to CQMs will no longer be an option except in certain circumstances where electronic reporting is not feasible.
We are soliciting public input on the following areas of certification and testing of health IT, particularly relating to how often to require recertification, the number of CQMs a certified Health IT Module should be required to certify to, and the testing of certified Health IT Module(s) in order to reduce the burden and further streamline the process for providers and health IT developers while ensuring such products are certified and tested appropriately for effectiveness. The feedback will inform CMS and ONC of elements that may need to be considered for future rules relating to the reporting of quality measures under CMS programs. This request for information is part of the effort of CMS to streamline/reduce EP, eligible hospital, CAH, and health IT developer burden.
We conduct an annual analysis of CQM specifications in order to ensure measure efficacy, accuracy, and clinical relevance. Any updates to the calculation of a CQM through this process are released with the annual updates to the electronic specifications for EHR submission published by CMS (
While we believe that health IT developers should test and certify their products to the most recent version of the electronic specifications for the CQMs when feasible, we understand the burdens associated with this requirement and therefore, have not historically required re-certification of previously certified products when updates are made to CQM electronic specifications or to the standards required for reporting. During the FY 2016 IPPS/LTCH PPS rulemaking process, we received comments and requests from stakeholders to change this policy. We acknowledge that the certification process can be burdensome to health IT developers and believe that annual certification could compress the timeline for CQM and standard updates. We also acknowledge that stakeholders and providers reporting electronic CQMs have an interest in ensuring that their Health IT Module is tested and certified to the most recent version of electronic CQM specifications. We are soliciting feedback regarding testing and recertification, particularly relating to: The requirement for CEHRT products to be recertified when a new version of the CEHRT is available in order to ensure the accuracy of implementation; and the requirement for Health IT Modules to undergo annual CQM testing through CMS approved testing tools and the ONC Health IT Certification Program. We are also seeking comment on the following.
• What is the burden (both time and money) of additional testing and recertification?
• What are the benefits of requiring additional testing and recertification?
• How will it affect the timeline for CQM and standard updates?
• What are the benefits and challenges of establishing a predictable cycle from measure development to provider data submission?
The Medicare and Medicaid Programs; Electronic Health Record Incentive Program—Stage 3 and Modifications to Meaningful Use in 2015 through 2017 final rule (80 FR 62761) specifies the meaningful use criteria that EPs, eligible hospitals, and CAHs must meet in order to qualify for Medicare and Medicaid EHR incentive payments and avoid downward payment adjustments under Medicare. We believe EHRs should be certified to more than the minimum number of CQMs as required by the ONC 2014 Edition Base EHR definition of a minimum of 9 CQMs for EPs or 16 for eligible hospitals and CAHs (80 FR 16771, see also 45 CFR 170.102). With health IT developers having EHRs certified to the minimum number of CQMs, EPs, eligible hospitals, and CAHs may have limited CQMs available to them and may not be able to report on CQMs that are applicable to their patient population or scope of practice. As stated in the preamble of the final rule (80 FR 62895), we believe EPs, eligible hospitals, and CAHs should have a choice of which CQMs to report so that they can report on those CQMs most applicable to their patient population or scope of practice. Accordingly, we are soliciting comment on the following policy options that could provide greater choice for EPs, eligible hospitals, and CAHs. Specifically, we are soliciting comment on: The feasibility of health IT developers complying with the requirements of each option in the first year in which the requirements would become effective; the impact of each option on EPs, eligible hospitals/CAHs, and health IT developers; and what we would need to consider when assessing each of these options.
•
•
•
For Option 3, we invite stakeholders' input regarding the following approaches that are specific examples of implementation of the policy goal:
•
•
•
++ Multispecialty health IT developer—certifies all CQMs.
++ Primary care health IT developer—certifies a set of primary care CQMs.
++ Specialty provider health IT developer—certifies a minimum number of CQMs on an “a la carte” basis.
For this approach, we solicit comment on the number of measures that would be reasonable to require for certification under the “primary care health IT developer” option as well as the “specialty provider health IT developer” option. We invite general comment on this overall approach.
We are soliciting public input on other ways of grouping or classifying measures to ensure applicability and selection for providers. For example, one method of grouping measures could be by those that are invasive (for example, surgical), non-invasive, and cognitive. Another method could be by setting of care/venue.
As stated in the Medicare and Medicaid Programs; Electronic Health Record Incentive Program—Stage 3 and Modifications to Meaningful Use in 2015 through 2017 final rule (80 FR 62895), any specific proposals for the number of measures vendors would be required to certified to would be outlined in separate notice and comment rulemaking such as the Physician Fee Schedule or Inpatient Prospective Payment Systems rules.
ONC offers health IT certification for CQMs to record and export, import and calculate, and electronically report CQMs through its ONC Health IT Certification Program. This year, ONC has adopted a new edition of certification criteria in the 2015 Edition final rule (80 FR 62601). One objective of testing for the 2015 Edition CQM criteria (80 FR 62651) is to increase testing robustness (for example, increasing number of test records, robustly testing pathways by which a patient can enter the numerator or denominator of a measure), thereby ensuring that all certified products have capabilities commensurate to the increased requirements enumerated in the 2015 Edition final rule.
In the 2011 and 2014 Editions of certification criteria, the certification program sought to test basic capabilities and minimum requirements. Our expectation is that as time progresses and technology improves, EHR systems will have to demonstrate they are able to perform to increasing levels of complexity, including requirements to identify errors, consume larger numbers of test cases, and demonstrate stricter adherence to standards. This is to ensure that investments into certified products yield the functionality expected to improve health care. Certification criteria also includes optional and required elements that allow end users and quality improvement leaders to view, filter, and export quality measure data. These data enable point-of-care, iterative quality improvement efforts to identify patients whose care and conditions are not compliant with evidence-based guidelines, take action to improve their engagement with care processes, and achieve better outcomes.
CMS and ONC's Health IT Certification Program test CQM functionality (for example, by testing a health IT system's ability to import, export, capture, calculate, and report CQM data according to certain standards) through the Cypress Testing and Certification Tool by enabling repeatable and rigorous testing of a product's capability to accurately calculate CQMs.
• What changes to testing are recommended (or are not recommended) to increase testing robustness?
• How could CMS and ONC determine how many test cases are needed for adequate test coverage?
• Are there recommendations for the format of test cases that could be entered both manually and electronically?
• What kind of errors should constitute warnings rather than test failures?
• Are there recommendations for or against single measure testing?
• How could the test procedures and certification companion guides published by ONC be improved to help you be more successful in preparing for and passing certification testing?
CMS and ONC believe that increased testing robustness adds value to the process of certification, but acknowledge that it would increase health IT developer burden in certifying their products. Therefore, we welcome comments on the following:
• How can the CQM certification process be made more efficient and how can the certification tools and resources be augmented or made more useable?
• What, if any, adverse implications could the increased certification standards have on providers?
• What levels of testing will ensure that providers and other product purchasers will have enough information on the usability and effectiveness of the tool without unduly burdening health IT developers?
• Would flexibility on the vocabulary codes allowed for test files reduce burden on health IT developers?
• What are other ways in which the Cypress testing tool could be improved?
• When 45 CFR 170.315(c)(1) requires users to export quality measure data on demand, how would you want that to be accessed by users and what characteristics are minimally required to make this feature useful to end users?
• ONC finalized a 2015 Edition certification criterion for filtering of CQMs (45 CFR 170.315(c)(4)) to the following filters:
++ Taxpayer Identification Number (TIN).
++ National Provider Identifier (NPI).
++ Provider type.
++ Practice site address.
++ Patient insurance.
++ Patient age.
++ Patient sex.
++ Patient race and ethnicity.
++ Patient problem list data.
How useful are the “filtering” criteria to end users of systems for the purpose of safety and quality improvement? To quality improvement staff and organizations?
• Are there additional filters/data would be helpful to stratify CQM-Filters (45 CFR 170.315(c)(4)) data by?
• What, if anything additional, regarding this testing/certification should be published via the Certified Health IT Product List?
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Because of the large number of public comments we normally receive on
Centers for Medicare & Medicaid Services.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the
Comments must be received by February 29, 2016.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786-1326.
Reports Clearance Office at (410) 786-1326.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep
1.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing the availability of the draft guidance entitled “Public Notification of Emerging Postmarket Medical Device Signals (‘Emerging Signals’).” This guidance describes the Agency's policy for notifying the public about medical device “emerging signals.” Historically, FDA has communicated important medical device postmarket information after having completed an analysis of available data and, in most cases, after having reached a decision about relevant recommendations for the device user community and about whether further regulatory action is warranted. However, in addition to these types of public communications, we believe there also is a need to notify the public about emerging signals that the Agency is monitoring or analyzing, even when the information has not been fully analyzed, validated, or confirmed, and for which the Agency does not yet have specific recommendations. This draft guidance is not final nor is it in effect at this time.
Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment of this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by February 29, 2016.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
•
An electronic copy of the draft guidance document is available for download from the Internet. See the
Rebecca Nipper, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 1540, Silver Spring, MD 20993-0002, 301-796-6527.
All medical devices have benefits and risks. Health care providers, patients, and consumers must weigh these benefits and risks when making health care decisions. FDA weighs probable benefit to health from the use of the device against any probable risk of injury or illness from such use in determining the safety and effectiveness of a device. However, not all information regarding benefits and risks for a given device may be fully known or characterized prior to the device reaching the market. New information about the safety and/or effectiveness of the device often becomes available once the device is more widely distributed and used under real-world conditions of actual clinical practice.
FDA is issuing this draft guidance to describe the Agency's policy for notifying the public about medical device “emerging signals.” For the purposes of this guidance, an emerging signal is new information about a medical device used in clinical practice: (1) That the Agency is monitoring or analyzing, (2) that has the potential to impact patient management decisions and/or alter the known benefit-risk profile of the device, (3) that has not yet been fully validated or confirmed, and (4) for which the Agency does not yet have specific recommendations.
We believe there is a need to notify the public about emerging signals that the Agency is monitoring or analyzing, even when the information has not been fully analyzed, validated, or confirmed, and for which the Agency does not yet have specific recommendations. Timely communication about emerging signals is intended to provide health care providers, patients, and consumers with access to the most current information concerning the potential benefits and risks of marketed devices, so that they can make informed treatment choices bases on all available information. Therefore, because of the evolving nature of this information, FDA would be sharing it with the public at an early stage of the Agency's assessment and evaluation of the signal.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on “Public Notification of Emerging Postmarket Medical Device Signals (‘Emerging Signals’).” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
Persons interested in obtaining a copy of the draft guidance may do so by downloading an electronic copy from the Internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
This draft guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR parts 801 and 808, regarding labelling, have been approved under OMB control number 0910-0485 and the collections of information in 21 CFR part 803, regarding medical device reporting, have been approved under OMB control numbers 0910-0291, 0910-0437, and 0910-0471.
National Institutes of Health, HHS.
Notice.
In compliance with the requirement of Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, for opportunity for public comment on proposed data collection projects, the National Heart, Lung, and Blood Institute (NHLBI), the National Institutes of Health (NIH), will publish periodic summaries of proposed projects to the Office of Management and Budget (OMB) for review and approval.
Written comments and/or suggestions from the public and affected agencies are invited on one or more of the following points: (1) Whether the proposed collection of information is necessary for the proper performance of the function of the agency, including whether the information will have practical utility; (2) The accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
To obtain a copy of the data collection plans and instruments, submit comments in writing, or request more information on the proposed project, contact: Paul Sorlie, 6701 Rockledge Drive, MSC 7936, Bethesda, MD 20892, or call non-toll-free number (301) 435-0456, or Email your request to:
OMB approval is requested for 3 years. There are no costs to respondents other than their time. The total estimated annualized burden hours are 8,382.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the Board of Scientific Counselors, NIDA.
The meeting will be closed to the public as indicated below in accordance with the provisions set forth in section 552b(c)(6), Title 5 U.S.C., as amended for the review, discussion, and evaluation of individual intramural programs and projects conducted by the National Institute on Drug Abuse, including consideration of personnel qualifications and performance, and the competence of individual investigators, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Closed: 8:30 a.m. to 5:00 p.m.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable materials, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the meetings of the National Advisory Council on Alcohol Abuse and Alcoholism.
The meetings will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting. The open sessions will be videocast and can be accessed from the NIH Videocasting and Podcasting Web site (
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Paulette S. Gray, Ph.D., Director, Division of Extramural Activities, National Cancer Institute, National Institutes of Health, 9609 Medical Center Drive, Room 7W444, Bethesda, MD 20892, 240-276-6340,
Susan Weiss, Ph.D., Director, Division of Extramural Research, National Institute on Drug Abuse, National Institutes of Health, 6001 Executive Boulevard, NSC, Room 5274, 301-443-6487,
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant and contract applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant and contract applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Advisory Council on Drug Abuse.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and/or contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications and/or contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any member of the public interested in presenting oral comments to the committee may notify the Contact Person listed on this notice at least 10 days in advance of the meeting. Interested individuals and representatives of organizations may submit a letter of intent, a brief description of the organization represented, and a short description of the oral presentation. Only one representative of an organization may be allowed to present oral comments and if accepted by the committee, presentations may be limited to five minutes. Both printed and electronic copies are requested for the record. In addition, any interested person may file written comments with the committee by forwarding their statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Notice is hereby given of a change in the meeting of the National Cancer Institute Special Emphasis Panel, February 2-3, 2016 08:00 a.m. to 05:00 p.m., Hilton Washington DC/Rockville, Rockville, MD 20852 which was published in the
The meeting notice is amended to change the title from “NCI P01 Meeting II” to “NCI Program Project Meeting III”. The meeting is closed to the public.
Office of the Surgeon General (OSG) and Substance Abuse and Mental Health Services Administration (SAMHSA), Department of Health and Human Services (DHHS).
Notice.
On behalf of the United States Department of Health and Human Services, the Substance Abuse and Mental Health Services Administration and the Office of the Surgeon General announce the commission of the first-ever Surgeon General's Report presenting the state of the science on substance use, addiction, and health. The report will examine the health effects of drug and alcohol misuse from the perspectives of prevention, treatment, recovery, neurobiology, and delivery of care.
Jinhee Lee, Pharm.D., Public Health Advisor, SAMHSA/Center for Substance Abuse Treatment, 5600 Fishers Lane, Rockville, MD 20857, Email:
According to the 2014 NSDUH, 21.5 million Americans aged 12 or older had a substance use disorder in the past year. Among them, 14.4 million Americans had dependence or abuse of alcohol but not illicit drugs, while another 4.5 million had dependence or abuse of illicit drugs but not alcohol, and 2.6 million had dependence or abuse of both alcohol and illicit drugs. People with alcohol or illicit drug dependence or abuse were defined in the 2014 NSDUH as meeting the diagnostic criteria specified in the
The Affordable Care Act and new mental health parity protections are expanding mental health and substance abuse treatment benefits to 60 million Americans. Despite this historic expansion of health insurance coverage and other advances, too many Americans are not benefiting from treatment services. Based on the 2014 NSDUH data, although 21.5 million people aged 12 or older met the DSM-IV criteria for alcohol or illicit drug dependence or abuse, only an estimated 2.3 million received substance use treatment in the past year.
Drug poisoning (overdose) was responsible for about 47,000 deaths in the U.S. in 2014 (now the latest year for which national data are available). Furthermore, substance misuse (to include excessive alcohol use) and related disorders contribute to injury and chronic illness, lost productivity, family disruptions, and increased transmission of sexually and injection-related infectious diseases; are associated with higher rates of domestic violence and child abuse; and prevent many individuals from realizing their full potential.
Pursuant to Public Law 92-463, notice is hereby given that the Substance Abuse and Mental Health Services Administration's (SAMHSA) Center for Mental Health Services (CMHS) National Advisory Council will meet February 24, 2016, 9:00 a.m. to 5:00 p.m.
The meeting is open to the public and will include discussion of the Center's policy issues, and current administrative, legislative, and program developments. The meeting will be held at the SAMHSA building, Conference Room 5E29, 5600 Fishers Lane, Rockville, MD 20857. Attendance by the public will be limited to space available. Interested persons may present data, information, or views, orally or in writing, on issues pending before the Committee. Written submissions should be forwarded to the contact person on or before February 14, 2016. Oral presentations from the public will be scheduled at the conclusion of the meeting. Individuals interested in making oral presentations are encouraged to notify the contact on or before February 14, 2016. Five minutes will be allotted for each presentation.
The meeting may be accessed via telephone and web conferencing might be available. To attend on site, obtain the call-in number, access code, and/or web access link; submit written or brief
Office of Administration, HUD.
Routine Use Inventory republication.
Pursuant to the Privacy Act of 1974 (5 U.S.C. 552a), notice is hereby given that the Department of Housing and Urban Development proposes to update and combine into one notice its Routine Use Inventory notice published in the
All other changes shall be effective immediately without further notice, upon publication of this notice in the
Interested persons are invited to submit comments regarding the amended routine use statements or notice update to the Rules Docket Clerk, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street SW., Room 10276, Washington, DC 20410-0500. Communications should refer to the above docket number and title. Faxed comments are not acceptable. A copy of each communication submitted will be available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address.
Frieda B. Edwards, Acting Chief Privacy Officer, 451 Seventh Street SW., Room 10139, Washington, DC 20410, telephone number 202-402-4254 (this is not a toll-free number). Individuals who are hearing- and speech-impaired may access this number via TTY by calling the Federal Relay Service telephone number at 800-877-8339 (this is a toll-free number).
The Department's Routine Use Inventory describes disclosure requirements commonly used by more than one of the Department's systems of records. This amendment modifies routine uses (10) and (14), under the original notice. Routine use (10) stated that records could be disclosed “To other Federal agencies or non-Federal entities, including but not limited to, state and local government entities with whom HUD has a contract, service agreement, grant, cooperative agreement, or computer matching agreement to assist such agencies with preventing and detecting improper payments, or fraud, or abuse in major programs administered by the Federal Government, or abuse by individuals in their operations and programs, but only to the extent that the information is necessary and relevant to preventing improper payments for services rendered under a particular Federal or non-federal benefits programs of HUD or any of their components to verify pre-award and pre-payment requirements prior to the release of Federal funds.” Routine use (14) stated that records could be disclosed “To a court, magistrate, administrative tribunal in the course of presenting evidence, including disclosures to opposing counsel or witnesses in the course of civil discovery, litigation, mediation, or settlement negotiations or in connection with criminal law proceedings or in response to a subpoena or to a prosecution request when such records to be released are specifically approved by a court provided order.” Subsequently, these routine use conditions precisely specified that records could only be disclosed for purposes relevant to a HUD specific program, or to a specific set of individuals or entities, limiting the Department's ability to respond to and share its records as warranted. Accordingly, this notice corrects these misrepresentations and amends the routine use conditions under the original publication. The amended routine use conditions appear under this revised notice proposal at heading (6) entitled “Prevention of Fraud, Waste, and Abuse Disclosure Routine Use” and heading (11) entitled, “Disclosures for Law Enforcement Investigations Routine Uses.” Further, the Department implements minor editorial changes to simplify and implement administrative changes needed to keep published information in an up-to-date format that is easier to understand and use.
Title 5 U.S.C. 552a, as amended (e)(r) and (11) requires that the public be afforded a 30-day period in which to comment on any use of information by this notice and requires published notice of the existence and characters of the systems of records impacted by this change. The new system report, as required by 5 U.S.C. 552a(r) of the Privacy Act, was submitted to the United States Senate Committee on Homeland Security and Governmental Affairs, the House Committee on Oversight and Government Reform of the House of Representatives, and the Office of Management and Budget (OMB) pursuant to paragraph 4c of Appendix I to OMB Circular No. A-130, Federal Agency Responsibilities for Maintaining Records about Individuals, dated June 25, 1993 (58 FR 36075, July 2, 1993). The Department permits disclosure(s) from its systems of records to be made from its systems of records to such agencies, entities, and persons in the following instances, when authorized by statute, to assist in
Accordingly, the Department's Routine Use Inventory includes routine use statements implemented at the Department level for instances that may be utilized by more than one of the Department's systems of records referenced in the aforementioned list. In addition, the text of many of these routine uses model best practices that have already been adopted by several agencies, including the Department of Justice.
In addition to the disclosures generally permitted under 5 U.S.C. 552a(b), and the routine uses specifically described in each system of records notice, information in the systems of records maintained by the Department may be disclosed pursuant to 5 U.S.C. 552a(b)(3) as described below under Appendix I, provided that no routine use specified herein shall be construed to limit or waive any other routine use or exemption specified in the text of the individual system of records notice.
Further, pursuant to 5 U.S.C. 552a(k)(2), records in the systems of records, referenced by the above titles, and any others that reflect records designated as exempt from the requirements of subsections (c)(3); (d); (e)(1); (e)(4)(G), (H), and (I); and/or (f) of 5 U.S.C. 552a under a promulgated rule, or those that are restricted from release by statutory or regulatory requirements, are prohibited from disclosure (which shall apply only if those exemptions have been established in the records system notice for the particular system).
5 U.S.C. 552a.
Identifies authorized disclosures applicable to one or more of the Department's Privacy Act system of records notices. The Privacy Act allows HUD to disclose records from its systems of records, from the following headings (1)−(13), to appropriate agencies, entities, and persons, when the records being disclosed are compatible with the purpose for which the system was developed. The routine use statements specified in this notice shall not be used to construe, limit, or waive any other routine
(1) General Service Administration Information Disclosure Routine Use:
To the National Archives and Records Administration (NARA) and the General Services Administration (GSA) for records having sufficient historical or other value to warrant its continued preservation by the United States Government, or for inspection under authority of Title 44, Chapter 29, of the United States Code.
(2) Congressional Inquiries Disclosure Routine Use:
To a congressional office from the record of an individual, in response to an inquiry from the congressional office made at the request of that individual.
(3) Health and Safety Prevention Disclosure Routine Use:
To appropriate Federal, State, and local governments, or persons, pursuant to a showing of compelling circumstances affecting the health or safety or vital interest of an individual or data subject, including assisting such agencies or organizations in preventing the exposure to or transmission of a communicable or quarantinable disease, or to combat other significant public health threats, if upon such disclosure appropriate notice was transmitted to the last known address of such individual to identify the health threat or risk.
(4) Consumer Reporting Agency Disclosure Routine Use:
To a consumer reporting agency, when trying to collect a claim owed on behalf of the Government, in accordance with 31 U.S.C. 3711(e).
(5) Computer Matching Program Disclosure Routine Use:
To Federal, State, and local agencies, their employees, and agents for the purpose of conducting computer matching programs as regulated by the Privacy Act of 1974, as amended (5 U.S.C. 552a).
(6) Prevention of Fraud, Waste, and Abuse Disclosure Routine Use:
To Federal agencies, non-Federal entities, their employees, and agents (including contractors, their agents or employees; employees or contractors of the agents or designated agents); or contractors, their employees or agents with whom HUD has a contract, service agreement, grant, cooperative agreement, or computer matching agreement for the purpose of: (1) Detection, prevention, and recovery of improper payments; (2) detection and prevention of fraud, waste, and abuse in major Federal programs administered by a Federal agency or non-Federal entity; (3) detection of fraud, waste, and abuse by individuals in their operations and programs, but only to the extent that the information shared is necessary and relevant to verify pre-award and prepayment requirements prior to the release of Federal funds, prevent and recover improper payments for services rendered under programs of HUD or of those Federal agencies and non-Federal entities to which HUD provides information under this routine use.
(7) Research and Statistical Analysis Disclosure Routine Uses:
(a) To contractors, grantees, experts, consultants, Federal agencies, and non-Federal entities, including, but not limited to, State and local governments and other research institutions or their parties, and entities and their agents with whom HUD has a contract, service agreement, grant, or cooperative agreement, when necessary to accomplish an agency function, related to a system of records, for the purposes of statistical analysis and research in support of program operations, management, performance monitoring, evaluation, risk management, and policy development, or to otherwise support the Department's mission. Records under this routine use may not be used in whole or in part to make decisions that affect the rights, benefits, or privileges of specific individuals. The results of the matched information may not be disclosed in identifiable form.
(b) To a recipient who has provided the agency with advance, adequate written assurance that the record provided from the system of records will be used solely for statistical research or reporting purposes. Records under this condition will be disclosed or transferred in a form that does not identify an individual.
(8) Information Sharing Environment Disclosure Routine Uses:
To contractors, grantees, experts, consultants and their agents, or others performing or working under a contract, service, grant, or cooperative agreement with HUD, when necessary to accomplish an agency function related to a system of records. Disclosure requirements are limited to only those data elements considered relevant to accomplishing an agency function. Individuals provided information under these routine use conditions are subject to Privacy Act requirements and disclosure limitations imposed on the Department.
(9) Data Testing for Technology Implementation Disclosure Routine Use:
To contractors, experts and consultants with whom HUD has a contract, service agreement, or other assignment of the Department, when necessary to utilize relevant data for the purpose of testing new technology and systems designed to enhance program operations and performance.
(10) Data Breach Remediation Purposes Routine Use:
To appropriate agencies, entities, and persons when:
(a) HUD suspects or has confirmed that the security or confidentiality of information in a system of records has been compromised;
(b) HUD has determined that as a result of the suspected or confirmed compromise there is a risk of harm to economic or property interests, identity theft, or fraud, or harm to the security or integrity of systems or programs (whether maintained by HUD or another agency or entity) that rely upon the compromised information; and
(c) The disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with HUD's efforts to respond to the suspected or confirmed compromise and prevent, minimize, or remedy such harm for purposes of facilitating responses and remediation efforts in the event of a data breach.
When appropriate, HUD may disclose records compatible to one of its system of records notices during case specific circumstances, as follows: information relating to, but not in and of itself constituting, law enforcement information, as defined below, may only be disclosed upon a showing by the requester that the information is pertinent to the conduct of investigation.
(11) Disclosures for Law Enforcement Investigations Routine Uses:
(a) To appropriate Federal, State, local, tribal, or governmental agencies or multilateral governmental organizations responsible for investigating or prosecuting the violations of, or for enforcing or implementing, a statute, rule, regulation, order, or license, where HUD determines that the information would assist in the enforcement of civil or criminal laws.
(b) To third parties during the course of a law enforcement investigation, to the extent necessary to obtain information pertinent to the investigation, provided the disclosure of such information is appropriate to the proper performance of the official duties of the officer making the disclosure.
(12) Court or Law Enforcement Proceedings Disclosure Routine Uses:
(a) To a court, magistrate, administrative tribunal, or arbitrator in the course of presenting evidence, including disclosures to opposing counsel or witnesses in the course of civil discovery, litigation, mediation, or settlement negotiations; or in connection with criminal law proceedings; or in response to a subpoena or to a prosecution request when such records to be released are specifically approved by a court provided order.
(b) To appropriate Federal, State, local, tribal, or governmental agencies or multilateral governmental organizations responsible for investigating or prosecuting the violations of, or for enforcing or implementing, a statute, rule, regulation, order, or license, where HUD determines that the information would assist in the enforcement of civil or criminal laws.
(c) To third parties during the course of a law enforcement investigation to the extent necessary to obtain information pertinent to the investigation, provided disclosure is appropriate to the proper performance of the official duties of the officer making the disclosure.
(d) To another agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of the agency or instrumentality has made a written request to the agency that maintains the record, specifying the particular portion desired and the law enforcement activity for which the record is sought.
(13) Department of Justice for Litigation Disclosure Routine Use:
To the Department of Justice (DOJ) when seeking legal advice for a HUD initiative or in response to DOJ's request for the
Office of the Assistance Secretary for Fair Housing and Equal Opportunity, HUD.
Notice.
This notice announces the Assessment Tool developed by HUD for use by local governments that receive Community Development Block Grants (CDBG), HOME Investment Partnerships Program (HOME), Emergency Solutions Grants (ESG), or Housing for Persons with AIDS (HOPWA) formula funding from HUD when conducting and submitting their own Assessment of Fair Housing (AFH). The Assessment Tool will also be used for AFHs conducted by joint and regional collaborations between: (1) Such local governments; (2) one or more such local governments with one or more public housing agency (PHA) partners; and (3) other collaborations in which such a local government is designed as the lead for the collaboration. For purposes of this Assessment Tool, no AFH will be due before October 4, 2016. Please see HUD's Web page at
The requirement to conduct and submit an AFH is set forth in HUD's Affirmatively Furthering Fair Housing (AFFH) regulations, and this Assessment Tool has completed the notice and comment process required by the Paperwork Reduction Act (PRA), been reviewed by the Office of Management and Budget (OMB) and approved. The Assessment Tool announced in this notice, and the guidance accompanying this Assessment Tool (the Guidebook) can be found at
This
George D. Williams, Sr., Deputy Assistant Secretary for Policy, Legislative Initiatives and Outreach, Office of Fair Housing and Equal Opportunity, Department of Housing and Urban Development, 451 7th Street SW., Room 5246, Washington, DC 20410; telephone number 866-234-2689 (toll-free) or 202-402-1432 (local). Individuals who are deaf or hard of hearing and individuals with speech impediments may access this number via TTY by calling the toll-free Federal Relay Service during working hours at 1-800-877-8339.
On July 19, 2013, at 78 FR 43710, HUD published for public comment its AFFH proposed rule. The July 19, 2013, AFFH rule proposed a new approach that would enable program participants to more fully incorporate fair housing considerations into their existing planning processes and assist them in complying with their duty to affirmatively further fair housing as required by the Fair Housing Act (Title VIII of the Civil Rights Act) and other authorities. The new process, the Assessment of Fair Housing (AFH), builds upon and refines the prior fair housing planning process, called the analysis of impediments to fair housing choice (AI). As part of the new AFH process HUD advised that it would issue an “Assessment Tool” for use by program participants in completing and submitting their AFHs. The Assessment Tool, which includes instructions and nationally-uniform data provided by HUD, consists of a series of questions designed to help program participants identify, among other things, areas of racially and ethnically concentrated areas of poverty, patterns of integration and segregation, disparities in access to opportunity, and disproportionate housing needs.
At the time of publication of the July 19, 2013, AFFH proposed rule, HUD also posted and sought public comment on a draft “Data Documentation” paper online at
On September 26, 2014, at 79 FR 57949, HUD issued a notice for public comment on the Assessment Tool found at
In developing the Assessment Tool, HUD had four key objectives in mind. First, the Assessment Tool must ask questions that would be sufficient to enable program participants to perform a meaningful assessment of key fair housing issues and contributing factors
With these objectives in mind, HUD issued a first version of the Assessment Tool (Initial Assessment Tool) for public comment for a period of 60 days. The 60-day notice provided a detailed description of the five main sections of the Assessment Tool: Section I—Cover Sheet and Certification; Section II—Executive Summary; Section III—Community Participation Process; Section IV—Analysis; and Section V—Fair Housing Goals and Priorities.
By the close of the comment period on November 25, 2014, HUD received 281 public comments. Commenters included PHAs, grantees of Community Development Block Grants (CDBG), including States and local governments, advocacy groups, nonprofit organizations, and various individuals. All public comments received in response to the 60-day notice can be found at:
On January 15, 2015, at 80 FR 2062, HUD published a notice that solicited public comment on a staggered submission deadline for AFHs to be submitted for specific types of program participants. In the January 2015 notice, HUD advised that it was considering providing certain HUD program participants—States, Insular Areas, qualified PHAs,
On July 16, 2015, at 80 FR 42272, HUD published the AFFH final rule. The AFFH final rule provides, at § 5.160, for staggered submission deadlines for program participants, an aspect of the final rule for which HUD first solicited public comment on January 15, 2015. The final rule provides that each category of program participants listed in § 5.160 their first AFH shall be submitted no later than 270 days prior to the start of (1) their program year or fiscal year for which a new consolidated plan is due, or for which, in the case of PHAs, except qualified PHAs, a new 5-year plan is due. The action that commences the count of 270 days is issuance of an approved Final Assessment Tool for the specific category of program participants. The final rule also provides that if the first AFH submission date results in a preparation period for the AFH that is less than 9 months after the date of publication of the Assessment Tool that is applicable to the program participant or the lead entity if the submission is to be a regional AFH, then the submission deadline will be extended to a date that is not less than 9 months from the date of publication of the applicable Assessment Tool.
Under the AFFH final rule, program participants that received less than a $500,000 CDBG grant in Fiscal Year (FY) 2015 and qualified PHAs, as such term is defined in the rule, will have additional time to conduct and submit their first AFH.
On July 16, 2015, at 80 FR 42108, HUD published, in accordance with the PRA, its notice soliciting public comment for a period of 30 days, on a revised Assessment Tool (Revised Assessment Tool) in response to comments submitted on the 60-day notice. The July 2015 notice responded to significant issues public commenters on HUD's 60-day notice raised and requested comments on specific questions, at 80 FR 42116 and 42117. The changes that HUD made to the Revised Assessment Tool in response to comments received on the 60-day notice are described in the July 16, 2015, notice, at 80 FR 42111 through 42114.
By the close of the comment period on August 17, 2015, HUD received 40 public comments. All public comments received in response to the 30-day notice can be found at:
1. Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. The accuracy of the agency's estimate of the burden of the proposed collection of information;
3. Ways to enhance the quality, utility, and clarity of the information to be collected;
4. Ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated collection techniques or other forms of information technology,
5. Whether Option A or Option B of the Revised Assessment Tool would be the most effective and efficient way of conducting the analysis with respect to the selection of contributing factors.
6. While the Revised Assessment Tool was designed to set minimum AFH requirements as well as providing a straightforward process for HUD to review the AFH, how might program participants use the template to conduct broader collaborations including more comprehensive cross-sector collaborations? How could the Revised Assessment Tool provide greater flexibility for participants to collaborate and expand upon the framework HUD has set in the Revised Assessment Tool?
7. Whether additional changes to the Revised Assessment Tool would better facilitate regional collaboration among program participants.
Other commenters, however, stated that the Revised Assessment Tool reflected that HUD did not consider important changes recommended by the commenters, that the analysis was still highly burdensome, was largely incomprehensible, and showed little understanding of the dynamics of successful housing integration, and some commenters requested that HUD withdraw the Assessment Tool and commence the PRA process anew with a new version.
For those commenters recommending changes and identifying areas in need of improvement, the majority of commenters focused on the following: (1) That, in their view, the Assessment Tool does not account for the resource limitations of program participants and actions that program participants can reasonably take; (2) the data HUD is providing and the Data Tool; (3) the contributing factors—both with respect to the lists included and specific revisions to the explanations provided in Appendix C; (4) the process for setting goals; and (5) how HUD will evaluate submitted AFHs.
With respect to the two formats for structuring the Assessment Tool, Option A and Option B, offered in the 30-day notice, commenters expressed their preference for Option B, but those expressing preference for Option B recommended revisions that they thought would improve the utility of Option B. Overall, commenters on the 30-day notice provided detailed suggestions on how they believed the Assessment Tool could be structured to reduce burden, provide greater clarity, and improve the fair housing assessment process. Other commenters stated that, regardless of format, this Assessment Tool was not appropriate for certain program participants, such as States.
Certain commenters submitted comments on the AFFH rule, raising comments previously submitted and addressed by HUD in the rulemaking process, such as HUD has no authority to issue this rule, the rule is an unfunded mandate, HUD lacks the capacity to administer this rule, and HUD needs to establish safe harbors. Since the rulemaking process has been completed and the 30-day notice (and the 60-day notice) sought comment on the Assessment Tool, HUD is not responding to these comments in this notice.
HUD will be issuing separate Assessment Tools for States and Insular Areas, and for PHAs that are not submitting an AFH as part of a joint submission or regional collaboration. While HUD will take into consideration the issues raised by commenters about States in developing the State Assessment Tool, HUD will not respond to those comments in this notice. The State and Insular Areas Assessment Tool, and the PHA Assessment Tool, will all undergo the full PRA process that provides the public with two opportunities for comment.
HUD is also considering how burden may be reduced for small entities and qualified PHAs. HUD will soon be publishing a notice that seeks advance comment on how the Assessment Tool can best be used by small entities without jeopardizing the ability to undertake a meaningful assessment of fair housing.
HUD appreciates all comments on the Assessment Tool received in response to the 30-day notice, and, in developing this final version of the Assessment Tool all comments were carefully considered. The significant issues commenters raised and HUD's responses to these issues are addressed in Section II.B. of this notice. Additionally, HUD has posted on its Web site at
This section highlights the key features of the final Assessment Tool, and those that differ from the Revised Assessment Tool.
This section provides a summary of the most significant issues raised by commenters and HUD's responses.
In terms of resource limitations, HUD reiterates here what HUD has stated previously, and that is that HUD is aware that program participants may be limited in the actions that they can take to overcome barriers to fair housing choice and that the AFH process does not mandate specific outcomes. However, that does not mean that no actions can be taken, or that program participants should not strive to overcome barriers to fair housing choice or disparities in access to opportunity. With respect to small program participants, HUD continues to consider ways to better enable small entities in complying with their obligation to affirmatively further fair housing while recognizing their resource limitations. In this regard and, as further discussed below, HUD will be issuing an advance notice for comment on how the Assessment Tool can best be used by small entities while providing for meaningful assessment of fair housing issues, contributing factors, and goal setting. As HUD explained in the preamble to the final rule, “HUD recognizes that smaller program participants do not have the same capacity as larger participants and therefore burdens can be greater. HUD has strived in this final rule to reduce costs and burden involved in implementation of the new AFH as much as possible, especially for smaller program participants. The guidance that HUD intends to provide will further refine the application of the rule's requirements to specific types of program participants, especially smaller PHAs and local government agencies with limited staff and resources.”
While HMDA data is currently available from public sources, HUD did not require its use at this time. HUD is continuing to work to provide for batch exports of maps and data tables. With respect to identifying where there is an absence of data, the Final Assessment Tool identifies where local data and knowledge may be particularly helpful. Community participation is also expected to provide supplemental local data.
With respect to program participants setting goals that they can realistically be expected to achieve, as noted in response to an earlier comment, although program participants are required to affirmatively further fair housing, HUD has repeatedly stated that the AFH process does not dictate specific actions, goals, or outcomes,
With respect to the comment that collaborating participants should be allowed to conduct their own separate local analysis, the AFFH final regulations state that while program participants may divide work as they choose, all collaborating program participants are accountable for the analysis and any joint goals and priorities to be included in the collaborative AFH, and they are also accountable for their individual analysis, goals, and priorities to be included in the collaborative AFH.
HUD encourages both regional and joint submissions of AFHs. Both types of submissions have the potential to greatly increase the positive impact of fair housing planning as well as potentially reducing the burden of completing the AFH for many entities. All program participants are encouraged to consider options for either a joint or regional submission. In such consideration, program participants should consult the AFFH final rule for all requirements on joint or regional collaboration, including submission deadlines.
The Final Assessment Tool still retains the streamlined consideration of contributing factors that was adopted following the first round of public comments. As stated in HUD's 30-day notice on the Revised Assessment Tool, “The Initial Assessment Tool would have required contributing factors to be identified twice, once separately and again in answering specific questions. The Revised Assessment Tool only requires that contributing factors be identified once. The contributing factors analysis has also been revised by removing the previous requirements to
A commenter requested that specific housing preservation strategies should be included in the analysis questions and/or instructions, and suggested mentioning strategies such as, “preventing Project-based Section 8 contract opt outs, providing rehab assistance for existing subsidized projects, and recapitalizing and extending affordability for projects with maturing mortgages or expiring use restrictions.”
One commenter stated the explanation of the potential contributing factor on Lack of Community Revitalization should have explicitly mentioned housing preservation as, “an important tool within comprehensive community revitalization strategies and should be included.”
One specific suggestion made by commenters was to clarify the description of the contributing factor on “Siting selection policies” to remove the reference to housing rehabilitation in two places in the description, including in the sentence, “[t]he term `siting selection' refers here to the placement of new or rehabilitated publicly supported housing developments.”
A commenter requested that questions should be added to the analysis, “asking jurisdictions to identify affordable housing developments in areas of opportunity that are threatened with loss.”
First, the additional information questions in the analysis section of the Assessment Tool were clarified to indicate that they provide an opportunity for program participants to include information on the role of affordable housing as it relates to the analysis of the fair housing issues in each relevant section.
Regarding the comment suggesting the list of specific preservation activities, HUD has clarified in the instructions to the additional information questions that housing preservation activities that are related to fair housing issues may be discussed there. Also a change was made to the contributing factor on “displacement due to economic pressures” to clarify that economic pressures can include the loss of affordability restrictions, which can include items mentioned in the commenter's list.
Regarding the comment on the description of the Lack of Community Revitalization contributing factor, HUD amended the contributing factor description to include, “When a community is being revitalized, the preservation of affordable housing units can be a strategy to promote integration.” Moreover, fair housing considerations relating to housing preservation are also already covered in a number of other contributing factors, including displacement of persons due to economic pressures; and location and type of affordable housing. In addition, throughout the Assessment Tool, program participants also must identify “other” contributing factors that are not included in the HUD provided list.
The “Siting selection policies” contributing factor was clarified by deleting two references to rehabilitated housing where they originally appeared and adding this more precise description: “Placement of new housing refers to new construction or acquisition with rehabilitation of previously unsubsidized housing. State and local policies, practices, and decisions can significantly affect the location of new publicly supported housing.” This change was made to distinguish between rehabilitation activities relating to the preservation of subsidized housing and the siting of new subsidized housing that sometimes can involve acquisition of a previously unsubsidized building. Fair housing issues relating to the location of existing publicly supported housing would be addressed under the Location and Type of Publicly Supported Housing contributing factor. HUD notes that program participants still have the ability to consider other relevant factors when comparing the very different program activities of new construction and rehabilitation, such cost-effectiveness and trends in the overall market availability of units affordable to those with the lowest incomes.
HUD declined to adopt the commenters' suggestion that new questions be added to the analysis to identify specific affordable housing developments at risk of loss or conversion because HUD believes that the Assessment Tool provides adequate opportunities to discuss such concerns in several sections of the analysis and through the contributing factors analysis. HUD did respond, however, by amending the contributing factor, “displacement of residents due to economic pressures” to clarify that it can be applied to individual buildings at risk of loss of affordability as well as to neighborhoods undergoing rapid economic change and where preservation may be an appropriate fair housing related goal.
There were additional clarifications that were made in response to the general concerns raised, as reflected in the Compare Assessment Tool.
Several commenters also requested a question or other space to provide information on immigrant communities including, “cultural and religious organizations and social networks in local neighborhoods and communities.”
While HUD declined to add specific questions or instructions on immigrant communities and their various characteristics, program participants may address fair housing issues relating to immigrant communities in several sections of the Assessment Tool, including the additional information questions as well as the descriptive narrative and analysis in the Demographics section. HUD is familiar with the research on immigrant communities and recognizes that there are complex issues associated with them, as noted in the preamble to the AFFH final rule (see 80 FR. 42279-42280).
Additional suggestions on how the Data Tool could be improved included the following: Make the User Guide for the Data Tool easier to find without having to click through several screens before finding it; make both maps and tables exportable; divide the User Guide into two parts, one on maps and one on tables, and better define the terminology used in the Data Tool; add shape files (a data format for geographic information) for R/ECAPs that are available for download as well as different color options for shading census tracts to improve the readability of the maps; clarify that dot density maps defining R/ECAPs does provide a complete picture of segregation; better address family cluster indicators because they are not precisely geocoded, which may misrepresent the location of families away from community assets and away from opportunities and closer to hazards; if HUD is using sophisticated mapping software there is no reason why the maps provided by HUD cannot contain more layers, more symbols and more contrasting colors; clarify whether the data on the maps represents the distribution of publicly supported housing units within a census tract based on actual unit counts in the buildings located within the tract or if the count assumes that all units in a project are in a single building; include an “identify” tool that can provide existing information on the population in assisted developments; and allow program participants to overlay their own maps and data.
Other commenters offered recommendations on specific indices. Commenters offered the following comments: With respect to the Poverty Index, instead of using a poverty rate, HUD should construct a poverty index that is the average of the family poverty rate and the percentage of households receiving public assistance; the Neighborhood School Proficiency Index captures the percentage of elementary school students who pass state tests in math and reading in the schools in a given neighborhood, but the commenters stated that this is measure of school quality, and there is no attempt to measure value added or even quality-adjust schools based upon the characteristics of its students; the Job Access Model measures the distance to job centers but does not make much of an attempt to match jobs to the skills of workers; explain the advantage of aggregating the factors considered by the labor market engagement index and the poverty index—that it would seem more practical to report the difference between the census tract and the national or regional rate and conduct a test for statistical significance.
HUD will include census tract information in the HUD-provided data through the online AFFH Data and Mapping Tool. The Data and Mapping Tool will include a query tool that will allow users to filter and sort demographic data for both developments and census tracts by common characteristics for public housing, project-based Section 8, and Other HUD Multifamily housing (including Section 202 and Section 811). The query tool will include census tract demographic characteristics for LIHTC developments. The Data and Mapping Tool will also allow users to export tables showing this data from the query tool or the resulting comparisons from a query. These changes are intended to reduce grantee burden, improve the accuracy of analyses and reduce the risk of incorrect results (for example from drawing incorrect correlations from potentially complex data), as well as to better inform the community participation process.
Other commenters suggested that HUD require program participants to describe their efforts to identify supplemental data and local knowledge such as from universities, advocacy organizations, service providers, planning bodies, transportation departments, school districts, healthcare departments, employment services, unions, and business organizations. Other commenters went further, suggesting that HUD require program participants to conduct research for topics on which HUD is not providing data. Another commenter stated that local data should not be subject to a determination of statistical validity because such data is generally combined with local knowledge, which is not always statistical. Other commenters asked that HUD encourage all local data be made publicly available on Web sites prior to the community participation process, and that HUD-provided data must be publicly available as well. Another commenter requested that the Assessment Tool include a separate section on local knowledge or provide for local knowledge to be included in each question for each section in the Assessment.
While HUD has not adopted the commenter's suggestion to establish a separate section on local knowledge, HUD has added to the instructions many additional references to local knowledge and local data, to identify where HUD believes such knowledge and data would be particularly helpful in responding to questions. HUD believes these additional references provide the clarity that commenters sought. Additionally, HUD expects that local data and local knowledge will often be made available to program participants through the community participation process, and HUD will further addresses local data and local knowledge in the Guidebook to provide additional examples of local data and local knowledge and where such sources can be accessed.
HUD declines to impose additional requirements on program participants to searching for local data and to require program participants to describe their efforts to identify supplemental local data and local knowledge. HUD requires program participants to supplement HUD-provided data with local data and local knowledge because HUD acknowledges that it is not able to provide data on all areas relevant to a fair housing assessment from nationally uniform sources, and local data may be able to fill such gaps. For example, program participants may find valuable data through a variety of sources, including from other federal and state agencies Web sites. Some examples of federal online data sources include: The Department of Treasury's Community Development Financial Institution's Information Mapping System (
With respect to the requirement that local data is subject to a determination of statistical validity, HUD notes that this is a requirement of the Final Rule itself, but as stated in the Preamble to the Final Rule this provision is intended to, “clarify that HUD may decline to accept local data that HUD has determined is not valid [and not] that HUD will apply a rigorous statistical validity test for all local data.”
Other commenters stated that the program participants should be required to list the organizations they consulted, and further to provide a detailed list of the specific participation activities and the comments received or delivered at public hearings so that advocates can assess if the groups that participated represented a balance of opinions. Some commenters stated that program participants should be required to report on the discussions with residents of public and assisted housing and residents of R/ECAPs in places where community revitalization efforts existed or are planned to be undertaken in order to determine if residents wish to remain in their homes and communities or to relocate to areas that may offer other opportunities. A commenter stated that community participation should be given as much weight, if not more, than the data analysis conducted by program participants.
Other commenters stated that “additional information” questions should require more specific information from program participants; that program participants should describe efforts that are planned, have been made, or that are underway to preserve project-based section 8 developments at risk of opting out of the program, or other HUD multifamily-assisted developments from leaving the affordable housing stock due to FHA mortgage maturity. Commenters also stated that program participants should be required
Other commenters recommended that the transportation analysis be required to cross-reference to Title VI, environmental justice, and other civil rights obligations under federal transportation guidance, including but not limited to relevant Federal Transit Administration circulars. Commenters stated that an analysis of LIHTC properties should be required for all program participants so that patterns of the distribution of government assisted housing is placed in the proper context, stating that LIHTC properties are often concentrated in certain neighborhoods and that there is an unacceptably high level of segregation in and among LIHTC properties. Commenters stated that an analysis of patterns of location and segregation within each government assisted housing program is an important analysis that must be included in the AFH. Commenters added that this analysis should be required for all program participants on a regional level in each AFH so that the pattern of government assisted housing distribution is placed in context.
Commenters stated that the Assessment Tool does not properly recognize the changing factors of majority-minority localities that are experiencing an urban renewal renaissance where higher income and non-minority populations are migrating from the suburbs to urban centers of large cities. Commenters stated that the analysis of disparities in access to opportunity should include an analysis of rates of voter registration and participation, representation by different racial and ethnic groups on elected and appointed boards and commissions, and representation among staff in the school district, police force, and other municipal departments. These commenters also stated that exposure to adverse community factors should include a description of public health issues and health disparities among neighborhoods within the jurisdiction and between the jurisdiction and region, including disparities in low birth weight, infant mortality, sentinel health conditions, deaths due to fire, homicide, and gun violence, pedestrian auto fatalities, rates of premature death, and life expectancy. Commenters also advised that environmental factors should be included, such as water pollution, flooding caused by loss of wetlands, and mobile sources of air pollution.
While commenters stated that it is helpful that HUD has identified factors to be analyzed, the commenters stated that the list and descriptions of factors are characterized in ways that assume there is always a fair housing impact. Commenter stated that any potential bias should be removed. Commenters recommended that the list of contributing factors be referenced as “Factors to be Considered.” Other commenters stated that the term
Commenters stated that market driven forces should not be included in the list of contributing factors, because “location of employers” is an important issue driven by the free market, and that the factor of displacement of residents due to economic pressures is ill conceived. Commenters stated that there are inconsistencies between the lists of contributing factors in Options A and B and they must be reconciled in the final version. To add some clarity to contributing factors, a commenter recommended that HUD include a general statement that contributing factors may differ depending on local context.
With respect to commenters' request that market driven forces be removed from the list of contributing factors, HUD disagrees and has not removed these factors. Such factors may have fair housing implications and are included for program participants to consider as part of their analysis.
Commenters requested that HUD require more than one goal and require robust and specific goals. Commenters stated that it is highly unlikely that a local government that sets just one goal would be doing enough to meaningfully address particularly complex issues like exclusionary zoning.
By providing data and a framework for analysis, however, the AFH is intended to assist program participants in prioritization of fair housing contributing factors that inform policies and how best to allocate resources to meet identified local needs and comply with their duty to affirmatively further fair housing.
“A basic tenet of planning and performance management is recognition of “external factors” and other barriers to achieving goals, and which are beyond an organization to control (See,
With respect to providing examples of goals, HUD included such examples in the Guidebook.
Commenters stated that the descriptions of how to interpret the indices and dot density maps are helpful, and other commenters commended HUD for including a definition of “siting selection.” However, they stated while the term is correctly assigned to new developments, the definition conflates the issue of siting with respect to existing developments and this could lead to confusion. Commenters added that LIHTC is not a siting mechanism, but instead the primary financing tool for both rehabilitation and new construction of affordable housing. Other commenters stated that the outline for the template and instructions are not consistent and make it difficult to refer back and forth between the documents. To be more helpful, commenters suggested that the instructions should specifically note where local data and local knowledge may be relevant and provide examples of the types of local data and local knowledge that may be helpful. Other commenter stated that the instructions should emphasize the fact that program participants are required to supplement their responses for all questions when local data and local knowledge are available, even though HUD data is provided.
Commenters asked how HUD staff will review the AFH, including the contributing factors, and what metrics HUD staff will use to ensure clear and consistent review. Another commenter stated that metrics are needed to help HUD staff in reviewing a submitted AFH, and that similarly, metrics and benchmarks for contributing factors should be provided to help program participants and HUD staff to evaluate them. Other commenters requested that HUD identify the HUD reviewers of the AFH expressing concern that review may be conducted by an employee who does not have direct knowledge of the core functions of the program participant. Another commenter stated that the underlying principal behind the AFH must be to establish a causal connection between the policy or practice and the disparate impact. The commenter stated that Justice Kennedy has said that, “it may be difficult to establish causation because of the multiple factors” that go into a particular decision. Commenter suggested that this is the standard HUD should apply to the analysis in the AFH.
In § 5.162(b) HUD provides the bases for HUD's non-acceptance of an AFH. This section provides that HUD will not accept an AFH if HUD finds that the AFH or a portion of the AFH is inconsistent with fair housing or civil rights requirements or is substantially incomplete. In § 5.162(b)(i) and (ii), HUD provides, respectively, examples of an AFH that is inconsistent with fair housing and civil rights requirements, and an AFH that is substantially incomplete. For a regional or joint AFH, § 5.162(b) provides that a determination by HUD to not accept the AFH with respect to one program participant does not necessarily affect the acceptance of
Through these regulatory provisions, HUD sets out the standard for review of AFHs. HUD is further committed to providing technical assistance and examples that will help guide program participants as to what it means to have an AFH that is substantially incomplete or one that is inconsistent with fair housing or civil rights laws. HUD can, and will, provide a checklist to help program participants ensure they have responded to all required elements of the Assessment Tool.
By this signature, I am authorized to certify on behalf of the program participant that the program participant will take meaningful actions to further the goals identified in its AFH conducted in accordance with the requirements in §§ 5.150 through 5.180 and 24 CFR 91.225(a)(1), 91.325(a)(1), 91.425(a)(1), 570.487(b)(1), 570.601, 903.7(o), and 903.15(d), as applicable.
Second, an instruction was added for the certification that states: “Please note, for a joint or regional AFH, each collaborating program participant must authorize a representative to sign the certification on the program participant's behalf. In a joint or regional AFH, when responding to each question, collaborating program participants may provide joint analyses and individual analyses. The authorized representative of each program participant certifies only to information the program participant provides individually or jointly in response to each question in the assessment. The authorized representative does not certify for information applicable only to other collaborating program participants' analyses, if any.” HUD believes this additional instruction will provide greater clarity and further encourage joint and regional AFH submissions.
As the AFFH final rule itself makes clear, joint and regional submitting agencies are both responsible for the joint portions of the Assessment, including joint goals, and for their own individual portions of the assessment, including their agencies individual goals and priorities. They are therefore not responsible for other agencies' individual goals and priorities. As stated in § 5.156 (a)(3) of the AFFH final rule:
Collaborating program participants must designate, through express written consent, one participant as the lead entity to oversee the submission of the joint or regional AFH on behalf of all collaborating program participants. When collaborating to submit a joint or regional AFH, program participants may divide work as they choose, but all program participants are accountable for the analysis and any joint goals and priorities, and each collaborating program participant must sign the AFH submitted to HUD. Collaborating program participants are also accountable for their individual analysis, goals, and priorities to be included in the collaborative AFH.
HUD encourages program participants to enter into joint and regional collaborations. Doing so can have benefits for both the analysis of issues, which often cross-jurisdictional boundaries and for setting goals. HUD will work with all joint and regional participating entities to facilitate their cooperation and further clarify the roles and responsibilities of these agencies through additional technical assistance and guidance documents.
In issuing this Final Assessment Tool, HUD has strived to reach the appropriate balance in having program participants produce a meaningful assessment of fair housing that carefully considers barriers to fair housing choice and accessing opportunity and how such barriers can be overcome in respective jurisdictions and regions without being unduly burdensome. HUD has further committed to addressing program participant burden by providing data, guidance, and technical assistance, and such assistance will occur throughout the AFH process.
National Park Service, Interior.
Notice of availability.
The National Park Service (NPS) announces the availability of the Final White-tailed Deer Management Plan and Environmental Impact Statement (Final Plan/EIS) for Fire Island National Seashore, New York. The Final Plan/EIS identifies Alternative D as the NPS preferred alternative. When approved, the management plan will guide management of white-tailed deer at Fire Island National Seashore through the use of integrated tools and strategies to control the deer population and support preservation of the natural and cultural landscape, protection and restoration of native vegetation and other natural and cultural resources.
The NPS will prepare a Record of Decision (ROD) no sooner than 30 days following publication by the Environmental Protection Agency of a Notice of Availability of the Final Plan/EIS in the
The Final Plan/EIS is available electronically at
Morgan Elmer, NPS Denver Service Center, 303-969-2317,
Fire Island National Seashore (the Seashore), a unit of the National Park System, is located along the south shore of Long Island in Suffolk County, New York. The Seashore encompasses 19,579 acres of upland, tidal, and submerged lands along a 26-mile stretch of the 32-mile barrier island—part of a much larger system of barrier islands and bluffs stretching from New York City to the very eastern end of Long Island at
The NPS released the Draft Plan/EIS for public and agency review and comment beginning July 31, 2014 and ending October 10, 2014. The Draft Plan/EIS evaluated a no action alternative (A) and three action alternatives (B, C, and D). Each action alternative presented a different strategy to protect native plant communities and cultural plantings, promote forest regeneration, further reduce undesirable human-deer interactions, and reduce the deer population in the Seashore.
Comments were accepted on the Draft Plan/EIS during the 60-day public comment period. After reviewing and considering all comments received, the NPS has prepared this Final White-tailed Deer Management Plan and Environmental Impact Statement (Final Plan/EIS). The Final Plan/EIS identifies Alternative D as the NPS preferred alternative with no changes from the Draft Plan/EIS and presents the likely environmental consequences of implementing the preferred alternative, as well as the other alternatives considered. The Final Plan/EIS also discusses the comments received on the Draft Plan/EIS and responds to substantive comments.
Advisory Committee on the Federal Rules of Bankruptcy Procedure, Judicial Conference of the United States.
Notice of cancellation of public hearing.
The following public hearing on proposed amendments to the Federal Rules of Bankruptcy Procedure has been canceled: Bankruptcy Rules Hearing on January 22, 2016 in Washington, DC. Announcements for this meeting were previously published in 80 FR 48120, 80 FR 50324 and 80 FR 51604. The public hearing on proposed amendments to the Federal Rules of Bankruptcy Procedure scheduled for January 29, 2016, in Pasadena, California, remains scheduled, subject to sufficient expressions of interest.
Rebecca A. Womeldorf, Rules Committee Secretary, Rules Committee Support Office, Administrative Office of the United States Courts, Washington, DC 20544, telephone (202) 502-1820.
On December 23, 2015, the Department of Justice lodged two proposed consent decrees with the United States District Court for the District of Puerto Rico in the lawsuit entitled
One proposed consent decree resolves the United States' claims against the Puerto Rico Department of Natural and Environmental Resources (“DNER”) under the Clean Water Act (“CWA”), 33 U.S.C. 1251-1387, concerning CWA violations at three of its storm water pump stations located within San Juan. The proposed consent decree requires DNER to apply for a permit and implement a Storm Water Management Program, to undertake certain capital and operation improvements to its pump stations, and to provide financial support for investigations and work performed in the pump station service areas. The proposed consent decree resolves only the violations alleged against DNER in the Complaint through the date of lodging of the consent decree and does not resolve claims against the other Defendants. Due to financial challenges currently facing the Commonwealth, no civil penalties for past violations will be recovered under this consent decree.
The second proposed consent decree resolves the United States' claims against the Puerto Rico Department of Transportation and Public Works (“DTPW”) and the Puerto Rico Highways and Transportation Authority (“HTA”) under the CWA, concerning CWA violations throughout their storm sewer systems located within San Juan. The proposed consent decree provides for injunctive relief to be implemented in a two-stage, multi-phased approach including the study and repair of their MS4s, in addition to other infrastructure and operational improvements. The proposed consent decree resolves only
The publication of this notice opens a period for public comment on the proposed consent decrees. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division and should refer to
During the public comment period, the proposed consent decrees may be examined and downloaded at this Justice Department Web site:
Please enclose a check or money order for $10.25 (25 cents per page reproduction cost) for a copy of the DTPW/HTA proposed consent decree and $9.25 for a copy of the DNER proposed consent decree (copies of the appendices attached to the consent decrees are not included in this amount) payable to the United States Treasury.
U.S. Copyright Office, Library of Congress.
Notice of inquiry.
The United States Copyright Office is undertaking a public study to evaluate the impact and effectiveness of the DMCA safe harbor provisions contained in 17 U.S.C. 512. Among other issues, the Office will consider the costs and burdens of the notice-and-takedown process on large- and small-scale copyright owners, online service providers, and the general public. The Office will also review how successfully section 512 addresses online infringement and protects against improper takedown notices. To aid in this effort, and to provide thorough assistance to Congress, the Office is seeking public input on a number of key questions.
Written comments must be received no later than 11:59 p.m. Eastern Time on March 21, 2016. The Office will be announcing one or more public meetings to discuss issues related to this study, to take place after initial written comments are received, by separate notice in the future.
All comments should be submitted electronically. Specific instructions for the submission of comments will be posted on the Copyright Office Web site at
Jacqueline C. Charlesworth, General Counsel and Associate Register of Copyrights, by email at
Congress enacted section 512 in 1998 as part of the Digital Millennium Copyright Act (“DMCA”).
In enacting section 512, Congress created a system for copyright owners and online entities to address online infringement, including limitations on liability for compliant service providers to help foster the growth of internet-based services.
Congress was especially concerned about the liability of online service providers for infringing activities of third parties occurring on or through their services. To address this issue, Congress created a set of “safe harbors”—
Recent research suggests that the volume of infringing material accessed via the internet more than doubled from 2010 to 2012, and that nearly one-quarter of all internet bandwidth in North America, Europe, and Asia is devoted to hosting, sharing, and acquiring infringing material.
As observed by the House Judiciary Committee's Ranking Member in the course of the Committee's ongoing multi-year review of the Copyright Act, and consistent with the testimony of the Register of Copyrights in that hearing, the operation of section 512 poses policy issues that warrant study and analysis.
The present study will review the statutory requirements of section 512 and evaluate its current effectiveness and impact on those who rely upon it. The key aspects of section 512 that are the subject of this review, including notable legal and practical developments, are summarized below.
Section 512 provides safe harbors from infringement liability for online service providers that are engaged in qualifying activities and that also meet certain eligibility requirements. There are four distinct safe harbors, detailed in sections 512(a), (b), (c), and (d), respectively. These safe harbors are available when a service provider engages in one or more of the following corresponding activities: (a) Serving as a conduit for the automatic online transmission of material as directed by third parties; (b) caching (
A service provider that meets the relevant eligibility requirements for one or more of the safe harbors is not liable for monetary relief and is subject only to limited injunctive relief for infringing activities conducted on or through its system or network.
In order to qualify for the limitation on liability provided under section 512(a), (b), (c), or (d), the service provider must comply with certain threshold requirements. Two of these requirements apply to all four safe harbors: (1) The adoption and reasonable implementation of a policy to terminate “repeat infringers”;
Service providers seeking protection under the safe harbors in section 512(b), (c), or (d), however, must, in addition, maintain a compliant notice-and-takedown process by responding expeditiously to remove or disable access to material claimed to be infringing upon receipt of proper notice from a copyright owner or the owner's authorized agent.
The statute prescribes that a copyright owner's takedown notice must include “substantially the following”: (i) The signature of the copyright owner or an authorized agent (
In addition to responding to takedown notices, service providers that seek protection under the section 512(c) and (d) safe harbors must also act expeditiously to remove or disable access to material when they have “actual knowledge” of infringement or, in the absence of such actual knowledge, when they have “aware[ness] of facts or circumstances from which infringing activity is apparent”—the “awareness” standard often referred to as “red flag” knowledge.
Finally, to qualify for the section 512(c) and (d) safe harbors, a service provider must not “receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.”
In addition to the general limitations on infringement liability, the statute provides specific protections for service providers that remove material in response to takedown notices, as well as for users who post material that is claimed to be infringing. Under section 512, a service provider is not liable for the good-faith removal or disabling of access to material “claimed to be infringing or based on facts or circumstances from which infringing activity is apparent”—even material not ultimately found to be infringing—so long as the provider takes reasonable steps to promptly notify the user who posted the material that it has been removed and also complies, as applicable, with a statutory counter-notification process.
Section 512(g) allows a user whose content has been removed in response to a takedown notice to submit a counter notification to a service provider's designated agent requesting that the content be reposted. The counter notification must include: (i) The signature of the subscriber (
Since the enactment of section 512, stakeholders have adopted practices and systems to implement it, and courts have been called upon to interpret its provisions—from eligibility for safe harbors to the requirements for valid takedown notices to the standards that govern misrepresentations in the notification process. Some stakeholders have created best practices, entered into voluntary agreements to streamline enforcement procedures, and/or pursued other non-judicial approaches. Notwithstanding these developments, many on both sides of the equation express significant frustration with the process. A brief overview of the most salient issues follows.
Today, copyright owners send takedown notices requesting service providers to remove and disable access to hundreds of millions of instances of alleged infringement each year.
Many smaller copyright owners, for example, lack access to third-party services and sophisticated tools to monitor for infringing uses, which can be costly, and must instead rely on manual search and notification processes
Accordingly, some have proposed that the notice-and-takedown procedure be revised to become a “notice-and-stay-down” procedure—that is, once a service provider receives an effective and uncontested takedown notice for a particular work, the provider should be required to make commercially reasonable efforts to keep that work from reappearing on its site.
Of course, the burdens of the notice-and-takedown process do not fall on copyright owners alone. Service providers must devote the time and resources necessary to respond to the increasing number of takedown notices sent each day. Smaller providers, in particular, may find the task to be a daunting one.
Since the passage of the DMCA, courts have been called upon to address the elements required for an “effective”—
In addition, there is debate about whether search engine services must disable access to (
A good deal of litigation relating to section 512 to date has focused on the legal standards for determining when a service provider has sufficient knowledge or awareness to require it to remove or disable infringing material in order to remain eligible for the safe harbor protections of section 512(c) or (d). Courts have held “actual knowledge” to require evidence that the service provider subjectively knew that specific material on its site infringed copyright.
Courts have also recognized the common law doctrine of willful blindness in addressing whether a service provider has actual knowledge of infringement.
As also noted above, sections 512(c) and (d) require a service provider to disable access to material or activity if it has “red flag” knowledge,
Copyright owners have argued that Congress' intent in creating the red flag test was to “require[ ] less specificity than the actual knowledge” standard and to prevent service providers from qualifying for safe harbor protection when they are aware of widespread infringement.
In assessing these knowledge requirements, courts have also looked to the language of section 512(m), which states that “[n]othing” in section 512 conditions the availability of safe harbor protection on “a service provider monitoring its service or affirmatively seeking facts indicating infringing activity, except to the extent consistent with a standard technical measure.”
Litigation regarding the Section 512(c) and (d) safe harbors has also addressed what it means for a service provider to receive a “financial benefit directly attributable” to infringing activity where it has the “right and ability to control” such activity.
Like the traditional standard for vicarious liability under common law, the financial benefit/right to control test has been held not to turn on a service provider's knowledge of infringement.
Sections 512(c) and (d) also exclude service providers from safe harbor protection when they “receive a financial benefit directly attributable to the infringing activity.”
Under section 512(i), a service provider seeking to avail itself of any of the safe harbors is required to “adopt[ ] and reasonably implement[ ]” a policy to terminate “repeat infringers” in “appropriate circumstances.”
Service providers and advocacy groups have raised concerns about fraudulent and abusive section 512 notices that may restrain fair use, free speech, or otherwise misuse the notice-and-takedown process.
As noted above, a takedown notice must include a statement that the complaining party has a “good faith belief” that the use is not authorized.
In a number of cases challenging the validity of takedown notices, courts have fleshed out the meaning and application of section 512(f). For example, courts have held that the “good faith belief” requirement of section 512(c)(3)(A)(v) “encompasses a subjective, rather than objective standard”; that is, the sender is not responsible for an “unknowing mistake,” even if the sender's assessment of infringement was objectively unreasonable.
While interested parties continue to test and clarify aspects of section 512 in the courts, some stakeholders have chosen to work together to develop voluntary protocols and best practices to avoid litigation, improve online enforcement, and protect free speech and innovation. Several of these initiatives have been undertaken with the support of the U.S. government, including the Copyright Alert System, an effort supported by the U.S. Intellectual Property Enforcement Coordinator (“IPEC”),
The Copyright Office seeks public input, including, where available, empirical data on the efficiency and effectiveness of section 512 for owners and users of copyrighted works and the overall sustainability of the system if, as appears likely, the volume of takedown notices continues to increase. The Office invites written comments in particular on the subjects below. A party choosing to respond to this Notice of Inquiry need not address every subject, but the Office requests that responding parties clearly identify and separately address each
1. Are the section 512 safe harbors working as Congress intended?
2. Have courts properly construed the entities and activities covered by the section 512 safe harbors?
3. How have section 512's limitations on liability for online service providers impacted the growth and development of online services?
4. How have section 512's limitations on liability for online service providers impacted the protection and value of copyrighted works, including licensing markets for such works?
5. Do the section 512 safe harbors strike the correct balance between copyright owners and online service providers?
6. How effective is section 512's notice-and-takedown process for addressing online infringement?
7. How efficient or burdensome is section 512's notice-and-takedown process for addressing online infringement? Is it a workable solution over the long run?
8. In what ways does the process work differently for individuals, small-scale entities, and/or large-scale entities that are sending and/or receiving takedown notices?
9. Please address the role of both “human” and automated notice-and-takedown processes under section 512, including their respective feasibility, benefits, and limitations.
10. Does the notice-and-takedown process sufficiently address the reappearance of infringing material previously removed by a service provider in response to a notice? If not, what should be done to address this concern?
11. Are there technologies or processes that would improve the efficiency and/or effectiveness of the notice-and-takedown process?
12. Does the notice-and-takedown process sufficiently protect against fraudulent, abusive or unfounded notices? If not, what should be done to address this concern?
13. Has section 512(d), which addresses “information location tools,” been a useful mechanism to address infringement that occurs as a result of a service provider's referring or linking to infringing content? If not, what should be done to address this concern?
14. Have courts properly interpreted the meaning of “representative list” under section 512(c)(3)(A)(ii)? If not, what should be done to address this concern?
15. Please describe, and assess the effectiveness or ineffectiveness of, voluntary measures and best practices—including financial measures, content “filtering” and takedown procedures—that have been undertaken by interested parties to supplement or improve the efficacy of section 512's notice-and-takedown process.
16. How effective is the counter-notification process for addressing false and mistaken assertions of infringement?
17. How efficient or burdensome is the counter-notification process for users and service providers? Is it a workable solution over the long run?
18. In what ways does the process work differently for individuals, small-scale entities, and/or large-scale entities that are sending and/or receiving counter notifications?
19. Assess courts' interpretations of the “actual” and “red flag” knowledge standards under the section 512 safe harbors, including the role of “willful blindness” and section 512(m)(1) (limiting the duty of a service provider to monitor for infringing activity) in such analyses. How are judicial interpretations impacting the effectiveness of section 512?
20. Assess courts' interpretations of the “financial benefit” and “right and ability to control” standards under the section 512 safe harbors. How are judicial interpretations impacting the effectiveness of section 512?
21. Describe any other judicial interpretations of section 512 that impact its effectiveness, and why.
22. Describe and address the effectiveness of repeat infringer policies as referenced in section 512(i)(A).
23. Is there sufficient clarity in the law as to what constitutes a repeat infringer policy for purposes of section 512's safe harbors? If not, what should be done to address this concern?
24. Does section 512(i) concerning service providers' accommodation of “standard technical measures” (including the definition of such measures set forth in section 512(i)(2)) encourage or discourage the use of technologies to address online infringement?
25. Are there any existing or emerging “standard technical measures” that could or should apply to obtain the benefits of section 512's safe harbors?
26. Is section 512(g)(2)(C), which requires a copyright owner to bring a federal lawsuit within ten business days to keep allegedly infringing content offline—and a counter-notifying party to defend any such lawsuit—a reasonable and effective provision? If not, how might it be improved?
27. Is the limited injunctive relief available under section 512(j) a sufficient and effective remedy to address the posting of infringing material?
28. Are the remedies for misrepresentation set forth in section 512(f) sufficient to deter and address fraudulent or abusive notices and counter notifications?
29. Please provide any statistical or economic reports or studies that demonstrate the effectiveness, ineffectiveness, and/or impact of section 512's safe harbors.
30. Please identify and describe any pertinent issues not referenced above that the Copyright Office should consider in conducting its study.
Millennium Challenge Corporation.
Notice.
This report is provided in accordance with section 608(d)(1) of the Millennium Challenge Act of 2003, Pub. L. 108-199, Division D, (the “Act”), 22 U.S.C. 7708(d)(1).
This report is provided in accordance with section 608(d)(1) of the Millennium Challenge Act of 2003, as amended, Public Law 108-199, Division D, (the “Act”) (22 U.S.C. 7707(d)(1)).
The Act authorizes the provision of Millennium Challenge Account
1. The countries that are “candidate countries” for assistance for fiscal year (“FY”) 2016 based on their per-capita income levels and their eligibility to receive assistance under U.S. law, and countries that would be candidate countries but for specified legal prohibitions on assistance (section 608(a) of the Act (22 U.S.C. 7707(a)));
2. The criteria and methodology that the Board of Directors of MCC (the “Board”) will use to measure and evaluate the policy performance of the “candidate countries” consistent with the requirements of section 607 of the Act in order to select “eligible countries” from among the “candidate countries” (section 608(b) of the Act (22 U.S.C. 7707(b))); and
3. The list of countries determined by the Board to be “eligible countries” for FY 2016, with justification for eligibility determination and selection for compact negotiation, including with which of the eligible countries the Board will seek to enter into compacts (section 608(d) of the Act (22 U.S.C. 7707(d))).
This is the third of the above-described reports by MCC for FY 2016. It identifies countries determined by the Board to be eligible under section 607 of the Act (22 U.S.C. 7706) for FY 2016 and countries with which the MCC will seek to enter into compacts under section 609 of the Act (22 U.S.C. 7708), as well as the justification for such decisions. The report also identifies countries determined by the Board to be eligible for MCC's Threshold Program under section 616 of the Act (22 U.S.C. 7715).
The Board met on December 16, 2015, to select countries that will be eligible for assistance under section 607 of the Act (22 U.S.C. 7706) for FY 2016. The Board selected the following countries as eligible for such assistance for FY 2016: Cote d'Ivoire, Kosovo, and Senegal. The Board also reselected the following countries as eligible for FY 2016 compact assistance: Niger, Nepal, and the Philippines. The Board did not vote on the re-selection of Tanzania and Lesotho. The Board also reaffirmed its support for Mongolia's continued effort to develop its compact proposal that will access funds appropriated to MCC when Mongolia was a candidate country.
In accordance with the Act and with the “Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2016” formally submitted to Congress on September 22, 2015, selection was based primarily on a country's overall performance in three broad policy categories: Ruling Justly, Encouraging Economic Freedom, and Investing in People. The Board relied, to the maximum extent possible, upon transparent and independent indicators to assess countries' policy performance and demonstrated commitment in these three broad policy areas. The Board compared countries' performance on the indicators relative to their income-level peers, evaluating them in comparison to either the group of low income countries (“LIC”) or the group of lower middle income countries (“LMIC”).
The criteria and methodology used to assess countries on the annual scorecards are outlined in the “Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2016.”
The Board also considered whether any adjustments should be made for data gaps, data lags, or recent events since the indicators were published, as well as strengths or weaknesses in particular indicators. Where appropriate, the Board took into account additional quantitative and qualitative information, such as evidence of a country's commitment to fighting corruption, investments in human development outcomes, or poverty rates. For example, for additional information in the area of corruption, the Board considered how a country is evaluated by supplemental sources like Transparency International's Corruption Perceptions Index, the Global Integrity Report, Open Government Partnership status, and the Extractive Industry Transparency Initiative, among others, as well as on the defined indicator. The Board may also take into account the margin of error around an indicator, when applicable. In keeping with legislative directives, the Board also considered the opportunity to reduce poverty and promote economic growth in a country, in light of the overall information available, as well as the availability of appropriated funds.
This was the sixth year the Board considered the eligibility of countries for subsequent compacts, as permitted under section 609(k) of the Act (22 U.S.C. 7708(k)). The Board also considered the eligibility of countries for initial compacts. The Board sees the selection decision as an annual opportunity to determine where MCC funds can be most effectively invested to support poverty reduction through economic growth in relatively well-governed, poor countries. The Board carefully considers the appropriate nature of each country partnership—on a case by case basis—based on factors related to economic growth and poverty reduction, the sustainability of MCC's investments, and the country's ability to attract and leverage public and private resources in support of development.
MCC's engagement with partner countries is not open-ended, and the Board is very deliberate when determining eligibility for follow-on partnerships. In determining subsequent compact eligibility, the Board considered—in addition to the criteria outlined above—the country's performance implementing its first compact, including the nature of the country's partnership with MCC, the degree to which the country has demonstrated a commitment and capacity to achieve program results, and the degree to which the country has implemented the compact in accordance with MCC's core policies and standards. To the greatest extent possible, this was assessed using pre-existing monitoring and evaluation targets and regular quarterly reporting. This information was supplemented with direct surveys and consultation with MCC staff responsible for compact implementation, monitoring, and evaluation. MCC published a Guide to
As with previous years, a number of countries that performed well on the quantitative elements of the selection criteria (
Using the criteria described above, Cote d'Ivoire, Kosovo, and Senegal are the only candidate countries under section 606(a) of the Act (22 U.S.C. 7705(a)) that were newly selected as eligible for assistance under section 607 of the Act (22 U.S.C. 7706).
Cote d'Ivoire: After years of working with MCC and MCC indicator institutions in order to strengthen their scorecard performance, Cote D'Ivoire went from passing 5 to 13 indicators over the last four years, due to updating data and pursuing policy reforms linked to the scorecard. In FY 2015, Cote D'Ivoire met the minimum scorecard criteria for the first time, passing 10 indicators, including both hard hurdles. Given the continued improvement from FY 2015 to FY 2016, selection for a compact program allows MCC to continue strengthen its relationship with Cote d'Ivoire while rewarding continued policy improvement.
Kosovo: After years of working to improve data collection and quality, as well as improve policy outcomes, Kosovo passed the MCC scorecard for the first time in FY16, passing 13 of 20 indicators including both hard hurdles and passing Control of Corruption. The country remains one of the poorest in Europe with close to 30% of the population living on less than $2/day, and an economy highly dependent on remittances. A compact investment will serve as an opportunity to reduce poverty through sustainable economic development while also building on the positive relationship built over the past few years.
Senegal: Senegal has consistently passed the scorecard criteria for eight consecutive years and scored above the 90th percentile in Control of Corruption for three consecutive years. Through its first compact, Senegal has proven to be a strong partner, successfully completing the compact ($540 million) in September 2015. In working on a second compact, MCC is able to continue to partner with the Government of Senegal to reduce poverty and support strong economic investments in the country.
Three of the countries selected as eligible for compact assistance for FY 2016 were previously selected as eligible in FY 2015. These countries are Niger, Nepal and the Philippines. The Board reselected these countries based on their continued or improved policy performance since their prior selection. The Board also expressed its support for continued development of a compact with Mongolia using funds appropriated in FY 2015 and prior years, as the country moved in FY 2016 to the upper middle income category before its proposal was finalized. The Board deferred a vote on the selection of Tanzania and Lesotho and emphasized the seriousness with which it takes a country's commitment to MCC's eligibility criteria.
Tanzania: The Board deferred a vote on Tanzania's reselection. The Board discussed the fact that due to ongoing concerns about the Zanzibar elections, as well as the use of Tanzania's Cyber Crimes legislation in the context of the national elections, a vote on reselection would be premature at this time. The Board may revisit its decision over the course of 2016 as more information becomes available.
Lesotho: The Board deferred a vote on Lesotho's reselection. The Board discussed the fact that due to ongoing concerns over the rule of law and accountability in the country, and an expected report from the Southern Africa Development Community on these same issues, a vote on reselection would be premature at this time. The Board may revisit its decision over the course of 2016 as more information becomes available.
The Board selected Sri Lanka and Togo as eligible to receive threshold program assistance.
Sri Lanka: Sri Lanka consistently passed the scorecard from FY 2011 through FY 2015. Though Sri Lanka failed the scorecard in FY 2016 due to failing the democratic rights indicators, this was largely due to the indicators reflecting events in 2014, and likely not yet capturing the democratic rights improvements following the 2015 elections. A threshold program investment is an opportunity to build on this positive momentum, and allows Sri Lanka the opportunity to further strengthen its scorecard performance. It also allows MCC the opportunity to work with the government on the country's ongoing efforts in policy reform.
Togo: Togo has shown consistent improvements on the MCC scorecard over the past three years. A government committee has been strongly engaged with MCC to strategize and prioritize policy improvements, including reforming the family code to ensure gender equality and improving control of corruption. As a result, Togo moved from passing 5 of 20 indicators in FY 2014 to 10 of 20 indicators in FY 2016. Togo's eligibility for threshold program assistance will allow MCC to engage with Togo on continued policy reform, as well as offer Togo an opportunity to further strengthen its scorecard performance.
Once MCC has signed a compact with a country, MCC does not consider the country for reselection on an annual basis during the term of its compact. However, the Board emphasized the need for all partner countries to maintain or improve their policy performance. If it is determined during compact implementation that a country has demonstrated a significant policy reversal, MCC can hold it accountable by applying MCC's Suspension and Termination Policy.
National Aeronautics and Space Administration.
Notice of intent to grant exclusive license.
This notice is issued in accordance with 35 U.S.C. 209(e) and 37 CFR 404.7(a)(1)(i). NASA hereby gives notice of its intent to grant an exclusive license in the United States to practice the inventions described and claimed in U.S. Patent No. 7,341,883 titled “Silicon Germanium Semiconductive Alloy and Method Of Fabricating Same,” NASA Case No. LAR-16868-1; U.S. Patent No. 7,514,726 titled “Graded Index Silicon Germanium on Lattice Matched Silicon Germanium Semiconductive Alloy,” NASA Case No. LAR-16872-1; U.S. Patent No. 7,558,371 titled “Method of Generating X-Ray Diffraction Data for Integral Detection of Twin Defects in Super-Hetero-Epitaxial Materials,” NASA Case No. LAR-17044-1; U.S. Patent No, 7,906,358 titled “Epitaxial Growth of Cubic Crystalline Semiconductor Alloys on Basal Plane of Trigonal or Hexagonal Crystal,” NASA Case No. LAR-17185-1; U.S. Patent No. 8,226,767 titled “Hybrid Bandgap Engineering for Super-Hetero-Epitaxial Semiconductor Materials, and Products Thereof,” NASA Case No. LAR-17405-1; U.S. Patent No. 8,257,491 titled “Rhombohedral Cubic Semiconductor Materials on Trigonal Substrate with Single Crystal Properties and Devices Based on Such Materials,” NASA Case No. LAR-17553-1; U.S. Patent No. 7,769,135 titled “X-ray Diffraction Wafer Mapping Method for Rhombohedral Super-Hetero-Epitaxy,” NASA Case No. LAR-17554-1; U.S. Patent Application No. 14/202,699 titled “High Mobility Transport Layer Structures for Rhombohedral Si/Ge/SiGe Devices,” NASA Case No. LAR-17841-1; U.S. Patent Application No. 14/204,535 titled “Double Sided Si(Ge)/Sapphire/III-Nitride Hybrid Structure,” NASA Case No. LAR-17922-1; U.S. Patent No. 8,044,294 titled “Thermoelectric Materials and Devices,” NASA Case No. LAR-17381-1; and U.S. Patent Application No. 14/279,614 titled “Integrated Multi-Color Light Emitting Device Made with Hybrid Crystal Structure,” NASA Case No. LAR-18133-1, to innoScience, Inc., having its principal place of business in Gaithersburg, Maryland. Certain patent rights in these inventions have been assigned to the United States of America as represented by the Administrator of the National Aeronautics and Space Administration. The prospective exclusive license will comply with the terms and conditions of 35 U.S.C. 209 and 37 CFR 404.7.
The prospective exclusive license may be granted unless, within fifteen (15) days from the date of this published notice, NASA receives written objections including evidence and argument that establish that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR 404.7. Competing applications completed and received by NASA within fifteen (15) days of the date of this published notice will also be treated as objections to the grant of the contemplated partially exclusive license.
Objections submitted in response to this notice will not be made available to the public for inspection and, to the extent permitted by law, will not be released under the Freedom of Information Act, 5 U.S.C. 552.
Objections relating to the prospective license may be submitted to Patent Counsel, Office of Chief Counsel, NASA Langley Research Center, MS 30, Hampton, VA 23681; (757) 864-3221 (phone), (757) 864-9190 (fax).
Jennifer L. Riley, Patent Attorney, Office of Chief Counsel, NASA Langley Research Center, MS 30, Hampton, VA 23681; (757) 864-5057; Fax: (757) 864-9190. Information about other NASA inventions available for licensing can be found online at
All meetings are held at 2:00 p.m.
Tuesday, January 5;
Wednesday, January 6;
Thursday, January 7;
Tuesday, January 12;
Wednesday, January 13;
Thursday, January 14;
Tuesday, January 19;
Wednesday, January 20;
Thursday, January 21;
Tuesday, January 26;
Wednesday, January 27;
Thursday, January 28;
Board Agenda Room, No. 5065, 1015 Half St., SE., Washington, DC 20570
Closed.
Pursuant to § 102.139(a) of the Board's Rules and Regulations, the Board or a panel thereof will consider “the issuance of a subpoena, the Board's participation in a civil action or proceeding or an arbitration, or the initiation, conduct, or disposition . . . of particular representation or unfair labor practice proceedings under section 8, 9, or 10 of the [National Labor Relations] Act, or any court proceedings collateral or ancillary thereto.” See also 5 U.S.C. 552b(c)(10).
Gary Shinners, Executive Secretary, (202) 273-3737.
National Science Foundation.
Notice of permits issued under the Antarctic Conservation of 1978, Public Law 95-541.
The National Science Foundation (NSF) is required to publish notice of permits issued under the Antarctic Conservation Act of 1978. This is the required notice.
Nature McGinn, ACA Permit Officer, Division of Polar Programs, Rm. 755, National Science Foundation, 4201 Wilson Boulevard, Arlington, VA 22230. Or by email:
On November 12, 2015 the National Science Foundation published a notice in the
Laura K.O. Smith, Owner, Operator of Quixote Expeditions—Permit No. 2016-020.
Nuclear Regulatory Commission.
Exemption; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing exemptions in response to a February 13, 2015, request from Entergy Nuclear Operations, Inc. (ENO or the licensee). The licensee requested that Vermont Yankee Nuclear Power Station (Vermont Yankee) be granted a permanent partial exemption from regulations that require retention of records for certain systems, structures, and components (SSCs) until the termination of the operating license.
Please refer to Docket ID NRC-2015-0111 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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James Kim, Office of Nuclear Reactor Regulation, telephone: 301-415-4125; email:
Vermont Yankee is a single unit General Electric 4, Mark 1 Boiling Water Reactor located in Vernon, Vermont. Vermont Yankee was granted Operating License No. DPR-28 under part 50 of title 10 of the
On January 12, 2015, ENO submitted the certifications, pursuant to 10 CFR 50.82(a)(1), of permanent cessation of operations and permanent removal of fuel from the reactor (ADAMS Accession No. ML15013A426). Decommissioning activities will be carried out by Entergy Nuclear Vermont Yankee, and are described in the Post Shutdown Decommissioning Activities Report submitted to the NRC on December 19, 2014 (ADAMS Accession No. ML14357A110). The SSCs that supported the generation of electric power are being prepared to enter the SAFSTOR phase. Completion of fuel transfer from the spent fuel pool (SFP) to an independent spent fuel storage installation (ISFSI) is scheduled for 2020. Preparation for dismantlement and license termination are scheduled to begin in 2068.
By letter dated February 13, 2015 (ADAMS Accession No. ML15069A439), ENO filed a request for NRC approval of a permanent exemption from the following recordkeeping requirements: 10 CFR part 50, appendix B, Criterion XVII, 10 CFR 50.59(d)(3), and 10 CFR 50.71(c). The request was made pursuant to 10 CFR 50.12, “Specific exemptions.”
The licensee is requesting NRC approval of an exemption from 10 CFR part 50, appendix B, Criterion XVII, which requires certain records be retained throughout the life of the unit; 10 CFR 50.59(d)(3), which requires records to be maintained “until the termination of an operating license”; and 10 CFR 50.71(c) where records required by license condition or technical specifications (TS) are to be retained until termination of the license. The licensee proposes that:
(1) The need to maintain records for SSCs associated with nuclear power generation will be eliminated when those SSCs are removed from the licensing basis documents, such as TSs or the updated final safety analysis report (UFSAR), by appropriate change mechanisms.
(2) The need to maintain records for SSCs associated with safe storage of fuel in the SFP will be eliminated when spent nuclear fuel has been completely transferred from the SFP to dry storage, and the SFP and associated SSCs are removed from licensing basis documents by appropriate change mechanisms.
The licensee justifies the request by stating that when the associated SSCs are removed from the licensing basis documents, the SSCs will not serve any function regulated by the NRC. Therefore, the need to retain the records will be, on a practical basis, eliminated. The licensee cites precedents for records retention exemptions granted to Zion Nuclear Power Station, Units 1 and 2 (ADAMS Accession No. ML111260277), Millstone Power Station, Unit No. 1, (ADAMS Accession No. ML070110567), and Haddam Neck Plant (ADAMS Accession No. ML052160088).
Records associated with residual radiological activity and with necessary programmatic controls, such as security and quality assurance, are addressed through current licensing documents and are therefore, not affected by the exemption request. Also, the licensee did not request an exemption from records associated with the Vermont Yankee ISFSI, records associated with retention of the spent fuel assemblies, or records associated with decommissioning or dismantlement. In addition, the licensee did not request an exemption from 10 CFR part 50, appendix A, Criterion 1, “Quality standards and records,” as had been granted in the cited precedents. Because Vermont Yankee was granted a construction license prior to February 1971, it is not subject to the requirements in 10 CFR part 50, appendix A.
Pursuant to 10 CFR 50.12, the Commission may, upon application by any interested person or upon its own initiative, grant exemptions from the requirements of 10 CFR part 50 when (1) the exemptions are authorized by law, will not present an undue risk to public health or safety, and are consistent with the common defense and security, and (2) when special circumstances are present.
Vermont Yankee permanently shut down on December 29, 2014, and subsequently removed the spent fuel from the reactor to the SFP. The nuclear reactor and SSCs associated with the nuclear steam supply system and balance of plant that had supported
The SSCs supporting the continued operation of the SFP remain operable at Vermont Yankee and will be configured for operational efficiency until the fuel is removed to permanent dry storage. The records associated with the SFP SSCs will be retained through the SFP's functional life. Similar to other plant SSCs, when the SFP is emptied of fuel, drained, and prepared for demolition, SSCs that support the SFP will be removed from licensing basis documents by appropriate change mechanisms. At that point, there will be no safety-related or regulatory basis to retain the records associated with SFP SSCs.
Section 50.71(d)(2) allows for the granting of specific exemptions to the retention of records required by regulations. Section 50.71(d)(2) states, in part, “the retention period specified in the regulations in this part for such records shall apply unless the Commission, pursuant to § 50.12 of this part, has granted a specific exemption from the record retention requirements specified in the regulations in this part.”
Based on 10 CFR 50.71(d)(2), if the requirements of 10 CFR 50.12 are satisfied, an exemption from the recordkeeping requirements in 10 CFR part 50, appendix B, 10 CFR 50.59(d)(3), and 10 CFR 50.71(c), as requested by the licensee, is authorized by law.
As SSCs are prepared for SAFSTOR and eventual decommission and dismantlement, they will be removed from NRC licensing basis documents through appropriate change mechanisms, such as through the process stipulated by 10 CFR 50.59 or through a license amendment request approved by the NRC. These change processes involve either a determination by the licensee or an approval by the NRC that the affected SSC no longer serves any safety purpose regulated by the NRC. Therefore, the removal of the SSC would not present an undue risk to the public health and safety. In turn, removal of the records associated with the affected SSC would not cause any additional impact to public health and safety.
The partial exemptions from the requested requirements of 10 CFR part 50, appendix B, Criterion XVII; 10 CFR 50.59(d)(3); and 10 CFR 50.71(c) are administrative in nature and will have no impact on future decommissioning activities or radiological effluents. The partial exemptions will only advance the schedule for the removal of the records. Because the content of the records pertains to SSCs that have already been removed from licensing basis documents, elimination of the records on an advanced timetable will have no reasonable potential to present any undue risk to the public health and safety.
The elimination of records associated with SSCs, which have already been removed from NRC licensing basis documents, is administrative in nature, and does not involve information or involve activities that could potentially impact the common defense or security. After the SSCs are removed from NRC licensing basis documents by appropriate change mechanisms, they are determined to no longer serve the purpose of safe operation or maintain conditions that would affect the ongoing health and safety of workers or the public. Therefore, removal of the associated records will also present no potential for impacting the safe operation of the plant or the defense or security of the workers or the public.
The exemptions requested are administrative in nature and will merely advance the current schedule for removal of the specified records. Therefore, the partial exemptions from the recordkeeping requirements of 10 CFR part 50, appendix B, Criterion XVII; 10 CFR 50.59(d)(3); and 10 CFR 50.71(c), and for the types of records as specified above, are consistent with the common defense and security.
Pursuant to 10 CFR 50.12, the Commission will consider granting an exemption if special circumstances are present. Section 50.12(a)(2)(ii) states, in part, that “Special circumstance are present whenever “Application of the regulation in the particular circumstances would not serve the underlying purpose of the rule, or is not necessary to achieve the underlying purpose of the rule.”
Appendix B of 10 CFR part 50, Criterion XVII, states in part: “Sufficient records shall be maintained to furnish evidence of activities affecting quality. . . . Records shall be identifiable and retrievable.”
Section 50.59(d)(3) states in part: “The records of changes in the facility must be maintained until the termination of an operating license under this part. . .”
Section 50.71(c), states in part: “Records that are required by the regulations in this part or 10 CFR part 52 of this chapter, by license condition, or by technical specifications must be retained for the period specified by the appropriate regulation, license condition, or technical specification. If a retention period is not otherwise specified, these records must be retained until the Commission terminates the facility license. . . .”
In the statements of consideration for the final rulemaking, effective July 26, 1988 (53 FR 19240; May 27, 1988) “Retention Periods for Records,” as a response to public comments during the rulemaking process, the NRC states that records must be retained “. . . so they will be available for examination by the Commission in any analysis following an accident, incident, or other problem involving public health and safety . . . [and] . . . for NRC to ensure compliance with the safety and health aspects of the nuclear environment and for the NRC to accomplish its mission to protect the public health and safety.”
The statements of consideration express that the underlying purpose of the recordkeeping rule is to ensure that, in the event of an accident, incident, or condition that could impact public health and safety, the NRC has access to information in the records that would assist in the recovery from the event and prevent similar events or conditions, which would impact health and safety. These regulations do not consider the nature of the decommissioning process, in which safety-related SSCs are retired or disabled, and subsequently removed from NRC licensing basis documents by appropriate change mechanisms prior to the termination of the license.
Appropriate removal of an SSC from the licensing basis requires either a determination by the licensee or an approval by the NRC of whether the SSC has the potential to cause an accident, event, or other problem, which would adversely impact the public health and safety. It follows that at a nuclear power generation plant in the decommissioning stage, SSCs that have been retired from service and removed from licensing basis documents have already been determined, through that evaluation, to no longer have an adverse impact on public health and safety.
The records subject to removal under these exemptions are associated with SSCs that had been important to safety during power operation but are no longer important operationally or capable of causing an event, incident, or condition that would adversely impact public health and safety, as evidenced by their appropriate removal from licensing basis documents. If the SSCs no longer have the potential to cause an event, incident, or other problem, which would adversely impact public health and safety, then it is reasonable to conclude that the records associated with these SSCs would not reasonably be necessary for recovery from or prevention of such an event or incident, and therefore, their retention would not serve the underlying purpose of the rule to assist in recovery from an event or prevent future events, incidents, or problems. Once removed from licensing basis documents, SSCs are no longer governed by the NRC's regulations, and therefore, are not subject to compliance with the safety and health aspects of the nuclear environment. Therefore, retention of these records does not serve the underlying purpose of the rule of maintaining compliance with the safety and health aspects of the nuclear environment or to accomplish the NRC's mission.
Records, which continue to serve the underlying purpose of the rule, that is, to maintain compliance and to protect public health and safety, will continue to be retained under regulations in 10 CFR part 50 and 10 CFR part 72. These retained records not subject to the exemption include those associated with programmatic controls, such as those pertaining to residual radioactivity, security, quality assurance, etc., and records associated with the ISFSI and spent fuel assemblies.
Section 50.12(a)(2)(iii) states, in part, “Compliance would result in undue hardship or other costs that are significantly in excess of those contemplated when the regulation was adopted . . . .”
The retention of records required by 10 CFR part 50, appendix B, Criterion XVII, 10 CFR 50.59(d)(3), and 10 CFR 50.71(c) provides assurance that records associated with SSCs will be captured, indexed, and stored in an environmentally suitable and retrievable condition. Given the volume of records associated with the SSCs, compliance with the records retention rules results in a considerable cost to the licensee. Retention of the volume of records associated with these SSCs during the operations phase is appropriate to serve the underlying purpose of providing information to the Commission for examination in the case of an event, incident, or other problem involving the public health and safety, as discussed above. However, the cost effect of retaining operations phase records beyond the operations phase until the termination of the license was not fully considered or understood. Therefore, compliance with the rule would result in an undue cost in excess of that contemplated when the rule was adopted.
The granted exemptions apply to records that are associated with SSCs that had supported the operations phase of electricity generation and wet storage of spent fuel assemblies, and that have been, or will be, retired in place, prepared for dismantlement, and removed from licensing basis documents. Records that continue to apply to retired SSCs during the SAFSTOR and decommissioning phase, such as records associated with programmatic controls pertaining to residual radioactivity, security, quality assurance, etc., and records associated with the ISFSI and spent fuel assemblies, will continue to be maintained in an environmentally suitable and retrievable condition.
Under 10 CFR 51.22(c)(25), granting of an exemption from the requirements of any regulation in Chapter I of 10 CFR is a categorical exclusion provided that (i) there is no significant hazards consideration; (ii) there is no significant change in the types or significant increase in the amounts of any effluents that may be released offsite; (iii) there is no significant increase in individual or cumulative public or occupational radiation exposure; (iv) there is no significant construction impact; (v) there is no significant increase in the potential for or consequences from radiological accidents: And (vi) the requirements from which an exemption is sought are among those identified in 10 CFR 51.22(c)(25)(vi).
The Director, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation, has determined that approval of the exemption request involves no significant hazards consideration because allowing the licensee exemption from the recordkeeping requirements of 10 CFR part 50, appendix B, Criterion XVII; 10 CFR 50.59(d)(3); and 10 CFR 50.71(c), at the permanently shutdown and defueled Vermont Yankee power reactor, does not (1) involve a significant increase in the probability or consequences of an accident previously evaluated; or (2) create the possibility of a new or different kind of accident from any accident previously evaluated; (3) involve a significant reduction in a margin of safety. Accordingly, there is no significant change in the types or significant increase in the amounts of any effluents that may be released offsite, and no significant increase in individual or cumulative public or occupational radiation exposure. The exempted regulation is not associated with construction, so there is no significant construction impact. The exempted regulation does not concern the source term (
Allowing the licensee partial exemption from record retention requirements from which the exemption is sought involve recordkeeping requirements, reporting requirements of an administrative, managerial, or organizational nature.
Therefore, pursuant to 10 CFR 51.22(b) and 51.22(c)(25), no environmental impact statement or environmental assessment need be prepared in connection with the approval of this exemption request.
Accordingly, the Commission has determined that, pursuant to 10 CFR 50.12, that ENO's request for partial exemptions from recordkeeping requirements in 10 CFR part 50, appendix B, Criterion XVII; 10 CFR 50.59(d)(3); and 10 CFR 50.71(c) are authorized by law, will not present an undue risk to the public health and safety, and are consistent with the common defense and security. Also, special circumstances are present. Therefore, the Commission hereby grants ENO's one-time partial exemptions from 10 CFR part 50, appendix B, Criterion XVII; 10 CFR 50.59(d)(3); and 10 CFR 50.71(c) to advance the schedule to remove records
For the Nuclear Regulatory Commission.
The Department of State (“the Department”) requests written information to assist in reporting on the degree to which the United States and foreign governments comply with the minimum standards for the elimination of trafficking in persons (“minimum standards”) that are prescribed by the Trafficking Victims Protection Act of 2000, (Div. A, Pub. L. 106-386) as amended (“TVPA”). This information will assist in the preparation of the
Submissions must be received by 5 p.m. on January 19, 2016.
Written submissions and supporting documentation may be submitted by the following methods:
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Submissions may include written narratives that answer the questions presented in this Notice, research, studies, statistics, fieldwork, training materials, evaluations, assessments, and other relevant evidence of local, state, and federal government efforts. To the extent possible, precise dates and numbers of officials or citizens affected should be included.
Where applicable, written narratives providing factual information should provide citations to sources, and copies of the source material should be provided. If possible, send electronic copies of the entire submission, including source material. If primary sources are utilized, such as research studies, interviews, direct observations, or other sources of quantitative or qualitative data, details on the research or data-gathering methodology should be provided. The Department does not include in the
The Department prepares the
The TVPA creates a four tier ranking system. Tier placement is based more on the extent of government action to combat trafficking than on the size of the problem, although that is a consideration. The Department first evaluates whether the government fully complies with the TVPA's minimum standards for the elimination of trafficking. Governments that fully comply are placed on Tier 1. For other governments, the Department considers the extent of efforts to reach compliance. Governments that are making significant efforts to meet the
Since the inception of the
Since 2003, the primary reporting on the United States' anti-trafficking activities has been through the annual Attorney General's Report to Congress and Assessment of U.S. Government Activities to Combat Human Trafficking (“AG Report”) mandated by section 105 of the TVPA (22 U.S.C. 7103(d)(7)). Since 2010, the
The TVPA sets forth the minimum standards for the elimination of trafficking in persons as follows:
(1) The government of the country should prohibit severe forms of trafficking in persons and punish acts of such trafficking.
(2) For the knowing commission of any act of sex trafficking involving force, fraud, coercion, or in which the victim of sex trafficking is a child incapable of giving meaningful consent, or of trafficking which includes rape or kidnapping or which causes a death, the government of the country should prescribe punishment commensurate with that for grave crimes, such as forcible sexual assault.
(3) For the knowing commission of any act of a severe form of trafficking in persons, the government of the country should prescribe punishment that is sufficiently stringent to deter and that adequately reflects the heinous nature of the offense.
(4) The government of the country should make serious and sustained efforts to eliminate severe forms of trafficking in persons.
The following factors should be considered as indicia of serious and sustained efforts to eliminate severe forms of trafficking in persons:
(1) Whether the government of the country vigorously investigates and prosecutes acts of severe forms of trafficking in persons, and convicts and sentences persons responsible for such acts, that take place wholly or partly within the territory of the country, including, as appropriate, requiring incarceration of individuals convicted of such acts. For purposes of the preceding sentence, suspended or significantly reduced sentences for convictions of principal actors in cases of severe forms of trafficking in persons shall be considered, on a case-by-case basis, whether to be considered as an indicator of serious and sustained efforts to eliminate severe forms of trafficking in persons. After reasonable requests from the Department of State for data regarding investigations, prosecutions, convictions, and sentences, a government which does not provide such data, consistent with the capacity of such government to obtain such data, shall be presumed not to have vigorously investigated, prosecuted, convicted, or sentenced such acts. The Secretary of State may disregard the presumption contained in the preceding sentence if the government has provided some data to the Department of State regarding such acts and the Secretary has determined that the government is making a good faith effort to collect such data.
(2) Whether the government of the country protects victims of severe forms of trafficking in persons and encourages their assistance in the investigation and prosecution of such trafficking, including provisions for legal alternatives to their removal to countries in which they would face retribution or hardship, and ensures that victims are not inappropriately incarcerated, fined, or otherwise penalized solely for unlawful acts as a direct result of being trafficked, including by providing training to law enforcement and immigration officials regarding the identification and treatment of trafficking victims using approaches that focus on the needs of the victims.
(3) Whether the government of the country has adopted measures to prevent severe forms of trafficking in persons, such as measures to inform and educate the public, including potential victims, about the causes and consequences of severe forms of trafficking in persons; measures to establish the identity of local populations, including birth registration, citizenship, and nationality; measures to ensure that its nationals who are deployed abroad as part of a diplomatic, peacekeeping, or other similar mission do not engage in or facilitate severe forms of trafficking in persons or exploit victims of such trafficking; a transparent system for remediating or punishing such public officials as a deterrent; measures to prevent the use of forced labor or child labor in violation of international standards; effective bilateral, multilateral, or regional information-sharing and cooperation arrangements with other countries; and effective policies or laws regulating foreign labor recruiters and holding them civilly and criminally liable for fraudulent recruiting.
(4) Whether the government of the country cooperates with other governments in the investigation and prosecution of severe forms of trafficking in persons and has entered into bilateral, multilateral, or regional law enforcement cooperation and coordination arrangements with other countries.
(5) Whether the government of the country extradites persons charged with acts of severe forms of trafficking in persons on substantially the same terms and to substantially the same extent as persons charged with other serious crimes (or, to the extent such extradition would be inconsistent with the laws of such country or with international agreements to which the country is a party, whether the government is taking all appropriate measures to modify or replace such laws and treaties so as to permit such extradition).
(6) Whether the government of the country monitors immigration and emigration patterns for evidence of severe forms of trafficking in persons and whether law enforcement agencies of the country respond to any such evidence in a manner that is consistent with the vigorous investigation and prosecution of acts of such trafficking, as well as with the protection of human rights of victims and the internationally recognized human right to leave any country, including one's own, and to return to one's own country.
(7) Whether the government of the country vigorously investigates, prosecutes, convicts, and sentences public officials, including diplomats and soldiers, who participate in or facilitate severe forms of trafficking in persons, including nationals of the country who are deployed abroad as part of a diplomatic, peacekeeping, or
(8) Whether the percentage of victims of severe forms of trafficking in the country that are non-citizens of such countries is insignificant.
(9) Whether the government has entered into effective, transparent partnerships, cooperative agreements, or agreements that have resulted in concrete and measureable outcomes with—
(A) Domestic civil society organizations, private sector entities, or international non-governmental organizations, or into multilateral or regional arrangements or agreements, to assist the government's efforts to prevent trafficking, protect victims, and punish traffickers; or
(B) The United States toward agreed goals and objectives in the collective fight against trafficking.
(10) Whether the government of the country, consistent with the capacity of such government, systematically monitors its efforts to satisfy the criteria described in paragraphs (1) through (8) and makes available publicly a periodic assessment of such efforts.
(11) Whether the government of the country achieves appreciable progress in eliminating severe forms of trafficking when compared to the assessment in the previous year.
(12) Whether the government of the country has made serious and sustained efforts to reduce the demand for:
(A) Commercial sex acts; and
(B) Participation in international sex tourism by nationals of the country.
Submissions should include, but need not be limited to, answers to relevant questions below for which the submitter has direct professional experience; that experience should be noted. Citations to source material should also be provided. Note the country or countries that are the focus of the submission. Please see the
1. How have trafficking methods changed in the past 12 months? For example, are there victims from new countries of origin? Is internal trafficking or child trafficking increasing? Has sex trafficking changed from brothels to private apartments? Is labor trafficking now occurring in additional types of industries or agricultural operations? Is forced begging a problem? Does child sex tourism occur in the country or involve its nationals abroad, and if so, what are their destination countries?
2. In what ways has the government's efforts to combat trafficking in persons changed in the past year? What new laws, regulations, policies, and implementation strategies exist (
3. Please provide observations regarding the implementation of existing laws and procedures. Are there laws criminalizing those who knowingly solicit or patronize a trafficking victim to perform a commercial sex act and what are the prescribed penalties?
4. Are the anti-trafficking laws and sentences strict enough to reflect the nature of the crime?
5. Please provide observations on overall anti-trafficking law enforcement efforts and the efforts of police and prosecutors to pursue trafficking cases. Is the government equally vigorous in pursuing labor trafficking and sex trafficking? If aware, please note any efforts to investigate and prosecute suspects for knowingly soliciting or patronizing a sex trafficking victim to perform a commercial sex act.
6. Do government officials understand the nature of trafficking? If not, please provide examples of misconceptions or misunderstandings.
7. Do judges appear appropriately knowledgeable and sensitized to trafficking cases? What sentences have courts imposed upon traffickers? How common are suspended sentences and prison time of less than one year for convicted traffickers?
8. What was the extent of official complicity in trafficking crimes? Were officials operating as traffickers (whether subjecting persons to forced labor and/or sex trafficking offenses) or taking actions that may facilitate trafficking (including accepting bribes to allow undocumented border crossings or suspending active investigations of suspected traffickers, etc.)? Were there examples of trafficking occurring in state institutions (prisons, child foster homes, institutions for mentally or physically handicapped persons)? What proactive measures did the government take to prevent official complicity in trafficking in persons crimes? How did the government respond to reports of complicity that arose during the reporting period?
9. Has the government vigorously investigated, prosecuted, convicted, and sentenced nationals of the country deployed abroad as part of a diplomatic, peacekeeping, or other similar mission who engage in or facilitate trafficking?
10. Has the government investigated, prosecuted, convicted, and sentenced organized crime groups that are involved in trafficking?
11. Please provide observations regarding government efforts to address the issue of unlawful child soldiering.
12. Does the government make a coordinated, proactive effort to identify victims? Do officials effectively coordinate among one another and with relevant nongovernmental organizations to refer victims to care? Is there any screening conducted before deportation to determine whether individuals were trafficked?
13. What victim services are provided (legal, medical, food, shelter, interpretation, mental health care, health care, employment, training, etc.)? Who provides these services? If nongovernment organizations provide the services, does the government support their work either financially or otherwise?
14. How could victim services be improved?
15. Are services provided equally and adequately to victims of labor and sex trafficking? Men, women, and children? Citizen and noncitizen? Members of the LGBT community?
16. Do service providers and law enforcement work together cooperatively, for instance, to share information about trafficking trends or to plan for services after a raid? What is the level of cooperation, communication, and trust between service providers and law enforcement?
17. May victims file civil suits or seek legal action against their trafficker? Do victims avail themselves of those remedies? Is there a formal policy that encourages victims' voluntary participation in investigations and prosecutions? How did the government protect victims during the trial process? If a victim was a material witness in a court case against a former employer, was the victim permitted to obtain employment, move freely about the country, or leave the country pending trial proceedings? How did the government work to ensure victims were not re-traumatized during participation in trial proceedings? Can victims provide testimony via video or written statements? Were victims' identities kept confidential as part of such proceedings?
18. Does the government repatriate victims who wish to return home? Does the government assist with third country resettlement? Does the government engage in any analysis of whether victims may face retribution or hardship upon repatriation to their country of origin? Are victims awaiting repatriation or third country resettlement offered services? Are victims indeed repatriated or are they deported?
19. Does the government effectively assist its nationals exploited abroad? Does the government work to ensure victims receive adequate assistance and support for their repatriation while in destination countries? Does the government provide adequate assistance to repatriated victims after their return to their countries of origin, and if so, what forms of assistance?
20. Does the government inappropriately detain or imprison identified trafficking victims?
21. Does the government punish trafficking victims for forgery of documents, illegal immigration, unauthorized employment, or participation in illegal activities directed by the trafficker?
22. What efforts has the government made to prevent human trafficking?
23. Has the government entered into effective bilateral, multilateral, or regional information-sharing and cooperation arrangements that have resulted in concrete and measureable outcomes?
24. Does the country have effective policies or laws regulating foreign labor recruiters? What steps did the government take to minimize the trafficking risks faced by migrant workers departing from or arriving in the country?
25. Does the government undertake activities that could prevent or reduce vulnerability to trafficking, such as registering births of indigenous populations?
26. Does the government provide financial support to NGOs working to promote public awareness or does the government implement such campaigns itself? Have public awareness campaigns proven to be effective?
27. Please provide additional recommendations to improve the government's anti-trafficking efforts.
28. Please highlight effective strategies and practices that other governments could consider adopting.
Ohio River Partners LLC (ORP), a noncarrier, has filed a verified notice of exemption under 49 CFR 1150.31 to acquire from Hannibal Development, LLC (Hannibal), and to operate 12.2 miles of rail line known as the Omal Secondary Track (the Line).
Hannibal acquired the Line from the bankruptcy estate of ORMET Railroad Corporation (ORMET) in 2014. Prior to entering bankruptcy, ORMET granted Hannibal Real Estate, LLC (HRE)
This transaction is related to a concurrently filed verified notice of exemption in
The transaction may not be consummated until January 17, 2016 (30 days after the notice of exemption was filed).
ORP certifies that its projected annual revenues as a result of this transaction will not result in its becoming a Class II or Class I rail carrier and will not exceed $5 million.
ORP states that the transaction does not impose any interchange commitment on it.
If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions to stay must be filed no later than January 8, 2016 (at least seven days before the exemption becomes effective).
An original and 10 copies of all pleadings, referring to Docket No. FD 35984, must be filed with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423-0001. In addition, a copy of each pleading must be served on Terence M. Hynes, Sidley Austin LLP, 1501 K St. NW., Washington, DC 20005.
Board decisions and notices are available on our Web site at “
By the Board, Julia M. Farr, Acting Director, Office of Proceedings.
The Surface Transportation Board has received a request Neville Peterson LLP on behalf of Trinity Industries, Inc. (WB605-12—12/22/15) for permission to use certain data from the Board's 2014 Carload Waybill Sample. A copy of this request may be obtained from the Office of Economics.
The waybill sample contains confidential railroad and shipper data; therefore, if any parties object to these requests, they should file their objections with the Director of the Board's Office of Economics within 14 calendar days of the date of this notice. The rules for release of waybill data are codified at 49 CFR 1244.9.
Fortress Investment Group LLC (Fortress) has filed a verified notice of exemption pursuant to 49 CFR 1180.2(d)(2) for the benefit of Fortress Transportation and Infrastructure Investors LLC (FTAI), which is managed by an affiliate of Fortress, to continue in control of Ohio River Partners LLC (ORP), a noncarrier, upon ORP becoming a Class III rail carrier.
This transaction is related to a concurrently filed verified notice of exemption in
The parties intend to consummate the proposed transaction as soon as practicable after the effective date of this notice of exemption and the concurrent notice of exemption filed in Docket No. FD 35984.
Two other rail carriers subject to the Board's jurisdiction, Florida East Coast Railway, L.L.C. (FECR) and Central Maine & Quebec Railway US Inc. (CMQR), are currently controlled by companies managed by affiliates of Fortress.
Fortress represents that: (1) The rail lines operated by FECR and CMQR do not connect with each other, nor do they connect with the Line that ORP proposes to acquire and operate in Docket No. FD 35984; (2) the transaction that is the subject of Docket No. FD 35984 is not part of a series of anticipated transactions that would connect the Line that ORP proposes to acquire with the lines of any other rail carrier owned by Fortress, any affiliate of Fortress, or any investment fund or entity managed by an affiliate of Fortress;
Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. As a condition to the use of this exemption, any employees adversely affected by this transaction will be protected by the conditions set forth in
If the notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than January 8, 2016.
An original and 10 copies of all pleadings, referring to Docket No. FD 35985, must be filed with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423-0001. In addition, one copy of each pleading must be served on Terence M. Hynes, Sidley Austin LLP, 1501 K Street NW., Washington, DC 20005.
Board decisions and notices are available on our Web site at
By the Board, Julia M. Farr, Acting Director, Office of Proceedings.
Roanoke Southern, LLC (RSRL),
RSRL states that the line is being acquired to facilitate the commencement of the VMT-sponsored, intrastate excursion operations. RSRL notes that in the event that a demand for freight service was to emerge following consummation of the proposed transaction, RSRL acknowledges that it
RSRL certifies that the proposed transaction would not involve a provision or agreement that would limit RSRL's ability to interchange with a third-party connecting carrier. RSRL states that it will connect and interchange with NSR in the vicinity of milepost 6.92.
RSRL also certifies that its projected annual revenues as a result of this transaction will not result in RSRL becoming a Class I or Class II rail carrier and states that its projected annual revenues will not exceed $5 million.
The transaction is expected to be consummated on or after January 17, 2016, the effective date of the exemption (30 days after the verified notice was filed).
If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions to stay must be filed no later than January 8, 2016 (at least seven days before the exemption becomes effective).
An original and 10 copies of all pleadings, referring to Docket No. FD 35976, must be filed with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423-0001. In addition, a copy of each pleading must be served on Robert A. Wimbish, Fletcher & Sippel LLC, 29 South Wacker Drive, Suite 920, Chicago, IL 60606.
Board decisions and notices are available on our Web site at
By the Board, Julia M. Farr, Acting Director, Office of Proceedings.
Bureau of the Fiscal Service, Treasury.
Notice.
For the period beginning January 1, 2016, and ending on June 30, 2016, the prompt payment interest rate is 2
Comments or inquiries may be mailed to: E-Commerce Division, Bureau of the Fiscal Service, 401 14th Street SW., Room 306F, Washington, DC 20227. Comments or inquiries may also be emailed to
Effective January 1, 2016, to June 30, 2016.
Thomas M. Burnum, E-Commerce Division, (202) 874-6430; or Thomas Kearns, Attorney-Advisor, Office of the Chief Counsel, (202) 874-7036.
An agency that has acquired property or service from a business concern and has failed to pay for the complete delivery of property or service by the required payment date shall pay the business concern an interest penalty. 31 U.S.C. 3902(a). The Contract Disputes Act of 1978, Sec. 12, Public Law 95-563, 92 Stat. 2389, and the Prompt Payment Act, 31 U.S.C. 3902(a), provide for the calculation of interest due on claims at the rate established by the Secretary of the Treasury.
The Secretary of the Treasury has the authority to specify the rate by which the interest shall be computed for interest payments under section 12 of the Contract Disputes Act of 1978 and under the Prompt Payment Act. Under the Prompt Payment Act, if an interest penalty is owed to a business concern, the penalty shall be paid regardless of whether the business concern requested payment of such penalty. 31 U.S.C. 3902(c)(1). Agencies must pay the interest penalty calculated with the interest rate, which is in effect at the time the agency accrues the obligation to pay a late payment interest penalty. 31 U.S.C. 3902(a). “The interest penalty shall be paid for the period beginning on the day after the required payment date and ending on the date on which payment is made.” 31 U.S.C. 3902(b).
Therefore, notice is given that the Secretary of the Treasury has determined that the rate of interest applicable for the period beginning January 1, 2016, and ending on June 30, 2016, is 2
Department of the Treasury.
Notice.
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the date of publication of this notice.
Comments should be received on or before February 1, 2016 to be assured of consideration.
Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission(s) may be obtained by email at
Department of the Treasury.
Notice.
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the date of publication of this notice.
Comments should be received on or before February 1, 2016 to be assured of consideration.
Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission may be obtained by emailing
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before February 29, 2016.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Nancy J. Kessinger at (202) 632-8924 or FAX (202) 632-8925.
Under the PRA of 1995 (Pub. L. 104-13; 44 U.S.C. 3501—21), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Veterans Health Administration, Department of Veterans Affairs.
Notice.
The Veterans Health Administration (VHA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Comments must be submitted on or before February 1, 2016.
Submit written comments on the collection of information through
Crystal Rennie, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 632-7492 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Summary presentation of interim and final rules.
This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) in this Federal Acquisition Circular (FAC) 2005-86. A companion document, the
For effective dates see the separate documents, which follow.
The analyst whose name appears in the table below in relation to the FAR case. Please cite FAC 2005-86 and the specific FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.
Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these rules, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-86 amends the FAR as follows:
This rule amends the FAR to define “multiple-award contract.” This rule implements the definition established by the Small Business Administration (SBA) in its final rule that published in the
This final rule does not place any new requirements on small entities.
This interim rule amends the FAR to implement regulatory changes made by the Small Business Administration (SBA) in its final rule as published in the
This interim rule may have a positive economic impact on women-owned small businesses.
This final rule amends the FAR to add Montenegro and New Zealand as new designated countries under the World Trade Organization Government Procurement Agreement (WTO GPA). The rule also updates the list of parties to the Agreement on Trade in Civil Aircraft by adding Montenegro.
This final rule has no significant impact on the Government and contractors, including small business entities.
This final rule amends the FAR to adjust the thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements as determined by the United States Trade Representative, according to a pre-determined formula under the agreements.
Federal Acquisition Circular (FAC) 2005-86 is issued under the authority of the Secretary of Defense, the Administrator of General Services, and the Administrator for the National Aeronautics and Space Administration.
Unless otherwise specified, all Federal Acquisition Regulation (FAR) and other directive material contained in FAC 2005-86 is effective December 31, 2015 except for item I and III which are effective February 1, 2016, and item IV which is effective January 1, 2016.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Final rule.
DoD, GSA, and NASA are issuing a final rule to amend the Federal Acquisition Regulation (FAR) to define “multiple-award contract.”
Ms. Mahruba Uddowla, Procurement Analyst, at 703-605-2868, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-86, FAR Case 2015-019.
DoD, GSA, and NASA published a proposed rule in the
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comment in the development of the final rule. A discussion of the comment is provided as follows:
There were no changes made to the rule as a result of the comment received. There were no comments on the Regulatory Flexibility Act analysis.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601,
The final rule amends the FAR to define “multiple-award contract.” On October 2, 2013, the Small Business Administration (SBA) issued a final rule in the
There were no significant issues raised by the public in response to the Initial Regulatory Flexibility Analysis provided in the proposed rule.
This rule applies to all entities that do business with the Federal Government, but it is not expected to have a significant impact.
This rule does not impose any new reporting, recordkeeping or other compliance requirements. The rule does not duplicate, overlap, or conflict with any other Federal rules.
Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.
The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
Government procurement.
Therefore, DoD, GSA, and NASA amend 48 CFR part 2 as set forth below:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
(b) * * *
(2) * * *
(1) A Multiple Award Schedule contract issued by GSA (
(2) A multiple-award task-order or delivery-order contract issued in accordance with FAR subpart 16.5, including Governmentwide acquisition contracts; or
(3) Any other indefinite-delivery, indefinite-quantity contract entered into
Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA).
Interim rule.
DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration (SBA) that provide for authority to award sole source contracts to economically disadvantaged women-owned small business concerns and to women-owned small business concerns eligible under the Women-Owned Small Business (WOSB) Program.
Submit comments identified by FAC 2005-86, FAR Case 2015-032, by any of the following methods:
•
•
Ms. Mahruba Uddowla, Procurement Analyst, at 703-605-2868 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-86, FAR Case 2015-032.
This interim rule revises the FAR to implement regulatory changes that the SBA has made in its final rule published in the
The WOSB Program, as set forth in section 8(m) of the Small Business Act (15 U.S.C. 637(m)), authorizes contracting officers to restrict competition to EDWOSB concerns and to WOSB concerns eligible under the WOSB Program for Federal contracts, in certain industries that SBA has determined to be underrepresented or substantially underrepresented by small business concerns owned and controlled by women. DoD, GSA, and NASA published an interim rule for FAR Case 2010-015 in the
The WOSB Program was subsequently amended in section 825 of the NDAA for FY2015, which granted contracting officers the authority to award sole source contracts to EDWOSB concerns and WOSB concerns eligible under the WOSB Program. SBA established procedures for this new statutory authority in its final rule published in the
In keeping with the tenets of the WOSB Program, the sole source authority may only be used in industry sectors that SBA has determined to be underrepresented or substantially underrepresented by WOSB concerns. The same eligibility requirements for participating in set-asides under the WOSB Program, set forth in SBA's regulations at 13 CFR 127.100 through 127.509, also apply to sole source acquisitions. In general, an award under the WOSB program may be pursued on a sole source basis when the contracting officer does not have a reasonable expectation, through market research, that two or more eligible EDWOSB or WOSB concerns will submit offers at a fair and reasonable price, but identifies one responsible EDWOSB or WOSB that can perform at a fair and reasonable price. The dollar thresholds for sole source awards are equal to or less than $6.5 million for manufacturing requirements and equal to or less than $4 million for all other requirements, including all options.
This rule amends FAR subparts 2.1, 4.8, 6.3, 18.1, 19.0, 19.1, 19.3, 19.15, and 52.2. These changes are summarized in the following paragraphs:
•
•
•
•
This section is amended to include the authority for sole source awards to EDWOSB concerns and WOSB concerns eligible under the WOSB program.
•
•
•
•
•
•
•
•
This rule amends the FAR clauses at 52.219-29, Notice of Set-Aside for Economically Disadvantaged Women-owned Small Business Concerns, and 52.219-30, Notice of Set-Aside for Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program, in order to implement paragraph (a)(3) of section 825 of the NDAA for FY 2015. The Federal Acquisition Regulatory Council, pursuant to the authority granted in 41 U.S.C. 1905 and 1906, and the Administrator, Office of Federal Procurement Policy, pursuant to the authority granted in 41 U.S.C. 1907, have determined that the application of this statutory authority to contracts at or below the simplified acquisition threshold and to contracts for commercial items and commercially available off-the-shelf items, is in the best interests of the Federal Government.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
The changes may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601,
DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement paragraph (a)(3) of section 825 of the Carl Levin and Howard P. `Buck' McKeon National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2015, Public Law 113-291. Section 825 of the NDAA for FY 2015 included language granting contracting officers the authority to award sole source contracts to Women-Owned Small Businesses (WOSBs) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) under the WOSB Program.
The objectives of this interim rule are to put the WOSB Program on a level playing field with other SBA Government contracting programs that have sole source authority, and to provide an additional, needed tool for agencies to meet the statutorily mandated goal of 5 percent of the total value of all prime contract and subcontract awards for WOSBs. The authorizing legislation is paragraph (a)(3) of section 825 of the NDAA for Fiscal Year 2015.
This rule may have a positive economic impact on WOSB concerns. The Dynamic Small Business Supplemental Search (DSBS) lists approximately 41,500 firms as either WOSBs or EDWOSBs under the WOSB Program. An analysis of the Federal Procurement Data System from April 1, 2011 (the implementation date of the WOSB Program), through September 1, 2015, revealed that there were approximately 44,053 women-owned small business concerns, including 332 EDWOSBs and 1,063 WOSBs eligible under the WOSB Program, that received obligated funds from Federal contract awards, task or delivery orders, and modifications to existing contracts. This rule could affect a smaller number of EDWOSBs and WOSBs than those eligible under the WOSB Program since the sole source authority can only be used where a contracting officer does not have a reasonable expectation, through market research, that two or more eligible EDWOSB or WOSB concerns will submit offers at a fair and reasonable price; in addition, the sole source authority for WOSBs and EDWOSBs is limited to contracts valued at $6.5 million or less for manufacturing contracts and $4 million or less for all other contracts.
This interim rule does not impose any new reporting, recordkeeping or other compliance requirements for small businesses. This rule
The Regulatory Secretariat has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the SBA. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule consistent with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2015-032), in correspondence.
The interim rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary to meet the Congressional intent of leveling the playing field between the Women-Owned Small Business (WOSB) Program and SBA's other socioeconomic contracting programs. Prior to passage of section 825 of the National Defense Authorization Act for Fiscal Year 2015, the WOSB Program was the only socioeconomic small business program that did not provide contracting officials the authority to make sole source awards to its intended beneficiaries.
WOSBs are an important growth area in the U.S. economy and yet the Federal Government has consistently failed to achieve the minimum five percent annual women-owned small business participation goal set forth in statute. As a result, women entrepreneurs continue to struggle to gain access to the Federal marketplace. This situation will persist, and women-owned small businesses will be excluded from valuable Federal procurement opportunities on a daily basis unless the sole source authority for EDWOSBs and WOSBs is implemented as quickly as possible. The new sole source authority allows contracting officers to implement the preferences accorded under the WOSB Program to the fullest extent possible, and serves as an additional, needed tool to increase procurement opportunities for WOSBs.
The statute went into effect on the date of enactment, December 19, 2014. The SBA final rule went into effect October 14, 2015. Pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD, GSA, and NASA will consider public comments received in response to this interim rule in the formation of the final rule.
Government procurement.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 6, 18, 19, and 52 as set forth below:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
The revisions read as follows:
(b) * * *
(i) Economically disadvantaged women-owned small business (EDWOSB) concerns eligible under the WOSB Program for Federal contracts assigned a North American Industry Classification Systems (NAICS) code in an industry in which the Small Business Administration (SBA) has determined that WOSB concerns are underrepresented in Federal procurement; and
(a) * * *
(42) When limiting competition, or awarding on a sole source basis, to economically disadvantaged women-owned small business (EDWOSB) concerns or women-owned small business (WOSB) concerns eligible under the WOSB Program in accordance with subpart 19.15, include documentation—
(ii) * * *
(A) Underrepresented for EDWOSB concerns; or
(B) Substantially underrepresented for WOSB concerns.
(b) * * *
(7) Sole source awards under the WOSB Program-15 U.S.C. 637(m) (see 19.1506).
Contracts may be awarded to economically disadvantaged women-owned small business (EDWOSB) concerns and women-owned small business (WOSB) concerns eligible under the WOSB Program on a competitive or sole source basis. (See subpart 19.15.)
The revisions read as follows:
(a) * * *
(3) Setting acquisitions aside for exclusive competitive participation by small business, 8(a) business development participants, HUBZone small business concerns, service-disabled veteran-owned small business concerns, and economically disadvantaged women-owned small business (EDWOSB) concerns and women-owned small business (WOSB) concerns eligible under the WOSB Program;
(9) Sole source awards to HUBZone small business concerns, service-disabled veteran-owned small business concerns, and EDWOSB concerns and WOSB concerns eligible under the WOSB Program.
(f) * * *
(1) * * * However, see the limitations on subcontracting at 52.219-14 that apply to any small business offeror other than a nonmanufacturer for purposes of set-asides and 8(a) awards, 52.219-3 for HUBZone set-asides and HUBZone sole source awards, 52.219-27 for SDVOSB set-asides and SDVOSB sole source awards, 52.219-29 for economically disadvantaged women-owned small business (EDWOSB) set-asides and EDWOSB sole source awards, and 52.219-30 for set-asides and sole source awards to women-owned small business (WOSB) concerns eligible under the WOSB Program.
(b)(1) For sole source acquisitions, the contracting officer or SBA may protest the offeror's status as an economically disadvantaged women-owned small business (EDWOSB) concern or as a WOSB concern eligible under the WOSB Program. For all other acquisitions, an interested party (see 13 CFR 127.102) may protest the apparent successful offeror's EDWOSB or WOSB status.
(a) * * *
(2) May set aside acquisitions exceeding the micro-purchase threshold for competition restricted to EDWOSB concerns or WOSB concerns eligible under the WOSB Program when the acquisition—
(i) Is assigned a NAICS code in which SBA has determined that WOSB concerns are underrepresented in Federal procurement; or
(ii) Is assigned a NAICS code in which SBA has determined that WOSB concerns are substantially underrepresented in Federal procurement, as specified on SBA's Web site at
(a) A contracting officer shall consider a contract award to an EDWOSB concern on a sole source basis (see 6.302-5(b)(7)) before considering small business set-asides (see 19.203 and subpart 19.5) provided none of the exclusions at 19.1504 apply and—
(1) The acquisition is assigned a NAICS code in which SBA has determined that WOSB concerns are underrepresented in Federal procurement;
(2) The contracting officer does not have a reasonable expectation that offers would be received from two or more EDWOSB concerns; and
(3) The conditions in paragraph (c) of this section exist.
(b) A contracting officer shall consider a contract award to a WOSB concern (including EDWOSB concerns) eligible under the WOSB Program on a sole source basis (see 6.302-5(b)(7)) before considering small business set-asides (see 19.203 and subpart 19.5) provided none of the exclusions at 19.1504 apply and—
(1) The acquisition is assigned a NAICS code in which SBA has determined that WOSB concerns are substantially underrepresented in Federal procurement;
(2) The contracting officer does not have a reasonable expectation that offers would be received from two or more WOSB concerns (including EDWOSB concerns); and
(3) The conditions in paragraph (c) of this section exist.
(c)(1) The anticipated award price of the contract, including options, will not exceed—
(i) $6.5 million for a requirement within the NAICS codes for manufacturing; or
(ii) $4 million for a requirement within any other NAICS codes.
(2) The EDWOSB concern or WOSB concern has been determined to be a responsible contractor with respect to performance.
(3) The award can be made at a fair and reasonable price.
(d) The SBA has the right to appeal the contracting officer's decision not to make a sole source award to either an EDWOSB concern or WOSB concern eligible under the WOSB program.
12. Revise newly redesignated section 19.1507 to read as follows:
(a) The contracting officer shall insert the clause 52.219-29, Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-owned Small Business Concerns, in solicitations and contracts for acquisitions that are set aside or reserved for, or awarded on a sole source basis to, EDWOSB concerns under 19.1505(b) or 19.1506(a). This includes multiple-award contracts when orders may be set aside for EDWOSB concerns as described in 8.405-5 and 16.505(b)(2)(i)(F).
(b) The contracting officer shall insert the clause 52.219-30, Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program, in solicitations and contracts for acquisitions that are set aside or reserved for, or awarded on a sole source basis to WOSB concerns under 19.1505(c) or 19.1506(b). This includes multiple-award contracts when orders may be set aside for WOSB concerns eligible under the WOSB Program as
(b)* * *
___(23) 52.219-29, Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-Owned Small Business Concerns (Dec 2015) (15 U.S.C. 637(m)).
___(24) 52.219-30, Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program (Dec 2015) (15 U.S.C. 637(m)).
As prescribed in 19.1507, insert the following clause:
(b) * * *
(1) Contracts that have been set aside or reserved for, or awarded on a sole source basis to, EDWOSB concerns;
As prescribed in 19.1507, insert the following clause:
(b) * * *
(1) Contracts that have been set aside or reserved for, or awarded on a sole source basis to, WOSB concerns eligible under the WOSB Program;
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Final rule.
DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to add Montenegro and New Zealand as new designated countries under the World Trade Organization Government Procurement Agreement (WTO GPA) and update the list of parties to the Agreement on Trade in Civil Aircraft.
Ms. Cecelia L. Davis, Procurement Analyst, at 202-219-0202, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-86, FAR Case 2015-034.
On July 15, 2015, Montenegro became a party to the WTO GPA. New Zealand became a party to the WTO GPA on August 12, 2015. The Trade Agreements Act (19 U.S.C. 2501
Effective July 15, 2015, because Montenegro became a party to the WTO GPA, and because the U.S. Trade Representative has determined that Montenegro will provide appropriate reciprocal competitive Government procurement opportunities to United States products and services, the U.S. Trade Representative published a notice in the
Effective August 12, 2015, because New Zealand became a party to the WTO GPA, and because the U.S. Trade Representative has determined that New Zealand will provide appropriate reciprocal competitive Government procurement opportunities to United States products and services, the U.S. Trade Representative published a notice in the
In addition, the Office of the U.S. Trade Representative has also indicated that Montenegro is a party to the Agreement on Trade in Civil Aircraft. The U.S. Trade Representative has waived the Buy American Act for civil aircraft and related articles from countries that are parties to the Agreement on Trade in Civil Aircraft.
Therefore, this rule adds Montenegro and New Zealand to the list of World Trade Organization Government Procurement Agreement countries wherever it appears in the FAR, whether as a separate definition, part of the definition of “designated country” or “Recovery Act designated country,” or as part of the list of countries exempt from the prohibition of acquisition of products produced by forced or indentured child labor (FAR 22.1503, 25.003, 52.222-19, 52.225-5, 52.225-11, and 52.225-23).
This rule also updates FAR 25.407 and 52.225-7 to reflect that Montenegro is already a party to the Agreement on Trade in Civil Aircraft.
Conforming changes were required to FAR 52.212-5, Contract Terms and Conditions Required to Implement Statute or Executive Orders—Commercial Items, and 52.213-4, Terms
“Publication of proposed regulations”, 41 U.S.C. 1707, applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because it has no significant cost or administrative impact on contractors or offerors. The rule solely updates the lists of designated countries and countries that are parties to the Agreement on Trade in Civil Aircraft, in order to conform to the determinations by the U.S. Trade Representative.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision within the meaning of FAR 1.501-1 and 41 U.S.C. 1707 does not require publication for public comment.
The Paperwork Reduction Act does apply, because the rule affects the response of an offeror that is offering a product of Montenegro to the information collection requirements in the provisions at FAR 52.212-3(g)(5), 52.225-6, and 52.225-11. The offeror is no longer required to list a product from Montenegro or New Zealand under “other end products”, because Montenegro is now a designated country. These information collection requirements are currently approved under OMB clearances 9000-0136, 9000-0025, and 9000-0141 respectively. The impact, however, is negligible.
Government procurement.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 22, 25, and 52 as set forth below:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
(b) * * *
__ (26) 52.222-19, Child Labor—Cooperation with Authorities and Remedies (FEB 2016) (E.O. 13126).
__ (43) 52.225-5, Trade Agreements (FEB 2016) (19 U.S.C. 2501,
(b) * * *
(1) * * *
(ii) 52.222-19, Child Labor—Cooperation with Authorities and Remedies (FEB 2016) (E.O. 13126). (Applies to contracts for supplies exceeding the micro-purchase threshold).
The revision reads as follows:
The revision reads as follows:
The revision reads as follows:
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Final rule.
DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to incorporate revised thresholds for application of the World Trade Organization (WTO) Government Procurement Agreement (GPA) and the Free Trade Agreements (FTAs), as determined by the United States Trade Representative.
Ms. Cecelia L. Davis, Procurement Analyst, at 202-219-0202, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-86, FAR case 2016-001.
Approximately every two years, the trade agreements thresholds are adjusted according to a pre-determined formula under the agreements. These thresholds become effective on January 1, 2016. The United States Trade Representative published new procurement thresholds in the
This final rule implements the new thresholds in FAR subpart 25.4, Trade Agreements, and other sections in the FAR that include trade agreements thresholds (
In addition, changes are required to FAR sections 52.204-8, Annual Representations and Certifications, and 52.222-19, Child Labor-Cooperation with Authorities and Remedies, with conforming changes to the clause dates in FAR sections 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders-Commercial Items, and 52.213-4, Terms and Conditions-Simplified Acquisitions (Other Than Commercial Items).
“Publication of proposed regulations,” 41 U.S.C. 1707, applies to the publication of the FAR. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure, or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure, or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because it only adjusts the thresholds according to pre-determined formulae to adjust for changes in economic conditions, thus maintaining the status quo, without significant effect beyond the internal operating procedures of the Government.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision, and 41 U.S.C. 1707 does not require publication for public comment.
The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply, because the final rule affects the prescriptions for use of the certification and information collection requirements in the provisions at FAR sections 52.225-4, OMB Control No. 9000-0130, titled: Buy American Act—Free Trade Agreement-Israeli Trade Certificate; 52.225-6, OMB Control No. 9000-0025, titled: Trade Agreements Certificate; and the clauses at FAR 52.225-9, 52.225-11, 52.225-21, and 52.225-23, OMB Control No. 9000-0141, titled: Buy American—Construction. However, there is no impact on the estimated burden hours, because the threshold changes are in line with inflation and maintain the status quo.
Government procurement.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 22, 25, and 52 as set forth below:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
(b) * * *
The revision reads as follows:
(b) * * *
__(26) 52.222-19, Child Labor—Cooperation with Authorities and Remedies (JAN 2016) (E.O. 13126).
(b) * * *
(1) * * *
(ii) 52.222-19, Child Labor—Cooperation with Authorities and Remedies (JAN 2016) (E.O. 13126). (Applies to contracts for supplies exceeding the micro-purchase threshold.)
The revision reads as follows:
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Small Entity Compliance Guide.
This document is issued under the joint authority of DOD, GSA, and NASA. This
December 31, 2015.
For clarification of content, contact the analyst whose name appears in the table below. Please cite FAC 2005-86 and the FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.
Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these rules, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-86 amends the FAR as follows:
This rule amends the FAR to define “multiple-award contract.” This rule implements the definition established by the Small Business Administration (SBA) in its final rule that published in the
This final rule does not place any new requirements on small entities.
This interim rule amends the FAR to implement regulatory changes made by the Small Business Administration (SBA) in its final rule as published in the
This interim rule may have a positive economic impact on women-owned small businesses.
This final rule amends the FAR to add Montenegro and New Zealand as new designated countries under the World Trade Organization Government Procurement Agreement (WTO GPA). The rule also updates the list of parties to the Agreement on Trade in Civil Aircraft by adding Montenegro.
This final rule has no significant impact on the Government and contractors, including small business entities.
This final rule amends the FAR to adjust the thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements as determined by the United States Trade Representative, according to a pre-determined formula under the agreements.
U.S. Citizenship and Immigration Services, DHS.
Proposed rule.
The Department of Homeland Security (DHS) is proposing to amend its regulations related to certain employment-based immigrant and nonimmigrant visa programs. The proposed amendments would provide various benefits to participants in those programs, including: Improved processes for U.S. employers seeking to sponsor and retain immigrant and nonimmigrant workers, greater stability and job flexibility for such workers, and increased transparency and consistency in the application of agency policy related to affected classifications. Many of these changes are primarily aimed at improving the ability of U.S. employers to hire and retain high-skilled workers who are beneficiaries of approved employment-based immigrant visa petitions and are waiting to become lawful permanent residents (LPRs), while increasing the ability of such workers to seek promotions, accept lateral positions with current employers, change employers, or pursue other employment options.
First, DHS proposes to amend its regulations consistent with certain worker portability and other provisions in the American Competitiveness in the Twenty-first Century Act of 2000 (AC21), as amended, as well as the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA). These proposed amendments would clarify and improve longstanding agency policies and procedures—previously articulated in agency memoranda and precedent decisions—implementing sections of AC21 and ACWIA related to certain foreign workers, including sections specific to workers who have been sponsored for LPR status by their employers. In so doing, the proposed rule would enhance consistency among agency adjudicators and provide a primary repository of governing rules for the regulated community. In addition, the proposed rule would clarify several interpretive questions raised by AC21 and ACWIA.
Second, consistent with existing DHS authorities and the goals of AC21 and ACWIA, DHS proposes to amend its regulations governing certain employment-based immigrant and nonimmigrant visa programs to provide additional stability and flexibility to employers and workers in those programs. The proposed rule would, among other things: improve job portability for certain beneficiaries of approved employment-based immigrant visa petitions by limiting the grounds for automatic revocation of petition approval; further enhance job portability for such beneficiaries by increasing their ability to retain their priority dates for use with subsequently approved employment-based immigrant visa petitions; establish or extend grace periods for certain high-skilled nonimmigrant workers so that they may more easily maintain their nonimmigrant status when changing employment opportunities; and provide additional stability and flexibility to certain high-skilled workers by allowing those who are working in the United States in certain nonimmigrant statuses, are the beneficiaries of approved employment-based immigrant visa petitions, are subject to immigrant visa backlogs, and demonstrate compelling circumstances to independently apply for employment authorization for a limited period. These and other proposed changes would provide much needed flexibility to the beneficiaries of employment-based immigrant visa petitions, as well as the U.S. employers who employ and sponsor them for permanent residence.
Finally, to provide additional certainty and stability to certain employment-authorized individuals and their U.S. employers, DHS is also proposing changes to its regulations governing the processing of applications for employment authorization to minimize the risk of any gaps in such authorization. These changes would provide for the automatic extension of the validity of certain Employment Authorization Documents (EADs or Forms I-766) for an interim period upon the timely filing of an application to renew such documents. At the same time, in light of national security and fraud concerns, DHS is proposing to remove regulations that provide a 90-day processing timeline for EAD applications and that require the issuance of interim EADs if processing extends beyond the 90-day mark.
Written comments must be received on or before February 29, 2016.
You may submit comments, identified by DHS Docket No. USCIS-2015-0008, by one of the following methods:
•
•
•
•
Kathleen Angustia or Nikki Lomax-Larson, Adjudications Officers (Policy), Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, 20 Massachusetts Avenue NW., Washington, DC 20529. The contact telephone number is (202) 272-8377.
All interested parties are invited to participate in this rulemaking by submitting written data, views, or comments on all aspects of this proposed rule. DHS and USCIS also invite comments that relate to the economic, environmental, or federalism effects that might result from this proposed rule. To provide the most assistance to USCIS in implementing these changes, comments should reference a specific portion of the proposed rule, explain the reason for any recommended change, and include data, information, or authority that supports such recommended change.
DHS is proposing to amend its regulations related to certain employment-based immigrant and nonimmigrant visa programs. The proposed rule is intended to benefit U.S. employers and foreign workers participating in these programs, by streamlining the processes for employer sponsorship of nonimmigrant workers for lawful permanent resident (LPR) status, increasing job portability and otherwise providing stability and flexibility for such workers, and providing additional transparency and consistency in the application of agency policies and procedures related to these programs. These changes are primarily intended to better enable U.S. employers to employ and retain high-skilled workers who are beneficiaries of employment-based immigrant visa petitions, while increasing the ability of such workers to further their careers by accepting promotions, changing positions with current employers, changing employers, and pursuing other employment opportunities.
First, this proposed rule would largely conform DHS regulations to longstanding agency policies and procedures established in response to certain sections of the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA), Public Law 105-277, div. C, tit. IV, 112 Stat. 2681, and the American Competitiveness in the Twenty-first Century Act of 2000 (AC21), Public Law 106-313, 114 Stat. 1251, as amended by the 21st Century Department of Justice Appropriations Authorization Act, Public Law 107-273, 116 Stat. 1758 (2002). These sections were intended, among other things, to provide greater flexibility and job portability to certain nonimmigrant workers, particularly those who have been sponsored for LPR status as an employment-based immigrant, while enhancing opportunities for innovation and expansion, maintaining U.S. competitiveness, and protecting U.S. workers. The proposed rule would further clarify and improve agency policies and procedures in this area—policies and procedures that have long been set through a series of policy memoranda and a precedent decision of the USCIS Administrative Appeals Office. By clarifying such policies in regulation, DHS would provide greater transparency and certainty to affected employers and workers, while increasing consistency among agency adjudications. In addition, the proposed rule would clarify several interpretive questions raised by AC21 and ACWIA.
Specifically, this proposed rule would clarify and improve policies and practices related to:
• The ability of H-1B nonimmigrant workers who are being sponsored for lawful permanent residence (and their dependents in H-4 nonimmigrant status) to extend their nonimmigrant status beyond the otherwise-applicable 6-year limit pursuant to AC21.
• The ability of certain workers who have pending applications for adjustment of status to change employers or jobs without endangering the approved employment-based immigrant visa petitions filed on their behalf.
• The ability of H-1B nonimmigrant workers to change jobs or employers,
• The way in which H-1B nonimmigrant workers are counted against the annual H-1B numerical cap, including: (1) The method for calculating when such workers may access so-called “remainder time” (
• The method for determining which H-1B nonimmigrant workers are exempt from the H-1B numerical cap due to their employment with an institution of higher education, a nonprofit entity related to or affiliated with such an institution, or a governmental or nonprofit research organization, including a revision to the definition of the term “related or affiliated nonprofit entity” for such purposes.
• The ability of H-1B nonimmigrant workers who are disclosing information in aid of, or otherwise participating in, investigations regarding alleged violations of Labor Condition Application obligations in the H-1B program to provide documentary evidence to USCIS to demonstrate that their resulting failure to maintain H-1B status was due to “extraordinary circumstances.”
Except where changes to current policies and practices are noted in the preamble of this proposed rule, DHS intends these proposals to effectively capture the longstanding policies and procedures that have developed since enactment of AC21 and ACWIA. The Department welcomes comments that identify any such proposals that commenters believe are unintentionally inconsistent with current practices, so that any such inconsistencies can be resolved in the final rule.
Second, this rulemaking builds on the provisions listed above by proposing additional changes consistent with the immigration laws to further provide stability and flexibility in certain immigrant and nonimmigrant visa categories. These provisions would improve the ability of certain foreign workers, particularly those who are successfully sponsored for LPR status by their employers, to accept new employment opportunities, pursue normal career progression, better establish their lives in the United States, and contribute more fully to the U.S. economy. The changes would also provide certainty in the regulated community and improve consistency across agency adjudications, thereby enhancing the agency's ability to fulfill its responsibilities related to U.S. employers and certain foreign workers. Specifically, this proposed rule would provide the following:
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As noted above, these changes would help improve various employment-based immigrant and nonimmigrant visa classifications, including by making it easier to hire and retain nonimmigrant workers who have approved immigrant visa petitions and giving such workers additional career options as they wait for immigrant visa numbers to become available. These improvements are increasingly important considering the lengthy and growing backlogs of immigrant visas.
Finally, to provide additional stability and certainty to U.S. employers and individuals eligible for employment authorization in the United States, DHS is also proposing several changes to its regulations governing its processing of applications for employment authorization. First, to minimize the risk of any gaps in employment authorization, DHS proposes to automatically extend the validity of Employment Authorization Documents (EADs or Forms I-766) in certain circumstances based on the timely filing of an application to renew such EADs. Specifically, DHS would automatically extend the employment authorization and validity of existing EADs issued to certain employment-eligible individuals for up to 180 days from the date of the cards' expiration, so long as: (1) A renewal application is filed based on the same employment authorization category as the previously issued EAD (or the renewal application is for an individual approved for Temporary Protected Status (TPS) whose EAD was issued pursuant to 8 CFR 274a.12(c)(19)); (2) such renewal application is timely filed prior to the expiration of the EAD and remains pending; and (3) the individual's eligibility for employment authorization continues beyond the expiration of his or her EAD, and an independent adjudication of the individual's underlying eligibility is not a prerequisite to the extension of employment authorization. At the same time, DHS would eliminate the current regulatory provisions that require adjudication of EAD applications within 90 days of filing and that authorize interim EADs in cases where such adjudications are not conducted within the 90-day timeframe. These changes would provide enhanced stability and certainty to employment-authorized individuals and their employers, while reducing opportunities for fraud and protecting the security-related processes undertaken for each EAD application.
The authority of the Secretary of Homeland Security (Secretary) for these regulatory amendments is found in various sections of the Immigration and Nationality Act (INA), 8 U.S.C. 1101
• Section 205 of the INA, 8 U.S.C. 1155, which grants the Secretary broad discretion in determining whether and how to revoke any immigrant visa petition approved under section 204 of the INA, 8 U.S.C. 1154;
• Section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), which authorizes the Secretary to prescribe by regulation the terms and conditions of the admission of nonimmigrants;
• Section 274A(h)(3)(B) of the INA, 8 U.S.C. 1324a(h)(3)(B), which recognizes the Secretary's authority to extend employment authorization to noncitizens in the United States;
• Section 413(a) of ACWIA, which amended Section 212(n)(2)(C) of the INA, 8 U.S.C. 1182(n)(2)(C), to authorize the Secretary to provide certain whistleblower protections to H-1B nonimmigrant workers;
• Section 414 of ACWIA, which added section 214(c)(9) of the INA, 8 U.S.C. 1184(c)(9), to authorize the Secretary to impose a fee on certain H-1B petitioners to fund the training and education of U.S. workers;
• Section 103 of AC21, which amended section 214(g) of the INA, 8 U.S.C. 1184(g), to provide: (1) An exemption from the H-1B numerical cap for certain H-1B nonimmigrant workers employed at institutions of higher education, nonprofit entities related to or affiliated with such institutions, and nonprofit or governmental research organizations; and (2) that a worker who has been counted against the H-1B numerical cap within the 6 years prior to petition approval will not again be counted against the cap unless the individual would be eligible for a new 6-year period of authorized H-1B admission.
• Section 104(c) of AC21, which authorizes the extension of H-1B status beyond the general 6-year maximum for H-1B nonimmigrant workers who have approved EB-1, EB-2, or EB-3 immigrant visa petitions but are subject to backlogs due to application of certain “per-country” limitations on immigrant visas;
• Section 105 of AC21, which added what is now section 214(n) of the INA, 8 U.S.C. 1184(n),
• Sections 106(a) and (b) of AC21, which, as amended, authorize the extension of H-1B status beyond the general 6-year maximum for H-1B nonimmigrant workers who have been sponsored for permanent residence by their employers and who are subject to certain lengthy adjudication or processing delays;
• Section 106(c) of AC21, which added section 204(j) of the INA, 8 U.S.C. 1154(j), to authorize certain beneficiaries of approved EB-1, EB-2, and EB-3 immigrant visa petitions who have filed applications for adjustment of status to change jobs or employers without invalidating their approved petitions; and
• Section 101(b)(1)(F) of the HSA, 6 U.S.C. 111(b)(1)(F), which establishes as a primary mission of DHS the duty to “ensure that the overall economic security of the United States is not diminished by efforts, activities, and programs aimed at securing the homeland.”
Taken together, the proposed amendments aim to reduce unnecessary disruption to businesses and families caused by immigrant visa backlogs, as described in Section III.E. The benefits from these proposed amendments add value to the U.S. economy by retaining high-skilled workers who make important contributions to the U.S. economy, including technological advances and research and development endeavors, which are highly correlated with overall economic growth and job creation.
DHS has analyzed potential costs of these proposed regulations and has determined that the changes proposed by DHS have direct impacts to individual beneficiaries of employment-based nonimmigrant and immigrant visa petitions in the form of filing costs, consular processing costs, and potential for longer processing times for EAD applications during filing surges, among other costs. Due to the fact that some of these petitions are filed by a sponsoring employer, this rule also has indirect effects on employers in the form of employee replacement costs.
The proposed amendments would clarify and amend policies and practices in various employment-based immigrant and nonimmigrant visa programs, with the primary aim of providing additional stability and flexibility to both foreign workers and U.S. employers participating in those programs. In part, the proposed rule clarifies and improves upon longstanding policies adopted in response to the enactment of ACWIA and AC21 to ensure greater consistency across agency adjudications and provide greater certainty to regulated employers and workers. These changes would provide various benefits to U.S. employers and certain foreign workers, including the enhanced ability of such workers to accept promotions or change positions with their employers, as well as change employers or pursue other employment opportunities. These proposals also benefit the regulated community by providing instructive rules governing: Extensions of stay for certain H-1B nonimmigrant workers facing long delays in the immigrant visa process; the ability of workers who have been sponsored by their employers for LPR status to change jobs or employers 180 days after they file applications for adjustment of status; the circumstances under which H-1B nonimmigrant workers may begin employment with a new employer; how H-1B nonimmigrant workers count time toward maximum periods of stay; which entities are properly considered related to or affiliated with institutions of higher education for purposes of the H-1B program; and when H-1B nonimmigrant workers can claim whistleblower protections. The increased clarity provided by these rules will enhance the ability of these workers to take advantage of the job portability and related provisions in AC21 and ACWIA.
The proposed rule would also amend the current regulatory scheme governing certain immigrant and nonimmigrant visa programs to enhance job portability for certain workers and improve the ability of U.S. businesses to retain highly valued individuals. These benefits are achieved by: Proposing a revised method to retain the approval of employment-based immigrant visa petitions already adjudicated by DHS and to retain priority dates of these approved petitions for purposes of immigrant visa or adjustment of status processing; providing a grace period to certain nonimmigrants to enhance their ability to seek an authorized change of employment; establishing a means for certain nonimmigrant workers with approved employment-based immigrant visa petitions to directly request separate employment authorization for a limited time when facing compelling circumstances; and identifying exceptions to licensing requirements applicable to certain H-1B nonimmigrant workers.
Finally, the proposed rule would also amend current regulations governing the processing of applications for employment authorization to provide additional stability to certain employment-authorized individuals in the United States while addressing fraud and national security concerns. To prevent gaps in employment for such individuals and their employers, the proposed rule would provide for the automatic extension of EADs (and, where necessary, employment authorization) upon the timely filing of a renewal application. To protect against fraud and other abuses, the proposed rule would also eliminate current regulatory provisions that require adjudication of applications for employment authorization in 90 days and that authorize interim EADs when that timeframe is not met.
DHS has prepared a full costs and benefits analysis of the proposed regulation, which can be found on
Current employment-based immigrant visa (
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The INA further provides that immigrant visa numbers authorized in one preference category may be moved to other preference categories when demand for visas in the original preference category is insufficient to use all available visas.
Although the INA makes the above minimum number of employment-based immigrant visas available each fiscal year, the INA requires that no more than 27 percent of the available number be issued in any of the first 3 quarters of the fiscal year.
Individuals seeking to obtain LPR status in the United States through the EB-1, EB-2, or EB-3 preference categories must often go through a complex, multi-step process. With respect to most individuals described in the EB-2 and EB-3 categories, the immigrant visa process normally begins when a U.S. employer seeks to obtain a labor certification from the U.S. Department of Labor (DOL).
Upon completion of the recruitment process (if recruitment is required), the employer files an “Application for Permanent Employment Certification” (ETA Form 9089) with DOL's Office of Foreign Labor Certification.
After obtaining an approved permanent labor certification from DOL, or if no such certification is required for the classification sought, the U.S. employer files an immigrant visa petition with USCIS on behalf of the worker (or “beneficiary”).
If the immigrant visa petition is approved, the beneficiary must take additional steps to obtain LPR status, by either requesting an immigrant visa to enter the United States from abroad or filing an application for adjustment of status while in the United States. The ability to take such steps, however, is limited by the number of immigrant visas authorized for issuance and any superseding demand for such visas. As mentioned above, the beneficiary's priority date determines the duration of that beneficiary's wait for an immigrant visa by positioning the beneficiary behind individuals with earlier priority dates in the same employment-based preference category and country of birth. In certain situations, the beneficiary of an approved EB-1, EB-2, or EB-3 immigrant visa petition may retain the priority date listed in the approved petition for use in a subsequent immigrant visa petition.
The beneficiary of an approved immigrant visa petition may be able to obtain LPR status in one of two ways. The beneficiary may apply at a U.S. consular post abroad for an immigrant visa, which, once received, would allow the beneficiary to apply for admission to the United States as an LPR.
In the alternative, a beneficiary who is in the United States in lawful nonimmigrant status, with limited exception, may seek LPR status by filing with USCIS an application for adjustment of status to that of a lawful permanent resident (“application for adjustment of status”) in accordance with section 245 of the INA, 8 U.S.C. 1255. Before filing such an application, however, the beneficiary must wait until an immigrant visa is “immediately available” to him or her.
After the application for adjustment of status is filed, USCIS commences its adjudication. It is possible, however, that while the application is pending, higher than expected demand for immigrant visas will cause DOS to determine that immigrant visas that previously were available are no longer available to the applicant and cannot be authorized for issuance to him or her. This is often referred to as “visa retrogression.” In such cases, USCIS may not approve the application until an immigrant visa is again available and authorized for issuance to the applicant under the Visa Bulletin. USCIS will place these cases on “hold” in the interim. Similarly, retrogression may cause a DOS consular post abroad to no longer be able to issue an immigrant visa to an overseas applicant.
Prior to being sponsored for an immigrant visa by a U.S. employer, many foreign national employees first come to the United States pursuant to a nonimmigrant visa, such as an H-1B visa for “specialty occupation workers” or an L-1 visa for “intracompany transferees.” These and other nonimmigrant visa classifications allow these individuals to be employed in the United States for temporary periods. Each classification has its own eligibility requirements, as well as requirements related to duration of status, ability to renew status, ability to change jobs or employers, minimum wages, and worker protections.
A U.S. employer seeking to temporarily employ a foreign national in the United States in a “specialty occupation” may file a petition to obtain H-1B nonimmigrant classification on behalf of the individual.
Before filing an H-1B petition, the U.S. employer (or “petitioner”) generally must first file a Labor Condition Application (LCA) with DOL that covers the proposed dates of H-1B employment.
If the H-1B petition is approved, H-1B classification may generally be issued for a period of up to 3 years but may not exceed the validity period of the LCA.
The maximum period of authorized admission of an individual in the H-1B classification is generally limited to 6 years.
Spouses and minor, unmarried children of an H-1B nonimmigrant worker are eligible for H-4 nonimmigrant status subject to the same period of admission and limits as the H-1B nonimmigrant.
Generally, a request for an extension of H-1B stay may be filed only if the individual's H-1B status has not expired.
• The delay was due to extraordinary circumstances beyond the control of the foreign national or petitioner, and USCIS finds the delay commensurate with the circumstances;
• The foreign national has not otherwise violated his or her nonimmigrant status;
• The foreign national remains a bona fide nonimmigrant; and
• The foreign national is not the subject of deportation proceedings under section 242 of the INA, 8 U.S.C. 1252 (prior to April 1, 1997), or removal proceedings under section 240 of the INA, 8 U.S.C. 1229a.
Foreign nationals may also work in the United States in other temporary nonimmigrant statuses. The employment-based nonimmigrant statuses that are relevant to this proposed rule are described below.
ACWIA was enacted on October 21, 1998. Among other things, ACWIA was intended to address shortages of workers in the U.S. high-technology sector. To increase the number of such workers in the United States, section 411 of ACWIA increased the annual numerical cap on H-1B visas from 65,000 to 115,000 in each of fiscal years (FY) 1999 and 2000, and to 107,500 in FY 2001.
ACWIA also included several measures intended to improve protections for U.S. and H-1B nonimmigrant workers. Section 413 of the act provided enhanced penalties for employer violations of LCA obligations, as well as willful misrepresentations by employers in LCAs.
Section 413 of ACWIA also made it a violation for an H-1B employer to retaliate against an employee for providing information to the employer or other persons, or for cooperating in an investigation, related to an employer's violation of its LCA attestations and obligations. Employers are prohibited from taking retaliatory action in such situations, including any action “to intimidate, threaten, restrain, coerce, blacklist, discharge, or in any other manner discriminate” against an employee for “disclos[ing] information to the employer, or to any other person, that the employee reasonably believes evidences [an LCA] violation, any rule or regulation pertaining to the statutory LCA attestation requirements, or for cooperating, or attempting to cooperate, in an investigation or proceeding pertaining to the employer's LCA compliance.”
Section 412 of ACWIA created additional requirements for U.S. employers deemed to be “H-1B dependent,”
Section 414 of ACWIA imposed a temporary fee on certain H-1B employers to fund, among other things, job training of U.S. workers and scholarships in the science, technology, engineering, and mathematics (STEM) fields.
AC21 was enacted on October 17, 2000. It made numerous changes to the INA designed, among other things, to improve the U.S. economy in both the short and long term. First, AC21 sought to positively impact economic growth and job creation by immediately increasing the United States' access to high-skilled workers.
To improve the immigrant visa process for certain workers, AC21 contained several provisions designed to improve access to employment-based immigrant visas. Section 104 of AC21, for example, sought to ameliorate the impact on intending immigrants of the per-country limitations, which, as noted earlier, generally limit the number of immigrant visas that may be issued to the nationals of any one country to no more than 7 percent of the total number of such visas.
Section 104(c) of AC21 was designed to further ameliorate the impact of the per-country limitations on H-1B nonimmigrant workers who are the beneficiaries of approved EB-1, EB-2, or EB-3 immigrant visa petitions. Specifically, section 104(c) authorized the extension of H-1B status beyond the statutory 6-year maximum for such individuals if immigrant visa numbers are not immediately available to them because the relevant preference category is already over-subscribed for that foreign national's country of birth.
AC21 also sought to more generally ameliorate the impact of the lack of employment-based immigrant visas on the high-skilled beneficiaries of approved immigrant visa petitions. Sections 106(a) and (b) of AC21, as amended by section 11030A of the 21st Century DOJ Appropriations Act, Public Law 107-273(2002), authorized the extension of H-1B status beyond the statutory 6-year maximum for H-1B nonimmigrant workers who are being sponsored for LPR status by U.S. employers and are subject to lengthy adjudication or processing delays. Specifically, these provisions exempted H-1B nonimmigrant workers from the 6-year limitation on H-1B status contained in INA section 214(g)(4), 8 U.S.C. 1184(g)(4), if 365 days or more have elapsed since the filing of a labor certification application (if such
Finally, to provide stability and flexibility to beneficiaries of approved immigrant visa petitions subject to immigrant visa backlogs and processing delays, AC21 also provided certain workers the improved ability to change jobs or employers without losing their position in the immigrant visa queue. Specifically, section 106(c) of AC21 provides that certain immigrant visa petitions filed under the EB-1, EB-2, and EB-3 preference categories will remain valid with respect to a new qualifying job offer if the beneficiary changes jobs or employers, provided an application for adjustment of status has been filed and such application has been pending for 180 days or more.
As noted above, one of the principle purposes for the enactment of AC21 was to improve the country's access to high-skilled workers. As such, AC21 contains several additional provisions intended to expand and strengthen the H-1B program.
Section 103 of AC21 amended the INA to create an exemption from the H-1B numerical cap for those H-1B nonimmigrant workers who are employed or offered employment at an institution of higher education, a nonprofit entity related or affiliated to such an institution, or a nonprofit research or governmental research organization.
For purposes of this H-1B numerical cap exemption, the term “institution of higher education” is given the same meaning as that set forth in section 101(a) of the Higher Education Act of 1965, Public Law 89-329, 79 Stat. 1224 (1965), as amended (codified at 20 U.S.C. 1001(a) (“Higher Education Act”).
(1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate, or persons who meet the requirements of [8 U.S.C. 1091(d)];
(2) is legally authorized within such State to provide a program of education beyond secondary education;
(3) provides an educational program for which the institution awards a bachelor's degree or provides not less than a 2-year program that is acceptable for full credit toward such a degree, or awards a degree that is acceptable for admission to a graduate or professional degree program, subject to review and approval by the Secretary [of Education];
(4) is a public or other nonprofit institution; and
(5) is accredited by a nationally recognized accrediting agency or association, or if not so accredited, is an institution that has been granted preaccreditation status by such an agency or association that has been recognized by the Secretary [of Education] for the granting of preaccreditation status, and the Secretary [of Education] has determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency or association within a reasonable time.
Section 103 of AC21 also amended the INA to ensure that H-1B nonimmigrant workers can change jobs or employers without requiring that they again count against the H-1B cap. Specifically, section 103 provides that an individual who has been counted against the H-1B numerical cap within the 6 years prior to petition approval will not be counted against the cap unless that individual would be eligible for a new 6-year period of authorized H-1B admission.
Section 103 of AC21 also amended the INA to address cases in which an H-1B nonimmigrant worker seeks to change employment from a cap-exempt entity to a “cap-subject” entity. Specifically, section 103 provides that once employment ceases with respect to a cap-exempt entity, the H-1B nonimmigrant worker will be subject to the cap if not previously counted and no other exemptions from the cap apply.
Section 105 of AC21 further improved the H-1B program by increasing job portability for H-1B nonimmigrant workers. Specifically, section 105 allows an H-1B nonimmigrant worker to begin concurrent or new H-1B employment upon the filing of a timely, non-frivolous H-1B petition.
The Secretary of Homeland Security has broad authority to extend employment authorization to noncitizens in the United States.
Individuals in the second class, described at 8 CFR 274a.12(b), are also employment authorized incident to their nonimmigrant status, but such employment authorization is valid only with a specific employer. Individuals in this second group are not issued an EAD; instead these individuals obtain an Arrival-Departure Record (Form I-94) indicating their nonimmigrant status and attendant employment authorization and do not file separate requests for evidence of employment authorization.
Individuals in the third class, described at 8 CFR 274a.12(c), are required to apply for employment authorization and may begin working only if USCIS approves their application. Such employment authorization is subject to the restrictions described in the regulations for his or her respective employment eligibility category. With respect to individuals described in the first and third categories, USCIS has the discretion to establish a specific validity period for the EAD.
Individuals requesting an EAD must file an Application for Employment Authorization (Form I-765) with USCIS in accordance with the form instructions.
This proposed rule is intended, in part, to address some of the challenges that flow from the statutory limits on immigrant visas, consistent with existing DHS authorities. As noted above, the number of employment-based immigrant visas allocated per year has remained unchanged since the passage of the Immigration Act of 1990. In the intervening 25 years, the country's economy has expanded dramatically. The U.S. economy, as measured by U.S. gross domestic product (GDP), has increased by 78 percent from $8.955 trillion in 1990 to $15.961 trillion in 2014.
Since AC21 was enacted in October of 2000, workers seeking LPR status in the United States—particularly within the EB-2 and EB-3 preference categories—have faced increasing challenges as a consequence of the escalating wait times for immigrant visas. It often takes many years before an immigrant visa number becomes available. For some, the delays can last more than a decade. The combination of numerical limitations in the various employment-based preference categories with the per-country limitations that further limit visa availability to certain workers, has produced significant oversubscription in the EB-2 and EB-3 categories, particularly for Indian and Chinese nationals. For instance, the current approximate backlog for an EB-3 immigrant visa for workers from most countries is only a few months. For nationals of certain countries applying in the EB-3 category, delays have extended more than a decade.
Given the long and growing delays for many beneficiaries of employment-based immigrant visa petitions, the challenges facing such workers and the U.S. economy, while similar to those recognized by AC21, are substantially greater than those that existed at the time AC21 passed. Although DHS has worked diligently to improve processing times during the intervening period, visa backlogs due to statutory numerical limits for many individuals seeking EB-2 and EB-3 classification have grown significantly.
Indeed, many individuals subject to the immigrant visa backlogs confront the choice between remaining employed in a specific job under the same terms and conditions originally offered to them or abandoning either their place in the immigrant visa queue or the pursuit of LPR status altogether. When such a worker changes employers or jobs—including a change to an identical job with a different employer or to a related job for the same employer—the worker is typically subject to uncertainty as well as expensive additional immigration processes, greatly discouraging any such changes. Indeed, under current regulations, some changes in employment could result in the loss of nonimmigrant status, loss of the ability to change to another nonimmigrant status, loss of the ability to obtain an immigrant visa or adjust to LPR status, and the need for the affected worker and his or her family to immediately depart the United States. As a result, these employees often suffer through many years of effective career stagnation, as they are largely dependent on current employers for immigration status and are substantially restricted in their ability to change employers or even accept promotions from, or make lateral movements within, their current employers.
Simply put, many workers in the immigrant visa process are not free to consider all available employment and career development opportunities. This effectively prevents U.S. employers from treating them like the high-potential individuals the employer hired them to be, thus restricting productivity and the promise they offer to our nation's economy and undermining the very purpose of the employment-based immigrant visa system that prioritizes such workers for LPR status. The lack of predictability and flexibility for such workers may also prevent them from otherwise investing in and contributing to the local, regional, and national economy or fully assimilating into American society.
DHS is proposing to amend its regulations related to certain employment-based immigrant and nonimmigrant visa programs. The proposed amendments are intended to benefit U.S. employers and workers participating in these programs, including by: Streamlining the processes for employer sponsorship of individuals for permanent residence; ameliorating some of the effects of immigrant visa backlogs by increasing job portability and otherwise providing stability and flexibility for such workers; and providing additional transparency and consistency in the application of agency policies and procedures related to these programs. These changes are primarily aimed at improving the ability of U.S. employers to employ and retain workers who are beneficiaries of approved immigrant visa petitions and are waiting for LPR status, while increasing the ability of such workers to further their careers by accepting promotions, making lateral changes within current employers, changing employers, and pursuing other employment opportunities.
The improvements proposed in this rulemaking would help DHS fulfill its responsibility to assist U.S. employers, U.S. workers, and foreign national workers, while strengthening and protecting the U.S. economy. The immigrant and nonimmigrant visa programs at issue in this proposed rule were designed to improve the ability of U.S. employers to hire and retain critical foreign workers, while creating job opportunities for and protecting U.S. workers. Consistent with these provisions, the proposed rule would enhance the Department's ability to administer the INA in a manner that better accounts for fluctuating economic conditions and that provides additional stability and flexibility to regulated persons and entities.
DHS proposes to clarify and improve longstanding agency policies and procedures established in response to certain sections of AC21 and ACWIA. These sections were intended, among other things, to provide greater flexibility and job portability to certain workers, particularly those who have been sponsored for LPR status by their employers, while protecting U.S. workers, enhancing opportunities for innovation and expansion, and maintaining U.S. competitiveness. The proposed rule would further clarify and improve agency policies and procedures in this area—policies and procedures that have long been set through a series of policy memoranda and a precedent decision of the USCIS Administrative Appeals Office. By establishing such policies in regulation, DHS would provide greater transparency and certainty to affected employers and workers and increase consistency among agency adjudications. In addition, the proposed rule would clarify several interpretive questions raised by AC21 and ACWIA.
As noted above, except where improvements on current practices are noted in the following sections, DHS intends the following proposals to effectively capture the longstanding policies and procedures that have developed since enactment of AC21 and ACWIA. The Department welcomes all comments on these proposals, including those that identify any such proposals that commenters believe are inconsistent with current practices (and not identified as such in the preamble), so that any such inconsistencies can be resolved in the final rule.
DHS proposes to codify in regulation and improve longstanding agency policies and practices related to two provisions in AC21 that allow for certain individuals who are being sponsored by employers for permanent residence to obtain H-1B status beyond the general 6-year maximum period of stay. The first provision provides an exemption to certain beneficiaries of approved employment-based immigrant
First, the proposed rule would clarify and improve DHS' implementation of section 104(c) of AC21.
Consistent with current practice, DHS proposes that such exemptions be granted in 3-year increments until USCIS adjudicates the beneficiary's adjustment of status application.
DHS also proposes, consistent with current policy guidance, to make this exemption available to individuals who remain eligible for an additional period of admission in H-1B status, whether or not such individuals are physically in the United States on H-1B status at the time the H-1B petition is filed.
Consistent with current practice, DHS proposes to allow any qualified H-1B petitioner to file for an exemption under section 104(c) with respect to any qualified beneficiary of an approved EB-1, EB-2, or EB-3 immigrant visa petition.
As discussed later in this proposed rule, however, DHS is effectively proposing to improve access to exemptions under section 104(c) by proposing amendments to DHS regulations promulgated under section 205 of the INA, 8 U.S.C. 1155, that govern when approvals of immigrant visa petitions are automatically revoked.
Finally, the proposed rule, as per current practice, would allow exemptions authorized under section 104(c) of AC21 only with respect to the principal beneficiaries of employment-based immigrant visa petitions, and not any derivative beneficiaries named in such petitions who may also be in H-1B status.
Thus, if both spouses are H-1B nonimmigrant workers, to extend their H-1B authorized admission period under section 104(c) of AC21, each spouse would individually have to be the beneficiary of an approved EB-1, EB-2, or EB-3 immigrant visa petition. If only one spouse is eligible for the exemption as an H-1B nonimmigrant, the spouse who is not eligible could seek a change of status to H-4 status and, if otherwise eligible, may remain in H-4 status, as described above. While such a spouse may no longer be eligible to be employed as an H-1B nonimmigrant, certain H-4 spouses may be eligible to apply for and obtain work authorization pursuant to 8 CFR 214.2(h)(9)(iv), including, among others, those whose H-1B nonimmigrant spouse is the beneficiary of an approved EB-1, EB-2, or EB-3 immigrant visa petition.
DHS invites the public to comment on all aspects of this proposal.
Second, the proposed rule would clarify and improve DHS' implementation of sections 106(a) and (b) of AC21, as amended by the 21st Century DOJ Appropriations Act.
Consistent with existing policy, DHS proposes to make H-1B extensions under section 106(b) available to workers who remain eligible for additional periods of H-1B status, whether or not such individuals are in H-1B status or in the United States at the time the H-1B petition is filed.
As with section 104(c), section 106 of AC21 does not limit its application only to those individuals currently in H-1B status within the United States. DHS interprets the provision to require only that the individuals have previously been issued H-1B status, meet the requirements of section 106(a), and are otherwise eligible for an H-1B approval.
DHS also proposes to conform its regulations with existing policy in this area by requiring the prospective H-1B employer to file an H-1B petition demonstrating that the beneficiary has previously held H-1B status and that 365 days has elapsed or will have elapsed between: (1) The filing of an application for labor certification or an employment-based immigrant visa petition on behalf of the individual; and (2) the date on which the individual reached or will reach the 6-year limitation on H-1B admission.
Also consistent with existing policy, DHS proposes not to grant an extension of H-1B status under section 106(b) if, at the time the extension request is filed, the labor certification is deemed expired under DOL regulations.
DHS also proposes to conform its regulations with current policy by
Moreover, each approval granted under sections 106(a) and (b) will provide the beneficiary with a new date upon which the limitation on H-1B admission will be reached. Employers filing an H-1B petition seeking a second or subsequent extension of H-1B status for a beneficiary under sections 106(a) and (b) must demonstrate that a qualifying labor certification or immigrant visa petition was filed at least 365 days prior to the new H-1B expiration date authorized under that section.
DHS proposes, consistent with current practice, to allow applications for extensions under section 106(b) to be filed only by principal beneficiaries seeking to obtain status under section 203(b) of the INA, and not by derivative beneficiaries described in section 203(d) of the INA.
Finally, DHS proposes to restrict extensions of H-1B status under sections 106(a) and (b) for beneficiaries who have not taken certain steps in furtherance of obtaining LPR status. As noted above, these sections were intended to allow individuals to remain in the United States as H-1B nonimmigrant workers while pursuing permanent residence.
DHS invites the public to comment on all aspects of this proposal.
DHS is proposing to clarify and improve policies and procedures related to the job portability protections provided by section 106(c) of AC21.
To provide greater clarity to the regulated community and enhance consistency across agency determinations under section 204(j) of the INA, DHS proposes to update and conform its regulations governing adjustment of status consistent with longstanding agency policy. For purposes of approving an application for adjustment of status, the proposed rule would clarify that an immigrant visa petition for EB-1 (other than for “aliens of extraordinary ability”), EB-2, or EB-3 classification filed under section 204(a)(1)(F) of the INA, 8 U.S.C. 1154(a)(1)(F), remains valid if the petition is approved and either:
(1) The employment offer from the petitioning employer is continuing and remains bona fide; or
(2) pursuant to section 204(j), the beneficiary has a new offer of employment in the same or a similar occupational classification as the employment offer listed in the approved petition, the application for adjustment of status based on this petition has been pending for 180 days or more, and the approval of the petition has not been revoked.
Although the individual need not have been employed at any time by the employer that filed the immigrant visa petition—or, in a case involving section 204(j) portability, the employer presenting the new offer of employment—DHS will in all cases determine whether a relevant offer of employment is bona fide. In cases involving 204(j) portability, DHS considers whether the employer that filed the immigrant visa petition had the intent, at the time the petition was approved, to employ the beneficiary upon approval of the application for adjustment of status.
As noted above, DHS is proposing to amend its regulations governing applications for adjustment of status to prohibit approval of such an application when the approval of the immigrant visa petition on which the application is based has been revoked.
Taken together, these regulatory changes are generally consistent with current policy concerning adjustment of status. The regulatory amendments, for example, do not change existing policy with respect to applications for adjustment of status filed by beneficiaries of immigrant visa petitions who seek to adjust status based on a continuing offer of employment from the petitioning employer. In such cases, if the petitioning employer withdraws or goes out of business, there would be no continuing offer of employment on which the beneficiary may rely. Thus, even in a case where such a petition has been approved for at least 180 days and would no longer be subject to automatic revocation based upon withdrawal of the petition or termination of the employer's business, the beneficiary would remain ineligible to file for adjustment of status based solely on that petition.
With respect to beneficiaries who have applications for adjustment of status that have been pending for at least 180 days and seek to adjust status pursuant to section 204(j), the proposed regulations are also consistent with current policy, except in one respect. Under current policy, withdrawal by the petitioner in such cases does not require the beneficiary to be named in a new immigrant visa petition; rather, the beneficiary would only be required to demonstrate, pursuant to section 204(j) of the INA, that he or she has a new offer of employment in a same or similar occupational classification.
DHS is further proposing a new supplementary form to the application for adjustment of status to assist the Department in the adjudicative process. In general cases, the supplementary form will assist DHS in confirming that a job offer described in an employment-based immigrant visa petition is still available at the time an individual files an application for adjustment of status. In cases involving section 204(j) portability requests, the form will assist DHS in determining, among other things, whether a new offer of employment is in the same or a similar occupational classification as the job offer listed in the immigrant visa petition. In section 204(j) cases, an individual may submit the supplement affirmatively or when required at the request of USCIS to establish eligibility under the proposed regulatory requirements. Currently, DHS is not proposing an extra fee for submission of this new supplement, but may consider implementing a fee in the future.
DHS contemplates that applicants for adjustment of status seeking approval based on a new offer of employment will submit various pieces of evidence, along with the supplementary form, demonstrating compliance with section 204(j) and the proposed regulations. Unless instructed otherwise, including by the form or form instructions, an applicant will be able to submit: (1) A written attestation signed by the applicant and employer describing the new employment offer, including a description of the position and its requirements; (2) an explanation demonstrating that the new employment offer is in the same or a similar occupational classification as the original employment offer listed in the approved petition; and (3) a copy of the Notice of Action (Form I-797C) issued by USCIS (or, if unavailable, secondary evidence) showing that the individual's application for adjustment of status has
Because the statute does not define the terms “same” or “similar,” DHS proposes definitions for those terms based on their common dictionary definitions, as well as the agency's practice and experience in this context.
DHS invites the public to comment on all aspects of this proposal, including the new proposed supplementary form to the application for adjustment of status (and form instructions) and the possibility of charging a supplemental fee in the future related to such form.
DHS proposes to conform its regulations to its policies and practices under section 105(a) of AC21, which amended the INA by adding the H-1B job portability provision at section 214(n), 8 U.S.C. 1184(n). This section enhances the ability of H-1B nonimmigrant workers to change jobs or employers by authorizing them to accept new or concurrent employment upon the filing of a non-frivolous H-1B petition (“H-1B portability petition”).
In harmony with the statutory provision, the proposed rule would provide that H-1B nonimmigrant workers who are beneficiaries of new H-1B petitions seeking an amendment or extension of their stay in H-1B status are eligible to commence new or concurrent employment upon the filing of a non-frivolous H-1B petition by that employer.
DHS proposes, consistent with current policy, to make the H-1B portability provision discussed in this section available only to H-1B beneficiaries who are in the United States in H-1B status.
DHS also proposes to conform its regulations to current policy regarding the ability of H-1B employers to file successive H-1B portability petitions (often referred to as “bridge petitions”) on behalf of H-1B nonimmigrant workers. Under current policy, an H-1B nonimmigrant worker who has changed employment based on an H-1B portability petition filed on his or her behalf may again change employment based on the filing of a new H-1B portability petition, even if the former H-1B portability petition remains pending.
DHS is also proposing conforming changes to its employment authorization regulations to recognize the employment authorization of H-1B nonimmigrant workers who are employed pursuant to an H-1B portability petition filed under section 214(n) of the INA.
DHS invites the public to comment on all aspects of this proposal.
DHS proposes to clarify in regulation its current policy with respect to calculating and “recapturing” what is known as “remainder time” for H-1B nonimmigrant workers.
DHS proposes to codify this policy through this rulemaking. Under this proposed rule, time spent outside the United States by an individual during the validity of an H-1B petition that was approved on his or her behalf could be added back to or “recaptured” for his or her maximum period of authorized admission as an H-1B nonimmigrant worker.
In accordance with current policy, the H-1B petitioner would bear the burden of demonstrating “recapture” eligibility. Along with documentary evidence, the petitioner may provide complementary, explanatory evidence (as described above) to assist USCIS adjudicators in the adjudication process.
DHS invites public comment on all aspects of this proposal.
DHS proposes to clarify and improve its regulations and policies identifying which employers are cap-exempt under the H-1B program. As discussed above in section III.C.2.b.i., AC21 amended section 214(g)(5) of the INA to allow certain employers to employ H-1B nonimmigrant workers without application of the numerical cap on H-1B visas.
DHS has interpreted this provision to exempt H-1B nonimmigrant workers in two types of circumstances. First, H-1B nonimmigrant workers are currently exempt from the cap if they are employed
DHS is now proposing to amend its regulations, in part, to provide additional clarity with respect to the “employed at” statutory language.
DHS also proposes to conform its regulations to current policy with respect to the definitions of several terms in section 214(g)(5) and the applicability of these terms to both: (1) ACWIA provisions that require the payment of fees by certain H-1B employers; and (2) AC21 provisions that exempt certain employers from the H-1B numerical caps. First, the proposed rule would expressly adopt for the purpose of cap exemption the definition of the term “institution of higher education” provided by section 101(a) of the Higher Education Act.
Furthermore, consistent with current DHS regulations, see 8 CFR 214.2(h)(19)(iii)(B), the term “related or affiliated nonprofit entity” would be defined, both for ACWIA fee and cap exemption purposes, to continue to include nonprofit entities that are: (1) Connected or associated with an institution of higher education through shared ownership or control by the same board or federation; (2) operated by an institution of higher education; or (3) attached to an institution of higher education as a member, branch, cooperative, or subsidiary.
In particular, based on its experience in this area, DHS believes that the current definition for “affiliated or related nonprofit entities” does not sufficiently account for the nature and scope of common, bona fide affiliations between nonprofit entities and institutions of higher education. To better account for such relationships, DHS proposes to expand on the current definition by including nonprofit entities that have entered into formal written affiliation agreements with institutions of higher education and are able to meet two additional criteria. First, such entities must establish an active working relationship with the institution of higher education for the purposes of research or education. Second, they must establish that one of their primary purposes is to directly contribute to the research or education mission of the institution of higher education.
This proposed definition provides much needed flexibility in this area, allowing DHS to better account for the full range of nonprofit entities that are “related or affiliated” with institutions of higher education and thus better ensure that such entities are not subject to the H-1B cap or the ACWIA fee as Congress intended. For example, under federal statute, Veterans Affairs (VA) hospitals are considered affiliated with a medical school or institution of higher learning based on “a contract or agreement . . . for the training or education of health personnel.” 38 U.S.C. 7423(d)(1). But such agreements may be inadequate under the current regulatory definition to establish the requisite affiliation or relation for purposes of the H-1B cap or ACWIA fee exemptions. Such bona fide affiliation contracts or agreements are common in the private sector as well. DHS believes the proposed definition better captures these and other valid types of relationships with institutions of higher education that are contemplated under AC21 and ACWIA.
DHS welcomes public comment on all aspects of this proposal.
DHS also proposes to conform its regulations to existing policy for determining when a change in employment requires a previously exempt H-1B nonimmigrant worker to be counted against the H-1B cap.
Consistent with this interpretation, the proposed rule would require a reassessment of an H-1B nonimmigrant worker's cap-exempt status when he or she ceases employment at an institution of higher education, a nonprofit entity related to or affiliated with such an institution, a nonprofit research organization, or a governmental research organization.
DHS welcomes public comment on this proposal.
DHS proposes to conform its regulations governing the H-1B program to certain policies and practices that have developed since ACWIA amended the INA to provide additional protections to H-1B nonimmigrant workers and other workers.
Section 212(n)(2)(C) also requires DHS to establish a process under which an H-1B nonimmigrant worker who files a complaint with DOL regarding such illegal retaliation, and is otherwise eligible to remain and work in the United States, “may be allowed to seek other appropriate employment in the United States for a period not to exceed the maximum period of stay authorized for such nonimmigrant classification.” INA section 212(n)(2)(C)(v), 8 U.S.C. 1182(n)(2)(C)(v). Under current policy, if credible documentary evidence is provided in support of an H-1B petition demonstrating that the H-1B nonimmigrant worker faced retaliatory action from his or her employer based on a report regarding a violation of the employer's LCA obligations, DHS may consider any related loss of H-1B status by the worker as an “extraordinary circumstance” under 8 CFR 214.1(c)(4) and 248.1(b) justifying an extension of H-1B status or change of status for the worker.
The proposed rule would codify in regulation DHS' current policy regarding these protections.
DHS invites the public to comment on all aspects of this proposal.
DHS further proposes to amend its regulations, consistent with AC21 and DHS authorities, related to certain employment-based immigrant and nonimmigrant visa programs to provide additional stability and flexibility to employers and workers in those programs. The proposals are primarily intended to improve job portability for certain beneficiaries of approved employment-based immigrant visa petitions, including by limiting the grounds for automatic revocation of petition approval and increasing the ability of such workers to retain their priority dates for use with subsequently approved employment-based immigrant visa petitions.
The proposed rule would also: Improve or establish grace periods for certain nonimmigrant workers so that they may more easily seek and accept new employment opportunities; further assist applicants for adjustment of status and certain other employment-eligible individuals by automatically extending EADs for an interim period upon the timely filing of a renewal application; and provide additional stability and flexibility to high-skilled workers in certain nonimmigrant statuses to apply for employment authorization for a limited period if they meet certain criteria, including demonstrating that they are beneficiaries of approved employment-based immigrant visa petitions, are subject to immigrant visa backlogs, and demonstrate compelling circumstances. These and other proposed changes would provide much needed flexibility to a limited group of beneficiaries of employment-based immigrant visa petitions, as well as the U.S. employers who employ and sponsor them for permanent residence.
As referenced above, DHS is proposing to amend its regulations governing revocation of petition approval to provide greater stability and flexibility to certain workers who have approved EB-1, EB-2, or EB-3 immigrant visa petitions and are on the path to obtaining LPR status in the United States. The INA provides that any immigrant visa petition, once approved, may have such approval revoked by the Secretary of Homeland Security “for what he deems to be good and sufficient cause.” INA section 205, 8 U.S.C. 1155. Pursuant to this statutory authority, current DHS regulations provide grounds for automatic revocation and revocation on notice to the petitioner.
The proposed rule would amend these regulations so that EB-1, EB-2, and EB-3 immigrant visa petitions that have been approved for 180 days or more would no longer have such approval automatically revoked based only on withdrawal by the petitioner or termination of the petitioner's business.
DHS believes these regulatory changes are critical to fully implementing the job portability provisions of AC21. The current regulations concerning revocation of employment-based petition approval were last amended in 1996,
Importantly, Congress enacted AC21 with the specific purpose of providing increased job flexibility to certain workers who are being sponsored for permanent residence by a particular employer, but who as a result of long delays are forced to wait inordinate periods of time for such permanent residence. Section 106(c) of AC21, for example, created section 204(j) of the INA to allow certain workers with approved immigrant visa petitions and pending applications for adjustment of status to change jobs or employers without invalidating their approved immigrant visa petitions.
The same is true with respect to the various provisions of AC21 that were intended to provide certainty and flexibility to H-1B nonimmigrant workers. AC21 provided various ways in which such workers could extend their H-1B status beyond the general 6-year limitation if they had been sponsored for permanent residence by an employer.
Accordingly, this proposed rule would amend DHS regulations governing revocation with respect to employment-based immigrant visa petitions to better reflect and enhance the job portability eligibility authorized by AC21. As noted above, DHS proposes that an employment-based immigrant visa petition that has been approved for 180 days or more would no longer have such approval automatically revoked based only on withdrawal by the
While enhancing these protections, the regulatory changes in this proposed rule would remain consistent with current policy concerning these workers' ability to obtain adjustment of status or an immigrant visa. The proposed rule, for example, would continue to require a valid and qualifying offer of employment (unless the requirement for such an offer is exempted by law) at the time a worker seeks to apply for or receive adjustment of status. As discussed in Section IV.B.1. of this proposed rule, beneficiaries of employment-based immigrant visa petitions who seek to adjust status based on continuing offers of employment from petitioning employers would be unaffected by this rule. If the petitioning employer of such a beneficiary withdraws or goes out of business, the beneficiary must have a new offer of employment and a new immigrant visa petition filed on his or her behalf in order to file for or obtain adjustment of status, consistent with current policy.
The analysis is similar for beneficiaries of immigrant visa petitions who seek to adjust status based in part on the portability protection of section 204(j) of the INA. Where the petitioner withdraws or goes out of business 180 days or more after the adjustment of status application is filed, the beneficiary would continue to be required to demonstrate that he or she has a new and valid offer of employment in a same or similar occupational classification, consistent with section 204(j).
Accordingly, DHS believes that the proposed changes provide important stability and flexibility to workers who have been sponsored for permanent residence while also protecting against fraud and misuse. First, as just discussed, beneficiaries of approved employment-based immigrant visa petitions will continue to be unable to rely on such petitions for the purposes of adjusting status or obtaining an immigrant visa in cases where the petitioning employer has withdrawn or gone out of business, unless eligible for section 204(j) portability. Second, DHS is proposing to restrict revocation based on petitioner withdrawal or business termination only for petitions that have been approved for 180 days or more.
DHS welcomes public comment on all aspects of this proposed change.
DHS also proposes to amend its regulations to enhance the ability of beneficiaries with approved EB-1, EB-2 or EB-3 immigrant visa petitions to retain the priority dates associated with those petitions and rely on them when seeking to obtain an immigrant visa or adjust status.
First, the proposed rule would update DHS regulations to provide clarity to all beneficiaries of employment-based immigrant visa petitions regarding the establishment of priority dates and to eliminate obsolete references in this area.
Second, the proposed rule would clarify and expand the ability of beneficiaries of approved EB-1, EB-2, and EB-3 immigrant visa petitions to retain their priority dates for use with subsequently filed EB-1, EB-2, and EB-3 petitions.
This change, in combination with the proposed changes to the automatic revocation provisions discussed above, would effectively expand beneficiaries' ability to retain the priority dates of their approved EB-1, EB-2, and EB-3 petitions, particularly those that are later withdrawn or that involve petitioning employers that go out of business. Notably, the ability to retain priority dates under this amendment
DHS welcomes public comment on all aspects of this proposed change.
To further improve stability and flexibility for high-skilled nonimmigrant workers, DHS proposes to authorize and improve grace periods in certain nonimmigrant visa classifications. As further described below, DHS is effectively proposing to extend the current grace periods for H-1B nonimmigrant workers—which authorize admission up to 10 days before and after the relevant validity period—to certain other high-skilled nonimmigrant classifications (E-1, E-2, E-3, L-1, and TN classifications). DHS further proposes to make a grace period available in these classifications, as well as the H-1B and H-1B1 nonimmigrant classifications, for up to 60 days during the period of petition validity (or other authorized validity period).
First, DHS proposes to provide grace periods similar to those currently available to H-1B nonimmigrant workers to other high-skilled nonimmigrant workers.
The proposed rule would extend similar 10-day grace periods to individuals in certain other employment-authorized nonimmigrant visa classifications, namely the E-1, E-2, E-3, L-1, and TN classifications. Providing grace periods in such classifications—which, like the H-1B classification, are generally available to high-skilled individuals and authorize stays of multiple years—reflects goals similar to those underlying AC21 and serves the national interest by promoting stability and flexibility for such workers. A 10-day grace period before the petition or authorized validity period begins allows these nonimmigrants a reasonable amount of time to enter the United States and prepare for their employment in the country. A 10-day grace period after their petition or authorized validity period ends provides a reasonable amount of time to depart the United States or take other actions to extend, change, or otherwise maintain lawful status after their period of authorized employment ends.
Consistent with the current grace periods in the H-1B classification, the proposed rule would not allow eligible nonimmigrants to be employed during either of the 10-day grace periods.
DHS welcomes public comment on all aspects of this proposed change.
Second, the proposed rule would authorize a grace period in the E-1, E-2, E-3, H-1B1, L-1, and TN classifications, as well as the H-1B classification, during the period of petition validity (or other authorized validity period). To enhance job portability for these high-skilled nonimmigrants, DHS proposes to generally establish a one-time grace period during an authorized nonimmigrant validity period of up to 60 days or until the existing validity period ends, whichever is shorter, whenever employment ends for these individuals.
Under current policy, for example, an H-1B nonimmigrant worker whose employment ends—whether voluntarily or upon being laid off or terminated by the H-1B employer—is generally considered to be in violation of his or her status and must depart the United States immediately. Under the proposed rule, however, H-1B nonimmigrant workers would be afforded up to 60 days upon the end of employment to seek new H-1B employment and thus extend their H-1B status without having to immediately depart the country. Accordingly, this interim grace period would further support the enhanced job portability protections provided to H-1B nonimmigrant workers by AC21, which authorizes them to change jobs or employers upon the filing of a non-frivolous H-1B petition, if otherwise eligible. The proposed change described in this section would provide H-1B and certain other nonimmigrant workers a small degree of stability and flexibility
As with the 10-day grace periods discussed in the preceding section, eligible nonimmigrants would not be authorized for employment during an interim grace period of up to 60 days proposed by this rule.
DHS welcomes public comment on all aspects of this proposal, including on the appropriate length of the grace period and on the nonimmigrant classifications that should be afforded eligibility for such grace periods.
DHS proposes to further enhance stability and flexibility for high-skilled nonimmigrant workers who are the beneficiaries of approved immigrant visa petitions filed by sponsoring U.S. employers and who face compelling circumstances while they wait for their immigrant visas to become available. As discussed in Section III.E., the continually expanding backlogs for employment-based immigrant visas can place sponsored workers and their sponsoring employers in untenable positions.
Currently, sponsoring employers and sponsored workers cannot deviate from the specific job offer described in a labor certification and approved employment-based immigrant visa petition until the worker: (1) Has an immigrant visa immediately available to him or her; (2) has filed an application for adjustment of status; and (3) has such application pending for at least 180 days.
To provide flexibility in the face of such compelling circumstances, DHS proposes to extend employment authorization to a discrete subset of high-skilled workers who are the beneficiaries of approved employment-based immigrant visa petitions and are in the United States in certain nonimmigrant statuses. Specifically, the proposed rule would provide the ability for individuals to apply for employment authorization for 1 year when they meet all of the following criteria: (1) The individual is currently in the United States and maintaining E-3, H-1B, H-1B1, O-1 or L-1 nonimmigrant status; (2) the individual is the beneficiary of an approved immigrant visa petition under the EB-1, EB-2 or EB-3 classification; (3) the individual does not have an immigrant visa immediately available; and (4) the individual can demonstrate to the satisfaction of DHS compelling circumstances that justify an independent grant of employment authorization.
DHS anticipates that use of this proposal, if finalized, would be limited for various reasons. First, DHS believes that the other changes proposed in this rule to enhance flexibility for employers and nonimmigrant workers, if finalized, would significantly decrease instances where this proposal will be needed. Second, nonimmigrant workers will have significant incentive to choose other options, as the proposal discussed in this section would require the worker to relinquish his or her nonimmigrant status, thus restricting his or her ability to change nonimmigrant status or adjust status to that of a lawful permanent resident. Accepting the employment authorization under this proposal, for example, would generally require the worker to forego adjusting status in the United States and instead seek an immigrant visa abroad through consular processing. Finally, DHS anticipates that a limited number of nonimmigrant workers with approved EB-1, EB-2, or EB-3 immigrant visa petitions will be able to demonstrate
DHS is not proposing to define the term “compelling circumstances” at this time, as the Department seeks to retain flexibility as to the types of compelling circumstances that clearly warrant the Secretary's exercise of discretion in granting employment authorization. DHS, however, has currently identified four circumstances in which it may consider granting employment authorization under the proposed change:
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○ An L-1B nonimmigrant worker is sponsored for permanent residence by an employer that subsequently undergoes corporate restructuring (
○ An H-1B nonimmigrant worker is providing critical work on biomedical research for an entity affiliated with an institution of higher education, thus making the entity exempt from the H-1B cap, when the funding for the research unexpectedly changes and now comes through a for-profit entity, thus causing the entity to lose its cap-exempt status. In cases where the worker is unable to quickly obtain H-1B status based on a cap-subject H-1B petition or another work-authorized nonimmigrant status, the employment authorization proposal would provide a temporary bridge for continued employment of the worker when his or her departure would create substantial disruption to the employer's biomedical research.
In each of these examples of situations where USCIS may find compelling circumstances, the proposed provision would provide individuals with the ability to retain employment authorization and the opportunity to find a new sponsoring employer or explore options with the current sponsoring employer. DHS invites public comment on these examples of compelling circumstances or other types of compelling circumstances that may warrant a discretionary grant of separate employment authorization. DHS also welcomes public comment on the manner in which applicants should be expected to document such compelling circumstances.
As noted above, DHS is proposing this employment authorization only for certain workers who are the beneficiaries of approved employment-based immigrant visa petitions and who are in the United States in E-3, H-1B, H-1B1, O-1, or L-1 nonimmigrant status.
DHS is further proposing that workers who have been granted 1 year of employment authorization under the proposed rule would not be able to extend such employment authorization at the end of the 1-year period unless certain criteria are met. DHS is proposing to limit renewal of such employment authorization to those workers who can show that they continue to be the principal beneficiary of an approved EB-1, EB-2 or EB-3 immigrant visa petition and either: (1) The worker continues to face compelling circumstances; or (2) the worker has a priority date that is less than 1 year from the current cut-off date for the relevant employment-based category and country of nationality in the most recent visa bulletin published by the Department of State.
DHS further proposes that individuals would be ineligible to obtain employment authorization under this rule, whether initial or renewal, if at the time of the filing of the EAD application the alien's priority date is more than 1 year beyond the date on which immigrant visa numbers were authorized to be issued to individuals with the same priority date for the relevant employment-based category and country of nationality. DHS believes this outer limit would discourage individuals from relying on the proposed employment authorization in lieu of completing the employment-based immigrant visa process.
DHS also proposes to generally require these applicants to appear in person at a USCIS Application Support Center (ASC) to submit biometric information and pay a biometric fee as prescribed in 8 CFR 103.7(b)(1)(i)(C).
With regard to dependents of qualifying principal nonimmigrants,
DHS further proposes conforming amendments to 8 CFR 274a.12(c), which lists classes of individuals who must apply for employment authorization. These amendments would add two new categories of individuals eligible for employment authorization, one for the principal beneficiaries described above and one for their dependent spouses and children.
DHS welcomes public comment on all aspects of this proposal, including the appropriate validity period for grants of employment authorization and the nonimmigrant visa classifications that should be eligible to request such employment authorization.
DHS proposes to amend its regulations consistent with current policy for determining when H-1B status may be granted notwithstanding the H-1B beneficiary's inability to obtain a required license.
DHS is now proposing to formalize this policy in its H-1B regulations. Under the proposed rule, DHS may approve an H-1B petition for a 1-year validity period if a state or local license to engage in the relevant occupation is required and the appropriate licensing authority will not grant such license absent evidence that the beneficiary has been issued a social security number or granted employment authorization.
Moreover, the petitioner would generally be required to demonstrate that at the time of the petition's filing, the beneficiary has already filed an application for the relevant license in accordance with state or local licensing procedures.
The proposed rule would also clarify that an individual without an occupational license may obtain H-1B status if he or she will be employed in a state that allows such an unlicensed individual to fully practice the occupation under the supervision of licensed senior or supervisory personnel. In such cases, DHS will examine the nature of the H-1B nonimmigrant worker's proposed duties and the level at which they will be performed, as well as evidence provided by the petitioner as to the identity, physical location, and credentials of the individual(s) who will supervise the H-1B nonimmigrant worker.
DHS invites public comment on all aspects of this proposal.
DHS is also proposing to update its regulations governing the processing of Applications for Employment Authorization (Forms I-765). First, to help prevent gaps in employment authorization, DHS proposes to automatically extend the validity of expiring EADs for up to 180 days from such document's and such employment authorization's expiration date in certain circumstances upon the timely filing of an application to renew such documents. Such automatic renewal would be available to individuals with pending applications for adjustment of status and other employment-authorized individuals who: (1) Are seeking renewal of an EAD (and, if applicable, employment authorization) based on the same employment authorization category under which it was granted (or the renewal application is for an individual approved for Temporary Protected Status (TPS) whose EAD was issued pursuant to 8 CFR 274a.12(c)(19)); and (2) either continue to be employment authorized incident to status beyond the expiration of the
First, DHS proposes to amend its regulations to help prevent gaps in employment authorization for certain employment-authorized individuals who are seeking to renew expiring EADs. Under the proposed rule, such individuals who fall within certain classes of individuals eligible for employment authorization may have the validity of their EADs (and, if necessary, their employment authorization as well) extended for up to 180 days from such document's and such employment authorization's expiration date upon the timely filing of an application to renew such EAD (or the renewal application is for an individual approved for TPS whose EAD was issued pursuant to 8 CFR 274a.12(c)(19)).
(1) The individual files a request for renewal of his or her EAD (currently through an Application for Employment Authorization, Form I-765) prior to its expiration date.
(2) The individual is requesting renewal based on the same employment authorization category under which the expiring EAD was granted (as indicated on the face of the EAD), or the individual has been approved for TPS and his or her EAD was issued pursuant to 8 CFR 274a.12(c)(19).
(3) The individual either continues to be employment authorized incident to status beyond the expiration of the EAD or is applying for renewal under a category that does not first require adjudication of an underlying application, petition, or request.
Moreover, DHS is proposing that the expired EAD, in combination with a Notice of Action (Form I-797C) indicating timely filing of the application to renew the EAD (provided it lists the same employment authorization category as that listed on the expiring or expired EAD), would be considered an unexpired EAD for purposes of complying with Employment Eligibility Verification (Form I-9) requirements.
These provisions would significantly mitigate the risk of gaps in employment authorization and required documentation for eligible individuals, thereby benefitting them and their employers. For compliance with Form I-9 documentation requirements, however, individuals would need to file their renewal applications far enough in advance to receive the Notice of Action (Form I-797C), which is necessary to document that filing for their employers, prior to the expiration of their EADs. The Form I-797C generation and issuance process is currently automated such that it is able to issue forms within a few days after receiving an Application for Employment Authorization. DHS expects that applicants would generally receive the Form I-797C within 2 weeks of the date of filing.
As discussed, DHS is proposing an automatic extension period of up to 180 days past the expiration date noted on the face of the EAD for qualifying individuals. DHS believes that this time period is reasonable and provides more than ample time for USCIS to complete the adjudication process based on USCIS's current 3-month average processing time for Applications for Employment Authorization.
As noted above, DHS is proposing two conditions to ensure that only eligible aliens receive automatic extensions of their EADs and thus to protect the employment authorization program from abuse. First, DHS is proposing to require that the renewal application be based on the same employment authorization category as that indicated on the expiring EAD, including renewal applications based on TPS re-registration filed by applicants who still hold EADs that were initially issued under 8 CFR 274a.12(c)(19).
Based on the above parameters, DHS has identified 15 employment authorization categories where renewal applicants would be able to receive automatic extensions under this proposed rule. Among these are applicants for adjustment of status. So long as their applications for adjustment of status remain pending or USCIS determines, upon written notice to the applicant or notice published in the
• Aliens admitted as refugees.
• Aliens granted asylum.
• Aliens admitted as parents or dependent children of aliens granted permanent residence under section 101(a)(27)(I) of the INA, 8 U.S.C. 1101(a)(27)(I).
• Aliens admitted to the United States as citizens of the Federated States of Micronesia or the Marshall Islands pursuant to agreements between the United States and the former trust territories.
• Aliens granted withholding of deportation or removal.
• Aliens granted Temporary Protected Status (TPS) (regardless of the employment authorization category on their current EADs).
• Aliens who have properly filed applications for TPS and who have been deemed
• Aliens who have properly filed applications for asylum or withholding of deportation or removal.
• Aliens who have filed applications for adjustment of status under section 245 of the INA, 8 U.S.C. 1255.
• Aliens who have filed applications for suspension of deportation under section 244 of the INA (as it existed prior to April 1, 1997), cancellation of removal pursuant to section 240A of the INA, or special rule cancellation of removal under section 309(f)(1) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.
• Aliens who have filed applications for creation of record of lawful admission for permanent residence.
• Aliens who have properly filed legalization applications pursuant to section 210 of the INA, 8 U.S.C. 1160.
• Aliens who have properly filed legalization applications pursuant to section 245A of the INA, 8 U.S.C. 1255a.
• Aliens who have filed applications for adjustment pursuant to section 1104 of the LIFE Act.
• Aliens who are the principal beneficiaries or qualified children of approved VAWA self-petitioners, under the employment authorization category “(c)(31)” in the form instructions to the Application for Employment Authorization (Form I-765).
As noted above, each of these categories describes individuals who are eligible to apply for employment authorization after their EADs have expired and are thus candidates for automatic extensions of EADs under this proposed rule. To provide maximum clarity to the regulated public, DHS proposes to list these categories as eligible for automatic extensions on USCIS' Web site.
DHS is not currently proposing to make automatic extensions of EADs (or attendant employment authorization) available to other classes of employment-authorized individuals. For example, DHS considered making automatic extensions available to certain H-4 nonimmigrants (
DHS welcomes public comment on all aspects of this proposal.
Second, due to fraud and national security concerns, and in light of technological and process advances with respect to document production, DHS is proposing to eliminate certain existing regulations concerning the processing of Applications for Employment Authorization (Forms I-765). Specifically, DHS would eliminate the provision at 8 CFR 247a.13(d) that currently requires, with certain limited exceptions, the adjudication of Applications for Employment Authorization within 90 days of receipt.
DHS believes that the 90-day timeframe and interim EAD provisions are outdated and no longer reflect the operational realities of the Department, including its adoption of improved processes and technological advances in document production to reduce fraud and address threats to national security. The 90-day timeframe at 8 CFR 274a.13(d), for example, was established more than 20 years ago when Applications for Employment Authorization were adjudicated at local offices of legacy INS and corresponding documents were also produced by such offices.
In response to these concerns, the former INS and DHS made considerable efforts to upgrade application procedures and leverage technology to enhance integrity, security, and efficiency in all aspects of the immigration process. For example, to combat the document security problem discussed above, the former INS took steps to centralize application filing locations and card production. By 2006, DHS fully implemented these centralization efforts.
While the 90-day timeframe and interim EAD provisions at 8 CFR 274a.13(d) may have made sense when applications were processed and cards were produced at the local level, DHS believes that the intervening changes discussed above now require that such provisions be eliminated. DHS, for example, may be unable to meet the 90-day processing timeframe for applicants who are required to submit biometric information at an ASC but who do not provide such information in a timely manner. DHS may also be unable to meet the 90-day timeframe in a given case where security checks remain pending. Given the fraud and national security concerns discussed above, DHS believes it is not prudent to issue interim EADs in such cases. Moreover, the 90-day timeframe constrains DHS' ability to maintain necessary levels of security when application receipt volumes suddenly increase, as well as the ability to implement security improvements if those improvements may further extend the adjudication of applications in certain cases.
Given these considerations, DHS believes that the 90-day timeframe and interim EAD provisions at 8 CFR 274a.13(d) do not provide sufficient flexibility to reconcile with DHS' core missions to enforce and administer our immigration laws and enhance security. Moreover, DHS notes that under current processing timelines, elimination of these provisions would not have any noticeable effect on the vast majority of applicants.
DHS welcomes public comment on all aspects of this proposal, including alternate suggestions for regulatory amendments to the 90-day processing timeframe and interim employment authorization provisions not already discussed that address customer service, national security, and identity verification considerations that USCIS must fulfill as part of its core mission within DHS.
Finally, DHS proposes to make conforming and technical amendments to its regulations in light of the changes described above. The proposed rule first
Similarly, the proposed rule would amend DHS regulations at 8 CFR 214.2(h)(9)(iv) concerning H-4 nonimmigrant spouses of H-1B nonimmigrant workers. This regulation currently allows H-4 spouses to file their applications for employment authorization concurrently with their underlying requests for nonimmigrant status, but tolls the 90-day processing timeframe at 8 CFR 274a.13(d) until the underlying benefit requests are approved.
This rule also proposes a technical amendment that would merge the current text at paragraph (a) of 8 CFR 274a.13, with similar, repetitive text at paragraph (a)(1) of that section. The text at paragraph (a) currently describes the application requirement with respect to individuals authorized for employment incident to status listed in 8 CFR 274a.12(a)(3), (4), (6) through (8), (10) through (15), and (20). Text describing the application requirement is essentially repeated at paragraph (a)(1), but with respect to aliens listed in 8 CFR 274a.12(c) (except asylum applicants at 8 CFR 274a.12(c)(8), which are covered by 8 CFR 274a.13(a)(2)). DHS has determined that listing the application requirements at both 8 CFR 274a.13(a) and (a)(1) is unnecessarily repetitive and potentially confusing. DHS proposes to describe the application requirement once in the introductory text at 8 CFR 274a.13(a), which would apply to classes of individuals described at both 8 CFR 274a.12(a) and (c). The proposed text also would clarify that the same application requirement would apply to both individuals requesting only an EAD
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available alternatives, and if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action” that is economically significant, under section 3(f)(1) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.
DHS is proposing to amend its regulations relating to certain employment-based immigrant and nonimmigrant visa programs. The proposed amendments interpret existing law as well as propose regulatory changes in order to provide various benefits to participants in those programs, including: Improved processes for U.S. employers seeking to sponsor and retain immigrant and nonimmigrant workers, greater stability and job flexibility for such workers, and increased transparency and consistency in the application of agency policy related to affected classifications. Many of these changes are primarily aimed at improving the ability of U.S. employers to retain high-skilled workers who are beneficiaries of approved employment-based immigrant visa petitions and are waiting to become lawful permanent residents (LPRs), while increasing the ability of such workers to seek promotions, accept lateral positions with current employers, change employers, or pursue other employment options.
First, DHS proposes to amend its regulations consistent with certain worker portability and other provisions in the American Competitiveness in the Twenty-first Century Act of 2000 (AC21), as amended, as well as the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA). These proposed amendments would clarify and improve longstanding agency policies and procedures, previously articulated in agency memoranda and precedent decisions. These proposed amendments would also implement sections of AC21 and ACWIA relating to certain foreign workers, specifically sections on workers who have been sponsored for LPR status by their employers. In so doing, the proposed rule would provide a primary repository of governing rules for the regulated community and enhance consistency among agency adjudicators. In addition, the proposed rule would clarify several interpretive questions raised by AC21 and ACWIA.
Second, and consistent with existing DHS authorities and the goals of AC21 and ACWIA, DHS proposes to amend its regulations governing certain employment-based immigrant and nonimmigrant visa programs to provide additional stability and flexibility to employers and workers in those programs. The proposed rule would, among other things: Improve portability for certain beneficiaries of approved employment-based immigrant visa petitions by limiting the grounds for automatic revocation of petition approval; enhance job portability for such beneficiaries by improving their ability to retain their priority dates for use with subsequently approved employment-based immigrant visa petitions; establish or extend grace periods for certain high-skilled nonimmigrant workers so that they may more easily maintain their nonimmigrant status when changing employment opportunities or preparing for departure; and provide additional stability and flexibility to certain high-skilled workers by allowing those who are working in the United States in certain nonimmigrant statuses, are the beneficiaries of approved employment-based immigrant visa petitions, are subject to immigrant visa backlogs, and demonstrate compelling circumstances to effectively apply for independent employment authorization for a limited period. These and other proposed changes would provide much needed flexibility to the beneficiaries of employment-based immigrant visa petitions, as well as the U.S. employers who employ and sponsor them for permanent residence. In addition, these changes will provide greater stability and predictability for U.S. employers and avoid potential disruptions to ongoing business operations in the United States.
Finally, consistent with providing additional certainty and stability to certain employment-authorized individuals and their U.S. employers, DHS is also proposing changes to its regulations governing the processing of applications for employment authorization to minimize the risk of any gaps in such authorization. These changes would provide for the automatic extension of the validity of certain Employment Authorization Documents (EADs or Form I-766) for an interim period upon the timely filing of an application to renew such documents. At the same time, in light of national security and fraud concerns, DHS is proposing to remove regulations that provide a 90-day processing timeline for EAD applications and that require the issuance of interim EADs if processing extends beyond the 90-day mark.
Table 1, below, provides a more detailed summary of the proposed provisions and their impacts.
As required by OMB Circular A-4,
DHS has prepared a full analysis according to Executive Orders 12866 and 13563 which can be found by searching for RIN 1615-AC05 on
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121 (March 29, 1996), requires Federal agencies to consider the potential impact of regulations on small entities during the development of their rules. The term “small entities” comprises small businesses, not-for-profit organizations that are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. An “individual” is not defined by the RFA as a small entity, and costs to an individual from a rule are not considered for RFA purposes. In addition, the courts have held that the RFA requires an agency to perform a regulatory flexibility analysis of small entity impacts only when a rule directly regulates small entities.
The changes proposed by DHS have direct impacts to individual beneficiaries of employment-based nonimmigrant and immigrant visa petitions. As individual beneficiaries of employment-based immigrant visa petitions are not defined as small entities, costs to these individuals are not considered as RFA costs. However, due to the fact that the petitions are filed by a sponsoring employer, this rule has
Small entities primarily affected by this rule that could incur additional indirect costs are those that file and pay fees for certain immigration benefit petitions, including Form I-140, Immigrant Petition for Alien Worker. DHS conducted a statistically valid sample analysis of these petition types to determine the number of small entities indirectly impacted by this rule. While DHS acknowledges that the changes engendered by these proposed rules would directly impact individuals who are beneficiaries of employment-based immigrant visa petitions, which are not small entities as defined by the RFA, DHS believes that the actions taken by such individuals as a result of these proposals will have immediate indirect impacts on U.S. employers. Employers will be indirectly impacted by employee turnover-related costs as beneficiaries of employment-based immigrant visa petitions take advantage of these proposals. Therefore, DHS is choosing to discuss these indirect impacts in this initial regulatory flexibility analysis to aid the public in commenting on the impact of the proposed requirements.
• In particular, DHS requests information and data to gain a better understanding of the potential impact of this rule on small entities. Specifically, DHS requests information on: The numbers of small entities that have filed immigrant visa petitions for high-skilled workers who are waiting to adjust status, and the potential costs to such small entities associated with employee turnover resulting from employees who port;
• the potential costs to employers that are small entities associated with employee turnover if a sponsored nonimmigrant worker pursues the option for unrestricted employment authorization based on compelling circumstances; and
• the number of small entities that would qualify for the proposed exemptions of the ACWIA fee when petitioning for H-1B nonimmigrant workers.
a.
The purpose of this action, in part, is to amend regulations affecting certain employment-based immigrant and nonimmigrant classifications in order for DHS regulations to conform to provisions of AC21 and ACWIA. The proposed rule also seeks to permit greater job flexibility, mobility and stability to beneficiaries of employment-based nonimmigrant and immigrant visa petitions, especially when faced with long waits for immigrant visas. In many instances, the need for these individuals' employment has been demonstrated through the labor certification process. In most cases, before an employment-based immigrant visa petition can be approved, the DOL has certified that there are no U.S. workers who are ready, willing and available to fill those positions in the area of intended employment. By increasing flexibility and mobility, the worker is more likely to remain in the United States and help fill the demonstrated need for his or her services.
b.
DHS objectives and legal authority for this proposed rule are discussed in the preamble.
c.
DHS conducted a statistically valid sample analysis of employment-based immigrant visa petitions to determine the maximum potential number of small entities indirectly impacted by this rule when a high-skilled worker who has an approved employment-based immigrant visa petition and a pending adjustment of status application for 180 days or more ports to another employer. DHS utilized a subscription-based online database of U.S. entities, Hoovers Online, as well as two other open-access, free databases of public and private entities, Manta and Cortera, to determine the North American Industry Classification System (NAICS) code, revenue, and employee count for each entity.
Using FY 2013 data on actual filings of employment-based immigrant visa petitions, DHS collected internal data for each filing organization. Each entity may make multiple filings. For instance, there were 63,953 employment-based immigrant visa petitions filed, but only 24,912 unique entities that filed petitions. DHS devised a methodology to conduct the small entity analysis based on a representative, random sample of the potentially impacted population. To achieve a 95 percent confidence level and a 5 percent confidence interval on a population of 24,912 entities, DHS used the standard statistical formula to determine that a minimum sample size of 385 entities was necessary.
d.
The proposed amendments in this rule do not place direct requirements on small entities that petition for workers. However, if the principal beneficiaries of employment-based immigrant visa petitions take advantage of the flexibility provisions proposed herein (including porting to a new sponsoring
The proposed amendments relating to the H-1B numerical cap exemptions may impact some small entities by allowing them to qualify for exemptions of the ACWIA fee when petitioning for H-1B nonimmigrant workers. As DHS cannot predict the numbers of entities these proposed amendments would impact at this time, the exact impact on small entities is not clear, though some positive impact should be anticipated.
e.
DHS is unaware of any duplicative, overlapping, or conflicting Federal rules, but invites any comment and information regarding any such rules.
f.
This rule does not impose direct costs on small entities. Rather, this rule imposes indirect cost on small entities because the proposed provisions would affect beneficiaries of employment-based immigrant visa petitions. If those beneficiaries take actions or steps in line with the proposals that provide greater flexibility and job mobility, then there would be an immediate indirect impact—an externality—to the current sponsoring U.S. employers. DHS considered whether to exclude from the flexibility and job mobility provisions those beneficiaries who were sponsored by U.S. employers that were considered small. However, because DHS so limited the eligibility for unrestricted employment authorization to beneficiaries who are able to demonstrate compelling circumstances, and restricted the portability provisions to those seeking employment within the same or similar occupational classification(s), DHS did not feel it was necessary to pursue this proposal. There are no other alternatives that DHS considered that would further limit or shield small entities from the potential of negative externalities and that would still accomplish the goals of this regulation. To reiterate, the goals of this regulation include providing increased flexibility and normal job progression for beneficiaries of approved employment-based immigrant visa petitions. To incorporate alternatives that would limit such mobility for beneficiaries that are employed or sponsored by small entities would be counterproductive to the goals of this rule. DHS welcomes public comments on significant alternatives to the proposed rule that would minimize significant economic impact to small entities.
The Unfunded Mandate Reform Act of 1995 (UMRA) is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments. Title II of UMRA requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector. The value equivalent of $100,000,000 in 1995 adjusted for inflation to 2014 levels by the Consumer Price Index for All Urban Consumers is $155,000,000.
Although this rule does exceed the $100 million expenditure threshold in the first year of implementation (adjusted for inflation), this rulemaking does not contain such a mandate. Providing job flexibility through unrestricted employment authorization to a limited number of employment-authorized nonimmigrants in compelling circumstances is not a required immigration benefit, nor will use of the proposed flexibilities result in any expenditures by State, local, and tribal governments. The requirements of Title II of UMRA, therefore, do not apply, and DHS has not prepared a statement under UMRA.
This proposed rule is a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will result in an annual effect on the economy of more than $100 million in the first year only. For each subsequent year, the annual effect on the economy will remain under $100 million. As small businesses may be impacted under this proposed regulation, DHS has prepared a Regulatory Flexibility Act (RFA) analysis. The RFA analysis can be found with the analysis prepared under Executive Orders 12866 and 13563 on regulations.gov.
This rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.
This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.
Under the Paperwork Reduction Act (PRA) of 1995, Public Law 104-13, Departments are required to submit to the Office of Management and Budget (OMB), for review and approval, any reporting requirements inherent in a rule. This rule proposes revisions to the following information collections:
1. The Application for Employment Authorization, Form I-765; and Form I-765 Work Sheet, Form I-765WS, OMB Control Number 1615-0040. Specifically, USCIS is revising this collection by revising the instructions to Form I-765 to include information for the newly proposed group of applicants (beneficiaries of an approved Form I-140 who are in the United States in E-
2. USCIS is revising the form and its instructions and the estimate of total burden hours has increased due to the addition of this new population of Form I-765 filers, and the increase of burden hours associated with the collection of biometrics from these applicants.
3. The Immigrant Petition for Alien Worker, Form I-140; OMB Control Number 1615-0015. Specifically, USCIS is revising this information collection to remove ambiguity regarding whether information about the principal beneficiary's dependent family members should be entered on Form I-140, by revising the word “requests” to “requires” for clarification in the form instructions. USCIS is also revising the instructions to remove the terms “in duplicate” in the second paragraph under the labor certification section of the instructions because USCIS no longer requires uncertified Employment and Training Administration (ETA) Forms 9089 to be submitted in duplicate. There is no change in the data being captured on the information collection instrument, but there is a change to the estimated annual burden hours as a result of USCIS' revised estimate of the number of respondents for this collection of information.
4. The Petition for Nonimmigrant Worker, Form I-129, OMB Control Number 1615-0009. USCIS is making revisions to Form I-129, specifically the H-1B Data Collection and Filing Fee Exemption Supplement and the accompanying instructions, to correspond with revisions to the regulatory definition of “related or affiliated nonprofit entities” for the purposes of determining whether the petitioner is exempt from: (1) Payment of the $750/$1,500 fee associated with the American Competitiveness and Workforce Improvement Act (ACWIA) and (2) the statutory numerical limitation on H-1B visas (also known as the H-1B cap). USCIS does not estimate that new respondents would file petitions for alien workers as a result of the changes proposed by this rule.
5. The Application to Register Permanent Residence or Adjust Status, Form I-485, including new Supplement J, “Confirmation of Bona Fide Job Offer or Request for Job Portability under INA Section 204(J),” OMB Control Number 1615-0023. Specifically, USCIS is creating a new Supplement J to Form I-485 to allow the adjustment applicant requesting portability under section 204(j) of the INA, and the U.S. employer offering the applicant a new permanent job offer, to provide formal attestations regarding important aspects of the job offer. Providing such attestations is an essential step to establish eligibility for adjustment of status in any employment-based immigrant visa classification requiring a job offer, regardless of whether the applicant is making a portability request under section 204(j) or is seeking to adjust status based upon the same job that was offered in the underlying immigrant visa petition. Through this new supplement, USCIS will collect required information from U.S. employers offering a new permanent job offer to a specific worker under section 204(j). Moreover, Supplement J will also be used by applicants who are not porting pursuant to section 204(j) to confirm that the original job offer described in the Form I-140 petition is still bona fide and available to the applicant at the time the applicant files Form I-485. Supplement J will replace the current Form I-485 initial evidence requirement that an applicant must submit a letter on the letterhead of the petitioning U.S. employer that confirms that the job offer on which the Form I-140 petition is based is still available to the applicant.
This supplement will also serve as an important anti-fraud measure, and it will allow USCIS to validate employers extending new permanent job offers to individuals under section 204(j). USCIS estimates that approximately 29,166 new respondents would file Supplement J as a result of the changes proposed by the rule.
Additionally, USCIS is revising the instructions to Form I-485 to reflect the implementation of Supplement J. The Form I-485 instructions are also being revised to clarify that eligible applicants will need to file Supplement J to request job portability under section 204(j) of the INA. There is no change to the estimated annual burden hours as a result of this revision as a result of the changes proposed in this rule.
DHS is requesting comments on the proposed revisions to these information collections until February 29, 2016.
In accordance with the PRA, information collection notices are published in the
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Overview of this information collection:
(1) Type of Information Collection: Revision of a Currently Approved Collection.
(2) Title of the Forms/Collections:
• Application for Employment Authorization Document;
• Form I-765 Work Sheet;
• Immigrant Petition for Alien Worker;
• Petition for Nonimmigrant Worker;
• Application to Register Permanent Residence or Adjust Status.
(3) Agency form number, if any, and the applicable component of the DHS sponsoring the collection: Forms I-765/I-765WS, I-140, I-129 and I-485; USCIS.
(4) Affected public who will be asked or required to respond, as well as a brief abstract:
(5) An estimate of the total annual number of respondents and the amount of time estimated for an average respondent to respond:
• Form I-765/I-765WS:
○ 4,618,099 responses related to Form I-765 at 3.42 hours per response;
○ 437,070 responses related to Form I-765WS at .50 hours per response;
○ 592,137 responses related to Biometrics services at 1.17 hours; and
○ 4,618,099 responses related to Passport-Style Photographs at .50 hours per response.
• Form I-140:
○ 101,719 respondents at 1.5 hours per response.
• Form I-129:
○ Form I-129—333,891 respondents at 2.34 hours;
○ E-1/E-2 Classification to Form I-129—4,760 respondents at .67 hours;
○ Trade Agreement Supplement to Form I-129—3,057 respondents at .67 hours;
○ H Classification Supplement to Form I-129—255,872 respondents at 2 hours;
○ H-1B and H-1B1 Data Collection and Filing Fee Exemption Supplement—243,965 respondents at 1 hour;
○ L Classification Supplement to Form I-129—37,831 respondents at 1.34 hours;
○ O and P Classifications Supplement to Form I-129—22,710 respondents at 1 hour;
○ Q-1 Classification Supplement to Form I-129—155 respondents at .34 hours; and
○ R-1 Classification Supplement to Form I-129—6,635 respondents at 2.34 hours.
• Form I-485:
○ 697,811 respondents at 6.25 hours per response;
○ 697,811 respondents related to Biometrics services at 1.17 hours.
(6) An estimate of the total annual public burden (in hours) associated with these collections:
• Form I-765/I-765WS: 19,014,283.37 hours.
• Form I-140: 152,579 hours.
• Form I-129: 1,631,234 hours.
• Form I-485: 5,238,957 hours.
(7) An estimate of the annual public burden (monetized) associated with these collections:
• Form I-765/I-765WS: $1,357,721,106
• Form I-140: $42,365,964.
• Form I-129: $73,751,280.
• Form I-485: $239,349,173.
Administrative practice and procedure, Adoption and foster care, Immigration, Reporting and recordkeeping requirements.
Administrative practice and procedure, Immigration.
Administrative practice and procedure, Aliens, Cultural exchange programs, Employment, Foreign officials, Health professions, Reporting and recordkeeping requirements, Students.
Aliens, Immigration, Reporting and recordkeeping requirements.
Administrative practice and procedure, Aliens, Employment, Penalties, Reporting and recordkeeping requirements.
Accordingly, DHS proposes to amend chapter I of title 8 of the Code of Federal Regulations as follows:
8 U.S.C. 1101, 1103, 1151, 1153, 1154, 1182, 1184, 1186a, 1255, 1324a, 1641; 8 CFR part 2.
The revisions and addition read as follows:
(d)
(e)
(2) The priority date of a petition may not be retained under paragraph (e)(1) of this section if at any time USCIS revokes the approval of the petition because of:
(i) Fraud, or a willful misrepresentation of a material fact;
(ii) Revocation by the Department of Labor of the approved permanent labor certification that accompanied the petition;
(iii) Invalidation by USCIS or the Department of State of the permanent labor certification that accompanied the petition; or
(iv) A determination by USCIS that petition approval was in error.
(3) A denied petition will not establish a priority date.
(4) A priority date is not transferable to another alien.
(5) A petition filed under section 204(a)(1)(F) of the Act for an alien shall remain valid with respect to a new employment offer as determined by USCIS under section 204(j) of the Act and 8 CFR 245.25. An alien will continue to be afforded the priority date of such petition, if the requirements of paragraph (e) of this section are met.
(n) * * *
(3)
(p)
(i) In the case of an initial request for employment authorization, the individual is in E-3, H-1B, H-1B1, O-1, or L-1 nonimmigrant status at the time the application for employment authorization is filed;
(ii) An immigrant visa is not immediately available to the principal beneficiary based on his or her priority date at the time the application for employment authorization is filed; and
(iii) USCIS determines, as a matter of discretion, that the principal beneficiary demonstrates compelling circumstances that justify the issuance of employment authorization.
(2)
(3) Subject to paragraph (p)(5) of this section, an alien may be eligible to receive renewal of employment authorization under paragraph (p) of this section, upon application, if:
(i) He or she is the principal beneficiary of an approved immigrant petition for classification under sections 203(b)(1), 203(b)(2) or 203(b)(3) of the Act and either:
(A) USCIS determines, as a matter of discretion, that the principal beneficiary continues to demonstrate compelling circumstances that justify the issuance of employment authorization, or
(B) The difference between the principal beneficiary's priority date and the date upon which immigrant visas are authorized for issuance for the principal beneficiary's preference category and country of chargeability is 1 year or less according to the current Department of State Visa Bulletin; or
(ii) Is a family member, as described under paragraph (p)(2) of this section, of a principal beneficiary satisfying the requirements under paragraph (p)(3)(i) of this section, except that the family member need not be maintaining nonimmigrant status at the time the principal beneficiary applies for renewal employment authorization under paragraph (p) of this section.
(4)
(5)
(i) The individual has been convicted of any felony or two or more misdemeanors; or
(ii) The principal beneficiary's priority date is more than 1 year beyond the date immigrant visas were authorized for issuance for the principal beneficiary's preference category and country of chargeability according to the Department of State Visa Bulletin current at the time the application for employment authorization, or successor form, is filed.
8 U.S.C. 1101, 1103, 1151, 1153, 1154, 1155, 1182, 1324a, and 1186a.
(a) * * *
(3) * * *
(iii) * * *
(C) In employment-based preference cases, upon written notice of withdrawal filed by the petitioner to any officer of USCIS who is authorized to grant or deny petitions, where the withdrawal is filed less than 180 days after approval of the employment-based preference petition, provided that the revocation of a petition's approval under this clause will not, by itself, impact a beneficiary's ability to retain his or her priority date under 8 CFR 204.5(e). A petition that is withdrawn 180 days or more after approval remains approved unless its approval is revoked on other grounds. If an employment-based petition on behalf of an alien is withdrawn, the job offer of the petitioning employer is rescinded and the alien must obtain a new employment-based preference petition on his or her behalf in order to seek adjustment of status or issuance of an immigrant visa as an employment-based immigrant, unless eligible for adjustment of status under section 204(j) of the Act and in accordance with 8 CFR 245.25.
(D) Upon termination of the petitioning employer's business less than 180 days after petition approval in an employment-based preference case under section 203(b)(1)(B), 203(b)(1)(C), 203(b)(2), or 203(b)(3) of the Act, provided that the revocation of a petition's approval under this clause will not, by itself, impact a beneficiary's ability to retain his or her priority date under 8 CFR 204.5(e). If a petitioning employer's business terminates 180 days or more after approval, the petition remains approved unless its approval is revoked on other grounds. If a petitioning employer's business terminates, the job offer of the petitioning employer is rescinded and the beneficiary must obtain a new employment-based preference petition on his or her behalf in order to seek adjustment of status or issuance of an immigrant visa as an employment-based immigrant, unless eligible for adjustment of status under section 204(j) of the Act and in accordance with 8 CFR 245.25.
8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1186a, 1187, 1221, 1281, 1282, 1301-1305 and 1372; sec. 643, Pub. L. 104-208, 110 Stat. 3009-708; Pub. L. 105-277, 112 Stat. 2681-641; Pub. L. 106-313, 114 Stat. 1251-1255; Pub. L. 106-386, 114 Stat. 1477-1480; section 141 of the Compacts of Free Association with the Federated States of Micronesia and the Republic of the Marshall Islands, and with the Government of Palau, 48 U.S.C. 1901 note, and 1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2.
(l)
(2) An alien admitted or otherwise provided status in E-1, E-2, E-3, H-1B, H-1B1, L-1, or TN classification and his or her dependents shall not be considered to have failed to maintain nonimmigrant status solely on the basis of the cessation of the employment on which the alien's classification was based for a one-time period during any authorized validity period. Such one-time period shall last up to 60 days or until the end of the authorized validity period, whichever is shorter.
(3) An alien in any authorized period described in paragraph (l) of this section may apply for and be granted an extension of stay under paragraph (c)(4) of this section or change of status under 8 CFR 248.1, if otherwise eligible. DHS may eliminate or shorten the 60-day period described in paragraph (l)(2) of this section as a matter of discretion and, unless otherwise authorized under 8 CFR 274a.12, the alien may not work during such period.
The revisions and additions read as follows:
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(A) Except as set forth in 8 CFR 214.1(l) with respect to H-1B beneficiaries and their dependents and paragraph (h)(5)(viii)(B) of this section with respect to H-2A beneficiaries, a beneficiary shall be admitted to the United States for the validity period of the petition, plus a period of up to 10 days before the validity period begins and 10 days after the validity period ends. The beneficiary may not work except during the validity period of the petition.
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8 U.S.C. 1101, 1103, 1182, 1255; Pub. L. 105-100, section 202, 111 Stat. 2160, 2193; Pub. L. 105-277, section 902, 112 Stat. 2681; Pub. L. 110-229, tit. VII, 122 Stat. 754; 8 CFR part 2.
(n) * * *
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(a)
(1) The employment offer by the petitioning employer is continuing; or
(2) Under section 204(j) of the Act, the applicant has a new offer of employment from the petitioning employer or a different U.S. employer, or a new offer based on self-employment, in the same or a similar occupational classification as the employment offer under the qualifying petition, provided that:
(i) The alien's application to adjust status based on a qualifying petition has been pending for 180 days or more; and
(ii) The approval of the qualifying petition has not been revoked.
(b)
(2)
(i) A written attestation signed by the new employer describing the new employment offer, including its requirements and a description of the duties in the new position, and stating that the employer intends that the applicant will commence the employment described in the new employment offer within a reasonable period upon adjustment of status;
(ii) An explanation from the new employer establishing that the new employment offer and the employment offer under the approved petition are in the same or similar occupational classification, which may include material and credible information provided by another Federal government agency, such as information from the Standard Occupational Classification (SOC) system, or similar or successor system, administered by the Department of Labor; and
(iii) A copy of the receipt notice issued by USCIS, or if unavailable, secondary evidence showing that the alien's application to adjust status based on such petition has been pending with USCIS for 180 days or more.
(3)
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8 U.S.C. 1101, 1103, 1324a; 48 U.S.C. 1806; 8 CFR part 2.
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(vii) If an individual's employment authorization expires, the employer,
The additions read as follows:
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(9) * * * In the case of a nonimmigrant with H-1B status, employment authorization will automatically continue upon the filing of a qualifying petition under 8 CFR 214.2(h)(2)(i)(H) until such petition is adjudicated, in accordance with section 214(n) of the Act and 8 CFR 214.2(h)(2)(i)(H);
(c) * * *
(35) An alien who is the principal beneficiary of a valid immigrant petition under section 203(b)(1), 203(b)(2) or 203(b)(3) of the Act described as eligible for employment authorization in 8 CFR 204.5(p).
(36) A spouse or child of a principal beneficiary of a valid immigrant petition under section 203(b)(1), 203(b)(2) or 203(b)(3) of the Act described as eligible for employment authorization in 8 CFR 204.5(p).
The revisions read as follows:
(a)
(d)
(i) Properly filed as provided by form instructions before the expiration date shown on the face of the Employment Authorization Document;
(ii) Based on the same employment authorization category as shown on the face of the expiring Employment Authorization Document or is for an individual approved for Temporary Protected Status whose EAD was issued pursuant to 8 CFR 274a.12(c)(19); and
(iii) Based on a class of aliens whose eligibility to apply for employment authorization continues notwithstanding expiration of the Employment Authorization Document and is based on an employment authorization category that does not require adjudication of an underlying application or petition before adjudication of the renewal application, including aliens described in 8 CFR 274a.12(a)(12) granted Temporary Protected Status and pending applicants for Temporary Protected Status who are issued an EAD under 8 CFR 274a.12(c)(19), as may be announced on the USCIS Web site.
(2)
(3)
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Securities and Exchange Commission.
Advance notice of proposed rulemaking; Concept release; Request for comment.
The Securities and Exchange Commission (“Commission”) is publishing this Advance Notice of Proposed Rulemaking, Concept Release, and Request for Comment on Transfer Agent Regulations (“release”) to seek public comment regarding the Commission's transfer agent rules. The first transfer agent rules were adopted in 1977 and remain essentially unchanged. At the same time, transfer agents now operate in a market structure that bears little resemblance to the structure in 1977. The release, noting the importance of transfer agents within the national market structure, includes a history of transfer agent services and applicable regulations as well as an overview of current transfer agent services and activities, and requests comment on all topics. The release includes an Advance Notice of Proposed Rulemaking in specific areas, such as transfer agent registration and reporting requirements, safeguarding of funds and securities, and revision of obsolete or outdated rules, along with requests for comment, as well as a Concept Release and Request for Comment addressing additional areas of specific Commission interest, including processing of book-entry securities, broker-dealer recordkeeping for beneficial owners, transfer agents to mutual funds, and administration of issuer plans. The Commission intends to consider the public's comments in connection with any future rulemaking, and comments to the Advance Notice of Proposed Rulemaking will be used to further consider the sufficiency and scope of the rulemaking proposals described therein.
Comments must be in writing and received by February 29, 2016.
Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Use the Federal eRulemaking Portal (
• Send paper comments to: Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
Moshe Rothman, Branch Chief, Thomas Etter, Special Counsel, Catherine Whiting, Special Counsel, Mark Saltzburg, Special Counsel, Lauren Sprague, Special Counsel, or Elizabeth de Boyrie, Counsel, Office of Clearance and Settlement, Division of Trading and Markets, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-7010 at (202) 551-5710.
3. Recordkeeping and Safeguarding Rules: Rules 17Ad-8 through 17Ad-13
The United States' securities markets are indispensable to this country's and the world's economy. The Commission
As agents for issuers, transfer agents play a critical role with respect to securities settlement, though they rarely receive much public attention. Among their key functions, they may: (i) Track, record, and maintain on behalf of issuers the official record of ownership of each issuer's securities; (ii) cancel old certificates, issue new ones, and perform other processing and recordkeeping functions that facilitate the issuance, cancellation, and transfer of those securities; (iii) facilitate communications between issuers and registered securityholders; and (iv) make dividend, principal, interest, and other distributions to securityholders. A transfer agent's failure to perform its duties promptly, accurately, and safely can compromise the accuracy of an issuer's securityholder records, disrupt the channels of communication between issuers and securityholders, disenfranchise investors, and expose issuers, investors, securities intermediaries, and the securities markets as a whole to significant financial loss.
The securities markets and the National C&S System in which transfer agents operate have changed significantly since the Commission first began regulating transfer agents in the 1970s. The changes largely reflect a decades-long evolution from a manual securities settlement process focused on the processing of physical securities certificates to a highly automated electronic environment centered on the processing and transfer of electronic book-entry securities.
As a result, the Commission has observed over time that transfer agents now perform a more diverse array of functions and services, many of which may not be fully addressed by the Commission's transfer agent rules. In addition, the Commission has observed that the manner in which transfer agents carry out their traditional functions may no longer be adequately addressed in the rules. The Commission's consideration of these observations has led it to include two interrelated approaches in this release. Under the first approach, the Commission believes it has identified a series of new and amended rules that, based on its current understanding of transfer agents and their functions, it intends to propose. These anticipated new and amended rules, which the Commission intends to propose as soon as is practicable, either individually or in groups or phases, and irrespective of any other changes to the transfer agent rules, are discussed in detail in the Advance Notice of Proposed Rulemaking found in Section VI. The Commission is soliciting public comment on the anticipated rulemaking proposals described in Section VI. Public feedback and data would assist the Commission in further refining and calibrating the anticipated proposals as well as other potential proposals.
Under the second approach, reflected in the Concept Release and Request for Comment contained in Section VII, the Commission discusses and requests comment regarding a number of additional transfer agent issues that primarily arise from the diverse array of transfer agent functions and services which have developed over time. Public comment on these additional issues will allow the Commission to evaluate the need for, and potentially develop, additional rulemaking proposals appropriately tailored to these complex areas. In undertaking these approaches, the Commission remains sensitive to whether any distinctions between the actual activities of transfer agents and what is contemplated by the Commission's rules may create undue uncertainty or risks for the National C&S System and the market participants that rely upon it, including investors, issuers, regulators, and transfer agents. As transfer agents continue to evolve in their roles and activities, any such distinctions, and the commensurate risks associated with them, may also grow.
We begin with an overview of the antecedents, advent, and subsequent history of the National C&S System, including a discussion of the “Paperwork Crisis” which helped precipitate the legislative amendments that gave rise to that system. We then describe the National C&S System and transfer agents' role within that system as it functions today, followed by a discussion of the current regulatory regime and the core functions performed by transfer agents. The remainder of the release consists of the two sections noted above: The Advance Notice of Proposed Rulemaking in Section VI and the Concept Release and Request for Comment in Section VII.
We are mindful that the role of transfer agents in the National C&S System and the need to address specific risks associated with transfer agents have been topics of discussion and debate, both within and outside the Commission, for many years.
We are also mindful that market developments have occurred beyond the changes that are the focus of this release and that affect transfer agents. For example, transfer agents and market participants now often communicate with one another using structured data on electronic platforms. Data standardization efforts have emerged to further enhance these electronic communication methods, such as the international standards effort focusing on corporate actions, which may ultimately be used by transfer agents.
The Commission is sensitive to the effects that could result from any regulatory action, and accordingly we also seek input on the economic effects or tradeoffs associated with any potential regulatory action, including any costs, benefits, or burdens of such action, and any effects on efficiency, competition, and capital formation. We are also mindful that the various aspects of the transfer agent regulatory program and securities transfer process that we address in this release are interconnected, and that changes to one aspect may affect other aspects, as well as complement or frustrate other potential changes. Therefore, we encourage the public to consider these relationships when formulating comments, and invite comment on whether alternative approaches, or a combination of approaches, would better address the concerns raised.
Investment securities confer certain intangible rights and benefits upon the holder.
This ability to transfer the rights associated with share ownership helps drive the securities markets.
[E]ither the certificate or a stock power must be indorsed, the signature guaranteed, authority to transfer title documented, and the stock certificate and the other documentation delivered, not to mention the registration of transfer on the stockholders list, the destruction of the old certificate and the issue of a new one.
Historically, transactions involving certificated securities effected on securities exchanges could be significantly more complex:
In sales and purchases by persons other than brokers and specialists, the owner of the security will instruct a broker to sell, the broker will transfer the order to the exchange floor/system or a market maker, where it will be matched wholly or partially with one or more buy orders. Once the order is executed, the seller will have to deliver the executed certificate(s) to his broker so that the selling broker can deliver it to the buying broker, market maker, specialist, or central counterparty. Once the buying broker receives delivery, she will have to deliver to the issuer's transfer agent with a request for registration of transfer on the stockholder list. The latter, after inspecting all necessary documentation, will register the transfer, cancel the old certificate, and issue a new certificate to the buyer. Thus, beyond indorsement of the certificate and its delivery, each stage of the transaction will demand the documents, guarantees and assurances that constitute “good delivery” on the respective exchange.
Historically, from the transfer agent's perspective, the transfer of certificated securities held by registered owners was a time-consuming manual process. First, the transfer agent would receive from the broker a bundle of documents (the “transfer bundle”) that typically included the following: (i) A “ticket” pinned to the bundle of documents that served as a transmittal letter and receipt;
As an example of the extensive process for transferring certificated securities, prior to 1975, for New York City transfer agents, nearly 90 percent of these transfer bundles were received from messengers at the transfer agent's “window,” which was a physical drop-off location at the transfer agent's offices, rather than through the mail, in which case the transfer bundles would be routed to the mail room.
The next step was to prepare the transfer journal entries documenting the cancellation of the old certificate and the issuance of the new certificate.
Prior to sending certificates to a registrar, the transfer agent's staff would perform several audits to verify the accuracy of the transfer journal and new certificate.
In 1977, the concept of the “uncertificated security” was introduced in Article 8 of the UCC.
Prior to 1968, individual clearing brokers
As trading volume increased throughout the 1960s and early 1970s, the burdensome manual process associated with transferring certificated securities created what came to be known as the Paperwork Crisis. It was, at the time, “the most prolonged and severe crisis in the securities industry”
In the immediate aftermath of the Paperwork Crisis, more than 100 broker-dealers went bankrupt or were acquired by other firms and “[t]he inability of the securities industry to deal with its serious operational problems . . . contributed greatly to the loss of investor confidence in the efficiency and safety of [the U.S.] capital markets.”
In immediate response to the Paperwork Crisis, regulators and industry participants studied and adopted alternative settlement systems and other potential options which might reduce or eliminate the problems associated with the traditional process for transferring certificated securities. First, in June 1968, the NYSE established the Central Certificate Service (“CCS”) as a division of the Stock Clearing Corporation. Broker-dealers and banks who were members of the NYSE were permitted to deposit their certificated securities with CCS, which would hold the certificates in custody and transfer them into the name of a CCS nominee.
Around the same time, the American Stock Exchange hired the North American Rockwell Information
To address unnecessary complexity, for example, the Rockwell Study focused on whether more efficient clearance and settlement of securities could be achieved by allowing single entities to perform both registrar and transfer agent functions. If so, the entity would need to function in a way that still would preserve the independent audit and shareholder protection function that a registrar historically was viewed, by many participants in the securities industry, as providing.
To reduce the physical movement of securities, the Rockwell Study recommended the establishment of individual transfer agent depositories (“TADs”), which was, at the time, a theoretical proposal that had not been implemented in any market.
From July 1968 to April 1969, Arthur D. Little & Co. conducted a study for the National Association of Securities Dealers (“NASD”) on the problem of settlement fails,
In December 1969, the NASD formed the National Clearing Corporation (“NCC”) as the vehicle for developing and implementing a nationwide system of interconnected regional clearinghouses that would form a national OTC clearing system utilizing continuous net settlement. NCC took over the operations of the National Over-the-Counter Clearing Corporation and eventually grew to include OTC transactions in all issues listed on exchanges or included on the NASDAQ system.
In early 1970, around the same time that CCS extended its services to the American Stock Exchange, the Banking and Securities Industry Committee (“BASIC”) was formed by banking and
In 1970, Congress enacted the Securities Investor Protection Act of 1970 which established the Securities Investor Protection Corporation for the broad purpose of affording financial protection for the customers of registered brokers and dealers.
Although it was generally recognized at the time that the complete elimination of certificated securities, known as “dematerialization,” was the best approach to eliminating the risks associated with the processing of physical securities, due to technological and legal impediments, dematerialization was viewed as a “utopian solution” that “would require very extensive legal work and lead time to implement.”
While there was widespread industry support for the TAD model, there were legal and technological impediments to its immediate implementation.
Following publication of the Commission's Unsafe Practices Study, the Senate Subcommittee on Securities conducted its own 18-month study, which resulted in the Securities Industry Study of 1973 Report (“Securities Industry Study”).
The Securities Industry Study ultimately led to Congress enacting the Securities Act Amendments of 1975 (“1975 Amendments”),
Between 1968 and 1975, in addition to CCS (now known as DTC), several other securities depositories were established, including by the Midwest Stock Exchange, Inc., the Pacific Stock Exchange, and TAD Depository Corporation. The number of shares evidenced by certificates immobilized in depositories increased between 1968 and 1976 from approximately 400 million to over 4 billion.
Over the next several decades, factors such as technology enhancements and regulatory changes led to the increased prevalence of securities depositories, and many of them substantially expanded their services and participant base, especially DTC. Of particular note, in 1975, DTC introduced the Fast Automated Securities Transfer (“FAST”) Program, which was approved by the Commission in 1976.
Prior to FAST, transferring securities to or from DTC on behalf of its participants required moving certificated securities back and forth between DTC and transfer agents. For securities being deposited with DTC, participants would send certificates to DTC, which would then send the certificates to the transfer agent for re-registration into the name of DTC's partnership nominee, Cede & Co.,
The FAST Program substantially reduced the movement of paper certificates by permitting transfer agents to become custodians for balance certificates registered in the name of Cede & Co. The balance certificate represents on the transfer agent's books the sum total of shares for that issue held by all of DTC's participants.
In 1983, DTC adopted technological enhancements to its Participant Terminal System which allowed participants to automatically match book-entry receive notifications and facilitate redelivery to other participants.
A number of legal and regulatory changes also led to increased participation at securities depositories among banks and broker-dealers. For example, in 1978, the UCC was revised to substitute the concept of delivery of securities specific to the physical delivery of certificated securities with the concept of “transfer” by book-entry on the books of a central depository.
In 1982 and 1983, the NASD and five stock exchanges, including the NYSE and American Stock Exchange, amended their rules to require their members to use a Commission-registered securities depository for the confirmation, affirmation and settlement of transactions in depository eligible securities if the member provides its customer with delivery-versus-payment privileges.
Throughout the late 1980s and mid-1990s, DTC merged with or absorbed business from several other depositories, leading to its further growth. First, in April 1987, the Pacific Stock Exchange Board of Governors closed the Pacific Securities Depository Trust Company. Virtually all eligible securities in its custody were moved to DTC. Then, in 1995, DTC and NSCC worked together to absorb the business of Midwest Securities Trust Company and Midwest Clearing Corporation in light of the Chicago Stock Exchange's decision to exit the clearing and settlement business.
By the late 1990s, DTC had become the largest depository in the United States, and NSCC was the largest clearing agency.
Today, DTC provides depository and book-entry settlement services for substantially all corporate and municipal debt, equity securities, asset-backed securities, and money market instruments available for trading in the United States.
Because transfer agents operate within the National C&S System, it is important to understand that system, especially concerning the services transfer agents provide by maintaining accurate ownership records on behalf of issuers, facilitating the issuance or cancellation of securities, and distributing dividends within that system. Accordingly, this section provides a general overview of transfer agents' operations and processes within the National C&S System.
Under the current centralized depository model in the United States, there are two types of securities owners: (a) Registered and (b) beneficial.
Under state corporation law, certain securityholder rights commonly accrue only to those registered on the securityholder list and not to persons who may have an ultimate economic interest in the shares but who are not registered securityholders.
The vast majority of securityholders in the U.S. are beneficial owners rather than registered owners.
When securities are held in street name, there is a legal distinction between the nominee, who has legal status as the registered securityholder, and the person with economic or beneficial ownership of the security.
The clearance and settlement process differs depending on the type of security being traded, how the security is held by the investor (
All securities trades involve a legally binding agreement that sets forth the terms of the trade. In general, the “clearing” of those trades is the process of comparing and confirming the material terms of the agreement: (i) The identity of the buyer and seller; (ii) the identity and quantity of the securities being traded; and (iii) the price, date, and other material details of the trade.
Settlement is the fulfillment by the parties to the transaction of their respective obligations for the trade, usually by exchanging funds for the delivery of securities. For equities, settlement generally occurs three business days after the trade date (
Equity trades that are cleared and settled through DTC's facilities are generally processed in NSCC's CNS system, with final settlement on the third business day after the trade is executed. NSCC has approximately 1,000 members, made up of brokers, dealers, banks, and other intermediaries. Using CNS, NSCC nets multilaterally all of the clearing participants' purchases and sales in each security to one security position per participant per day in order to arrive at a daily net settlement obligation for each participant. NSCC then makes deliveries only on the remaining net positions through settlement accounts that the participants hold with DTC (for securities) and the Federal Reserve System (for cash).
The goal of netting is to minimize the number and value of transactions required for buyers and sellers (or the firms acting on their behalf) to settle their transactions. For example, if a broker purchases 100 shares of XYZ stock for a customer and sold 50 shares of XYZ stock for another customer, at the end of the day the broker's securities account at DTC would be credited with 50 shares of XYZ (the net difference between buying 100 shares and selling 50 shares). If the broker paid $25 per share to buy the 100 shares of XYZ and sold the 50 shares for the same price on the same day, at the end of the day the broker's cash account would be debited $1,250. The vast majority of equity trades handled by DTC clear and settle through NSCC's CNS, which, on average, results in an reduction of the volume of settlement transactions by approximately 98%.
For illustration purposes only, Figure 1 below depicts one possible example of how an equity trade effected on a national securities exchange is cleared and settled, beginning with the buyer conveying an order to an executing broker. If the executing broker is a member of NSCC it may be referred to as a “clearing broker.” If it is not a member of NSCC, it may be referred to as an “introducing broker” or “correspondent broker,” depending on whether the broker carries and is responsible for the customer's account. Where the executing broker is a member of NSCC (
This section provides a general overview of the federal and state law and other requirements, such as those of self-regulatory organizations (“SRO”), that apply to transfer agents and their activities. We begin with a review and discussion of each of the Commission's current transfer agent rules, then briefly discuss banking regulations and taxation-related requirements that may apply to transfer agents.
Prior to 1975, most transfer agents were banks or trusts.
The 1975 Amendments gave the Commission regulatory authority for the first time over transfer agents.
(A) Countersigning such securities upon issuance;
(B) monitoring the issuance of such securities with a view to preventing unauthorized issuance (
(C) registering the transfer of such securities;
(D) exchanging or converting such securities; or
(E) transferring record ownership of securities by bookkeeping entry without the physical issuance of securities certificates.
Section 17A(c)(1) of the Exchange Act requires any person performing any of these functions with respect to any security registered pursuant to Section 12 of the Exchange Act or with respect to any security which would be required to be registered except for the exemption contained in subsection (g)(2)(B) or (g)(2)(G) of Section 12 (“Qualifying Security”) to register with the Commission or other Appropriate Regulatory Agency (“ARA”).
Beginning in the late 1970s and early 1980s, the Commission adopted a series of transfer agent rules designed to regulate the basic recordkeeping and processing functions performed by transfer agents. The rules primarily related to routine transfers of certificated equity and debt securities and generally covered three areas: (i) Registration and annual reporting requirements; (ii) timing and certain notice and reporting requirements related to securities transaction processing (referred to as “turnaround rules”); and (iii) recordkeeping and record retention rules and safeguarding requirements for securities and funds.
As discussed more fully below, processing obligations related to mutual funds, dividend reinvestment plans (“DRIPs”),
The rules setting forth the registration, annual reporting, and withdrawal requirements for transfer agents are found in Exchange Act Rules 17Ac2-1 (application for registration), 17Ac2-2 (annual reporting), and 17Ac3-1 (withdrawal from registration).
Before a transfer agent may perform any of the statutory transfer agent functions defined in Section 3(a)(25) of the Exchange Act for a Qualifying Security, it must apply for registration by submitting Form TA-1 (Uniform Form of Registration as a Transfer Agent and for Amendment to Registration) to its ARA and its registration as a transfer agent with its ARA must have become effective.
All registered transfer agents, regardless of their ARA, must file an annual report with the Commission using Form TA-2 (Form for Reporting Activities of Transfer Agents Registered Pursuant to Section 17A of the Securities Exchange Act of 1934).
Form TA-2 requires transfer agents to identify and report on the use of service companies, or other transfer agents, in connection with their transfer agent activities. It also requires transfer agents to provide annual data regarding the transfer agent's compliance with the turnaround rules. Additionally, the form requires transfer agents to provide the Commission with updated information about their business activities, including accounts administered, items received,
Rule 17Ac2-2 provides exemptions from completing certain sections of Form TA-2 for small transfer agents and for transfer agents that outsource their work completely to service companies. If a registered transfer agent received fewer than 1,000 items for transfer in the reporting period and did not maintain master securityholder files for more than 1,000 individual securityholder accounts as of December 31 of the reporting period, it is only required to complete Questions 1 through 5, 11, and the signature section of Form TA-2.
The Commission, other ARAs and members of the public (including issuers and investors) use information on Forms TA-1 and TA-2. The Commission's EDGAR database provides a means through which information on these forms can be searched and retrieved. The Commission uses the information on Form TA-1 to review an entity's application for registration as a transfer agent and to maintain current information about transfer agents. The Commission uses information on Form TA-2, as well as information on Form TA-1 and amendments thereto, for several purposes, including: (i) To determine the nature of the business conducted by a transfer agent, (ii) to monitor transfer agent activities and to evaluate compliance with Commission rules, and (iii) to inform Commission transfer agent policymaking.
Pursuant to Rule 17Ac3-1, a registered transfer agent may voluntarily withdraw its registration by filing Form TA-W (Notice of Withdrawal from Registration as a Transfer Agent) with
On June 16, 1977, the Commission adopted Rules 17Ad-1 through 17Ad-7 as a set of performance standards for transfer agents.
The Commission expressed the same rationale with respect to redeemable securities of registered investment companies, stating that transactions in these securities were “significantly different from the transfer of ownership of stocks and bonds on issuer's records.”
Rule 17Ad-4(b) provides a similar exemption for certain small transfer agents by exempting a registered transfer agent from the turnaround, processing, recordkeeping, and other provisions of Rules 17Ad-2(a), (b), (c), (d) and (h), 17Ad-3, and 17Ad-6(a)(2)-(7) and (11), provided the transfer agent has received fewer than 500 items for transfer and fewer than 500 items for processing within a consecutive six month period, and provided that the transfer agent has filed proper notice of its exempt status with its ARA or has prepared a document certifying that the transfer agent qualifies as exempt (with respect to those ARAs where filing is not required).
The new regulatory regime established by the turnaround rules provided the Commission with visibility into the transfer agent industry and a way to review and analyze it. The first six years of monitoring transfer agent performance under the new regulatory regime highlighted some of the significant adverse operational and financial consequences for the securities industry, securities markets, issuer community, and investing public that could occur when a transfer agent's operations collapse, when records maintained by a transfer agent contain significant inaccuracies, or when a transfer agent's internal accounting controls are inadequate.
The impetus for Rule 17Ad-8 was the recommendation in the Final Street Name Study that “each depository be required to transmit periodically to each issuer whose securities the depository holds of record a list of the persons on whose behalf the depository holds the securities.”
On June 10, 1983, the Commission adopted Rules 17Ad-9 through 17Ad-13.
Rule 17Ad-9's certificate detail,
“Master securityholder file” is defined as the official list of individual securityholder accounts. With respect to uncertificated securities of investment companies registered under the Investment Company Act, the master securityholder file may consist of multiple, but linked, automated files.
A “subsidiary file” is any list of record of accounts, securityholders, or certificates that evidences debits or credits that have not been posted to the master securityholder file.
A “control book” is the record or other document that shows the total number of shares (in the case of equity securities) or the principal dollar amount (in the case of debt securities) authorized and issued by the issuer.
A “credit” is an addition of appropriate certificate detail to the master securityholder file, and a “debit” is a cancellation of appropriate certificate detail to the master securityholder file.
A “record difference” occurs when either: (i) The total number of shares or total principal dollar amount of securities in the master securityholder file does not equal the number of shares or principal dollar amount in the control book; or (ii) the security transferred or redeemed contains certificate detail different from the certificate detail currently on the master
A “recordkeeping transfer agent” is the registered transfer agent that maintains and updates a security's master securityholder file.
Finally, Rule 17Ad-9(l) clarifies that the term “file” includes both automated and manual records.
After the adoption of Rules 17Ad-8 through 17Ad-13, between 1983 and 2013 the Commission continued to adopt new rules to address specific issues. Specifically, Rules 17Ad-14 through 17Ad-20, as well as 17Ad-21T, address issues such as tender agent services, signature guarantee programs, notifications when transfer agents begin or cease acting for specific issues, lost shareholder searches, processes for cancelling certificates, transfer of restricted securities, and anticipated risks associated with Year 2000 compliance.
For example, securityholders sometimes have difficulty obtaining properly denominated physical certificates for tender to the bidder's depository prior to the offer's expiration date. Also, instances where there is unavailability of book-entry settlement have resulted in a substantially higher number of fails-to-deliver between broker-dealers. As a result, broker-dealers who are unable to satisfy tender obligations may have to buy securities in the cash market for same-day delivery (
Two rules relate to Year 2000 compliance.
There are approximately 95 registered transfer agents that are banks or subsidiaries of banks. For national banks and banks operating under the Code of Law for the District of Columbia, the ARA is the Office of the Comptroller of the Currency (“OCC”); for State member banks, subsidiaries thereof, bank holding companies, and bank subsidiaries thereof the ARA is the Federal Reserve Board; and for banks insured by the FDIC (non-members of the Federal Reserve), the ARA is the FDIC. Collectively, we refer to transfer agents registered with the OCC, FDIC, or Federal Reserve Board as “bank transfer agents.” For non-bank transfer agents (
Prior to the 1975 Amendments and the adoption of the Commission's transfer agent rules discussed in Section IV.A above, many of the organizations performing transfer agent services were banks or trust companies regulated by bank regulators. As noted in the Unsafe Practices Study, at that time, “[t]he power of the bank regulatory officials over the transfer function [was] not specific. Rather their concern [was] whether the performance of the transfer function may endanger the financial stability of the bank.”
With respect to examination and enforcement, both the ARA and the Commission have examinations powers over bank transfer agents, however, the Commission must provide notice to the appropriate ARA prior to conducting an examination and to arrange for a joint examination where desired.
In addition to complying with the Commission's transfer agent rules, bank transfer agents must also comply with their ARA's rules and standards. Those may supplement or exceed the Commission's rules. In part, this may be due to the fact that a bank transfer agent's activities could impact the proper functioning of the bank itself. As the FDIC explains in Section 11 of its Trust Examination Manual, one rationale for its transfer agent examination program is to “to detect and prevent situations which might threaten the viability of banks through diminution of their capital accounts.”
As a result, for example, the FDIC examines its transfer agents for internal control and risk management policies and procedures that are similar to what is required for banks.
Separately, depending on its duties, an OCC-registered transfer agent also may have to comply with statutory requirements for the treatment of “assets held in any fiduciary capacity.”
In addition, depending on the nature and scope of the services that transfer agents provide, they must comply with certain regulations and other guidance issued by the U.S. Department of the Treasury (“Treasury”) and the Internal Revenue Service. For example, transfer agents track and report to the Internal Revenue Service the dividend income and share sale activity they facilitate on behalf of issuers via Form 1099 reporting,
This section discusses some of the SRO rules and requirements applicable to transfer agents. While we focus here on NYSE and DTC requirements, we do so by way of example only. Other SROs may have additional rules which could apply to transfer agents in different contexts.
Transfer agents for NYSE listed securities are also subject to NYSE requirements. The requirements focus on (i) dual registrars and transfer agents; (ii) turnaround times; (iii) capitalization; and (iv) insurance coverage. The requirements also address transfer agent personnel, safeguarding, and co-transfer agents.
First, the NYSE Listed Company Manual (“NYSE LCM”), Section 601.01(B), provides that one person may serve as both registrar and transfer agent subject to compliance with the following conditions: (i) Meeting insurance and net capital requirements (discussed in more detail below); (ii) maintaining the functions separately and distinctly with appropriate internal controls; (iii) annual review of such internal controls by the transfer agent's independent auditors; (iv) submitting financial statements to the exchange; and (v) obtaining a certification from the transfer agent's insurer that NSYE insurance requirements have been met. This provision is less restrictive than stock exchange prohibitions on serving as a dual registrar and transfer agent that existed in earlier eras.
Second, as noted above, NYSE also imposes turnaround time requirements. NYSE LCM Section 601.01(A)(2) requires that routine transfers (as defined in Exchange Act Rule 17Ad-1) “must be processed under normal conditions within 48 hours of receipt of the securities by the transfer agent at its address designated for registration of transfers.” The 48 hour turnaround requirement was adopted by the NYSE in 1971 (originally as Rule 496) in the immediate wake of the transfer agent problems during the Paperwork Crisis.
Third, NYSE LCM Section 601.01(A)(1)(i) requires that a transfer agent must have at least $10 million in “capital, surplus (both capital and earned), undivided profits, and capital reserves.” Where a transfer agent is unable to meet this capital requirement, NYSE LCM Section 601.01(A)(12) provides for a lower alternative capital standard of $2 million that the transfer agent may meet if it maintains certain additional insurance coverage.
The NYSE also requires transfer agents to be staffed with “experienced personnel qualified to handle so-called `legal terms' and to advise on and handle other transfer problems.”
Transfer agents who participate in DRS must comply with DTC rules and regulations. Many transfer agents participate in DRS, especially because national U.S. securities exchanges, including NYSE and NASDAQ, require newly listed securities to be DRS eligible.
DTC requires transfer agents to satisfy four primary requirements before being eligible to process DRS transactions, including the following:
• Because DRS is integrated for communication purposes into DTC's Profile system, transfer agents must become “Limited Participants” in DTC by submitting an application to the DRS Program Administration for DTC approval.
• Participate in DTC's FAST program by becoming a FAST agent and agreeing to DTC's Operational Criteria for FAST Transfer Agent Processing (“FAST criteria”). The FAST criteria outline rules for securities transfers through FAST, DTC's Operational Arrangements, and DTC's Balance Certificate Agreement. The Operational Arrangements include, among other things, DTC's requirements for issues to be DTC-eligible, additional transfer requirements for FAST agents, record date requirements, and dividend and income notification procedures. By signing the Balance Certificate Agreement with DTC, transfer agents agree to maintain DTC-eligible inventory in the form of jumbo certificates registered in the name of DTC's nominee, Cede & Co., and that they will electronically reconcile DTC participants' daily deposit and withdrawal activities.
• Establish and maintain electronic communication links with DTC through Profile so that DTC participants (
• Participate in DTC's Profile Surety Program, which functions similarly to the medallion guarantee programs for paper based transactions by providing for a surety bond to back the representations made by the transacting parties.
Additionally, DTC criteria that must be met by a securities issuer to ensure its securities are eligible for DRS and Profile may indirectly apply to transfer agents acting on behalf of the issuer. For example, DTC requires issuers to mail DRS book-entry statements to registered owners evidencing their holdings at least once a year.
Transfer agents are subject indirectly to state corporation law when acting as agents of corporate issuers, and they are directly subject to state commercial law, principal-agent law, and other laws, many of which are focused on corporate governance and the rights and obligations of issuers and securityholders.
This section discusses some of the core recordkeeping, transfer, and other activities that transfer agents engage in, the manner in which the current transfer agent rules apply to those activities, and how those activities have evolved over time. The world looks very different today than it did in 1977, when the first transfer agent rules were adopted. Since then, the increased use and decreased cost of technology, the expansion of corporate actions to bring securities into the public market, the continued dematerialization of securities, and other changes have resulted in significant evolution and changes to the types of services transfer agents provide and the manner in which they provide them. At the same time, with limited exceptions, the Commission's transfer agent rules have not been updated. As a result, there may be divergence between modern transfer agents' activities and the activities that the Commission's rules are designed to regulate.
All transfer agents perform a number of core recordkeeping, transfer, and other services related to their primary function of facilitating the transfer of securities. This section discusses some of the activities transfer agents engage in with respect to these services and the relevant transfer agent rules applicable to them.
Transfer agents have direct responsibility for maintaining on behalf of the issuer the currency and integrity of the official list of the registered owners of an issuer's stocks and bonds, how those stocks and bonds are held, and how many shares or bonds each investor owns. This list is defined by Rule 17Ad-9(b) as the master securityholder file.
Transfer agents also maintain and keep current the control book which is defined by Rule 17Ad-9(d) as the record of the total number of shares of equity securities or the principal dollar amount of debt securities authorized and issued by the issuer for each issue the transfer agent services.
Finally, pursuant to Rule 17Ad-6, transfer agents maintain the transfer journal.
The primary recordkeeping rules that apply to the core records discussed above include Rules 17Ad-9, 17Ad-10, and 17Ad-11. These recordkeeping requirements are supplemented and reinforced by the recordkeeping and record retention and preservation requirements found in Rules 17Ad-6 and 17Ad-7. Rules 17Ad-9 and 17Ad-10 define the term master securityholder file, provide the specific information regarding a securityholder that must be maintained on the master securityholder file, defined in the rules as certificate detail,
The Commission's transfer agent rules seek to promote accurate recordkeeping by transfer agents by establishing specific requirements when a transfer agent identifies a specific type of discrepancy in its records referred to in Rule 17Ad-9(g) as a record difference.
As discussed above, if a record difference exists for “more than thirty calendar days,” it becomes an aged record difference under Rule 17Ad-11(a)(2).
Transfer agents are integrally involved in effecting transfers of ownership of securities, as well as exchanging and converting securities.
In connection with transfers of certificated securities, the first steps in the transfer process are to match the certificate detail with the master securityholder file, verify the signature guarantee, and then cancel the negotiable certificate that has been presented for transfer. With respect to verifying the signature, presentation by the transferor typically involves providing the transfer agent an indorsed security certificate bearing a medallion stamp. In some cases, the indorsement and assignment may be made not on the certificate itself but by an executed power of attorney authorizing the transfer of ownership on the books of the issuer.
Rule 17Ad-19 governs certificate cancellation and requires that “every transfer agent involved in the handling, processing, or storage of securities certificates shall establish and implement written procedures for the cancellation, storage, transportation, destruction, or other disposition of securities certificates.”
Rule 17Ad-12 governs the safeguarding of cancelled certificates. First, certificates that are cancelled generally must be stamped or perforated with the word “CANCELLED” and, for any cancelled certificate that is subsequently destroyed, the destruction of certificates must be witnessed by authorized personnel of the transfer agent or its designee.
Once the old certificate has been cancelled, the next step in the transfer of a certificated security will generally involve recording the change of record ownership of the relevant securities on the master securityholder file. In the context of certificated securities, this is done by debiting the securities account of the transferor. Rule 17Ad-9(f) defines the term “debit” as “a cancellation of appropriate certificate detail from the master securityholder file.” Because the cancellation date is one of the defined elements of certificate detail under Rule 17Ad-9, together Rules 17Ad-9(a)(6)
The final step in the process of completing a transfer for a certificated security is for the transfer agent to issue (on behalf of the issuer) a new security to the transferee. The transfer agent's role in connection with the issuance stage of transfer is discussed in more detail in the next section below.
For uncertificated securities, transfer agents do not issue or cancel physical securities certificates when transferring securities. Instead, they effect book-entry transfers by registering the change in ownership on the master securityholder file, which does not involve the physical issuance and cancelling of securities certificates. The term “registering” means an official form of recording by a person charged with that function, which is accomplished under Exchange Act Rules 17Ad-9(h) and 17Ad-10(e) by updating the master securityholder file, as discussed above. Book-entry transfer may be accomplished through DTC's DRS using DTC's Profile system.
Transfer agents are also involved in the issuance of securities, which may be one of the final stages before completing a transfer, as discussed above, or could involve a primary offering of securities such as an initial public offering. Generally, from the perspective of the transfer agent facilitating a transfer, issuance will involve a credit to the transferee's securities account, as compared to the cancellation and transfer processes discussed above, which involve debiting the securities account of the transferor.
The clock for turnaround under Rules 17Ad-1 and 17Ad-2 begins when a transfer agent receives an item and ends when a transfer agent issues the new security. Thus, from the transfer agent's perspective, issuance is what stops the clock. Rule 17Ad-2(a) generally has the effect of imposing a three day deadline on turnaround of transfer of a routine item.
Upon issuing the new security to the transferee, the transfer agent must credit the securities account of the transferee receiving the new security. This is accomplished by posting to the master securityholder file all of the certificate detail information set forth in Rule 17Ad-9(a), generally within five business days.
In the case of an uncertificated security, there is no certificate to cancel and no new certificate to be issued. Under Rule 17Ad-1(d), posting the new ownership information to the master securityholder file changes the ownership information of the securities account and “completes registration of change in ownership of all or a portion of those securities.”
Transfer agents are also responsible for countersigning securities upon issuance, which provides critical authentication of a security by an independent, outside actor. In general, “countersigning” means a signature added to a document previously signed by another person for authentication or confirmation. The second signature confirms the first signature, and the two signatures together are intended to show the certificate's legitimacy. In the case of certificated securities, the first signer is typically an officer of the issuing corporation, and the countersigner is typically an independent officer of the issuer's transfer agent. The procedures involved in countersignature of physical certificates are not mandated by the Exchange Act,
In the case of DRS shares, where no certificate exists, an investor has the option of having his or her ownership of securities registered in book-entry form on the issuer's records or on the books of the issuer's transfer agent, and in either case the investor receives a “statement of ownership.”
A corporate action is an event in the life of a security, typically instigated by the issuer, which affects a position in that security.
Transfer agents may perform a variety of roles and provide a variety of services, depending on the type and nature of the corporate action. For example, a transfer agent may take on the role of exchange agent in a mandatory corporate action, such as a stock-for-stock merger or a cash-for-stock merger. In a stock-for-stock merger the exchange agent might facilitate the surrender of outstanding securities for new securities, and in a cash-for-stock merger the exchange agent might facilitate the exchange of outstanding securities for cash.
In both of these examples, under Rule 17Ad-10, the transfer agent performing exchange agent services generally must update the master securityholder file with certificate details within five business days. But because the transfer associated with some of the most common corporate actions qualify as non-routine items under Rule 17Ad-1, including transfers “in connection with a reorganization, tender offer, exchange, redemption, or liquidation,”
Voluntary corporate actions, which permit securityholders to choose among different options, may result in the need for additional tasks and systems for transfer agents to process them. For example, in addition to the ordinary recordkeeping tasks, the transfer agent may be responsible for monitoring whether elections have been made by deadlines and for tracking such elections.
In addition to the examples discussed above, transfer agent roles in connection with corporate actions may also include serving as: (i) Tender agent, when the transfer agent collects shares surrendered from securityholders and makes payments for the shares at a predetermined price; (ii) exchange agent, when the transfer agent collects shares surrendered from securityholders and issues, registers, and/or distributes shares of the bidding company's securities as compensation for tendered securities of the subject company; (iii) subscription agent, when the transfer agent invites existing equity securityholders of an issuer to subscribe to a new issuance of additional debt or equity of the issuer; (iv) conversion agent, for example when the transfer agent converts debt securities into equity securities; and (v) escrow agent, when the transfer agent holds an asset on behalf of one party for delivery to another party upon specified conditions or events.
Finally, transfer agents providing corporate action services may be subject to Rule 17Ad-12 and 17Ad-13, regarding safeguarding requirements for funds and securities and an annual audit of internal control of safeguarding procedures. As discussed above, corporate actions may involve transfer agents making distributions on behalf of issuers to securityholders of cash and stock dividends as well as principal and interest payments on debt securities. Rule 17Ad-12(a) requires that:
Any registered transfer agent that has custody or possession of any funds or securities related to its transfer agent activities shall assure that: (1) All such securities are held in safekeeping and are handled, in light of all facts and circumstances, in a manner reasonably free from risk of theft, loss or destruction . . .; and (2) All such funds are protected, in light of all facts and circumstances, against misuse.
Rule 17Ad-13 requires every registered transfer agent to file an annual report with the Commission and the transfer agent's ARA prepared by an independent accountant concerning the transfer agent's system of internal accounting controls and procedures for, among other things, safeguarding of securities and funds. Specifically, Rule 17Ad-13(a)(2)(iii) requires the report to cover “[t]ransferring record ownership as a result of corporate actions” and Rule 17Ad-13(a)(2)(iv) requires the report to cover “[d]ividend disbursement or interest paying-agent activities.”
One of the key rights of securityholders is the right to vote their shares on important matters that affect the companies they own. Pursuant to state corporate law, registered securityholders may either attend a meeting to vote shares in person or authorize an agent to act as their “proxy” at the meeting to vote their shares pursuant to their voting instructions.
The process in the United States for distributing proxy materials and soliciting, tabulating, and verifying votes by securityholders is complex, especially with respect to beneficial securityholders.
In addition, under many state statutes, an issuer must appoint a vote tabulator (sometimes referred to as the “inspector of elections” or “proxy tabulator”) to collect and tabulate the proxy votes as well as ballot votes cast in person by registered owners at a securityholder meeting.
All transfer agents also provide some level of securityholder communications services. The level of services may depend on the type or size of the issuer, but at a minimum, most transfer agents facilitate the mailing of quarterly and annual statements with details of holdings, transaction confirmations, and letters or communications confirming other transactions, such as address-change confirmations. Many transfer agents also provide tax reporting services, including sending tax forms such as W-9, W-8BEN, 1099-DIV, and 1099-B.
Most transfer agents also receive and respond to inquiries and requests by securityholders and non-securityholders,
One aspect of these securityholder services is lost certificate replacement. If a securityholder loses a certificate, the old certificate must be cancelled and new shares issued, either in certificated or book-entry form. Transfer agents facilitate this process by processing the request and replacing the lost or missing certificate. Generally, the securityholder will be required to fill out a declaration, affidavit, or other form with identifying information and a description of the circumstances giving rise to the loss and pay a fee to the transfer agent for processing the request. Most transfer agents will also require a surety bond to indemnify the issuer and transfer agent against any potential losses in connection with the missing or replacement certificate in the event it is later presented for transfer or conversion. The transfer agent will then report the lost or missing certificate to SIC pursuant to Rule 17f-1, as described above in Section II.B.
Although not addressed directly in the transfer agent rules, most transfer agents today provide assistance with issuers' obligations to comply with various state and federal laws, including the federal securities laws, because many issuer compliance obligations fall directly into areas in which the transfer
Finally, transfer agents spend a much greater amount of time and resources on assisting issuers with their escheatment obligations under state law than they have done historically. Escheatment is the process of transferring abandoned property to the state or territory. All 50 states, Washington, DC, Puerto Rico, and all U.S. territories have abandoned property laws which apply to any type of holding, including stock and associated payments made to securityholders, such as dividend payments. When a property owner fails to demonstrate ownership of property—for example, by not cashing dividend checks or responding to mailings—for a period of time, that property is deemed abandoned and is turned over to the state. The state then converts the property to cash within 30 days to two years. A securityholder who is holding securities that have been escheated will only be able to reclaim the sale price the state received, without interest, not the securities themselves.
Pursuant to these abandoned property laws, issuers, through their transfer agents, are required to report when property is deemed to be abandoned based on the applicable abandoned property statute. Thus, issuers are required to file abandoned property reports annually with the individual states and U.S. territories, and to turn over abandoned property according to individual state laws. Failure to file on time can result in significant penalties and interest fees per year.
Transfer agents typically assist issuers with initial escheatment filings with the states in which securityholders have abandoned property, and then an annual filing every year after that with those states. In addition to fulfilling reporting requirements, typical activities may include attempted communications with the securityholder, maintaining up-to-date knowledge of federal and state escheatment requirements, proper accounting and handling of property prior to escheatment, and appropriate transfer of property.
An advance notice of proposed rulemaking provides notice to the public that the agency is considering rulemaking in an area so that the public can participate in the formulation of potential future rules and can help shape a future notice of proposed rulemaking. Through this advance notice of proposed rulemaking, the Commission is requesting comment on specific areas and topics with respect to transfer agent regulation. As noted earlier, the Commission then intends to review comments and to then propose new rules, as soon as is practicable, either individually or in groups or phases to expedite the rulemaking process.
In particular, based on our current understanding of transfer agents and their functions, the Commission intends to propose new or amended rules to: (1) Expand the scope of information collected by Forms TA-1 and TA-2 and capture all such information in a structured, electronic format as needed to enhance aggregation, comparison, and analysis; (2) require that any arrangement for transfer agent services between a registered transfer agent and an issuer be set forth in a written agreement that addresses topics such as the transfer agent services to be provided, the fee schedule, and requirements for the handing over of transfer agent records to the successor transfer agent; (3) enhance transfer agents' requirements for the safeguarding of issuer and securityholder funds and securities; (4) apply an anti-fraud provision to specific activities of transfer agents; (5) require transfer agents to establish business continuity and disaster recovery plans; (6) require transfer agents to establish basic procedures regarding the use of information technology, including methods of safeguarding personally identifiable information; (7) revise the recordkeeping requirements to more fully capture the scope of a transfer agent's business activities; and (8) conform and update various terms and definitions to reflect modern systems and usage, as well as the elimination of obsolete rules, such as those addressing Y2K issues.
In addition to the specific requests for comments in each section below, we also seek comment on the following:
1. For all regulatory issues discussed below, please comment on the need for revisions to the current regulatory framework, including the proposals described above, and the benefits they could provide for transfer agents, investors, issuers, and the capital markets. In particular, please comment on whether the proposals will increase the prompt and accurate clearance and settlement of securities transactions or have other benefits, such as reducing the potential for fraudulent activity. Please also comment on the potential effects on efficiency, competition, and capital formation of potential revisions to the current regulatory framework, if any. If you wish to comment on such potential benefits and effects, please explain the implications of any impact on competition, economic efficiency, capital formation, and the behavior of affected market participants, including transfer agents, issuers, and investors. For each benefit, effect and implication, provide supporting evidence and/or explain how such evidence may be obtained. Also please describe the current competitive landscape for each such affected transfer agent service. For example, to the extent possible, provide evidence on the identities of current providers, their market shares, their ease or cost of entry and exit, the cost to issuers of switching transfer agents, and the frequency of any such switching. Are there any other issues that are not discussed below but that should be addressed? If so, what are they and how should they be addressed?
2. For all regulatory issues discussed below, please comment on any potential interplay between applicable SRO rules and the potential revisions to the current regulatory framework for transfer agents discussed herein, including any potential conflicts that should be considered or resolved. Please provide a full explanation.
3. Are there specific areas where transfer agents need additional guidance or regulatory clarity regarding the applicability of current rules? How could such guidance best be provided? Would rule modification, staff guidance, or an industry roundtable be helpful?
4. Should the Commission prioritize certain of the proposed rule changes discussed in this Advance Notice of Proposed Rulemaking over others? If so, which ones and why? Are there other rule changes besides those discussed in this Advance Notice of Proposed Rulemaking that the Commission should prioritize? Please explain.
As discussed generally above in Section IV.A, Forms TA-1 and TA-2 are used to: (i) Help regulators, issuers, investors, and other interested parties determine whether a transfer agent is and will continue to be able to perform its functions properly; (ii) help regulators, issuers, investors, and other interested parties determine the nature of the business conducted by a particular transfer agent; (iii) permit the Commission to effectively target its transfer agent inspection program, including assisting examiners in preparing for and conducting transfer agent examinations; (iv) monitor transfer agent activity generally; (v) enable Commission staff to evaluate particular burdens and benefits that would be placed on the industry in potential rulemaking endeavors; and (vi) assist the Commission and Commission staff in assuring that rules are properly focused and refined.
To assure that Forms TA-1 and TA-2 continue to serve the regulatory goals described above, especially in light of the expanded scope of transfer agents' activities as discussed throughout this release, the Commission intends to propose amendments to the forms to include disclosure requirements with respect to certain financial information, such as the financial reports discussed below in Section VI.C (
A requirement that transfer agents and their officers and directors disclose any past or present affiliation with issuers serviced by, or broker-dealers affiliated with, the transfer agent could reveal instances where a transfer agent or its officers and directors have an ownership interest in such issuers and broker-dealers, including details about how the interest was obtained. Such disclosures could provide transparency about the existence of possible financial interests or other potential conflicts of interest that could incentivize a transfer agent to facilitate an improper transfer or engage in other improper conduct.
Financial disclosures may include annual financial statements using a data-tagged format, such as XBRL, broken out by the asset classes serviced by the transfer agent, such as equities, debt, and investment companies.
The Commission seeks comment on the following:
5. Should the Commission require any of the registration and disclosure items discussed above? Why or why not? Should the Commission consider other requirements? Please explain. What would be the benefits and costs associated with any such requirements? Please provide empirical data. If the Commission were to require transfer agents to disclose financial information, what information should be required, and why? Would requiring such information to be disclosed on Forms TA-1 and/or TA-2 be an effective and appropriate measure? What would be the benefits and costs associated with any such requirement?
6. Should the Commission consider amending the registration process to allow for the issuance of an order approving a transfer agent's TA-1 application before that application becomes effective, rather than having such applications become effective automatically after 30 days? Should the Commission consider making certain findings before approving a transfer agent's application? If so, what should those findings be? Should the Commission impose threshold requirements that transfer agents must satisfy before their applications can become effective? If so, what would they be?
7. The Commission intends to propose to require transfer agents to submit annual financial statements. Should these statements be required to be audited? Why or why not?
8. Should the Commission require that annual financial statements be submitted using a data-tagged format such as XML or XBRL? Would such a requirement require changes to the U.S. GAAP Taxonomy in order to capture the information included in transfer agents' financial statements? Why or why not? Should some other electronic format be required or permitted?
9. Does the receipt of securities as payment for services create conflicts of interest for transfer agents, and if so, should the Commission require that such payments be disclosed? The Commission intends to propose to amend Forms TA-1 and/or TA-2 to require transfer agents to disclose all actual and potential conflicts of interest. Should it do so? Why or why not? Should the Commission provide any guidance as to what constitutes a conflict of interest? Why or why not? Has the proliferation of the types of services offered by transfer agents in recent years created new conflicts of interest? How might transfer agents' conflicts of interest differ depending upon whether the transfer agent is paid by the issuer, the shareholder, or some combination thereof? Is disclosure of conflicts of interest a sufficient safeguard for investors? Should the Commission ban certain conflicts of interest entirely? For example, should the Commission prohibit transfer agents from having certain affiliations with issuers or broker-dealers, or from providing certain services if they have such affiliations? Please provide a full explanation.
10. Should the Commission amend Forms TA-1 and/or TA-2 to require transfer agents to disclose information regarding the fees imposed or charged by the transfer agent for various services or activities? If so, what type of information or level of detail should be required? Should the Commission require that fee disclosures be standardized to facilitate comparison? Should fees charged to both issuers and directly to shareholders be required to be disclosed? Please provide a full explanation.
11. To increase the ability of the Commission to monitor trends, gather data and address emerging regulatory issues, should the Commission require registered transfer agents to file material contracts with the Commission as exhibits to Form TA-2? What costs, benefits and burdens, if any, would this create for issuers or transfer agents? Should the Commission establish a materiality threshold or provide guidance on materiality were it to propose such a rule? Please provide a full explanation.
12. Should the Commission amend Forms TA-1 and/or TA-2 beyond any changes discussed above? If so, what amendments should the Commission consider in making that determination and why? Please provide a full explanation.
13. What costs, benefits, and burdens, if any, would the potential requirements discussed above create for issuers or transfer agents?
Transfer agency agreements between transfer agents and issuers are mainly governed by state contract law.
However, some transfer agents, often smaller transfer agents that may primarily service smaller issuers, may not document their arrangements with issuers in a written agreement or, even if they do enter into a written agreement, it may not cover all of the subjects identified above. Based on the Commission staff's experience administering the Commission's transfer agent rules and examination program, it appears that such undocumented or under-documented arrangements may be more likely than written agreements to lead to protracted disputes, especially with respect to: (1) The duration of the arrangement; (2) the conditions of the arrangement's termination; (3) the disposition of the securityholder records after termination or notice of termination; and (4) the fees charged by the transfer agent. Such disputes may interfere with the operations of the markets and the protection of investors by disrupting or otherwise hindering transfer agent processing, recordkeeping, and safeguarding. For example, it is the Commission staff's understanding that some transfer agents, after having been terminated by the issuer, have substantially delayed the handing over of securityholder records to successor transfer agents by demanding that the issuer pay a substantial “termination” fee before the transfer agent would agree to hand over the securityholder records it had been maintaining, even though the issuer claimed there was no written agreement in place or it had otherwise not agreed to such a fee.
The Commission believes that the existence of a written agreement that describes the ongoing relationship under which a transfer agent and an issuer will operate, including the terms under which the agreement between them may be terminated, could help to avoid such disputes, including disputes over agreed-upon fees, and could help ensure the timely and appropriate turnover of an issuer's shareholder records upon the termination of the written agreements. If the relationship between an issuer and a transfer agent is terminated and the issuer engages a new transfer agent, it is essential to the issuer, its securityholders, and the market participants who may seek to trade the issuer's securities, that the issuer's records are promptly delivered to the new transfer agent to provide an orderly continuity of services.
Among the issuer's records and related documents typically in the possession of its transfer agent are: (1) The master securityholder file with the names and addresses of current securityholders and the amount of securities owned by each holder;
The Commission therefore intends to propose amendments to the transfer agent rules to require that any arrangement for transfer agent services between a registered transfer agent and an issuer be set forth in a written agreement that covers certain basic topics, such as the transfer agent services to be provided, the terms of payment and fees to be imposed, particularly any termination fees, and requirements for the turnover of transfer agent records to the successor transfer agent. The Commission further intends to propose new or amended rules requiring transfer agents to pass through certain records to newly appointed or successor transfer agents in a prompt, complete, and uniform manner.
The Commission seeks comment on the following:
14. Should the Commission require that any arrangement for transfer agent services between a registered transfer agent and an issuer be set forth in a written agreement? Why or why not? What are the alternative means of achieving similar objectives, and are they as effective or efficient? If the Commission were to require a written agreement, should it cover certain topics? If so, what topics? For any such provisions or topics, are there asymmetries in information or other areas between transfer agents and issuers that the Commission should consider in connection with such contractual provisions? For what types of transfer agents, or in what types of such relationships, do these asymmetries most frequently arise, and where are they most acute? Please provide a full explanation and supporting evidence.
15. How are fees set out in transfer agent agreements today? Do issuers find it difficult to fully understand the fee structures offered by transfer agents, and how do those fee structures work in practice? Should the Commission require that all fee arrangements between an issuer and a transfer agent be set forth and specified in a written agreement? Why or why not? Should the Commission require that transfer agents disclose their fee arrangements in their filings with the Commission? If so, should transfer agents be required to utilize a standardized framework
16. Currently, transfer agents are not required by rule to pass through specified records to successor transfer agents. Are issuers or transfer agents aware of instances where records have not been passed from one agent to the next, or agents have not done so in a prompt manner? Are commenters aware of disputes between transfer agents and their issuer clients or successor transfer agents with respect to the transfer of records to a successor transfer agent? How was the situation resolved? Have transfer agents demanded previously undisclosed termination fees, or fees inconsistent with what those parties previously agreed to, in exchange for turning over records to a successor? Would the anticipated proposed rules described above help avoid or resolve any disputes between transfer agents and issuers or successor-transfer agents with respect to the transfer of records? Please provide a full explanation and supporting evidence.
17. What costs, benefits, and burdens, if any, would a written agreement create for issuers or transfer agents?
Because transfer agents already facilitate securities transfers and maintain securityholder records, approximately one-third of them are engaged by issuers to provide administrative, recordkeeping, and processing services related to the distribution of cash and stock dividends, bond principal and interest, mutual fund redemptions, and other payments to securityholders.
Additionally, the Commission's staff understands that transfer agents may hold residual funds from thousands to millions of dollars and securities for long periods of time ranging from over a month to several years, before distributing the funds or securities either to the intended recipients or escheating the funds or securities to a state or territory.
As demonstrated by the Paperwork Crisis, the financial crisis of 2008, the 2012 flooding of the DTCC securities vault in New York during Superstorm Sandy,
Further, even routine paying agent activity, such as dividend distribution processing, may be complex. For example, after determining record date eligibility, the paying agent (who may be a transfer agent) will calculate and balance the cash dividend amount or, in the case of a stock dividend, the equivalent number of shares, which the transfer agent will issue, register, and deliver, either in certificated or book-entry form. The paying agent may then
Other distributions, like those arising from lawsuits or settlements, may require special attention. For example, to ensure that only investors who held shares between specific dates or meet other detailed tests are compensated for a specific settlement, transfer agents who are engaged to perform distribution activities must carefully review ownership records to determine who is entitled to receive a payment and in what amount. Any processing errors at any point in this complex process could present substantial risks for both issuers and securityholders. For example, if there is a substantial positive adjustment to the share price following the payment date, a transfer agent's failure to calculate or distribute the correct amounts to securityholders could create risk of loss of funds or securities for investors, as well as risk of liability for the issuer, transfer agent, and others involved in the processing. A transfer agent's inadvertent failure to reinvest a dividend payment or an erroneous distribution of a cash payment could create similar risks.
Despite the amounts involved and risks posed, only one of the existing transfer agent rules—recently amended Rule 17Ad-17—specifically refers to and directly addresses certain limited conduct of paying agents.
More specificity and a more robust set of standards against which paying agent activities can be measured may be necessary to better protect investors, facilitate the prompt and accurate clearance and settlement of securities transactions, and keep pace with the evolving roles transfer agents occupy in this space. We intend to propose new rules or rule amendments to address transfer agents' expanded role in handling investor funds and securities, as well as the increase in the number and types of transactions currently facilitated by transfer agents. In particular, the Commission intends to propose new rules or amend Rule 17Ad-12 to require transfer agents to comply with specific minimum best practices requirements related to safeguarding funds and securities, such as: (i) Maintaining secure vaults; (ii) installing theft and fire alarms; (iii) developing specific written procedures for access and control over securityholder accounts and information; (iv) enhanced recordkeeping requirements; and (v) specific unclaimed property procedures. The Commission also intends to propose a rule requiring transfer agents to segregate client funds to ensure that bank accounts are appropriately designated to protect client funds from being counted as transfer agent funds in the event of insolvency, and to obtain written notification from banks holding the funds that the funds are for the exclusive benefit of the customers, not the transfer agent.
In addition, the Commission intends to propose new rules for transfer agents similar to those recently adopted for registered broker-dealers regarding amended annual reporting, independent audit, and notification requirements, which are designed to, among other things, increase broker-dealers' focus on compliance and internal controls.
The Commission seeks comment on the following:
18. Would the anticipated proposals described immediately above appropriately
19. Should the Commission require transfer agents to file on a periodic basis information disclosing whether and how a transfer agent maintains custody of issuer and securityholder funds and securities, similar to the information broker-dealers are required to report quarterly? Why or why not? What benefits, costs, and burdens would result? Please provide a full explanation.
20. In addition or as an alternative to the anticipated proposals described above, should the Commission provide specific guidelines or requirements for transfer agents' paying agent and custody services? Why or why not? What should those guidelines or requirements be? Do commenters believe the lack of such guidelines or requirements results in varying practices and standards among transfer agents, or specific areas of weakness or risk? Why or why not? Please provide a full explanation.
21. What are the current best practices with respect to the safeguarding of funds and securities (
22. What are the current best practices with respect to the creation, maintenance, and reconciliation (or other use) of financial or other records that might bear upon the safety of customer funds and securities? Should the Commission require any such best practices, such as: (i) Monitoring the financial position of the transfer agent by preparing, maintaining, and reconciling financial books and records, including a statement of financial condition, a statement of income, a statement of cash flows, and certain other financial statements; and (ii) adopting internal written procedures or specific internal controls requiring the monthly reconciliation of all bank accounts used in a transfer agent's business, and requiring audits of the effectiveness of these internal controls by independent public accountants? Why or why not? Please provide a full explanation.
23. Should the Commission require transfer agents to file certain additional reports prepared by an independent public accountant on the transfer agent's compliance and internal controls? Why or why not? In connection with any such requirement, should the Commission require transfer agents to allow representatives of the Commission or other ARA to review the documentation associated with certain reports of the transfer agent's independent public accountant and to allow the accountant to discuss with representatives of the Commission or ARA the accountant's findings associated with those reports when requested in connection with an examination of the transfer agent? Why or why not? Please provide a full explanation.
24. Do commenters believe that there are different risks associated with transfer agents maintaining issuer or securityholder funds at banks that are part of the same holding company structure as the transfer agent, as opposed to a wholly unaffiliated bank? Why or why not? If there are distinct risks, should the Commission act to mitigate those risks, and if so, how? Should the Commission prohibit a transfer agent from maintaining issuer and securityholder funds at a bank that is affiliated with the transfer agent? If so, how should “affiliated bank” be defined? Should transfer agents that are also custodian banks be required to maintain a segregated special account or accounts at an unaffiliated bank or other approved location? Why or why not? Please provide a full explanation.
25. If transfer agents were to be required to deposit or transmit issuer and securityholder funds into a special bank account, should the Commission also limit the amount of funds that could be deposited in special accounts at a bank to reasonably safe amounts, whether the bank is affiliated or non-affiliated? Why or why not? If so, what amounts should the Commission consider reasonably safe? Should such amounts be measured against the capitalization of the transfer agent and/or the bank? Why or why not? Please provide a full explanation.
26. What are the current insurance requirements and/or practices among transfer agents, and what is the source of those requirements and/or practices? Would different or additional insurance requirements address current paying agent risks, such as loss or misuse of funds? Why or why not? If so, what types and amounts of insurance would be sufficient to address current paying agent risks? Why? If the Commission proposes specific insurance requirements for transfer agents, should it also require transfer agents to establish and maintain written policies and procedures describing their process for evaluating and procuring insurance (such as fidelity, professional indemnity, cybersecurity, errors and omissions and surety coverage) and for determining the coverage amounts? Should the transfer agent's annual accountant's report on internal controls required by Rule 17Ad-13 include verification that the transfer agent has fulfilled these requirements? Please provide a full explanation.
27. What are the industry best practices with respect to safeguarding procedures specific to residual or unclaimed funds and securities remaining in the transfer agent's possession or control post-payment but prior to the successful distribution to securityholders or escheatment to a state or territory?
28. If the Commission were to require transfer agents to disclose information pertaining to residual or unclaimed funds, what type of information and level of detail should be required, and how frequently should it be required to be reported? What would be the cost, burdens or benefits, if any, of such disclosure for issuers or transfer agents?
29. Currently, Rule 17Ad-5 only requires a transfer agent who has not handled disbursements or dividends for at least three years to respond to inquiries by simply indicating the agent is no longer the paying agent. What volume of such requests do paying agents typically receive annually? Do paying agents typically know who the current agent is? What would be the costs, burdens or benefits if paying agents were required to provide such information? Please provide a full explanation.
30. What would be the costs, benefits, and burdens, if any, of the proposals described above?
Transfer agents play a particularly important role in the securities industry with respect to the issuance and transfer of restricted securities. Restricted securities cannot be resold legally unless there is an effective registration statement for their resale, or there is an available exemption from registration for the resale. Typically, these securities bear restrictive legends indicating that their sale or transfer may be subject to a restriction or limitation and intermediaries will not effectuate their transfer until restrictive legends are removed. Because transfer agents are often the party responsible for affixing, tracking, and removing restrictive legends, they play an important role in helping to prevent unregistered securities distributions that violate Section 5 of the Securities Act of 1933 (“Securities Act”).
The Commission's experience in investigating abuses in the microcap market and bringing enforcement actions charging violations of the federal securities laws demonstrates how the removal of restrictive legends can often be a central element contributing to illegal, unregistered distributions of securities. While these actions typically involve misconduct by persons other than the transfer agent, the Commission has charged transfer agents as culpable participants in a variety of circumstances. Transfer agents may face potential liability for aiding and abetting
Some transfer agents have expressed concern, however, that they perceive a conflict in some instances between their obligation to take appropriate steps to forestall an illegal distribution, and their obligation under state law to comply with a valid request to issue a security or facilitate a transfer, which may require removal of a restrictive legend.
More specificity around transfer agents' responsibilities with respect to illegal distributions may help to better protect investors, facilitate the prompt and accurate clearance and settlement of securities transactions, and combat fraud and manipulation in the microcap market. We therefore intend to propose new rules or rule amendments to address transfer agents' role in facilitating transfers of securities that result in illegal distributions of securities. In particular, the Commission intends to propose a new rule prohibiting any registered transfer agent or any of its officers, directors, or employees from directly or indirectly taking any action to facilitate a transfer of securities if such person knows or has reason to know that an illegal distribution of securities would occur in connection with such transfer.
We also intend to propose a new rule prohibiting any registered transfer agent or any of its officers, directors, or employees from making any materially false statements or omissions or engaging in any other fraudulent activity in connection with the transfer agent's performance of its duties and obligations under the Exchange Act and the rules promulgated thereunder, including any new or amended rules the Commission may promulgate in the future, such as those dealing with transfer agents' safeguarding, paying agent, and other activities discussed above in Section VI.C and throughout this release. We also intend to propose a new rule requiring each registered transfer agent to adopt policies and procedures reasonably designed to achieve compliance with applicable securities laws and applicable rules and regulations thereunder, and to designate and specifically identify to the Commission on Form TA-1 one or more principals to serve as chief compliance officer.
The Commission seeks comment on the following:
31. Is there a need for Commission rules clarifying transfer agent liability for participating in or facilitating an unlawful distribution of securities in violation of Section 5 of the Securities Act? Why or why not? If so, what rules should be considered?
32. Currently, there are no specific Commission rules regarding the placement or removal of restrictive legends by transfer agents. Is there a need for Commission rules governing the role of transfer agents in
33. Should the Commission provide specific guidelines and requirements for registered transfer agents in connection with removing a restrictive legend and in connection with issuing any security without a restrictive legend, such as: (1) Obtaining an attorney opinion letter; (2) obtaining approval of the issuer; (3) requiring evidence of an applicable registration statement or evidence of an exemption; and/or (4) conducting some level of minimum due diligence (with respect to the issuer of the securities, the shareholder and/or the attorney providing a legal opinion)? Why or why not? Should the Commission also consider specific recordkeeping and retention requirements related to the issuance of share certificates without restrictive legends? Why or why not? How should book-entry securities be addressed? Are there other guidelines or requirements the Commission should consider with respect to the issuance of share certificates or book-entry securities without restrictive legends?
34. If the Commission were to issue any standards for restrictive legend removal, what would be an appropriate level of due diligence? Should any due diligence requirements be compatible with current state law governing the issuance and transfer of securities? Should the Commission consider specific guidelines and requirements for the review of representations that a shareholder is not an affiliate of the issuer or is not acting in coordination with other shareholders? Why or why not? If so, what guidelines or requirements should be considered? Should the Commission consider specific guidelines and requirements regarding transfer agents' obligations to review or determine the ultimate beneficial ownership of shares, identification of control persons of the shareholders, and relationship of shareholders to the issuer, officers or each other?
35. Do transfer agents currently possess detailed and accurate information regarding the ownership history of the securities they process? For example, do transfer agents know whether the securities they process were ever owned by a control person or other affiliate of the issuer, and for how long? If so, how do they know this? If transfer agents possess such information, do they provide it to other market intermediaries, such as broker-dealers and securities depositories? If not, should transfer agents be required to do so? Has the inability of broker-dealers and other market intermediaries to obtain detailed and accurate securities ownership information facilitated the unlawful distribution of securities? Has it impaired secondary market liquidity, such as by making other market intermediaries unwilling or less willing to handle certain securities? If so, how can the Commission address these issues?
36. Should transfer agents be permitted to rely on the written legal opinion of an attorney under certain circumstances? If so, what should those circumstances be? For example, should there be requirements regarding the attorney's qualifications or the attorney's relation to the issuer or investor? Is it appropriate for transfer agents to rely on attorney opinion letters to the extent the letters are based on representations of the issuer or third parties without the attorney's review of relevant documentation or independent verification of the representations?
37. Should the Commission obligate transfer agents to: (i) Confirm the existence and legitimacy of an issuer's business (for example by reviewing leases for corporate offices, etc.); (ii) obtain names and signature specimens for persons the issuer authorizes to give issuance or cancellation instructions, together with any documents establishing such authorization; (iii) conduct credit and criminal background checks for issuers' officers and directors and shareholders requesting legend removal; (iv) obtain and confirm identifying information for shareholders requesting legend removal (
38. Should the Commission enumerate a non-exhaustive list of “red flags” or other specific factors which would trigger a duty of inquiry by the transfer agent? Why or why not? If so, which “red flags” should be included?
39. Are there types of securities or categories of transactions commenters believe should require a heightened level of scrutiny or review by transfer agents before removing a restrictive legend or processing a transfer? If so, which ones and why? What should any such heightened scrutiny or review entail? For example, should the Commission require additional diligence requirements for securities offered by issuers that are not required to file financials with the Commission? Why or why not?
40. The Commission is aware that industry participants have suggested that the Commission provide a safe harbor for transfer agents from direct liability or secondary liability (
41. Other than ensuring that the removal of restrictive legends is appropriate and not a means to sidestepping registration requirements, what requirements or prohibitions, if any, should the Commission consider as additional protections against the unlawful distribution of unregistered securities? For example, should transfer agents be required to deliver securities certificates directly to registered securityholders or be prohibited from delivering securities certificates to third parties that are not registered as owners of the certificates on the transfer agents' books? Why or why not?
42. In what form (
43. The Commission's staff understands that transfer agents may receive compensation in-kind in the form of securities of the issuer that hired the agent to remove restrictive legends. Does this create additional or different risks than if the transfer agent were paid in cash? If so, should the Commission limit transfer agents' acceptance of securities as payment for services related to penny-stock securities or small issuers, or acquiring shares of the issuers they are servicing through other means, such as gift or purchase? Why or why not?
44. What costs, benefits, and burdens, if any, would the potential requirements discussed above create for issuers or transfer agents?
45. Should the Commission require transfer agents to maintain, implement, and enforce written compliance and/or supervisory policies and procedures, similar to those required of broker-dealers? Why or why not? If so, what policies and procedures should be required? Should the Commission require transfer agents to disseminate written policies and procedures to all employees of the transfer agent on an annual or semi-annual basis? Why or why not? Please explain.
46. Should the Commission adopt rules requiring registered transfer agents to designate and identify a chief compliance officer? Why or why not? If so, should the Commission adopt rules governing the reporting lines and relationships of the chief compliance officer? Should the chief compliance officer be required to file an annual compliance report with the Commission? Why or why not? If so, what information should be included in the annual compliance report?
47. Should the Commission require transfer agents to undertake security checks or confirm regulatory and employment history for employees, certain third-party service providers, and associated persons,
48. Should the Commission require transfer agents to obtain certain information concerning their issuer clients, clients' securityholders and their accounts, and securities transactions? Why or why not? Please explain and provide supporting evidence where applicable. Should transfer agents be required to perform a form of due diligence on their clients and the transactions they are asked to facilitate, similar to the know-your-customer requirements applicable to broker-dealers? Should transfer agents be required to obtain a list of all affiliates of their issuer clients—including current and former control persons, promoters, and employees—and to take special precautionary steps whenever they are asked to process transactions for these affiliates?
49. Should the Commission require transfer agents to maintain originals of all communications received and copies of all communications sent (including both paper and electronic communications) to or from the transfer agent related to its business? Why or why not? Please explain.
Cybersecurity risk is a specific type of operational risk and includes risks related to the security of data stored on computers, networks, and similar systems, and technology-related disruptions of operational capacity. Given the increased use of and reliance on computers, networks, and similar systems throughout society, cybersecurity threats are omnipresent today. They come from many sources and present a significant risk to a wide range of American interests, including critical governmental and commercial infrastructures, the national securities markets, and financial institutions and other entities that are involved in the National C&S System. In 2012, a single group targeted and attacked more than a dozen financial institutions with a sustained Distributed Denial of Service attack on those institutions' public Web sites.
Cybersecurity risks faced by the capital markets and Commission-regulated entities are of particular concern to the Commission. Given the highly-dependent, interconnected nature of the U.S. capital markets and financial infrastructure, including the National C&S System, as well as the prevalence of electronic book-entry securities holdings in that system, the Commission has a significant interest in addressing the substantial risks of market disruptions and investor harm posed by cybersecurity issues.
Transfer agents are subject to many of the same risks of data system breach or failure that other market participants face. With advances in technology and the enormous expansion of book-entry ownership of securities, transfer agents today rely more heavily than ever on technology and automation for their core recordkeeping, processing, and transfer services, especially the use of computers and networks to store, access, and manipulate data, records, and other information. As a result, modern transfer agents are vulnerable to a variety of software, hardware, and information security risks which could threaten the ownership interest of securityholders or disrupt trading not only among registered securityholders but, because of transfer agents' electronic linkages to DTC, also among street name owners. For example, a software or hardware glitch, technological failure, or processing error by a transfer agent could result in the corruption or loss of securityholder information, erroneous securities transfers, or the release of confidential securityholder information to unauthorized individuals. A concerted cyber-attack or other breach could have the same consequences, or result in the theft of securities and other crimes.
Cybersecurity issues have been analyzed and discussed in detail over the last several years in a variety of fora.
In 2014, the Commission adopted Regulation Systems, Compliance and Integrity (“Reg SCI”), which requires entities covered by the rule to test their automated systems for vulnerabilities, test their business continuity and disaster recovery plans, notify the Commission of cyber intrusions, and recover their clearing and trading operations within specified time frames.
To address cybersecurity risk issues faced by financial institutions (as defined in the Fair Credit Reporting Act) that are registered with the Commission, in 2013 the Commission adopted Regulation S-ID, which requires these entities to adopt and implement identity theft programs.
Finally, Regulation S-P was adopted in 2000 and requires certain Commission-registered entities to adopt measures to protect sensitive consumer financial information.
Further, as discussed above, the Commission's efforts to address transfer agents' safeguarding obligations, including the adoption and application of Rule 17Ad-12,
In light of the foregoing, the Commission intends to propose certain amendments to the transfer agent rules to address how technology in general and cybersecurity risks in particular affect transfer agents and their activities, and how transfer agents' technology and information systems, including securityholders' data and personal information, may be related to their safeguarding activities. In particular, the Commission intends to propose new or amended rules requiring registered transfer agents to, among other things: (i) Create and maintain a written business continuity plan, tailored to the size and activities of the transfer agent, identifying procedures relating to an emergency or significant business disruption, including provisions such as data back-up and recovery protocols; (ii) create and maintain basic procedures and guidelines governing the transfer agent's use of information technology, including methods of safeguarding securityholders' data and personally identifiable information; and (iii) create and maintain appropriate procedures and guidelines related to a transfer agent's operational capacity, such as IT governance and management, capacity planning, computer operations, development and acquisition of software and hardware, and information security.
The Commission seeks comment on the following:
50. How do commentators understand transfer agents' safeguarding obligations as applied to uncertificated securities? Please be specific.
51. How have transfer agents' data gathering and retention practices evolved in recent years? Do transfer agents collect more or different types of information than in the past? What new risks, if any, have arisen as a result of these changes? Are there some types of information collected by transfer agents that are more valuable to cyber-attackers than others, or that could cause more harm to investors or the markets if disclosed? If so, please specify. Do transfer agents currently have special protocols to protect their most sensitive information? If not, should the Commission require them to do so?
52. Have transfer agents experienced internal or external access breaches, internal or external fraud or abuse, or other issues associated with creating, accessing, controlling, altering, or securely storing issuer or investor information or data, including securityholders' private account information and other private personal information, whether electronic or otherwise? If so, please describe the nature, extent, and resolution of such problems.
53. What are the most significant risks or threats with respect to such information and data and what challenges do transfer agents face when attempting to assure that it is created, accessed, altered, controlled, and securely stored and retained in a manner reasonably free from identified risks? What policies, procedures, or controls may be employed to mitigate these risks or threats
54. Have transfer agents identified risks related to information and data directly or tangentially related to funds and securities used in their operations, such as securityholder and account information stored on systems and in records, electronic or otherwise? Please describe the nature and scope of any such identified risks, as well as any challenges transfer agents face when attempting to mitigate them.
55. Do commenters believe that insufficient safeguarding of information and data, such as securityholder personal and account information stored in computer systems and in records, could lead to the loss of information, theft of securities or funds, fraudulent securities transfers, or the misappropriation or release of private securityholder information to unauthorized individuals? Why or why not? Are commenters aware of any such occurrences or incidents resulting from insufficient safeguarding of information? If so, please describe the nature, extent, and resolution thereof, including any steps perceived as necessary to be taken to prevent a reoccurrence.
56. What are the current industry best practices for protecting issuer or investor information or data in physical or printable records? What minimum standards, if any, should the Commission require for the safeguarding of such information or data?
57. To ensure that data, records, and other types of information stored on computers, networks, and similar systems used by various participants in the National C&S System are safeguarded in a manner that protects investors and promotes the prompt and accurate clearance and settlement of transactions in securities, should Commission requirements apply to certain types of data, records, or other information, rather than to a particular type of entity? For example, should the Commission impose specific safeguarding, recordkeeping, or other requirements on registered transfer agents and other entities registered or required to be registered with the Commission that possess or control securityholder and account information (electronic or otherwise)? Why or why not? What would be the costs, benefits, and burdens associated with such an approach? Please provide empirical data if available.
58. Should the Commission impose specific cybersecurity standards for transfer agents? If so, what should they be, and what standard would be appropriate? Should these standards vary depending on the size of the transfer agent or the nature and scope of the services it provides? Do commenters believe Reg SCI or Reg SDR provide an appropriate model for potential transfer agent rules addressing cybersecurity issues? Why or why not? If so, which aspects of Reg SCI or Reg SDR might be most appropriate given the activities of transfer agents? Are there other models that might be appropriate for the Commission to consider when developing cybersecurity rules for transfer agents? Regardless of the framework utilized, should the Commission consider requiring certain minimum cybersecurity protocols, such as practicing good cyber hygiene, patching critical software vulnerabilities, and using multi-factor authentication? Should the Commission require transfer agents to implement heightened security protocols for their most sensitive data? If so, which data would merit special protection, and what form should that protection take? Please provide a full explanation.
59. Should the Commission require transfer agents to demonstrate a certain level of operational capacity, such as IT governance and management, capacity planning, computer operations, development and acquisition of software and hardware, and information security? Why or why not? If so, what requirements should the Commission consider? For example, would it be appropriate to require transfer agents to adopt written procedures concerning all business services performed by, and IT and other systems used by, the transfer agent? Should the requirements be different depending on whether the transfer agent uses proprietary systems or contracts with outside parties for some or all of their services or IT and other systems? Should the requirements be different depending on the size of the transfer agent or the scope of its activities? Please provide a full explanation.
60. If the Commission proposes a rule requiring transfer agents to maintain a written business continuity or disaster recovery plan, what, if any, items should be required to be included in the plans in order to accomplish business continuity and disaster recovery objectives? Please provide a full explanation.
61. What risks do transfer agents face from internal or external cyber attacks? What costs, challenges, or issues do transfer agents face in dealing with those risks (
62. What tradeoffs should the Commission consider in addressing cybersecurity issues with respect to transfer agents? What evidence should it consider in evaluating those tradeoffs, including any benefits, burdens, or costs of specific rule proposals? Please provide a full explanation.
63. Are transfer agents who have offices or do business in multiple jurisdictions subject to different standards or requirements with respect to cybersecurity, data privacy or business continuity? Do those standards or requirements conflict with one another? If so, how and to what extent do those standards conflict?
64. What are the industry best practices with respect to identifying and addressing cybersecurity risk? What are the costs associated with any such best practices? Do commenters believe these costs are reasonable in light of relevant risks?
65. What are industry best practices with respect to protecting electronic communications between and among transfer agents and other market participants using standardized communication protocols and standards? Should the Commission require standards for message encryption? Why or why not? Please provide a full explanation.
66. What consequences for shareholders and issuers could result if the privacy of transfer agent records is compromised? Are there standards to which transfer agents should be required to adhere to reduce the possibility or likelihood of such an occurrence? Similarly, what consequences for shareholders and issuers could result from actions taken by impersonators due to inadequate authentication and/or attempts to cancel or repudiate previously executed instructions? Do the current processes and requirements for signature guarantees apply adequately in an electronic environment?
67. How often do transfer agents review operations and compliance policies and procedures related to cybersecurity? Are third-party vendors utilized and, if so, to what extent? Where third-party vendors are utilized, how do transfer agents conduct oversight of such vendors?
68. Should the Commission require transfer agents to have a minimum level of cybersecurity protection, and if so, what should those levels be? Should the Commission prohibit indemnification of transfer agents by issuers for liability for losses due to the agents' cybersecurity weaknesses? Why or why not?
69. Should the Commission require transfer agents to maintain minimum insurance coverage for operational risks associated with transfer agent operations and services, including cybersecurity losses? Why or why not? Should the level and type of coverage be based on the transfer agent's particular circumstances? If so, what requirements and level of coverage would be appropriate for what circumstances?
70. A new technology, the blockchain or distributed ledger system, is being tested in a variety of settings, to determine whether it has utility in the securities industry.
71. What costs, benefits, and burdens, if any, would the potential requirements
The Commission intends to propose certain amendments to Rules 17Ad-1 through 17Ad-20 designed to modernize, streamline, and simplify the overall regulatory regime for transfer agents and bring greater clarity, consistency, and regulatory certainty to the area, as well as mitigate any unnecessary costs or other burdens resulting from now obsolete or outdated requirements. In particular, the Commission intends to propose to: (i) Rescind Rules 17Ad-18 and 17Ad-21T; (ii) consolidate all definitions, including those in Rule 17Ad-1 and 17Ad-9, as well as specific definitions embedded in Rules 17Ad-5 (written inquiries), 17Ad-15 (signature guarantees), 17Ad-17 (lost securityholders), and 17Ad-19 (cancellation of securities certificates) into a single rule; (iii) update various definitions and references throughout the rules to correspond more accurately to the prevailing industry practices and standards, including clarifying that Rule 17Ad-2's turnaround provisions apply with equal force to book-entry securities and clarifying, where appropriate, that other references to “certificates” include book-entry securities, defining the terms “promptly, “as soon as possible,” and “non-routine” in Rule 17Ad-2, and other clarifications; (iv) update the current turnaround, recordkeeping, and retention requirements to correspond more closely to the operations and capabilities of modern transfer agents; (v) amend the recordkeeping and retention requirements in Rules 17Ad-7 (record retention), 17Ad-10 (prompt posting of certificate detail, etc.), 17Ad-11 (aged record differences), and 17Ad-16 (notice of assumption and termination) and consolidate them into a single rule; (vi) update the dollar and share thresholds reflected in Rule 17Ad-11 (aged record differences); (vii) amend Rule 17Ad-13 to provide additional and more useful information regarding transfer agents' internal controls; (viii) amend Rule 17Ad-15 to require transfer agents to document in writing their procedures and requirements for accepting signature guarantees; and (ix) propose other new rules and amendments designed to address certain TA activities not currently addressed by the rules, as discussed throughout this release.
Further, the Commission's core books and records rules for transfer agents, Exchange Act Rules 17Ad-6 and 17Ad-7, prescribe minimum recordkeeping requirements with respect to the records that transfer agents must make and record retention requirements specifying how long those records and other documents relating to a transfer agent's business must be kept.
72. Are any of the current transfer agent rules outdated or obsolete? If so, which ones and why? Do commenters believe that any such outdated or obsolete portions of the transfer agent rules create confusion or inefficiency among transfer agents, issuers, investors, and other market participants? Why or why not? Please provide a full explanation.
73. Should the Commission eliminate or amend any of the definitions in the transfer agent rules? If so, which ones and why? For example, should the Commission eliminate references to “control book,” “processing,” “process” deadlines, and “outside registrar”? Are there any other definitions which should be amended? Why and how? Please provide a full explanation.
74. Should the Commission eliminate the current exemption in Rule 17Ad-4 for small transfer agents? Why or why not? Have circumstances in the industry changed such that the original rationale for this exemption should be reconsidered? Should the Commission take into account the size of a transfer agent, or any other measure, in determining whether the current exemption is appropriate? Why or why not? Please provide a full explanation.
75. Currently, Rule 17Ad-5 (written inquiries and requests) permits transfer agents to respond to certain instructions and inquiries “promptly” rather than within a specified time period unless the requestor provides specific detailed information, such as a certificate number, number of shares, and name in which the certificate was received. In commenters' experience, is the detailed information specified in Rule 17Ad-5 an accurate description of the minimum information necessary to permit a transfer agent to identify the subject of an inquiry or instruction and respond? If not, what other information would allow a transfer agent to identify the subject of the inquiry and respond?
76. Does Rule 17Ad-5 address the full scope of inquiries received by transfer agents? If not, what additional types of inquiries and requests do transfer agents receive, and in what volume? How are those inquiries received (
77. Should the Commission update Rule 17Ad-6 to expand the categories and types of records required to be maintained by registered transfer agents? Why or why not? If so, what requirements should the Commission consider? Please provide a full explanation.
78. Should the Commission eliminate or amend the requirement to escrow “source code” in Rule 17Ad-7 (record retention)? Why or why not? How do transfer agents comply with this requirement, and what are the benefits, costs, burdens, and tradeoffs associated with those efforts? If the Commission amends rather than eliminate the requirement, what amendments should the Commission consider? Please provide a full explanation.
79. Rule 17Ad-7(g) requires certain records to be made available to the Commission. What records do commenters believe should be covered by the rule? Are there electronic communication standards in use by the industry to transfer such records and, if so, should the Commission require their use? Why or why not?
80. Are the different record retention requirements in Rules 17Ad-7 (record retentions), 17Ad-10 (prompt posting of certificate detail, etc.), 17Ad-11 (aged record differences), and 17Ad-16 (notice of assumption and termination) still appropriate in light of transfer agents' operational and technological capabilities? Why or why not? Particularly in light of the prevalence of electronic records, should retention periods for all documents be similar? Why or why not? For the records that transfer agents are
81. Does the current definition of certificate detail in Rule 17Ad-9 (definitions) reflect current processes? Why or why not? For example, should the Commission amend the definition to include additional information relevant to identifying the specific security, such as CUSIP number or a unique product identifier if available, or additional information relevant to identifying the investor, such as investor email address and phone number? Why or why not? Do commenters believe such information would help transfer agents identify lost securityholders or improve securityholder communications? Please provide a full explanation.
82. With respect to Rule 17Ad-11 (aged record differences), which requires reports for actual overissuances, should the Commission require transfer agents to provide issuers with information about all aged differences, rather than just differences that lead to overissuance? Why or why not? Are the current dollar and share thresholds reflected in Rule 17Ad-11 appropriate indicators of current or impending problems? Should the thresholds be amended? If so, what thresholds would be more appropriate? Are commenters aware of instances where impending problems were not reported because the dollar or share threshold did not apply to the situation? Please provide a full explanation.
83. Should the Commission again consider expanding Rule 17Ad-14 (tender agents) to include reorganization events such as conversions, maturities, redemptions, and warrants, as it proposed in 1998?
84. What are the current best practices with regard to accepting signature guarantees, if any? Should the Commission amend Rule 17Ad-15 to require transfer agents to document in writing their procedures and requirements for accepting signature guarantees? Why or why not? Should the Commission require transfer agents to establish and comply with certain minimum procedures and requirements related to accepting signature guarantees? Why or why not? If so, what procedures and requirements should be required, and why? Please provide a full explanation.
85. Should the Commission amend Rule 17Ad-16 (notice of assumption)? Why or why not? If so, what amendments should be considered, and why? Is the information required by Rule 17Ad-16 already provided to the industry, including DTC? If yes, how is that information being provided to the industry? Is there an industry standard for electronic communications of these changes? Please provide a full explanation.
86. Are there other amendments to the rules that commenters believe would be appropriate or beneficial that the Commission should consider? Please provide a full explanation.
87. What costs, benefits, and burdens, if any, would the potential requirements discussed above create for issuers or transfer agents?
In connection with the potential new rules and rule amendments discussed above, the Commission also intends to propose rules for conforming and other revisions to Forms TA-1 and TA-2 and to Rules 17Ad-1 through 17Ad-20, as appropriate. For example, the Commission may propose to amend Section 8(a)(iv) of Form TA-1 to require disclosure of employees' actual percentage ownership of the transfer agent, rather than whether their percentage ownership falls within a broad range. The Commission also intends to propose defining or clarifying certain terms and definitions used in the forms, such as “independent, non-issuer” and “control,” which are not currently defined in Form TA-1, and to clarify the type of disciplinary history required to be disclosed by Question 10. The Commission preliminarily believes that such clarifications would help ensure that transfer agents are interpreting, completing, and filing the requisite forms in a consistent manner. The Commission requests comment on all aspects of the conforming and other amendments described above.
This section discusses additional regulatory, policy, and other issues associated with transfer agents beyond those discussed above in Section VI and seeks comment to identify, where appropriate, possible regulatory actions to address those issues. In particular, we discuss: (i) The processing of book-entry securities by transfer agents; (ii) differences between transfer agent recordkeeping for registered securityholders and broker-dealer recordkeeping for beneficial owners; (iii) characteristics of and issues associated with transfer agents to mutual funds; (iv) crowdfunding; (v) services provided by transfer agents and other entities that act as “third party administrators” for issuer-sponsored investment plans; and (vi) issues associated with outside entities engaged by transfer agents to perform certain services. Throughout, we seek comment regarding the issues raised, and conclude with a series of requests for comment on potential broad changes to the overall regulatory regime for transfer agents that may be appropriate in light of the issues discussed throughout this release.
Most municipal and corporate bonds, U.S. government and mortgage-backed securities, commercial paper, and mutual fund securities, are offered almost exclusively in book-entry form (
Although many of the transfer agent rules refer only to certificated securities, it has long been the Commission's position that, absent an explicit exemption, all of the transfer agent rules apply equally to both certificated and uncertificated securities, particularly in cases where the rules impose time limits within which a transfer agent must turn around or process a transfer. For example, when adopting Rules 17Ad-9 through 17Ad-13 in 1983, the Commission clarified in its response to public comments that the definition of certificate detail in Rule 17Ad-9 applies with equal force to both certificated and uncertificated securities and related account details.
At the same time, the Commission is aware that differences of interpretation among transfer agents may result in widely varying compliance practices, procedures, and controls among transfer agents. For example, because Rule 17Ad-10(g) refers specifically to certificates,
The Commission believes it is appropriate to consider possible amendments to address the applicability of the transfer agent rules to uncertificated or book-entry securities, including those held in DRS or issued by investment companies such as mutual funds.
88. Should the Commission amend the existing rules in light of the significant increase in book-entry securities? If so, what approach should the Commission take? For example, although a significant percentage of transfer instructions are categorized as non-routine items under the current rules (such as investor requests for certificates, to close accounts, and to act in certain types of corporate actions), there are no specific processing requirements for non-routine items. Should the same processing obligations apply to all instructions, thereby dispensing with the current routine and non-routine distinctions in Exchange Act Rule 17Ad-1? Alternatively, or in conjunction with that approach, should the existing rules be amended to explicitly apply transfer agents' processing obligations, not only to “transfers” as defined in Rule 17Ad-1, but also to the entire range of instructions a transfer agent may receive, including those related to uncertificated securities, such as purchase and sale orders, balance certificates, establishment and movement of book-entry positions, corporate actions, and updates of securityholder book-entry account information? Why or why not? Are there other approaches that would be appropriate? If so, please describe.
89. What policies, concerns, factors, and other considerations do commenters believe should inform any approach the Commission might take to ensure the transfer agent rules apply appropriately to book-entry securities? For example, in determining whether a specific rule or requirement is appropriate, should the focus of the Commission's consideration be on the physical nature of the security (whether certificated or uncertificated), or market-based factors, such as whether there is a potential for backlog to occur based on trading volume in the particular type of asset, or both and why? Are there other appropriate considerations? If so, please describe.
90. Given that transfer and other requests now often involve the highly automated processing of book-entry securities rather than manual processing of certificates, should the Commission modify or eliminate the turnaround and processing requirements of Rules 17Ad-1 and 17Ad-2? Why or why not? For example, is the distinction between items received before noon and items received after noon still relevant given that the vast majority of requests are now received and responded to electronically? Should the Commission shorten the timeframe for fulfilling instructions and/or increase the percentage of transfer instructions that must be fulfilled within those timeframes each month? Why or why not?
91. Should the Commission shorten Rule 17Ad-9's permitted timeframes for posting credits and debits to the master securityholder file? Should the Commission require that certificate details be dispatched daily? Why or why not?
92. Are commenters aware of instances where securityholders or broker-dealers cannot determine whether their securities have been processed by transfer agents, despite the requirements of Rule 17Ad-5? If so, please describe any such instances and indicate what requirements, if any, the Commission should consider to address such instances. For example, should the Commission expand the definition of “item” to include presentation by both individual investors and broker-dealers or other intermediaries acting on behalf of individual investors and require transfer agents to report to the presentor of an item the status of any item for transfer not processed within the required timeframes? Why or why not?
93. It is the Commission staff's understanding that investors have brought legal actions against transfer agents under state law to require the transfer agent to effect a transfer, including when the transfer agent claimed the securityholder's instructions were not in good order and therefore the relevant securities were not transferred, or were delayed for a long period of time.
94. Do commenters believe there are problems associated with transfer agents failing to effect or reject transfer instructions within a reasonable time? Should the Commission amend the rules to define what information or documentation is required and from whom it must be received to constitute good order? Should the Commission amend the rules to define the terms “reject” or “rejection” in connection with transfer instructions? Why or why not? Should transfer agents be required to communicate the specific reasons why an instruction was not a good order? Should transfer agents be required to buy-in securities (or take other corrective action to satisfy transfer instructions that were received in good order but not completed after a specific period of time)? If so, should the requirement apply broadly or be limited to specific conditions? Please explain.
95. Are commenters aware of delays in processing incomplete or improper requests for DRS transactions? If so, what caused these delays, and would they be eliminated or reduced if transfer agents were to provide to securityholders the information the securityholder would need to prepare complete instructions for shares held in DRS? Please explain.
96. Given that most securityholders no longer receive paper certificates evidencing their holdings, should the Commission require transfer agents to provide securityholders with an account statement with specific details for each transaction that occurred with respect to each securityholder's account? If so, how and how often should such statements be provided and what information should be included? Please describe.
Although transfer agents provide critical recordkeeping and transfer services to registered owners, they generally do not have visibility beyond the master securityholder file and therefore rarely provide recordkeeping and transfer services to beneficial owners who hold in street name. Instead, recordkeeping and transfer services usually are provided to beneficial owners by the intermediary through whom the beneficial owner purchased the securities, usually a broker-dealer or bank.
The transfer and recordkeeping services provided to beneficial owners by banks and brokers are largely identical to the recordkeeping and transfer services provided with respect to registered owners by registered transfer agents. For example, banks and brokers often maintain accountholder information details, process transfers and other changes to accounts, provide securityholder services such as call center support, and provide account statements showing ownership positions for their beneficial owner customers. Yet although these services may be nearly identical to the services provided to registered owners by transfer agents, banks and brokers are typically not required to register as transfer agents under the Exchange Act solely for providing these services to beneficial owners. This is because the positions serviced are “securities entitlements” under the UCC rather than “Qualifying Securities” that trigger transfer agent registration.
As street name registration has become more prevalent and the number of registered holders has decreased, more banks and brokers are providing to more investors critical transfer, processing, and recordkeeping services, but are not required to register with the Commission or other ARA as a transfer agent.
The Commission seeks comment on the following:
97. Are there regulatory discrepancies among transfer agents and banks and brokers who provide similar services for beneficial owners? If so, what are they and do they present risks or raise competition issues in the market for these services? If so, what are the competition issues or risks associated with any such discrepancies, and what approach, if any, should the Commission consider to address them? Please provide a full explanation.
98. Are there reasons why the Commission should regulate transfer agent processing of registered owner securities held in book-entry positions differently than bank and broker processing of street name positions held in book-entry form? If so, please describe them. Please provide a full explanation.
99. In light of increased obligations under federal law for certain issuers to ascertain their securityholders' identities and the barriers to doing so created by the street name system, as discussed above in Section III.B, should the Commission require entities that are regulated by the Commission, including brokers, banks, or others who provide transfer and recordkeeping services to beneficial owners, to provide or “pass through” securityholder information to transfer agents? If so, what type of information should be provided and how should it be transmitted? What would be the effect on the actions and choices of affected parties, including transfer agents, banks and brokers, issuers, registered owners, and beneficial owners? Please provide a full explanation.
100. If the Commission were to require certain registrants to pass through securityholder information regarding beneficial owners to transfer agents, should the Commission prohibit transfer agents from using such information for other than certain prescribed purposes? If so, for what purposes should such information be allowed to be used, and why? For example, should the information be used solely for the transfer agent's legal/compliance purposes, or should it be permitted to be used for other purposes, such as securityholder communications? Should transfer agents' ability to share information be limited, particularly where information is shared in return for compensation or where information sharing is not fully disclosed to parties such as the issuer or the securityholder? Why or why not? Should such information be permitted to be shared only with the securityholder's consent? Please provide a full explanation.
U.S. registered investment companies managed $18.7 trillion in assets at year-end 2014.
Open-end funds
By mid-2014, 53.2 million households, approximately 43 percent of all U.S. households, owned mutual funds.
We understand that the shift to omnibus account arrangements for mutual fund shareholders
The complexity of recordkeeping for mutual fund shares also has increased significantly over the last several decades. The total number of mutual fund share classes offered increased from 1,243 share classes in 1984 to over 24,000 share classes in 2014.
The Commission understands that the growth in both mutual fund products and share classes offered has added complexity and requires Mutual Fund Transfer Agents to maintain, in addition to the master securityholder file, extensive CUSIP databases that define the characteristics and processing rules for each fund share class to ensure prospectus compliance and accurate processing and recordkeeping of mutual fund transactions.
The growth of the mutual fund industry since 1977, the attendant growth of the portion of the transfer agent community specifically focused on servicing that industry, the proliferation of fund share classes, the growth in intermediary omnibus account arrangements and the Mutual Fund Transfer Agent community, and the complexity of fund processing and reliance on NSCC's systems (discussed below), are among the factors informing the Commission's examination of its transfer agent rules.
If any person performs for a mutual fund any services listed in Exchange Act Section 3(a)(25), such as registering transfers and transferring registered investment company securities, the person must register with the Commission as a transfer agent pursuant to Exchange Act Section 17A(c)(1).
Today, these specialized Mutual Fund Transfer Agents provide many of the same transfer and account maintenance services that other transfer agents perform for operating companies, including the recordkeeping, transfer, and related activities discussed above in Section V.
Although many of the core services Mutual Fund Transfer Agents provide are similar to the core services provided by Operating Company Transfer Agents, there are differences. One is the degree to which the securities typically serviced by Mutual Fund Transfer Agents are dematerialized.
There are also important differences in how Mutual Fund Transfer Agents are organized and compensated compared to Operating Company Transfer Agents generally. For example, there are, in general, three types of Mutual Fund Transfer Agent arrangements: (i) Internal (which may also be referred to as “captive,” “affiliated” or “full internalization”),
External transfer agents have their own business model, processing and procedural routines, computer systems, and service providers.
Mutual Fund Transfer Agents may also have different compensation arrangements than typical Operating Company Transfer Agents, which generally will be compensated on a per securityholder account basis. While Mutual Fund Transfer Agents may also be compensated on a per securityholder account basis, many of them instead receive compensation based on a percentage of a fund's net assets.
As a result of the collective effect of the five factors discussed below, transaction processing for Mutual Fund Transfer Agents may be more complex
Second, Mutual Fund Transfer Agents also play a role that serves to assist in the determination of the appropriate price for an investor's purchase or redemption order (which is based on the NAV per share and any applicable commissions or fees). They do so by coordinating with mutual fund administrators, who commonly perform the main calculations that assist a mutual fund in determining its NAV.
Third, some mutual funds may provide their investors with options which may add additional complexity to the Mutual Fund Transfer Agent's or intermediary's processing tasks. For example, many mutual funds allow investors to exchange a mutual fund within the same fund complex without having to pay a sales load or other fee for purchasing shares of the new mutual fund. This arrangement may require Mutual Fund Transfer Agents (or intermediaries) to determine if the exchange qualifies for a waiver of the sales charge and to track the total time the investor has been invested in the mutual fund complex. In addition, some mutual funds may offer other services and options, such as systematic withdrawal plans, that may require Mutual Fund Transfer Agents and their intermediaries to keep track of a potentially wide range of securityholder elections, transaction types, and prospectus and business processing rules in CUSIP databases that are utilized for transaction processing.
Fourth, the use of different sales load structures and distribution methods, particularly with respect to redemption of mutual fund securities, as well as other fee payments to intermediaries, also adds complexity in the mutual fund context. For example, for load funds, or funds that charge a sales load to the investor, Mutual Fund Transfer Agents commonly process and distribute related commission payments to intermediaries in connection with sales of mutual fund shares.
Fifth, Mutual Fund Transfer Agents traditionally have functioned in a more central role in connection with clearing and settlement of securities transactions than have Operating Company Transfer Agents. With a mutual fund purchase or redemption, there is no clearing corporation involved that serves to novate trades as a central counterparty as in the case of a broker-facilitated trade in an equity security on a national securities exchange (as shown in Figure 1 in Section III.B above) because mutual funds generally are not exchange-traded.
Many Mutual Fund Transfer Agents may assist mutual funds with their compliance obligations, not only with respect to general recordkeeping obligations, but also to enable mutual funds to comply with regulations to which operating companies may not be subject in the same way or at all.
Mutual Fund Transfer Agents may also assist mutual funds in complying with requirements related to the price-dependent nature of mutual fund transaction processing. First, Mutual Fund Transfer Agents may be responsible for monitoring, on behalf of the mutual fund, that intermediaries such as dealers are properly separating orders received from customers before NAV is next computed from those received afterwards and are sending them in separate batches to the Mutual Fund Transfer Agent.
As happens in the operating company space, many securities intermediaries such as broker-dealers and banks perform recordkeeping and processing services for their customers who are beneficial owner investors in mutual funds.
Because intermediaries are compensated for providing recordkeeping and processing services for their customers who are beneficial owner investors in mutual funds, many of the issues discussed above in Section V.D.3 are relevant to Mutual Fund Transfer Agents. “Networking” of a single investor's account or position potentially gives Mutual Fund Transfer Agents more transparency through to beneficial owners than is available to Operating Company Transfer Agents, because the recordkeeping for such accounts is primarily kept on the Mutual Fund Transfer Agent's system. “Networking” is a service provided by NSSC by which Mutual Fund Transfer Agents can also exchange general shareholder account data with intermediaries such as brokers that provide sub-transfer agency services.
The use of breakpoints historically highlights some of the issues faced by Mutual Fund Transfer Agents that are associated with recordkeeping and processing services provided by intermediaries.
Finally, the Commission understands that there has been a movement to omnibus sub-accounting arrangements over the years for mutual fund shareholders
Given these developments, as well as the proliferation and growth of registered investment companies, including open-end funds, closed-end funds, UITs
In particular, the Commission seeks comment regarding the regulation of transfer agents to registered investment companies based on the unique trading, market, asset class, and other relevant characteristics of the registered investment companies they service. Some of the issues posed by these unique characteristics of these registered investment companies are illustrated by the potentially different treatment of UITs and closed-end funds with respect to the Rule 17Ad-4(a)
The Commission also seeks comment with respect to the Rule 17Ad-4(a) exemptions. As discussed above, although Mutual Fund Transfer Agents provide many of the same recordkeeping, transfer, account maintenance, and related services that Operating Company Transfer Agents provide, under Rule 17Ad-4(a) they are exempt from some of the turnaround, processing, performance, and recordkeeping requirements that make up the foundation of the transfer agent rules.
Based on these and the other issues and developments discussed in this section and throughout this release, the Commission believes it is appropriate to consider whether new or amended rules governing transfer agents' services and activities with respect to mutual funds and other registered investment companies could be appropriate. Accordingly, the Commission seeks comment on the following:
101. What are the similarities and differences among transfer agents that service equity securities, debt securities, and registered investment company securities? Please explain.
102. Do transfer agents face different risks and challenges depending on the industry segment or asset class they service? Does the level of complexity associated with transaction processing by Mutual Fund Transfer Agents create risks or challenges the Commission should consider addressing? Why or why not? Please explain.
103. Should the Commission address specific issues related to Mutual Fund Transfer Agents and transfer agents that service other registered investment companies? Should the Commission, in regulating transfer agents to registered investment companies, take into account the trading, market, asset class, or other characteristics of the securities or issuers being serviced? What other factors, if any, should be considered and why? Alternatively, should the Commission regulate all transfer agents uniformly, regardless of the industry segment or asset class they service? Why or why not? What data should the Commission consider in making that determination? Please explain.
104. Should the Commission impose additional recordkeeping and disaster recovery requirements for Mutual Fund Transfer Agents? Why or why not?
105. Should the Commission require that transfer agents provide more detailed information on Form TA-2 about the type of issuers they are servicing and the types of work they are performing for those issuers? Why or why not? For example, should Form TA-2 include information regarding whether a transfer agent is servicing investment companies or pension plans? Why or why not? Would this information be helpful to issuers who seek specific skills or experience from their transfer agent? Should Form TA-2 require the disclosure of the name of each issuer serviced during the reporting period? Why or why not? What would be the benefits, costs, or burdens associated with any such requirements? Are there already freely available sources for this information? Please provide empirical data, if any.
106. As noted, transfer agent services for interests in limited partnerships, DRIPS, and redeemable securities of registered investment companies are exempt from certain turnaround rules under Rule 17Ad-4(a). In light of the expanded role of transfer agents in these areas, should the Commission eliminate these exemptions? If so, what costs, burdens, or benefits would accrue to investors, issuers, or the transfer agent industry? If these exemptions are not eliminated, should the Commission add other book-entry forms of ownership to the
107. Are limited partnerships traded today in greater volumes than they were in 1977? Please provide empirical data. If so, do commenters believe the Commission should consider this as a potential basis for eliminating the exemption for transfer agents to limited partnerships in Rule 17Ad-4(a)? Why or why not?
108. In light of increased dematerialization, do commenters believe transfer agent processing of DRIP transactions today is largely similar to the processing of equity and debt securities? Why or why not? If so, do commenters believe the Commission should consider this as a potential basis for eliminating the exemption for transfer agents to DRIPs in Rule 17Ad-4(a)? Why or why not?
109. Transfer agents that service UITs are currently exempt under Rule 17Ad-4(a), but transfer agents that service closed-end funds are not. Should the Commission continue this distinction? Should the Commission apply transfer agent rules to transfer agents that service UITs in the same manner as the rules apply to transfer agents that service closed-end funds on the basis of historical similarities in the secondary market trading of both types of funds? Why or why not? Please explain.
110. Should the Commission amend the current transfer agent rules to explicitly address transfer agents for ETFs? Why or why not? How do transfer agent functions in connection with ETFs differ, if at all, from services transfer agents provide to other types of investment companies? Are there any particular issues unique to transfer agent service of ETFs that raise risks not present with respect to other types of investment companies? Please explain. If Rule 17Ad-4(a) is retained by the Commission in some form and is not proposed to be eliminated, should the Commission amend Rule 17Ad-4(a) to specify explicitly the applicability of its exemption to transfer agents to ETFs? If so, should transfer agents to ETFs be able to avail themselves of the exemption or should the exemption not apply to transfer agents to ETFs similar to the way in which the exemption today does not apply to transfer agents to closed-end funds, which in some cases are traded on national securities exchanges as are ETFs? Why or why not?
111. How are Mutual Fund Transfer Agents compensated today? Do any aspects of the structure or terms of their compensation raise regulatory concerns? Do Mutual Fund Transfer Agent fees based upon the fund's net assets create any conflicts of interest? Why or why not? If so, are there alternative fee structures that would not create conflicts of interest? Do Mutual Fund Transfer Agents provide fee rebates to issuers and, if so, do these raise any issues of regulatory concern? Do the internal and hybrid transfer agent models discussed above raise any special regulatory concerns? Why or why not? Please explain.
112. Should the Commission adjust its regulatory oversight of Mutual Fund Transfer Agents and, if so, how? Should any aspects of the Commission's regulatory regime for registered clearing agencies, including those that act as central securities depositories, apply to Mutual Fund Transfer Agents? Why or why not?
113. Given the increasing volume of transactions and activities facilitated through NSCC as the central clearance and settlement utility for mutual funds and intermediaries, what issues or concerns, if any, should the Commission consider with respect to the various activities conducted through NSCC for mutual fund investors? Please describe.
114. How often do Mutual Fund Transfer Agents serve as fund administrators for the same mutual fund? Does this dual role create conflicts of interest for either the mutual fund or the Mutual Fund Transfer Agent? Does this dual role raise other concerns? If so, please describe.
115. What ancillary information or systems do Mutual Fund Transfer Agents or intermediaries rely on to ensure accurate processing and recordkeeping of mutual fund shares (
116. Transfer agents currently engage in the processing of “as of” transactions, or transactions which correct errors in the purchase or sale of mutual fund shares. What, if anything, differentiates, the “as of” transactions from an initial purchase or sale? Should the Commission specifically address “as of” transactions in transfer agent rules? Why or why not? Should the Commission adopt rules that govern which party, the mutual fund issuer or the Mutual Fund Transfer Agent, loses or retains profits resulting from processing errors when these errors are corrected by later “as of” transactions?
117. Mutual fund transfer agents facilitate the delivery of critical information (
118. Should the Commission require that the number of “as of” transactions be reported by Mutual Fund Transfer Agents on Form TA-2? Why or why not? Are greater numbers of “as of” transactions indicative of potential processing problems at a Mutual Fund Transfer Agent, such as a turnaround backlog or problems with accuracy? Why or why not? Do greater numbers of “as of” transactions indicate potentially risky mutual fund trading practices that may dilute the interests of long-term investors in the mutual fund? Why or why not?
119. Does mutual funds' use of intermediaries who act as sub-transfer agents introduce new or additional risks to the prompt and accurate settlement of securities transactions? If so, what are those risks, should the Commission consider addressing those risks, and if so, how? Please explain.
120. Should the Commission propose rules governing how Mutual Fund Transfer Agents oversee sub-transfer agents to mutual funds? Why or why not? If so, what rules should the Commission consider? Why, and what would be the benefits, costs, or other consequences of such rules? Please explain.
121. What oversight functions, if any, do Mutual Fund Transfer Agents typically perform for intermediaries performing sub-transfer agent or sub-accounting services to beneficial owners of mutual fund shares? What are the types of initial versus ongoing due diligence performed? What types of obstacles do Mutual Fund Transfer Agents face in performing the oversight function?
122. What problems, if any, are created by transfer agents' lack of visibility into the identity of beneficial owners and products serviced by intermediaries acting as sub-transfer agents? Please describe. If appropriate, could these issues be addressed solely by the Commission through revisions to the rules governing transfer agents? Would other regulatory changes be necessary, such as changes to the rules under the Investment Company Act or rules for broker-dealers under the 1934 Act (and 1933 Act)? Would other regulators also need to enact rule changes (for example, banking regulators and the Department of Labor for retirement plan recordkeepers) to assist with transparency?
Pursuant to the Jumpstart Our Business Startups (JOBS) Act (“JOBS Act”), the Commission adopted Regulation Crowdfunding on October 30, 2015.
First, Regulation Crowdfunding created an exemption from the record holder count under Section 12(g) of the Exchange Act provided that certain conditions are met. One of these conditions is that “the issuer . . . has engaged the services of a transfer agent registered with the Commission pursuant to Section 17A of the Exchange Act.”
Second, under the JOBS Act and new Rule 501 of Regulation Crowdfunding, securities issued in crowdfunding offerings are subject to restrictions on resale for a period of one year, with the exception that they may be resold to other investors under specific conditions prior to the expiration of the holding period.
Third, Rule 301(b) of Regulation Crowdfunding requires intermediaries to have a “reasonable basis” for believing that an issuer has established means to keep accurate records of the holders of the securities it would offer and sell through the intermediary's platform.
As a result of these new provisions, transfer agents are likely to be involved in at least some crowdfunding offerings. Accordingly, the Commission seeks comment on the following:
123. What services, if any, do commenters anticipate transfer agents providing for crowdfunding issuers? How do commenters anticipate transfer agents will comply with their recordkeeping, safeguarding, and other requirements in the context of crowdfunding securities? Does the entry of transfer agents into the crowdfunding space pose new or additional risks for the prompt and accurate settlement of securities transactions? What are these risks, should the Commission address them, and, if so, how?
124. Transfer agents have traditionally assessed fees on a per shareholder basis. Do commenters believe transfer agents are likely to impose a per shareholder fee in connection with crowdfunding issuances? If so, is a per-shareholder fee appropriate? If not, what other kinds of fees are likely to be charged, and would they be appropriate?
Many transfer agents provide transfer, recordkeeping, administrative, and other services related to certain types of issuer-sponsored plans that provide incentives to the issuer or securityholders in the form of reduced fees and commissions, as well as other benefits. These plans include DRIPs, DSPPs,
The majority of Plan Administrators that provide services for Retirement Plans (and some Issuer Plans and mutual funds) do not perform statutory transfer agent functions,
One of the TPA's main responsibilities is acting as an intermediary between benefit plan participants and the plan. For example, TPAs provide various services when enrolling new employees in a company's benefit plan, including recording and processing their enrollment and collecting information about their funding and investing preferences (
TPAs continue to act as intermediaries between the benefit plan participants and plans after participants enroll in the plan. For example, if participants wish to transfer or reallocate mutual funds within their plan, they submit their request to the TPA, which will process and record these requests and provide the transactional details to the plan trustee or investment manager. Similarly, when participants request a payment, the TPA may send the transaction details to the NSCC, plan trustee, and investment manager, and provide payment instructions to the mutual fund and Mutual Fund Transfer Agent. In addition to processing transactions, TPAs may provide participants with customer service support, activity statements, and other communications.
TPAs may also provide sub-transfer agent services for plans that offer, as investment options of the plan, investment in the shares of mutual funds.
Once aggregated, TPAs may go a step further and create a single net order by offsetting the purchase and redemption orders against each other. These services allow TPAs to complement the administrative and recordkeeping services they already provide to plans and possibly earn additional fees from mutual fund complexes. They also reduce the amount of transactions that mutual fund complexes (and their Mutual Fund Transfer Agents) need to process. Under this arrangement, the mutual fund often does not know the identity of the plan participants since TPAs, not the mutual funds, are taking the orders directly from the plan participants and submitting orders to the mutual funds on behalf of and generally in the name of the plan.
Issuers commonly appoint Plan Administrators to administer their Issuer Plans. Depending on the type of security being serviced and the scope of the activities performed, Plan Administrators may be required to register with the Commission or other ARA as a transfer agent.
Plan Administrators perform primarily four tasks for these plans. First, they handle communications with investors, including their initial plan registration,
Second, they purchase company shares for the plan,
Third, Plan Administrators maintain custody of purchased shares on the participants' behalf,
Finally, Plan Administrators maintain Plan records and send regular account statements and other communications to plan participants. These typically include quarterly account statements and transactional statements after each cash investment, transfer, deposit, withdrawal, or sale. These statements generally show cash dividends and optional cash payments received, the number of shares purchased, the purchase price for the shares, the total number of shares held for the participant, and an accumulation of the transactions for the calendar year to date. In addition, Plan Administrators send plan participants the same communications that are sent to every other securityholder of the company's common stock, including the company's annual report, annual meeting notices, proxy statements, and income tax information for reporting dividends paid by the company.
As described above, Plan Administrators, TPAs, and Mutual Fund Transfer Agents all provide some level of transaction execution and order routing services. The specific services may vary depending on the plan or firm, but in general, administrators that provide transaction execution services will handle customer funds and securities and may provide some level of netting, which is the process of offsetting expected deliveries and payments against expected receipts in order to reduce the amount of cash and securities to be moved. For example, some administrators for employer-sponsored retirement plans offset purchase and sale transactions in the
The Exchange Act defines a “broker” as “any person engaged in the business of effecting transactions in securities for the account of others”
The Commission has brought enforcement actions against transfer agents operating as broker-dealers without registering as such with the Commission. For example, the Commission found that a transfer agent was acting as an unregistered broker-dealer in violation of Exchange Act Section 15(a) when it, among other things: opened accounts for individual retirement account (“IRA”) customers; established an interest bearing depository account to receive IRA customer monies; had a power of attorney to withdraw, deposit and transfer IRA customer funds held by custodial banks, and to purchase assets in the name of the custodian; charged IRA customers a transaction fee when IRA customers made a purchase or sale of securities through a broker-dealer or issuer; prepared periodic account statements for IRA customers; and physically held certain IRA customers' securities in its office vault.
The Commission staff has stated its view that it will not recommend enforcement action where a TPA performs some “clerical and ministerial” activities without registering as a broker, subject to the conditions that, among things, the TPA refrain from netting or matching orders.
The Commission is generally requesting comment on whether new rules may be appropriate to bring greater clarity, consistency, and regulatory certainty to Plan Administration and similar activities by entities registered with the Commission solely as transfer agents as well as by entities that may not be registered with the Commission in any capacity.
125. Exchange Act Rule 17Ad-9(m) describes various transfer agent functions that are broader than the five statutory functions defined in Exchange Act Section 3(a)(25). Likewise, as discussed in this and other sections, modern transfer agents perform a wide array of services and functions that do not fall within the confines of Section 3(a)(25) and are not otherwise identified or contemplated in the existing transfer agent rules. Should the Commission update the transfer agent rules to address additional transfer agent services and functions that do not fall within the confines of Section 3(a)(25)? Why or why not?
126. Should the Commission impose supervisory obligations on entities engaged in transfer agent activities, such as transfer agents and plan administrators, such as requiring that employees be properly trained, comply with continuing education requirements, and adhere to regulations and company policies? Why or why not?
127. Definitions in Rules 17Ad-1 and 17Ad-9 do not explicitly apply to all types of transactions and functions related to Issuer Plans, investment company securities, restricted securities, and corporate actions, or to all transactions relating to book-entry activity and DRS transactions. For example, the rule does not specify that “credit” and “debit” include Issuer Plan transactions and book-entry accounts as well as investment company securities transactions. Does the lack of specificity cause difficulties in providing services relating to those areas not specifically enumerated? Why or why not?
128. Does Rule 17Ad-2 create uncertainty concerning the applicability of the rule to activities related to Issuer Plans, investment company securities, restricted securities, and corporate actions? If there is such uncertainty, how does it impact transfer agents' functionality? Are issuers concerned
129. The recordkeeping requirements in Rule 17Ad-6 do not specifically include activities associated with investment company securities, Issuer Plans, DRS transactions, paying agent activities, or corporate actions. Are transfer agents applying the rule's recordkeeping requirements to these activities? If not, what would be the additional cost, benefits and/or burdens, if any, in doing so? Please describe.
130. Rule 17Ad-10 does not specifically address activities performed by many transfer agents, such as Plan Administration, paying agent activities, or corporate action recordkeeping. Does this create any obstacles to complying with the rule, such as by creating confusion or uncertainty? Why or why not? Please explain.
131. There are no Commission regulations addressing plan enrollment practices, such as negative consents or automatic enrollments. What risks, if any, arise from these enrollment methods? Should the Commission address any such risks? Why or why not? If, so how?
132. To ensure that transfer agents make and keep comprehensive records relating to all of their activities, should the Commission address records related to Issuer Plan and mutual fund activities? Why or why not? For example, should transfer agents be required to make and maintain records of orders for the purchase or sale of Plan or mutual fund securities in a manner similar to that required of broker-dealers? Why or why not? Should they be required to create and maintain records relating to reconciliations with custodial accounts and order-submitting entities? Should they be required to make and maintain specific records relating to plan participants? Why or why not? Please explain and provide supporting evidence regarding any potential effects. To the extent that any data, records, and/or other information that such rules might require to be made and preserved are prepared and maintained by an outside party on the transfer agent's behalf, should the Commission require that the outside entity file a signed, written undertaking with the Commission to the effect that such records are the property of the transfer agent and will be surrendered promptly on request of the transfer agent and subject to examination by the Commission or other ARA? Why or why not? Please explain and provide supporting evidence regarding any potential effects.
133. Should the Commission amend the rules so that transfer agents performing specific activities are exempt from broker-dealer registration only if they are (i) registered with the Commission as a transfer agent, (ii) limit their activities to those specified in the general rule, and/or (iii) agree to abide by certain other conditions designed to protect investors and limit the risks associated with those activities? Why or why not? Should the Commission require broker-dealer registration for any activities beyond what is permitted or conducted by an entity that is not registered with the Commission as a transfer agent under such an exemption? Why or why not? Please explain and provide supporting evidence regarding any potential effects.
134. Do commenters have any concerns about TPAs who voluntarily register with the Commission as transfer agents, but do not provide statutory transfer agent services as defined by Exchange Act Section 3(a)(25)? Why or why not? Should the Commission prohibit TPAs who do not perform statutory transfer agent functions as defined by Exchange Act Section 3(a)(25) from voluntarily registering with the Commission as transfer agents? Alternatively, should the Commission deny transfer agent registration applications or revoke registrations of TPAs that do not provide statutory transfer agent services as defined by Exchange Act Section 3(a)(25)? Why or why not? Please explain and provide supporting evidence regarding any potential effects.
135. Do commenters have any concerns regarding the activities or business practices of TPAs that are not registered with any federal financial regulator? If so, what actions, if any, should the Commission consider taking to address these concerns? Please explain and provide supporting evidence regarding any potential effects.
136. What risks, if any, do commenters believe are posed by the enrollment and purchase and sale activities of transfer agents with respect to Issuer Plans and registered investment companies? What, if anything, should the Commission do to address such risks and why? For example, would rules focusing on risk management address any risks associated with transfer agents' current role in the purchase and sale of securities? Please explain and provide supporting evidence regarding any potential effects. Are there additional Issuer Plan activities or services provided by transfer agents, Plan Administrators, or other entities that are not described in the release? If so, what are they?
137. Should the Commission conditionally exempt from broker-dealer registration transfer agents that effect orders to purchase or sell securities in connection with their servicing of Issuer Plans? If so, what conditions, if any, should apply to that exemption? Should they be subject to net capital or customer protection requirements to guard against the risks of mishandling investors' funds or securities? What regulations, if any, should the Commission propose to safeguard investor privacy? Does the Issuer Plan business necessitate different books and recordkeeping requirements? If so, how should the Commission amend its books and recordkeeping requirements? Should the Commission's rules require the personnel of Issuer Plan transfer agents who interact with Issuer Plan investors, such as call center representatives, to be subject to registration, licensing, training, or continuing education requirements? Should transfer agents for Issuer Plans be permitted to net customer buy and sell orders? Why or why not, and if so, under what conditions? Should transfer agents be required to hold the funds of Issuer Plan securities in a bank account for the exclusive benefit of investors? Why or why not? Under what circumstances should a transfer agent or its personnel be disqualified from effecting transactions on behalf of Issuer Plans? Should transfer agents be permitted to receive payment for order flow in connection with Issuer Plan transactions? Why or why not? What rules might help to ensure the integrity of the master securityholder file in cases where a transfer agent servicing the Issuer Plan is not the recordkeeping transfer agent?
138. What fees are being charged today by transfer agents directly to investors or indirectly to investors (such as through transaction fees in connection with Plan Administration activities that are comparable to broker commissions or dealer markups)? Should the Commission require transfer agents to clearly and concisely disclose fees charged to the investor? Do fees charged to investors by transfer agents or by sub-transfer agents encourage or deter investor decisions regarding their form of ownership (
139. Investors who transact with or through a broker-dealer receive confirmations pursuant to Rule 10b-10. However, investors holding securities positions directly with a transfer agent in DRS, in an Issuer Plan or other program administered by a transfer agent, or in a mutual fund that attracts self-directed investors, do not always receive comparable information from the transfer agent. Should the Commission require transfer agents to provide written communication to a securityholder with details about a transaction within a set time period? Why or why not? Are there other approaches the Commission could consider to ensure that investors are informed about their transactions on a timely basis? If so, please describe.
140. While transfer agents may be authorized by an issuer to assist with the enrollment process for plan participants, it may not be clear whether investors have initiated the enrollment or whether the transfer agent solicited the transaction. Similarly, while transfer agents may assist with securityholder inquiries, it may not be clear whether agents in so doing may, inadvertently or not, solicit securityholders for purchase or sale activities. What controls, if any, do transfer agents put in place to prevent solicitation? Do commenters believe those controls are effective? Why or why not? Should the Commission impose additional or different controls? Why or why not? Please explain.
As noted, the transfer agent rules established by the Commission are designed not only to ensure that transfer agents meet prescribed performance standards for their core recordkeeping and transfer activities, but to ensure they are regulated appropriately in the
Accordingly, the Commission seeks comment on the following:
141. What activities do transfer agents outsource, domestically or foreign, and why? Does the outsourcing of these activities present risks or raise other issues? What is the empirical evidence? What regulations, if any, should the Commission impose to address these risks? For example, should the Commission require outsourcing arrangements to be memorialized in a written agreement detailing the allocation of responsibilities? Why or why not? If such a written agreement were required, should the Commission require some or all records associated with the performance of the agreement to be considered records of the registered transfer agent and therefore subject to inspection by the Commission? Why or why not? Should outsourcing arrangements be disclosed in Form TA-2? Why or why not? Should the Commission apply different standards or different rules to transfer agents who use or engage in outsourcing activities? If so, what standards should apply, and why? Please identify any tradeoffs, including any costs and benefits that the Commission should consider. Please also provide supporting empirical evidence, if available.
142. Are there non-U.S. regulations governing transfer agents operating outside the United States that commenters believe the Commission could use as a model for similar regulations in the United States? If so, why, and how do these regulations serve the public interest in the jurisdictions in which they apply? If the Commission were to consider similar regulations, in what ways should such regulations be tailored to operations in the U.S. securities markets? What tradeoffs should the Commission consider in evaluating the alternatives?
143. Should the Commission's transfer agent rules apply with equal force to U.S. and non-U.S. transfer agents (or non-U.S. subsidiaries of U.S.-based transfer agents) that provide transfer-related services for Qualifying Securities? Why or why not?
144. Should the Commission codify existing staff interpretations stating that registered transfer agents that service at least one Qualifying Security must apply all of the transfer agent rules to all securities serviced by that transfer agent, including non-Qualifying Securities? Alternatively, should the Commission provide exemptions regarding non-Qualifying Securities from one or more or from all of the Commission's transfer agent rules? Why or why not? If so, what exemptions would be appropriate, and why? How would any such exemptions protect investor funds and securities, ensure the safe and efficient functioning of the National C&S System, and ensure appropriate oversight by regulators of transfer agents and the entities that perform services on their behalf?
145. Are there technological, legal, policy, or other reasons why a registered transfer agent would not be able to apply the transfer agent rules to all securities serviced by the transfer agent? Why or why not? If so, should the Commission provide exemptions to address such issues, and what should such exemptions provide?
146. Do transfer agents typically have access to or control over records created or held by sub-contractors?
147. Do other transfer agent activities, such as operating call centers, present investor protection or other concerns? How are call center employees supervised? How are call center employees trained on applicable federal securities law and legal documents that may govern or affect the issuer, for example policies and procedures of the issuer and, for certain types of issuers, prospectus limitations? Are risks greater if these securityholder services are conducted by offshore call centers?
148. Should the Commission impose additional recordkeeping, processing, and transfer rules on outside entities retained by transfer agents to address concerns that third-party firms may pose a risk to investors and the National C&S System? If so, should those rules apply to foreign firms that are engaged in services for U.S. issuers? Why or why not?
149. As noted, both Reg SDR and Reg SBSR may permit, in certain circumstances, substituted compliance for foreign participants and registrants. Should the Commission take a similar approach to regulating non-U.S. transfer agents? Why or why not?
We are also interested in more generalized concerns related to transfer agents and any other issues that commenters may wish to address relating to transfer agents. For example, we seek comment on how the role of transfer agents may continue to evolve, and what regulatory challenges these changes may pose. Please be as specific as possible in your discussion and analysis of any additional issues. In connection with comments, we also welcome comments that respond to requests for comment or of their own accord, and/or suggest specific amendments or new additions to the transfer agent rules including draft rule text. We also request commenters to provide any specific, detailed data and information related to potential or actual costs and benefits associated with any of the suggested reforms, changes, or amendments discussed throughout this release. Accordingly, the Commission seeks comment on the following:
150. Do the transfer agent rules accomplish the Commission's regulatory objectives of protecting investors, promoting the prompt and accurate clearance and settlement of securities transactions, and evaluating transfer agents' ability to perform their functions properly? Why or why not? Please provide a full explanation.
151. Do the current transfer agent rules adequately address the interests of issuers? If not, in what ways do they not address issuers' interests and should they? Why and in what way?
152. Do the current transfer agent rules adequately address the interests of other market participants? If not, in what ways do they not address those interests and should they? Why and in what way?
153. Some of the original transfer agent rules established metrics-based performance standards designed to measure the transfer and processing of paper certificates. Given the prevalence of electronic transactions, do those metrics-based performance standards adequately address transfer agents' operational capabilities, which now largely depend on systems and technology that did not exist when the original rules were adopted in 1977? Should the Commission rely on a different or additional approach to
154. In what ways do the activities performed and services provided by transfer agents differ depending on the type of issuer, asset class, product category, market segment, or other factors the transfer agent is servicing? For example, are there differences in activities, services, or other areas between issuers that act as their own transfer agent and independent transfer agents? If so, what are those differences? Do a transfer agent's processes differ if the transfer agent is servicing debt securities instead of equity securities? If a transfer agent primarily services debt securities, do the transfer agent's processes differ depending on the specific type of debt security being serviced (
155. Do commenters believe that transfer agent servicing of debt securities raises different issues or concerns than those raised by servicing of equity securities? Do commenters believe there are specific risks or issues related to transfer agents' servicing of debt issues that are not addressed by existing Commission transfer agent rules? Are there differences in agreements that equity transfer agents enter into with issuers as compared to transfer agency agreements between debt transfer agents and issuers, including differences in services to be provided, methods of compensation, or any other topics?
156. Should the Commission propose different rules for different types of transfer agents depending on the particular issuer type, asset class, or market segment serviced by the transfer agent? Why or why not?
157. What fees do transfer agents assess with respect to processing DRS instructions? How and to whom are such fees assessed? Do commenters believe the Commission should consider regulating such fees in some manner? If so, why and how? Please explain.
158. Do transfer agent fees vary, depending upon the asset class of the security serviced by the transfer agent? If so, how do they vary? To what extent does competition among transfer agents constrain such fees, and what is the evidence? Should the Commission require that any such fees be fair and reasonable? Why or why not? Please provide a full explanation.
159. To what extent are co-transfer agents used in securities processing today? Should the Commission amend its rules with respect to co-transfer agents?
160. What, if any, are the problems in the marketplace today with respect to the role of transfer agents and corporate actions? Should the Commission propose rules governing transfer agent services provided in connection with corporate actions? Why or why not? If so, which types of services provided in connection with corporate actions should the Commission consider regulating?
161. Should the Commission propose rules requiring standardized corporate actions processing as a method to facilitate communications among market participants? Why or why not? If so, what are the primary market issues that such a standardization program is likely to address? Would there be any market issues that such a standardized program would not be able to address? Please explain.
162. What, if any, are the risks posed by transfer agents' role when they serve as: (i) Tender agent; (ii) subscription agent; (iii) conversion agent; or (iv) escrow agent? Do commenters believe rules governing transfer agent services provided in connection with these services would be appropriate? Why or why not? If so, what regulatory action should the Commission consider to address those concerns and why?
163. Do commenters believe there are any concerns that might arise from regulation of the proxy tabulation process generally and the transfer agents' role in the proxy process in particular? If so, what regulatory action, if any, should the Commission consider to address those concerns and why?
164. Is the role that transfer agents play in the proxy process useful for efficient, accurate, and timely communications between issuers and their securityholders? In light of comments previously received by the Commission in connection with its concept release concerning the proxy process, are there additional concerns regarding consolidation in the market? If so, please describe any such concerns.
165. In connection with considerations of transfer agents' role within the National C&S System, do commenters believe the creation of an SRO for transfer agents would be useful or appropriate? Why or why not? If so, what should the scope of the purview of such an SRO be, and what should the SRO be tasked with? Please explain.
166. Do commenters believe the introduction of certain alternatives to the current central securities depository model, such as a modified transfer agent depository, could be beneficial to issuers, securityholders, and/or the National C&S System? Why or why not? Could it co-exist with the current central depository system? Why or why not? What would such a modified depository entail or look like?
167. Some observers have commented that current DTC requirements, such as those related to DRS and FAST, operate as so-called
168. Should the Commission propose any other amendments to the transfer agent rules that are not discussed above? If so, please describe what amendments should be considered and why, including any information on the benefits, risks, and/or burdens of any suggested approach.
169. How might the transfer agent industry continue to evolve in the future, and what challenges might that evolution pose for the regulatory structure? What regulatory issues and other challenges are posed by the industry's increasing concentration and specialization? What does the decline in the number of registered securityholders mean for the industry, and for the regulatory regime? Do commenters believe that, as dematerialization progresses, the role of transfer agents to operating companies will change? If so, will it converge with that of Mutual Fund Transfer Agents? If so, what are the possible implications of this?
170. Are there any other issues that commenters may wish to address relating to transfer agents? Please provide a full explanation.
By the Commission.
Agricultural Marketing Service, USDA.
Final rule.
This rule implements the provisions of section 10004 of the Agricultural Act of 2014 and modifies the organic assessment exemption regulations under 23 Federal marketing orders and 22 research and promotion programs (commodity promotion programs). This rule amends the current regulations to allow persons that produce, handle, market, process, manufacture, feed, or import “organic” and “100 percent organic” products to be exempt from paying assessments associated with commodity promotion activities, including paid advertising, conducted under a commodity promotion program administered by the Agricultural Marketing Service (AMS), regardless of whether the person requesting the exemption also produces, handles, markets, processes, manufactures, feeds, or imports conventional or nonorganic products. Currently, only persons that exclusively produce and market products certified as 100 percent organic are eligible for an exemption from assessments under commodity promotion programs. This rule expands the exemption to cover all “organic” and “100 percent organic” products certified under the National Organic Program regardless of whether the person requesting the exemption also produces, handles, markets, processes, manufactures, feeds, or imports conventional or nonorganic products.
Barry Broadbent, Senior Marketing Specialist, or Michelle Sharrow, Branch Chief, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938; or email:
Prior documents in this proceeding:
Proposed rule; Published in the
Proposed rule; Extension of comment period; Published in the
This final rule is being issued by the Department of Agriculture (USDA) with regard to Federal marketing orders in conformance with Executive Orders 12866, 13563, and 13175.
With regard to research and promotion programs, Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This action has been designated as a “non-significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget has waived the review process.
Additionally, with regard to research and promotion programs, this action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 11 of the Beef Promotion and Research Act of 1985 (7 U.S.C. 2910) provides that it shall not preempt or supersede any other program relating to beef promotion organized and operated under the laws of the United States or any State.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 524 of the Commodity Promotion, Research, and Information Act of 1996 (7 U.S.C. 7423) provides that it shall not affect or preempt any other Federal or State law authorizing promotion or research relating to an agricultural commodity.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 4512(a) of the Dairy Production Stabilization Act of 1983 provides that nothing in this Act may be construed to preempt or supersede any other program relating to dairy product promotion organized and operated under the laws of the United States or any State.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 1212(c) of the Hass Avocado Promotion, Research and Information Act of 2000 (7 U.S.C. 7811) provides that nothing in this Act may be construed to preempt or supersede any program relating to Hass avocado promotion, research, industry information, and consumer information organized and operated under the laws of the United States or of a State.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 1930 of
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 580 of the Popcorn Promotion, Research, and Consumer Information Act (7 U.S.C. 7489) provides that nothing in this Act preempts or supersedes any other program relating to popcorn promotion organized and operated under the laws of the United States or any State.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 1628 of the Pork Promotion, Research, and Consumer Information Act of 1985 (7 U.S.C. 4817) states that the statute is intended to occupy the field of promotion and consumer education involving pork and pork products and of obtaining funds thereof from pork producers. The regulation of such activity (other than a regulation or requirement relating to a matter of public health or the provision of State or local funds for such activity) that is in addition to or different from the Pork Act may not be imposed by a State.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Additionally, section 1974 of the Soybean Promotion, Research, and Consumer Information Act (7 U.S.C. 6309) provides, with certain exceptions, that nothing in the Soybean Act may be construed to preempt or supersede any other program relating to soybean promotion, research, consumer information, or industry information organized under the laws of the United States or any State. One exception in the Soybean Act concerns assessments collected by Qualified State Soybean Boards (QSSBs). The exception provides that, to ensure adequate funding of the operations of QSSBs under the Soybean Act, no State law or regulation may limit or have the effect of limiting the full amount of assessments that a QSSB in that State may collect, and which is authorized to be credited under the Soybean Act. Another exception concerns certain referenda conducted during specified periods by a State relating to the continuation of a QSSB or State soybean assessment.
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect.
This final rule is issued under the 23 Federal marketing orders and the 22 research and promotion programs established under the following acts: Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 601-674) (AMAA); Beef Promotion and Research Act of 1985 (7 U.S.C. 2901-2911); Commodity Promotion, Research, and Information Act of 1996 (7 U.S.C. 7411-7425); Cotton Research and Promotion Act of 1966 (7 U.S.C. 2101-2118); Dairy Production Stabilization Act of 1983 (7 U.S.C. 4501-4514); Egg Research and Consumer Information Act of 1974 (7 U.S.C. 2701-2718); Fluid Milk Promotion Act of 1990 (7 U.S.C. 6401-6417); Hass Avocado Promotion, Research, and Information Act of 2000 (7 U.S.C. 7801-7813); Mushroom Promotion, Research, and Consumer Information Act of 1990 (7 U.S.C. 6101-6112); Popcorn Promotion, Research, and Consumer Information Act of 1996 (7 U.S.C. 7481-7491); Pork Promotion, Research, and Consumer Information Act of 1985 (7 U.S.C. 4801-4819); Potato Research and Promotion Act of 1971 (7 U.S.C. 2611-2627); Soybean Promotion, Research, and Consumer Information Act (7 U.S.C. 6301-6311); and Watermelon Research and Promotion Act (7 U.S.C. 4901-4916). These acts are collectively referred to as “commodity promotion laws.”
The preceding acts provide that administrative proceedings must be exhausted before parties may file suit in court. Under those acts, any person subject to an order may file a petition with the Secretary of Agriculture stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. The petitioner is afforded the opportunity for a hearing on the petition. After the hearing, the Secretary will make a ruling on the petition. The acts provide that the district courts of the United States in any district in which the person is an inhabitant, or has his principal place of business, has the jurisdiction to review the Secretary's rule, provided a complaint is filed within 20 days from the date of the entry of the ruling. There are no administrative proceedings that must be exhausted prior to any judicial challenge to the provision of the Beef Promotion and Research Act of 1985.
Section 10004 of the Agricultural Act of 2014 (2014 Farm Bill) (Pub. L. 113-79) amended Section 501 of the Federal Agriculture Improvement and Reform Act of 1996 (FAIR Act) (7 U.S.C. 7401) on February 7, 2014. Section 501 of the FAIR Act establishes certain provisions for generic commodity promotion programs created under the various commodity promotion laws. Section 501 of the FAIR Act was previously amended in May 2002, by Section 10607 of the Farm Security and Rural Investment Act (2002 Farm Bill) (Pub. L. 107-171) to exempt persons that produced and marketed solely 100 percent organic products, and who did not otherwise produce or market any conventional or nonorganic products, from the payment of an assessment for commodity promotion program activities under a commodity promotion law.
Section 10004 of the 2014 Farm Bill subsequently expanded the organic assessment exemption to apply to any agricultural commodity that is certified as “organic” or “100 percent organic” as defined by the National Organic Program (NOP) (7 CFR part 205). The amendment further requires the Secretary of Agriculture to promulgate regulations concerning the eligibility and compliance procedures necessary to implement the exemption. Consistent with that provision of the 2014 Farm Bill, this final rule amends the organic assessment exemption provisions contained in 23 Federal marketing orders and 22 research and promotion programs to cover all certified “organic” or “100 percent organic” products of a producer, handler, marketer, processor, manufacturer, feeder, or importer regardless of whether the agricultural commodity subject to the exemption is produced, handled, marketed, processed, manufactured, fed, or imported by a person that also produces, handles, markets, processes, manufactures, feeds, or imports conventional or nonorganic agricultural products, including conventional or
On December 16, 2014, a proposed rule was published in the
In this final rule, USDA is making revisions to the general regulations affecting the 23 marketing order programs established under the AMAA. In addition, USDA is making similar amendments to the orders, plans and/or regulations of the 22 research and promotion programs administered by AMS. Also, USDA is terminating the existing provisions in § 1209.52 of the mushroom research and promotion order that are not consistent with amendments to the order's organic assessment exemption provisions contained in § 1209.252. The termination of § 1209.52(a)(2) and (a)(3) is authorized by § 1209.71(a) of the order. Lastly, while the existing organic exemption provisions will terminate in § 1209.52 of the order, this rule establishes revised organic exemption provisions in section § 1209.252(a) of the regulations.
Consistent with the provisions of the 2014 Farm Bill, this final rule modifies the current regulatory provisions that exempt organic producers, handlers, first handlers, marketers, processes, manufacturers, feeders, and importers from the payment of commodity promotion program assessments used to fund commodity promotion activities, including paid advertising, under a commodity promotion law.
This final rule is different from the proposed rule in a number of respects. The final rule has been revised to improve the clarity of certain provisions, to maintain conformity with the provisions of the FAIR Act, and to establish or promote consistency across all of the commodity promotion programs. The modifications to the proposed rule, as detailed herein, do not substantially alter the regulatory effect of the originally proposed text.
Specifically, this final rule revises the organic assessment exemption eligibility requirements for mushrooms contained in § 1209.252(a) to add clarity and to promote consistency with the organic assessment exemption requirements contained in § 900.700 and the other 21 research and promotion orders, plans, and/or regulations.
In addition, this final rule removes a current provision included in 14 research and promotion orders, plans, and/or regulations (7 CFR parts 1150, 1205, 1207, 1209, 1210, 1216, 1218, 1219, 1220, 1221, 1230, 1250, 1260, and 1280) that addresses the exemption eligibility of products produced and marketed under an organic system plan but not sold, labeled, or represented as organic. The provision was removed to align the modified organic assessment exemption regulations with the FAIR Act.
Lastly, this final rule makes technical, non-substantive changes to the regulatory text to aid clarity and promote uniformity in all of the organic assessment exemption regulations contained herein. This includes repositioning certain paragraphs in § 1212.53 to eliminate potential confusion between the program's minimum quantity and organic assessment exemption procedures.
USDA received 731 timely comments from individuals, conventional and organic producers, industry organizations, research and promotion boards/councils, marketing order boards/committees, and organic trade associations. Of those comments, 550 were in favor of the rule, 10 opposed the rule, and 33 did not state a position. USDA determined that 138 of the comments were non-substantive in nature and did not address the merits of the proposed rule.
Fourteen of the comments were submitted by entities requesting an extension of the original comment period. Nine of the fourteen entities that submitted comments requesting an extension submitted additional comments after the comment period extension was granted by USDA.
Of the substantive comments submitted after the comment period extension, 20 were from research and promotion or marketing order boards/councils/committees, 15 were from organic agriculture trade associations, 5 were from agriculture trade associations, and 5 were from large organic handlers.
The comments largely fall into three broad categories. One category addresses issues of eligibility and the application of the FAIR Act. Another category addresses issues concerning the assessment exemption reporting requirements and safeguards. The last category addresses administrative and procedural issues.
The provision was incorporated into the regulations to ensure that incidental non-conformance with the 2002 Farm Bill threshold requirement of “produces and markets solely 100 percent organic products” would not disqualify a producer from eligibility for an organic assessment exemption. Without the provision, under a strict interpretation of the 2002 Farm Bill statute, a certified organic producer under the NOP who produced and marketed any products through any conventional marketing channel, for any reason, would be ineligible for an organic assessment exemption. The provision was intended to reconcile administrative inconsistencies between the 2002 Farm Bill language and the intent of Congress in creating the exemption. USDA determined that certain common and acceptable production and marketing practices of NOP certified organic production operations could be allowed without jeopardizing the integrity of the exemption, even if some of those practices led to products entering conventional markets.
Under the provision, organic product produced in excess of demand in the organic market is permitted to enter a conventional market without jeopardizing the entity's organic assessment exemption status. Additionally, it allows product from buffer zones on certified organic production operations that could not otherwise be marketed as organic in an
In the proposed rule, USDA proposed making modifications to the provision and retaining it in the regulations of the 14 research and promotion programs that currently contain the language.
A number of the commenters submitted comments with regard to the provision as proposed. Several commenters suggested that the provision be expanded to all commodity promotion programs to promote uniformity. A number of other commenters assert that the provision creates a free rider situation when organic product exempt from assessment is allowed to enter the conventional market. They claim that organic product exempt from assessment would have an unfair competitive cost advantage when competing with conventionally produced product in the conventional market. In addition, the commenters asserted that exempt organic product in the conventional market would benefit from commodity promotion programs without having contributed to the cost of the promotion program. The commenters recommended the removal of the provision from the 14 programs that currently contain such language to rectify the inequitable situation moving forward.
After further consideration, with the expansion of the organic assessment exemption eligibility requirements in the 2014 Farm Bill to include split operations, any provision in the organic assessment exemption regulations to make allowances for product entering conventional markets in an effort to preserve an applicant's eligibility for the organic assessment exemption will no longer be necessary moving forward. In addition, if perpetuated, the provision could facilitate an unfair competitive environment and negatively impact conventional producers and marketers.
Therefore, for the reasons discussed above, USDA has removed the aforementioned provision from the 14 research and promotion programs that currently have the language in their orders/plans/regulations. As such, as a result of the modifications contained herein, all product that enters a conventional or non-organic market outlet will be subject to assessment in accordance with the respective commodity promotion program's order, plan, or regulation.
A number of commenters recommended amending the definition of “producer” (also “handler,” “processor,” and “importer”) in each of the orders, plans, and/or regulations covered under this rule for a blanket exclusion of participation from all program activities for entities who receive an organic assessment exemption. The commenters believe that entities that are exempt from the payment of assessments should not be allowed to be appointed board members and vote in referenda.
Currently, eight research and promotion programs specify a minimum quantity of product (referred to as the “de minimis” amount) that must be produced, handled, processed, or imported for an entity to be required to pay the commodity promotion assessment (7 CFR parts 1160, 1206, 1207, 1208, 1209, 1210, 1215, and 1221). For those programs, entities that produce, handle, process, or import quantities of product below a specified de minimis amount are, by definition, not required to pay assessments. The other research and promotion programs do not have de minimis as part of the definition of regulated entities, but rather within the assessment section of the programs' regulatory provisions.
Entities that are exempt by definition and/or entities that receive an assessment exemption are ineligible for nomination for board membership and for voting in referenda. While an entity operating below the de minimis level may be exempt from assessment provisions of an order/plan/regulation, all regulated entities are required to maintain reports to carry out the provisions of the program.
The Fluid Milk Promotion Program (7 CFR part 1160) is an example of a research and promotion program that specifies a de minimis amount in the definition. The definition specifically states “the term fluid milk processor shall not include in each of the respective fiscal periods those persons who process and market not more than 3,000,000 pounds of such fluid milk products during the representative month.” As such, since the provisions of the program only apply to fluid milk processors, and the definition of fluid milk processor does not include entities that process under 3,000,000 pounds of fluid milk a month, an entity that processes less than 3,000,000 pounds of fluid milk a month is not subject to the assessment provisions of the program, but must still report the quantity of fluid milk processed for the representative month of each fiscal period to verify its regulatory status.
An example of a research and promotion program that specifies a de minimis quantity in its assessment regulation is blueberries. A producer under the Blueberry Promotion, Research, and Information Order (7 CFR part 1218) is defined as “any person who grows blueberries in the United States for sale in commerce, or a person who is engaged in the business of producing, or causing to be produced for any market, blueberries beyond the person's own family use and having value at first point of sale.” However, any producer who produces less than 2,000 pounds of blueberries annually, and applies for such exemption, is not required to pay assessments. Blueberry producers who produce less than 2,000 pounds of blueberries however continue to be subject to the reports, books, and recordkeeping requirements in the blueberry order.
Since representation on the commodity promotion program boards is already reserved for regulated entities that financially participate in a commodity promotion program, it is unnecessary to amend program definitions. This includes all exemptions under these programs, including organic exemptions. Under existing procedures for the previous more narrowly defined organic exemption, entities that are exempt from paying assessments as a result of the organic exemption cannot participate in the program. This will not change with the expansion of the organic exemption.
Entities subject to the provisions of an order that produce, handle, market, process, manufacture, feed, or import both organic and conventional or nonorganic products (split operations), and are granted an organic assessment exemption are still subject to assessment on their conventional or nonorganic product. Under those circumstances, with the payment of any amount of an assessment, no matter how small, an entity would be eligible to participate in the program's activities.
USDA notes that the commenters' recommendation could only be applied to the research and promotion programs and not Federal marketing orders, as the
Based on the above, no changes have been made to the regulations as a result of the comments submitted.
Under the FAIR Act, a “commodity promotion law” is defined as “a Federal law that provides for the establishment and operation of a promotion program regarding an agricultural commodity that includes a combination of promotion, research, industry information, and/or consumer information activities, is funded by mandatory assessments on producers or processors, and is designed to maintain or expand markets and uses for the commodity” (7 U.S.C. § 7401(a)). The FAIR Act further establishes that the exemption of certified organic products from commodity promotion program assessments be limited to “the payment of assessments under a commodity promotion law.”
When the organic assessment exemption was first established as a result of 2002 Farm Bill amendments to the FAIR Act, USDA interpreted the law to apply to all of the activities of all established and future commodity promotion programs created “under a commodity promotion law,” as defined. Therefore, USDA amended all of the research and promotion programs' plans, orders, and/or regulations to exempt entities that were solely 100 percent certified organic from payment of the entire amount of a program's assessment.
However, regarding Federal marketing orders, USDA interpreted the FAIR Act to only apply to expenditures directly related to marketing promotion activities under a marketing order. Under 7 U.S.C. 7401(a)(1), the definition of “commodity promotion law” specifically narrows the term, as it relates to marketing order programs, to just include “the marketing promotion provisions under section 8c(6)(I) of the Agricultural Adjustment Act (7 U.S.C. 608c(6)(I)).” Therefore, in the establishment of the organic assessment exemption regulations for Federal marketing orders in § 900.700(a), USDA defined the term “marketing promotion” to mean “marketing research and development projects, and marketing promotion, including paid advertising, designed to assist, improve, or promote the marketing, distribution, and consumption of the applicable commodity.” Under § 900.700(d), the organic assessment exemption is not applicable to the portion of assessment that directly funds the other authorized activities of a marketing order, such as minimum quality regulation, mandatory inspection, container requirements, volume control, or production research.
A number of commenters submitted comments regarding the application of the organic assessment exemption to production research. Some of the commenters believe that the assessments allocated to fund production research projects under a research and promotion program should not be subject to an organic assessment exemption. The commenters believe that production research has applicability to all production within a commodity's industry and that organic entities should contribute to the cost along with other entities. In a contrary position, many commenters believe that all research, both production and marketing oriented, has no benefit to the organic industry and that the organic industry should not be expected to fund it. Commenters from both sides of the issue submitted proposed changes to be made to the regulations.
USDA believes that the provisions of the FAIR Act have been properly applied under both Federal marketing orders and research and promotion programs. Therefore, no changes have been made to the regulations as a result of the comments.
The 2014 Farm Bill amendment to the FAIR Act expanded the eligibility criteria for organic assessment exemptions to allow split operations, which are entities that produce, handle, market, process, manufacture, feed, or import organic and conventional or nonorganic products within the same business operation. The FAIR Act amendment renders the current reporting requirement for full disclosure of all commodities produced, handled, marketed, processed, manufactured, fed, or imported by an entity unnecessary moving forward, as an applicant no longer has to show that they are an exclusively organic operation to be granted an organic assessment exemption. As such, the current organic assessment exemption application requirements in the regulations have been revised to remove the requirement that lists all of an entity's commodities on the organic assessment exemption application form.
In addition, as a result of the modified reporting requirements contained in the regulations, the current approved organic assessment exemption request forms, Forms AMS-15 and FV-649, will be modified accordingly. A more detailed discussion regarding the changes to these forms can be found under the Paperwork Reduction Act heading below.
Many commenters supported the reduction in reporting requirements that resulted from this rule. They believed that reducing the paperwork burden on organic entities, many of which are small, would benefit the organic industry. However, while the commenters believed that the reduction in required documentation was a positive step, they recommended abandoning the annual reapplication requirement to reduce further the paperwork burden on organic entities. They suggest only requiring an entity submit an initial application for an organic assessment exemption and, if so granted, making the exemption perpetual. Additionally, several commenters recommended tying the organic assessment exemption to the organic certificate that is issued under the NOP by a USDA-accredited certifying agent to a certified organic operation, thus continuing eligibility for the organic assessment exemption until the applicant either surrenders their exemption rights or ceases to operate
A number of other commenters support increasing the reporting requirements to ensure compliance under the expanded organic assessment exemption. Under the modified provisions effectuated herein, split operations will now be allowed to request and receive organic assessment exemptions. As such, entities with some organic products and some conventional or nonorganic products will be allowed to request an assessment exemption on the organic portion of the products they produce or market. Several commenters recommended increasing the reporting requirements for these split operations to accurately account for the quantity of product that will continue to be subject to assessment. They believe that requiring applicants to disclose both the anticipated quantities of organic product and conventional or nonorganic product that the entity expects to produce, handle, market, process, manufacture, feed, or import will aide in maintaining the integrity of each program.
USDA believes that information collection is an important part of every commodity promotion program in general, and is integral to the oversight of the organic assessment exemption under each of those commodity promotion programs specifically. USDA agrees with the commenters that recommended increasing the information collection regarding the commodity research and promotion programs and will further revise Form AMS-15 accordingly. On the request form, applicants will be required to self-identify split operations and estimate the assessable and non-assessable quantities of product for the year. Specifically, applicants must report the estimated total quantity of product that the applicant expects to produce, handle, market, process, manufacture, feed, or import; the estimated quantity of product that will be certified organic; and the estimated quantity of product that will be conventional or nonorganic.
In addition, if needed, all commodity promotion programs have the ability, within their orders, plans, and/or regulations, to modify their reporting requirements outside the scope of the organic assessment exemption request form. If additional information is deemed necessary to administer a commodity promotion program and ensure its integrity with respect to the organic assessment exemption, the respective board/committee/council could initiate rulemaking to that effect.
USDA also believes that it is necessary to require applicants to submit an application annually for the proper administration of the organic assessment exemption by the boards/committees/councils. The oversight of organic assessment exemptions will necessitate the collection and retention of current and accurate information regarding the exempted entities. Reliance on AMS-NOP to facilitate the collection and dissemination of information needed by the commodity promotion programs to administer the organic assessment exemption, as suggested by commenters, is not practical at this time.
Therefore, in light of the above discussion, Form AMS-15 will be further revised to require the necessary information for commodity research and promotion programs to properly administer the organic assessment exemption. No additional changes will be made to Form FV-649 for Federal marketing orders and no changes will be made to the regulations as proposed.
A number of commenters submitted recommendations for safeguarding the organic assessment exemption against abuse. Some commenters suggested mandatory audits of firms that are granted an organic assessment exemption. Other commenters suggested including on the exemption request form explicit detail of the potential penalties for the fraudulent use of an organic assessment exemption (
USDA will be adding a statement regarding the potential penalties for fraudulent use of an organic assessment exemption language to Form AMS-15 in an effort to make it more consistent with other exemption forms. This is in addition to the other revisions concerning the estimated amount of product produced, handled, marketed, processed, manufactured, fed, or imported with an estimated quantity of organic and conventional or nonorganic product. The other safeguard provisions currently contained in the regulations (recordkeeping, reporting, and audit requirements) are adequate for ensuring compliance in the collection of assessments from conventional or nonorganic entities.
A number of commenters recommended that the regulations be modified to clearly state that organic producers, handlers, marketers, processors, manufacturers, feeders, and importers that are eligible for an organic assessment exemption are not obligated to apply for one and that they may voluntarily continue to fund a commodity promotion program.
USDA does not believe that the inclusion of a clause of this nature in the regulations, or on any form, is necessary, as an organic assessment exemption requires that an applicant submit an application to become eligible. The default for an entity subject to regulation is to pay assessments on all products produced, handled, marketed, processed, manufactured, fed, or imported, even entities that produced, handled, marketed, processed, manufactured, fed, or imported organic products. Therefore, no changes to the regulations will be made as a result of this recommendation.
Two commenters submitted comments regarding the financial impact that an organic assessment exemption will have on a commodity promotion program's ability to operate. The commenters believe that the
This action has been undertaken in response to a Congressional mandate and is not discretionary. Two commenters recommended that language be added to the organic assessment exemption regulations for each program to specify that the exemption is only from Federal program assessments and that organic entities must still participate in, and pay assessments to, any state and regional commodity promotion programs that may exist.
USDA does not control state or regional commodity promotion programs. Furthermore, USDA does not address such programs in Federal regulations to maintain a clear separation of jurisdictions, authorities, and powers. However, USDA acknowledges that some state and regional commodity promotion programs work in concert with Federal programs. As such, USDA will encourage the boards/committees/councils that oversee the Federal commodity promotion programs to remind entities that request a Federal organic assessment exemptions that there may be state and regional commodity promotion program assessments that are not exempted as part of a Federal program exemption.
One commenter sought confirmation that all future Federal marketing orders and research and promotion programs established after the effective date of this rule would include an organic assessment exemption similar to the provisions contained herein.
Any new Federal marketing order established under the AMAA would be subject to the provisions of § 900.700. In addition, the FAIR Act provides that the organic assessment exemption be applied to any commodity promotion law. The definition of “commodity promotion law” in the FAIR Act is extended to “any other provision of law enacted after April 4, 1996, that provides for the establishment and operation of an agricultural commodity promotion program.” Therefore, the commenter can reasonably expect that all existing and future commodity promotion programs will have an organic assessment exemption provision similar to that which is contained herein. However, should an organic research and promotion program be established in the future, entities that are currently exempt from payment of commodity promotion program assessments under an organic exemption may be subject to the assessment provisions of an organic research and promotion order.
One commenter stated that the proposed rule did not define, and was not consistent in the use of, the term “split operation.” The term “split operation” is found in the current regulatory provisions of each order, plan, and/or regulation modified by this rule. The term is used interchangeably throughout this rule to describe an entity that produces, handles, markets, processes, manufactures, feeds, or imports organic products, but also produces, handles, markets, processes, manufactures, feeds, or imports conventional or nonorganic products of the same or different agricultural commodities. USDA does not believe that a separate definition of “split operation” is necessary in the regulations.
A commenter questioned the language regarding the eligibility of importers to claim an organic assessment exemption. The commenter recommended adding language to the proposed regulations to reflect that products certified as “organic” and “100 percent organic” under U.S. equivalency arrangements established under the NOP were also eligible for the exemption. Language to that effect has been added to each of the programs' regulations that assess importers (7 CFR parts 1150, 1205, 1206, 1207, 1208, 1209, 1210, 1212, 1214, 1217, 1218, 1219, 1221, 1222, 1230, and 1260).
One commenter suggested that several of the provisions contained in each the various programs are applied inconsistently. Specifically, the commenter believes that the regulations concerning the timeframe that a commodity promotion program board/committee/council has to approve/disapprove an application, how exempt individuals demonstrate their exemption to other parties, and the effective date of the exemption should be consistent among all programs.
USDA believes that the regulations are as uniform as possible within the unique provisions in each of the various commodity promotion program orders, plans, and/or regulations. Variations in fiscal periods, assessment collection procedures, regulated entities, and other factors specific to a program make it difficult to achieve complete consistency across all programs. Therefore, no changes have been made as a result of these comments.
Three commenters believe that entities that have been granted an organic assessment exemption should be required to disclose their exempt status to the parties that purchase their product. The commenters have observed that the market price of a commodity often has a built in premium to account for payment of an assessment to a commodity promotion program and, by not disclosing an organic entity's exemption status, an unfair economic advantage could occur. To address commenters concerns, AMS will amend the current footnote contained in the Federal milk marketing order Class I price announcement related to the Fluid Milk Promotion Order (7 CFR part 1160). Currently the footnote reads, “If fluid milk processors market less than 3,000,000 pounds per month of fluid milk products in consumer packages, they are exempt from paying the 20 cents per hundredweight assessment.” USDA will include new language on the Class I price announcements indicating organic fluid milk processors may be exempt from the fluid milk assessment.
One commenter had concerns about the organic assessment exemption regulations and how they are applied to imported products. The commenter did not feel that the regulations, as proposed, were clear on the issuance of Harmonized Tariff Schedule (HTS) codes for imported products, whether or not U.S. Customs and Border Protection (Customs) would first collect then reimburse the assessment, and how a commodity promotion program board/committee/council would be able to identify and differentiate exempt from non-exempt product. USDA has drafted the regulations to align with current Customs practices. Some agricultural commodities have HTS codes assigned to organically produced product and some do not. As such, some products may be imported under an HTS code that applies the organic assessment exemption directly as the product enters the U.S. and could, therefore, bypass the collection of assessments by Customs. Other commodities may not have an HTS code assigned to organically produced product and the assessment may have to be collected from, and then subsequently reimbursed to, an exempt importer. The procedures for such reimbursements are addressed in each of the research and promotion program plans/orders/regulations.
Therefore, USDA does not believe that the regulations, as proposed, should be changed as a result of this comment. However, the regulations contained herein could be amended in the future to reflect any operational changes from Customs that would make the application of the organic assessment exemption more efficient regarding imported product.
Several commenters expressed concern that extending the organic assessment exemption to split
First, USDA would like to reiterate that the commenters' concerns may only be directed to the provisions of the 22 research and promotion programs, as no Federal marketing order contains a de minimis provision in its definition of “handler”. Next, the comments only pertain to the 8 programs that have de minimis amounts in their definition of the entities that are subject to the provisions of the order/plan/regulation (7 CFR parts 1160, 1206, 1207, 1208, 1209, 1210, 1215, and 1221). Therefore, with regards to the research and promotion programs with de minimis quantities, USDA would like to clarify how the organic assessment exemption will be applied under each of those programs.
To be eligible for an organic assessment exemption, an entity must first be subject to assessment under an order/plan/regulation. This means that the total quantity of a program commodity that an entity produces, handles, markets, processes, manufactures, feeds or imports is greater than the de minimis amount specified in the definition of entities subject to the provisions of the order/plan/regulation. In determining the total quantity, USDA considers all organic, conventional, and nonorganic product in the aggregate, as the provisions of each order/plan/regulation cover all of the commodity produced, handled, marketed, processed, manufactured, fed, or imported, regardless of production method employed in producing those products.
If an entity is subject to assessment after applying the de minimis amount on a total volume basis, then the quantity of organic product that the entity produces, handles, markets, processes, manufactures, feeds, or imports may be considered for an organic assessment exemption. Should the entity be a split operation, the entity would be obligated to pay assessments on the portion of the entity's product that is conventional or nonorganic, regardless of whether or not the quantity of conventional or nonorganic product is below the de minimis amount after exempting the organic product. Once the threshold for being subject to an order/plan/regulation has been met on a total product basis, the entity is subject to the provisions of the program and must pay assessments on any nonexempt product.
In summary, the determination of whether or not an entity is subject to the provisions of an order/plan/regulation comes before any determination of whether or not the entity may be exempt from any of those provisions, including assessment. Simply put, an entity cannot be exempted from a provision that it is not subject to. Further, the approval of an assessment exemption for some or all of an entity's assessable product under an order/plan/regulation cannot be construed as a reduction in the total quantity of product produced or marketed by that entity. The quantity of product on which an assessment exemption is granted cannot be deducted from the entity's total quantity and retroactively be applied to the de minimis amount established under the order/plan/regulation to determine whether or not the entity is subject to the provisions of that order/plan/regulation.
For example, the de minimis quantity for processors under the Popcorn Promotion, Research, and Consumer Information Order (7 CFR part 1215) is 4 million pounds annually. If a popcorn processor processes 6 million pounds annually, the processor is subject to the provisions of the order and is required to pay assessments on the 6 million pounds. If 4 million pounds of the 6 million pounds total are certified organic, the processor may request an organic assessment exemption on those 4 million pounds. However, the processor must pay the assessment on the remaining 2 million pounds, even though that quantity, by itself, would be below the de minimis quantity in the definition of a popcorn processor. The application of the minimum quantity provisions that determine what is subject to an order/plan/regulation are applied prior to the application of any assessment exemption and are not affected by the same after the fact.
Lastly, several commenters requested a delay, up to 120 days, in the implementation of the revised organic assessment exemption provisions to ensure that the expanded organic exemption provisions are implemented consistently and accurately throughout all Federal marketing orders and research and promotion program boards/committees/councils. USDA has reviewed the remittance and exemption procedures of each commodity promotion program and recognizes that there are differences in the timelines that each commodity promotion program board/committee/council follows. USDA recognizes that an implementation date of 90 to 120 days would be optimal. However, USDA also recognizes the significance of the Farm Bill revisions and has determined that an implementation date of 60 days is appropriate.
Section 10004 of the 2014 Farm Bill includes a provision stating that the organic assessment exemption is effective until the date the Secretary issues an organic commodity promotion order under the Commodity Promotion, Research, and Information Act of 1996 (7 U.S.C. 7411-7425). The promulgation of an organic commodity promotion order was also authorized under section 10004 of the 2014 Farm Bill.
The implementation of an organic commodity promotion order would follow the same process as other commodity promotion orders overseen by USDA; the industry submits a proposal for an order that contains analysis, justification, objectives, impact on small businesses, evidence of industry support, and the text of the proposed order. USDA would then review and publish the proposed order in the
In May 2015, USDA received an industry proposal for an organic commodity promotion order. USDA is currently reviewing the proposal.
The FAIR Act organic exemption amendment, as enacted by the 2014 Farm Bill, covers 23 marketing order programs established under the AMAA (Florida citrus—7 CFR part 905; Texas citrus—7 CFR part 906; Florida avocados—7 CFR part 915; Washington apricots—7 CFR part 922; Washington sweet cherries—7 CFR part 923; Southeastern California grapes—7 CFR part 925; Oregon/Washington pears—7 CFR part 927; Cranberries grown in the States of Massachusetts,
Federal marketing orders are locally administered by committees made up of producers and/or handlers, and often members of the public. Marketing order regulations, initiated by industry and enforced by USDA, bind the entire industry in the geographical area regulated once they are approved by the Secretary of Agriculture. Marketing orders employ one or more of the following authorities: (1) Maintain the high quality of produce available to the market; (2) standardize packages and containers; (3) regulate the flow of product to market; (4) establish reserve pools for storable commodities; and (5) authorize production research, marketing research and development, and advertising. Each unique marketing order helps to promote orderly marketing for the specific commodity and region covered by the regulation.
The 23 specific marketing order programs listed above allow for market promotion activities designed to assist, improve, or promote the marketing, distribution, or consumption of the commodity covered under each specific marketing order. Some of these programs also authorize market promotion in the form of paid advertising. Promotion activities, including paid advertising, are paid for by assessments levied on handlers regulated under the various Federal marketing orders.
Rules of practice and regulations governing all Federal marketing orders established under the AMAA are contained in 7 CFR part 900 General Regulations. Section 900.700 specifies the criteria for identifying persons eligible to obtain an assessment exemption for marketing promotion activities, including paid advertising; procedures for persons to apply for an exemption; procedures for calculating the assessment exemption; and other procedural details pertaining to the 23 marketing order programs that currently engage in, or have the authority for, marketing promotion, including paid advertising.
Currently under those provisions, only handlers that exclusively handle or market products that are eligible to be labeled “100 percent organic” are exempt from the portion of a marketing order assessment applicable to an order's marketing promotion activities, including paid advertising. As such, organic handlers who handle or market any quantity of conventional or nonorganic products in addition to their organic products are not currently able to claim an assessment exemption on any of the products they handle. The 2014 Farm Bill expanded the organic exemption in the FAIR Act to allow all organic handlers to apply for an exemption from assessments on products certified as “organic” or “100 percent organic,” regardless of whether the handler also handles or markets conventional or nonorganic products.
This final rule modifies the organic assessment exemption eligibility criteria contained in § 900.700. The requirements contained in that section will be revised to allow organic operations that are split operations to apply for and receive an assessment exemption on their certified “organic” and “100 percent organic” products, whereas such types of operations are explicitly precluded from the organic assessment exemption under the current language. More specifically, the eligibility provisions contained in § 900.700(b) will be modified to include certified organic handlers that maintain split operations. The section will also be amended to provide that exempt handlers must continue to pay assessments associated with any agricultural products that do not qualify for an exemption under that section.
Handlers who wish to claim the assessment exemption on their organic products will continue to be required to submit an application to the board or committee, and subsequently be approved, to qualify for the organic exemption. However, as a result of the revised eligibility requirements contained herein, the specific information that will be collected from applicants will change. Some of the information collection that is currently necessary for the board or committee to administer the organic assessment exemption will no longer be required moving forward (
The FAIR Act organic exemption amendment contained in the 2014 Farm Bill also covers 22 research and promotion programs established under either freestanding legislation (beef, cotton, dairy, eggs, fluid milk, Hass avocados, mushrooms, popcorn, pork, potatoes, soybeans, and watermelons) or the Commodity Promotion, Research, and Information Act of 1996 (blueberries, Christmas trees, honey, lamb, mangos, paper and paper-based products, peanuts, processed raspberries, softwood lumber, and sorghum).
Wholly funded and operated by industry, the research and promotion programs are charged with creating, maintaining, and expanding markets for the agricultural commodities they represent. While these programs are overseen by AMS, including the review of all financial budgets, marketing plans, and research projects, they are governed by boards and councils made up of industry participants. Producers, handlers, processors, manufacturers, feeders, importers, and/or others in the marketing chain pay assessments to the representative boards and councils to fund each program's activities. Industries voluntarily request the formation of these programs, which allows them to establish, finance, and execute coordinated programs of research, producer and consumer education, and generic commodity promotion to improve, maintain, and develop markets for their respective commodities.
Under this final rule, the eligibility criteria for obtaining an organic assessment exemption, as contained in each of the research and promotion orders, plans, and/or regulations, will be revised. The requirements for such an exemption will be modified to allow split organic operations to apply for and receive an assessment exemption on their certified “organic” and “100 percent organic” products, whereas such types of operations are explicitly precluded from the assessment exemption under the current provisions in each program. In addition, language will be added to provide that exempt producers, handlers, marketers, processors, manufacturers, feeders, or importers must continue to pay any assessments associated with any agricultural products that do not qualify for an exemption.
Persons who wish to claim the assessment exemption on their organic products will continue to be required to submit an application to the board or council, and subsequently be approved, to qualify for the organic exemption. However, as a result of the revised eligibility requirements contained herein, the specific information that will be collected from applicants will change. Some of the information collection that is currently necessary for the board or council to administer the organic assessment exemption will no longer be required moving forward (
This final rule will modify the eligibility requirements for organic assessment exemptions that are currently in place for marketing order programs. Under this action, persons who are subject to an assessment under a designated marketing order, who maintain a valid organic certificate, and who handle any assessable agricultural commodities that are certified as “organic” or “100 percent organic” (as defined in the NOP) will be eligible for the organic assessment exemption under amended requirements in part 900.
All of the 23 Federal marketing orders impacted by this rule assess only handlers (
The 2002 Farm Bill amended the FAIR Act to make organic assessment exemptions available to any person that “produces and markets” organic products, should they also conform to certain other criteria. This rule will incorporate the broadened eligibility criteria established by the 2014 Farm Bill amendment to the FAIR Act into the regulations. Importers of commodities covered by section 8e of the Agricultural Marketing Agreement Act of 1937 will remain ineligible for an exemption as importers do not pay assessments under marketing order programs.
In addition, the FAIR Act amendment also expanded eligibility to cover split organic operations. The requirement that operations be “solely” 100 percent organic was replaced with the requirement that operations maintain a “valid organic certificate” issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP. Handlers who handle certified “organic” and/or “100 percent organic” products will qualify for an organic assessment exemption regardless of whether the commodity subject to the exemption is handled by a person that also handles conventional or nonorganic agricultural products of the same commodity as that for which the exemption is claimed.
For all examples, assume that the person handles or markets a commodity regulated under a marketing order, is otherwise obligated to pay assessments under that order, and that 60 percent of the marketing order's budgeted expenses are attributed to market promotion activities, including paid advertising:
• A handler who handles all of their volume as certified “organic” or “100 percent organic” product (received from certified organic producers), and maintains a valid organic certificate under the NOP, will be eligible for an organic assessment exemption. The handler will be exempt from 100 percent of the portion of the marketing order assessment attributed to marketing promotion activities (60 percent). The handler will be obligated to pay 40 percent of the assessment rate on 100 percent of the product handled. The assessment calculation will be: Quantity handled × 40 percent of the assessment rate.
• A handler who handles 20 percent of their volume as certified “organic” or “100 percent organic” product (received from certified organic producers) and maintains a valid organic certificate under the NOP will be eligible for an organic assessment exemption. The handler will be exempt from the portion of the marketing order assessment attributed to marketing promotion activities (60 percent) on the quantity of the products handled that are organic (20 percent). Conversely, the handler will be obligated to pay 40 percent of the assessment rate on 20 percent of the product handled and 100 percent of the assessment rate on 80 percent of the product handled. The assessment calculation will be: (Quantity handled × 20 percent × 40 percent of the assessment rate) + (quantity handled × 80 percent × assessment rate).
• A handler who handles 20 percent of their volume as “organic” or “100 percent organic” received from certified organic producers, but does NOT maintain a valid organic certificate under the NOP, will NOT be eligible for any exemption of their marketing order assessments as they do not have proper certification. The handler will be obligated to pay 100 percent of the assessment associated with the quantity of product handled.
• An importer who imports a commodity that is subject to import regulation under section 8e will NOT be eligible for an exemption from marketing order assessments as importers are not obligated to pay assessments under a marketing order or the import regulations.
Just as for Federal marketing orders, this final rule will modify the eligibility requirements for organic assessment exemptions that are currently in place for research and promotion programs. Under this proposed action, persons who are subject to an assessment under a designated research and promotion program, who maintain a valid organic certificate, and who handle any assessable agricultural commodities that are certified as “organic” or “100 percent organic” (as defined in the NOP) will be eligible for an organic assessment exemption under amended requirements contained in each of the programs' respective orders, plans, and/or regulations. Persons who are importing organic products in compliance with a U.S. equivalency arrangement established by AMS-NOP
For the 22 research and promotion programs currently enacted, 16 assess producers, 2 assess handlers, 2 assess manufacturers, 2 assess processors, and 16 assess importers. Under the provisions for each of the respective programs, some also assess other entities, in addition to the named classes, including exporters, feeders, and seed stock producers. Any of the entities obligated to pay assessments under one of the aforementioned programs is eligible for an organic assessment exemption.
Under the current regulation, organic assessment exemptions are available to any person who “produces or markets solely 100 percent organic products” and conforms to certain requirements. As mentioned previously, the recent amendment to the FAIR Act expands the organic assessment exemption eligibility to any person that “produces, handles, markets, or imports” organic products under a “valid organic certificate” issued under the OFPA and the NOP. This final rule will remove the “solely 100 percent organic” requirement currently in the regulations and allow split operations to request an organic assessment exemption for all products that qualify as certified “organic” and “100 percent organic.” Also, just as for Federal marketing orders, “person” will continue to mean any individual, group of individuals, corporation, association, cooperative, or other business entity engaged in any of the aforementioned activities.
For all examples, assume that the person produces, handles, processes, or imports a commodity regulated under a research and promotion program and is otherwise obligated to pay assessments under that order:
• A producer who maintains a valid organic certificate under the NOP and markets 100 percent of the products they produce as certified “organic” or “100 percent organic” will be eligible for an organic exemption on 100 percent of the quantity produced.
• A handler who maintains a valid organic certificate under the NOP and handles 20 percent of the products they handle as certified “organic” or “100 percent organic” products will be eligible for an organic exemption on 20 percent of the total quantity they handle. Conversely, the handler will continue to be obligated to pay the full assessment on the 80 percent of the total quantity they handle that is not “organic” or “100 percent organic.” The assessment calculation will be: Quantity produced × 80 percent × assessment rate.
• A producer who has a split operation (50 percent organic and 50 percent conventional or nonorganic) with the combined total of production above the de minimis amount and maintains a valid organic certificate under NOP for the 50 percent organic product will be eligible for an exemption on the organic portion, but must pay on the 50 percent conventional or nonorganic portion—even though the remaining conventional or nonorganic portion is below the de minimis amount.
• A processor who processes 20 percent of their volume as “organic” or “100 percent organic” products received from certified organic producers, but does NOT maintain a valid organic certificate under the NOP, will NOT be eligible for any exemption of their assessment obligation as they are NOT a certified handling operation. The processor will be obligated to pay 100 percent of the assessment associated with the quantity of product they processed and marketed.
• An importer who maintains a valid organic certificate under the NOP and markets the products that they import as organic products, but the producers of the products are NOT certified under the NOP, will be eligible for an organic assessment exemption if the product is certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP.
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS is required to examine the impact of this final rule on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Accordingly, AMS has considered the economic impact of this action on small entities and has prepared this final regulatory flexibility analysis.
Marketing orders issued pursuant to the AMAA, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
Assessments under marketing order programs are paid by the handlers regulated under each of the Federal marketing orders. There are approximately 950 handlers regulated under the 23 Federal marketing orders with market promotion authority (there are 28 marketing orders total—5 do not have authority for market promotion activities). Currently, only 10 entities handle or market solely 100 percent organic products and claim exemptions from paying assessments for market promotion activities, including paid advertising, under the assessment exemption regulations contained in § 900.700. USDA believes that as many as 20 percent of the entities handling agricultural products under the various marketing orders (approximately 190 firms) may handle some quantity of organic products, but do not qualify for an assessment exemption under the current regulations.
Small agricultural service firms are defined by the Small Business Administration (SBA) as those having annual receipts of less than $7,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000 (13 CFR 121.201). All of the entities currently approved for an organic assessment exemption under the marketing order programs would be classified by SBA as small agricultural service firms. In addition, although the exact number of potential applicants is unknown, USDA believes that many of the entities that will become eligible for an organic assessment exemption as a result of this action may also be classified as small firms under the SBA classification.
As previously mentioned, Section 501 of the FAIR Act was amended by the 2002 Farm Bill to exempt persons that produced and marketed solely 100 percent organic products, and were not split operations, from the payment of an assessment for commodity promotion activities under a commodity promotion law. The amendment required the Secretary to promulgate regulations with regard to the eligibility and compliance of such organic assessment exemptions. AMS subsequently added § 900.700 to the General Regulations (7 CFR part 900) governing Federal marketing orders to establish the criteria and procedure for obtaining an organic assessment exemption.
On February 7, 2014, the FAIR Act was again amended by the 2014 Farm Bill to broaden the eligibility criteria for receiving an organic assessment exemption under a commodity promotion program. Specifically, the 2014 Farm Bill amendment to the FAIR Act exempts persons that produce, handle, market, or import products certified as “organic” or “100 percent organic” from payment of assessments under a commodity promotion program. The exemption applies regardless of
As required, USDA is amending the general regulations that will affect 23 of the 28 Federal marketing orders that have authority for market promotion, including paid advertising. These amendments modify the current provisions and broaden the eligibility for organic handling operations to become exempt from paying assessments on the certified “organic” and “100 percent organic” products that they handle, regardless of whether the handler is a split operation.
The 23 marketing order programs affected by this final rule allow for promotion activities designed to assist, improve, and promote the marketing, distribution, or consumption of the commodities covered under the marketing orders. Some of the orders also include authority for paid advertising. Expenses necessary to administer the programs are paid for by assessments levied on handlers regulated under the various marketing orders. Market promotion activities, including paid advertising, are only one component of each marketing order's regulatory scheme. The assessment exemption for organic products only applies to the portion of a marketing order assessment that is associated with market promotion activities, including paid advertising. All handlers subject to regulation under a marketing order are obligated to pay the portion of the assessment that is not directly related to market promotion, including paid advertising. This includes handlers who are granted an organic assessment exemption.
Under this final rule, § 900.700 is amended to broaden the criteria for persons eligible to obtain an assessment exemption for marketing promotion, including paid advertising; streamline the procedure for applying for an exemption; modify the procedure for calculating the assessment exemption; and revise other procedural details necessary to effectuate the 2014 Farm Bill amendment. These changes will allow more handlers to qualify for an organic assessment exemption than are presently eligible under the current regulations.
Regarding the impact on affected entities under a marketing order, this final rule will impose minimal incurred costs in filing the exemption application and in maintaining records needed to verify the applicant's exemption status during the period that the entity is exempt. Under the revised regulations, applicants will still be required to submit an application for exemption on Form FV-649 and receive approval from the applicable board or committee to obtain the assessment exemption. However, the eligibility criteria has been broadened and the amount of documentation required of an applicant has been reduced, thus reducing the burden on entities who wish to participate. Applicants will continue to submit one application annually. The annual burden associated with requests for organic assessment exemptions for all of the marketing order industries is estimated to total 47.5 hours (190 applicants × 15 minutes) (see the Paperwork Reduction Act section below for greater explanation of the information collection and recordkeeping burden).
The total estimated cost burden associated with the information collection is estimated to be $712, or $3.75 per applicant. The total cost was estimated by multiplying the expected burden hours associated with the organic exemption application (47.5 hours) by $15.00 per hour, a sum deemed reasonable should an applicant be compensated for their time.
During the 2012-2013 marketing season, assessments for all Federal marketing orders totaled approximately $89,700,000. Of that amount, about $58,300,000 (or 65 percent) was made available for marketing promotion activities, including paid advertising. While there is not enough information to generate a reasonable estimate, USDA believes about two percent, on average, of the total assessments are for commodities that are certified organic. Thus, assessments on organic commodities might have totaled as much as $1,794,000 (2 percent of $89,700,000). That total might be reduced moving forward by $1,166,000 (65 percent of $1,794,000—the portion of the assessments made available for marketing activities) if all of the approximately 190 handlers that USDA believes may be eligible were to apply to the respective board or committee and be approved for an organic assessment exemption under the revised regulations.
There are approximately 10 handlers that are approved for organic assessment exemptions under the current regulation, with a total exempted amount of approximately $135,000. The current exemption averages approximately $13,500 per handler. Based on the estimate that 190 handlers might be exempt from assessments under the proposed criteria, and an estimated $1,166,000 of potential exemptions, USDA estimates that exempted organic handlers may average $6,136 in decreased assessments. This amount is less than half of the current average. However, the revised eligibility requirements are expected to attract more handlers than under the current regulations. Many of those handlers may be small entities or may only handle a small percentage of organic products relative to the total amount of product handled.
There is some variation among the 23 marketing orders on the percent of assessments used for market promotion activities, including paid advertising. Thus, the actual reduction in assessments will differ among the various marketing orders. In fact, the amounts allocated for marketing promotion activities as a percentage of the total marketing order budgets range from less than 5 percent to almost 95 percent. As such, the financial impact of this rule to each handler individually, and to each of the 23 distinct marketing order programs collectively, cannot be accurately estimated. However, several of the affected marketing order programs do expect to see large reductions in assessment revenue moving forward. The Oregon-Washington Fresh Pear Committee anticipates a $362,718 reduction in assessments (approximately 3.8 percent of total assessments), the California Almond Board expects a reduction of $298,000 (approximately 0.5 percent), and the California Raisin Administrative Committee expects a reduction of $180,000 (approximately 3.5 percent) as a result of the expanded eligibility for organic assessment exemptions. These boards and committees will have to adjust programs and reduce budgeted expenses accordingly.
Since this action has the potential to exempt agricultural handling entities from assessments, AMS believes that this rule will have a net beneficial economic impact on exempted firms. The additional burden associated with the additional information collection will be more than offset by reduced assessment obligations. The benefits for this final rule are not expected to be disproportionately greater or less for smaller entities than for larger entities regulated under any of the 23 marketing order programs.
Research and promotion programs established under the various commodity promotion acts, and the rules and regulations issued thereunder,
Producers, handlers, processors, manufacturers, importers, exporters, feeders, and seed stock producers pay assessments to the national boards and councils that administer the various commodity research and promotion programs, or in some cases to other parties designated by a board or council to collect assessments. The number of entities paying assessments under each of the research and promotion programs varies considerably. For example, the mango program receives assessments from approximately 198 handlers and importers, while the beef program receives assessments from nearly 1 million producers and 125 importers.
As mentioned previously, small agricultural service firms are defined by the SBA as those having annual receipts of less than $7,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000. Many of the handlers, importers, manufacturers, exporters, feeders, and seed stock producers currently approved for organic assessment exemptions under the research and promotion programs would be classified by SBA as small agricultural service firms. In addition, most of the producers currently approved for exemptions would also be classified as small agricultural producers. The exact number and size of the potential applicants that will be eligible for an assessment exemption as a result of this action is not known. The current and estimated number of respondents filing exemption claims appears later in this discussion; however, USDA believes that many of the entities that will become eligible for an organic assessment exemption under the regulation changes contained herein may also be classified as small firms and/or small producers under the SBA classification.
This final rule was initiated as a result of amendments to the FAIR Act contained in the 2014 Farm Bill. This rule modifies the organic assessment exemption regulations established under each of the 22 research and promotion programs to revise the eligibility criteria for obtaining an organic assessment exemption. As revised, the regulations provide that entities that produce, handle, market, process, manufacture, feed, or import organic products may be exempt from the payment of an assessment under a commodity promotion law with respect to any agricultural commodity that is certified as “organic” or “100 percent organic” under the NOP. The exemption will apply to the certified “organic” or “100 percent organic” products regardless of whether the agricultural commodity subject to the exemption is produced, handled, marketed, processed, manufactured, fed, or imported by a person that also produces, handles, markets, processes, manufactures, feeds, or imports conventional agricultural products. This is a change from the previous regulations, which only allowed organic assessment exemptions for organic operations that produced and marketed solely products that were “100 percent organic” as defined under the OFPA and were not split operations.
Under the previous regulations, eligible producers, handlers, marketers, processors, manufacturers, exporters, feeders, and importers that wished to be exempted from assessment on their certified organic products must have first submitted a request for exemption to the appropriate board or council on Form AMS-15. This provision does not change as a result of this final rule. However, this action does change the information collection requirements for requesting an organic assessment exemption to reflect the revised eligibility criteria and will necessitate modifying Form AMS-15 to reflect the changes established by this rule. The modified form will continue to be required under the revised regulations to assist the board or council in the effective administration of the exemption and to ensure compliance with the exemption requirements.
In preparing this final regulatory flexibility analysis, AMS has attempted to identify the entities that will be affected by this final rule and examine the potential impact on such entities. AMS has determined that this action will have little negative impact on entities subject to research and promotion programs. Further, the changes will only impose minimal costs incurred in the filing of the exemption request and in maintaining records needed to verify the applicant's exemption status during the period that the entity is exempt. Under the revised regulations, the required information collection burden will be about the same for entities who wish to initiate or perpetuate an organic assessment exemption. Applicants will continue to be required to submit one application annually.
All of the entities paying assessments to the research and promotion programs are eligible to take advantage of the rule changes contained herein, provided the parties elect to apply and otherwise comply with the exemption requirements as specified under each of the individual orders.
Approximately 1,493 entities are currently approved for organic assessment exemptions under the 22 research and promotion programs. Organic assessment exemptions for the past year were approximately $1,400,000 for all of the programs in aggregate. In 2013, it is estimated that the dairy promotion and research program had the largest number of exemptions, with 1,150 producers exempt, and the highest dollar amount, with nearly 1 million dollars of assessment exemptions. Participation in the other programs varied. Ten of the 22 research and promotion programs currently do not have any entities approved for organic assessment exemptions.
The estimated number of respondents filing exemption claims with the boards or councils after implementation of the changes to the regulations is anticipated as follows:
No respondents are expected from among Christmas tree, paper and paper-based packaging, or softwood lumber entities, given the nature of their industries. In addition, several of the programs exempt smaller entities from assessment—fluid milk processors processing less than 3 million pounds; egg producers owning 75,000 or fewer hens; raspberry producers producing less than 20,000 pounds; mushroom producers producing less than 500,000 pounds; honey first handlers handling less than 250,000 pounds; popcorn processors processing less than 4 million pounds; blueberry producers producing less than 2,000 pounds; and sorghum importers importing less than 1,000 bushels of grain or 5,000 tons of silage. More new respondents would be expected under those programs if the smaller entities were not already exempt based on minimum quantities.
Under the revised regulations, the annual burden related to submitting requests for organic assessment exemptions for all of the entities covered under the 22 research and promotion programs is estimated to total 2,552.75 hours (10,211 entities × 15 minutes) (see the Paperwork Reduction Act section for more detail). The total financial burden associated with the information collection for all industries covered by the programs is estimated to be $38,291.25, or $3.75 per applicant. The total cost was estimated by multiplying the expected burden hours associated with the exemption application (2,552.75 hours) by $15.00 per hour, a sum deemed reasonable should an applicant be compensated for their time.
This final rule will allow eligible producers, handlers, first handlers, marketers, processors, manufacturers, importers, exporters, feeders, and importers to request an exemption from paying assessments on products certified as “organic” or “100 percent organic.” This action revises the organic exemption eligibility criteria under each of the research and promotion programs, thereby making the exemption available to more entities. The revised eligibility criteria are expected to increase the total number of participants as well as the total amount of organic assessment exemptions under each of the programs. The estimated total in organic assessment exemption amounts expected to result from revising the eligibility requirements are as follows:
There are no estimated assessment exemption amounts for the Christmas tree, paper and paper-based-packaging, or softwood lumber programs given the nature of these industries. Some boards and councils were able to estimate the number of organic production and marketing operations within their industries; however, based upon current data, there is not enough information to generate a reasonable estimate of the potential dollar amount of organic assessment exemptions reported as “no estimate.” The boards and councils that reported “no estimate” generally represent programs that estimated small percentages of participation amongst their industries. As a result of this action, some of the boards and councils listed above may have to adjust programs or reduce budgeted expenses in response to organic assessment exemptions.
Since this action has the potential to exempt agricultural production, handling, and marketing entities from assessments, this rule will have an additional burden associated with the additional information collection, which will be more than offset by reduced assessment obligations. The benefits for this action are not expected to be disproportionately greater or less for small producers, handlers, or marketers than for larger entities regulated under any of the 22 research and promotion programs.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection requirements have been previously approved by the Office of Management and Budget (OMB) under 23 Federal marketing order programs (7 CFR parts 905, 906, 915, 922, 923, 925, 927, 929, 930, 932, 948, 955, 956, 958, 959, 966, 981, 982, 984, 985, 987, 989, and 993) and 22 research and promotion programs (7 CFR parts 1150, 1160, 1205, 1206, 1207, 1208, 1209, 1210, 1212, 1214, 1215, 1216, 1217, 1218, 1219, 1220, 1221, 1222, 1230, 1250, 1260, and 1280). Upon publication of this final rule, AMS will submit a Justification for Change to OMB for the AMS-15 Exemption Application Form for Research and Promotion Programs, OMB No. 0581-0093 National Research, Promotion and Consumer Information Programs. AMS will also submit a Justification for Change to OMB for the FV-649 Exemption Application Form for Marketing Orders, OMB No. 0581-0216 Fruit and Vegetable Marketing Orders Certified Organic Handler Marketing Promotion Assessment Exemption under 23 Federal Marketing Orders. The Justification for Change will request approval for an increase in
After consideration of all relevant material presented, including information submitted by the commenters and other information, it is hereby found that this rule, as hereinafter set forth, is consistent with and will effectuate the declared policy of the previously referenced commodity promotion laws, the 2014 Farm Bill, and the FAIR Act.
Administrative practice and procedure, Freedom of information, Marketing agreements, Reporting and recordkeeping requirements.
Dairy products, Reporting and recordkeeping requirements, Research.
Milk, Reporting and recordkeeping requirements.
Advertising, Agricultural research, Cotton, Marketing agreements, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Consumer information, Agricultural research, Mango, Marketing agreements, Reporting and recordkeeping requirements.
Advertising, Agricultural Research, Potatoes, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Marketing agreements, Raspberries, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Mushrooms, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Reporting and recordkeeping requirements, Watermelons.
Administrative practice and procedure, Advertising, Agricultural research, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Christmas trees, Marketing agreements, Reporting and recordkeeping requirements.
Administrative practice and procedures, Advertising, Agricultural research, Popcorn, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Peanuts, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Marketing agreements, Reporting and recordkeeping requirements, Softwood lumber.
Administrative practice and procedure, Advertising, Agricultural Research, Blueberries, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Avocados, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Reporting and recordkeeping requirements, Soybeans.
Administrative practice and procedure, Advertising, Agricultural research, Consumer information, Marketing agreements, Reporting and recordkeeping requirements, Sorghum.
Administrative practice and procedure, Advertising, Labeling, Marketing agreements, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Meat and meat products, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Eggs and egg products, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Imports, Meat and meat products, Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Agricultural research, Meat and meat products, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR parts 900, 1150, 1160, 1205, 1206, 1207, 1208, 1209, 1210, 1212, 1214, 1215, 1216, 1217, 1218, 1219, 1220, 1221, 1222, 1230, 1250, 1260, and 1280 are amended as follows:
7 U.S.C. 601-674 and 7 U.S.C. 7401.
(a) This section specifies criteria for identifying persons eligible to obtain an exemption from the portion of the assessment used to fund marketing promotion activities under a marketing order and the procedures for applying for such an exemption under 7 CFR parts 905, 906, 915, 922, 923, 925, 927, 929, 930, 932, 948, 955, 956, 958, 959, 966, 981, 982, 984, 985, 987, 989, 993, and such other parts (included in 7 CFR parts 905 through 998) covering marketing orders for fruits, vegetables, and specialty crops as may be established or amended to include market promotion. For the purposes of this section, the term “assessment period” means fiscal period, fiscal year, crop year, or marketing year as defined under these parts; the term “marketing promotion” means marketing research and development projects or marketing promotion, including paid advertising designed to assist, improve, or promote the marketing, distribution, or consumption of the applicable commodity.
(b) A handler who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic handling system plan and is subject to assessments under a part or parts specified in paragraph (a) of this section may be exempt from the portion of the assessment applicable to marketing promotion, including paid advertising, provided that:
(1) Only agricultural commodities certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a handler regardless of whether the agricultural commodity subject to the exemption is handled by a person that also handles conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The handler maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522)(OFPA) and the NOP regulations issued under OFPA (7 CFR part 205);
(4) Any handler so exempted shall continue to be obligated to pay assessments under such part or parts specified that are associated with any agricultural products that do not qualify for an exemption under this section; and
(5) For exempted products, any handler so exempted shall be obligated to pay the portion of the assessment associated with the other authorized activities under such part or parts other than marketing promotion, including paid advertising.
(c)
(i) The date, applicable committee or board, and Federal marketing order number;
(ii) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(iii) Certification that the applicant maintains a valid certificate of organic operation under the OFPA and the NOP;
(iv) Certification that the applicant handles or markets organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(v) Certification that the applicant is otherwise subject to assessments under the Federal marketing order program for which the exemption is requested;
(vi) The number of organic certified producers for whom they handle or market product (including the applicant);
(vii) A requirement that the applicant attach a copy of their certificate of organic operation and all applicable producer certificates of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(viii) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(ix) Such other information as the committee or board may require, with the approval of the Secretary.
(2) The handler shall file the application with the committee or board, prior to or during the applicable assessment period, and annually thereafter, as long as the handler continues to be eligible for the exemption. If the person complies with the requirements of this section and is eligible for an assessment exemption, the committee or board will approve the exemption request and provide written notification of such to the applicant within 30 days. If the application is disapproved, the committee or board will provide written notification of the reason(s) for such disapproval within the same timeframe.
(3) The exemption will apply at the beginning of the next assessable period following notification of approval of the assessment exemption, in writing, by the committee or board.
(d)
(2) If a committee or board does not plan to conduct any market promotion activities in a fiscal year, the committee or board may submit a certification to that effect to the Secretary, and as long as no assessments for such fiscal year are used for marketing promotion projects, or the administration of projects are funded by a previous fiscal period's assessments, the committee or board may assess all handlers, regardless of their organic status, the full assessment rate applicable to the assessment period.
(3) For each assessment period, the Secretary shall review the portion of the assessment rate applicable to marketing promotion for persons eligible for an exemption and, if appropriate, approve the assessment rate.
(4) When the requirements of this section for exemption no longer apply to a handler, the handler shall inform the committee or board within 30 days and pay the full assessment on all remaining assessable product for all committee or board assessments from the date the handler no longer is eligible to the end of the assessment period.
(5) Within 30 days following the applicable assessment period, the committee or board shall re-compute the applicable assessment rate for handlers exempt under this section based on the actual expenditures incurred during the applicable assessment period. The Secretary shall review, and if appropriate, approve any change in the portion of the assessment rate for market promotion applicable to exempt handlers, and authorize adjustments for any overpayments or collection of underpayments.
7 U.S.C. 4501-4514 and 7 U.S.C. 7401.
(a) A producer described in § 1150.152(a)(1) and (2) who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of the producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) To apply for exemption under this section, a producer subject to assessments pursuant to § 1150.152(a)(1) and (2) shall submit a request to the Board on an
(c) A producer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid organic certificate issued under the OFPA and the NOP;
(3) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a producer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(e) A producer approved for exemption under this section shall provide a copy of the Certificate of Exemption to each person responsible for remitting assessments to the Board on behalf of the producer pursuant to § 1150.152(a).
(g) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments on those products. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” dairy products on an
(i) An importer who is exempt from payment of assessments under paragraph (g) of this section shall be eligible for reimbursement of assessments collected by the CBP on certified “organic” or “100 percent organic” dairy products and may apply to the Secretary for a reimbursement. The importer would be required to submit satisfactory proof to the Secretary that the importer paid the assessment on exempt organic products.
7 U.S.C. 6401-6417 and 7 U.S.C. 7401.
(b) A fluid milk processor described in § 1160.211(a) who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic handling system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a fluid milk processor regardless of whether the agricultural commodity subject to the exemption is processed by a person that also processes conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The fluid milk processor maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522)(OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any fluid milk processor so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(c) To apply for an assessment exemption, a fluid milk processor described in § 1160.211(a) shall submit a request to the Board on an
(d) A fluid milk processor request for exemption shall include the following information:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid organic certificate issued under the OFPA and the NOP;
(3) Certification that the applicant processes organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(e) If a fluid milk processor complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the processor within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
7 U.S.C. 2101-2118.
(a) A producer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under the OFPA (7 CFR part 205); and
(4) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) To apply for an exemption under this section, an eligible cotton producer shall submit a request for exemption to the Board on an
(c) A producer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant produces and/or imports organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a producer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(e) A producer approved for exemption under this section shall provide a copy of the Certificate of Exemption to each handler to whom the producer sells cotton. The handler shall maintain records showing the exempt producer's name and address and the exemption number assigned by the Board.
(f) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments on those products. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” cotton and cotton products on an
(h) An importer who is exempt from payment of assessments under paragraph (f) of this section shall be eligible for reimbursement of assessments collected by Customs on certified “organic” or “100 percent organic” cotton and cotton products and may apply to the Secretary for a reimbursement. The importer would be required to submit satisfactory proof to the Secretary that the importer paid the assessment on exempt organic products.
7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
(a) A first handler who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic handling system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products handled by the first handler regardless of whether the agricultural commodity subject to the exemption is handled by a person that also handles conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The first handler maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any first handler so exempted shall continue to be obligated to pay assessments under this part that are
(b) To apply for exemption under this section, an eligible first handler shall submit a request for exemption to the Board on an
(c) A first handler request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant handles organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a first handler complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the first handler within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(e) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, shall be exempt from the payment of assessments on those products. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” mangos on an
(g) An importer who is exempt from payment of assessments under paragraph (e) of this section shall be eligible for reimbursement of assessments collected by the CBP on certified “organic” or “100 percent organic” mangos and may apply to the Secretary for a reimbursement. The importer would be required to submit satisfactory proof to the Secretary that the importer paid the assessment on exempt organic products.
7 U.S.C. 2611-2627 and 7 U.S.C. 7401.
(a) A producer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522)(OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) To apply for exemption under this section, the producer shall submit a request to the Board on an
(c) The producer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a producer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(e) A producer approved for exemption under this section shall provide a copy of the Certificate of Exemption to each handler to whom the producer sells potatoes. The handler shall maintain records showing the exempt producer's name and address and the exemption number assigned by the Board.
(f) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S.
7 U.S.C. 7411-7425; 7 U.S.C. 7401.
(d)
(i) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(ii) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(iii) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(iv) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(2) To apply for exemption under this section, an eligible producer shall submit a request to the Council on an
(3) A producer request for exemption shall include the following:
(i) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(ii) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(iii) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(iv) A requirement that the applicant attach a copy of their certificate of organic operation provided by a USDA-accredited certifying agent under the OFPA and the NOP;
(v) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(vi) Such other information as may be required by the Council, with the approval of the Secretary.
(4) If a producer complies with the requirements of this section, the Council will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Council will notify the applicant of the reason(s) for disapproval within the same timeframe.
(5) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments on those products. Such importer may submit documentation to the Council and request an exemption from assessment on certified “organic” or “100 percent organic” processed raspberries on an
7 U.S.C. 6101-6112 and 7 U.S.C. 7401.
(a) The following persons shall be exempt from assessments under this part:
(1) A person who produces or imports, on average, 500,000 pounds or less of mushrooms annually shall be exempt from assessments under this part.
(2) [Reserved]
The revision and addition read as follows:
(a) * * *
(2) In addition to the exemption provided for in § 1209.52, a producer or importer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production or handling system plan may be exempt from the payment of assessments under this part, provided that:
(i) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(ii) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer or importer regardless of whether the agricultural commodity subject to the exemption is produced or imported by a person that also produces or imports conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(iii) The producer or importer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522)(OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(iv) Any producer or importer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(3) To apply for an exemption for organic mushrooms:
(i) An eligible mushroom producer shall submit a request for exemption to the Council on an
(ii) A producer request for exemption shall include the following:
(A) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(B) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(C) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(D) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(E) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(F) Such other information as may be required by the Council, with the approval of the Secretary.
(iii) If a producer complies with the requirements of this section, the Council will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Council will notify the applicant of the reason(s) for disapproval within the same timeframe.
(iv) An eligible mushroom importer shall submit a request for exemption from assessment on imported certified “organic” or “100 percent organic” mushrooms, or mushrooms certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, on an
(v) The exemption will apply immediately following the issuance of the Certificate of Exemption.
7 U.S.C. 4901-4916 and 7 U.S.C. 7401.
(a) A producer or handler who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production or handling system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer or handler regardless of whether the agricultural commodity subject to the exemption is produced or handled by a person that also produces or handles conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer or handler maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522)(OFPA) and the NOP regulations issued under the OFPA (7 CFR part 205); and
(4) Any producer or handler so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) To apply for exemption under this section, an eligible producer or handler shall submit a request to the Board on an
(c) The request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic
(3) Certification that the applicant produces or handles organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a producer or handler complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer or handler within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(f) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments on those products. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” watermelons on an
7 U.S.C. 7411-7425; 7 U.S.C. 7401.
The revisions read as follows:
(c) A first handler or importer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic handling system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP), or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a first handler or importer regardless of whether the agricultural commodity subject to the exemption is handled or imported by a person that also handles or imports conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The first handler or importer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any first handler or importer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(5) Persons eligible for an organic assessment exemption as provided this section may apply for such an exemption by submitting a request to the Board on an
(i) A first handler or importer request for exemption shall include the following:
(A) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(B) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(C) Certification that the applicant handles or imports organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(D) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(E) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(F) Such other information as may be required by the Board, with the approval of the Secretary.
(ii) Upon receipt of an application, the Board shall determine whether an exemption may be granted and issue a Certificate of Exemption to the first handler or importer within 30 calendar days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe. It is the responsibility of the first handler or importer to retain a copy of the certificate of exemption.
(e) Exempt importers shall be eligible for reimbursement of assessments collected by Customs.
(1) Importers exempt under paragraph (a) of this section must apply to the Board for reimbursement of any assessment paid. No interest will be paid on the assessment collected by Customs. Requests for reimbursement must be submitted to the Board within 90 days of the last day of the calendar year the honey or honey products were imported.
(2) If Customs collects the assessment on exempt product under paragraph (b) of this section that is identified as “organic” by a number in the Harmonized Tariff Schedule, the Board must reimburse the exempt importer the assessments paid upon receipt of such assessments from Customs. For all other exempt organic product for which Customs collects the assessment, the importer may apply to the Board for a
(g) Any person who desires an exemption from assessments for a subsequent calendar year shall reapply to the Board for a certificate of exemption.
7 U.S.C. 7411-7425; 7 U.S.C. 7401.
(c)
(i) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(ii) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(iii) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(iv) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(2) To apply for exemption under this section, an eligible producer shall submit a request to the Board on an
(3) A producer request for exemption shall include the following:
(i) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(ii) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(iii) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(iv) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent;
(v) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(vi) Such other information as may be required by the Board, with the approval of the Secretary.
(4) If a producer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(5) An importer who imports Christmas trees that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” Christmas trees on an
(6) If Customs collects the assessment on exempt product under paragraph (c)(5) of this section that is identified as “organic” by a number in the Harmonized Tariff Schedule, the Board must reimburse the exempt importer the assessments paid upon receipt of such assessments from Customs. For all other exempt organic product for which Customs collects the assessment, the importer may apply to the Board for a reimbursement of assessments paid, and the importer must submit satisfactory proof to the Board that the importer paid the assessment on exempt organic product.
(7) The exemption will apply immediately following the issuance of the Certificate of Exemption.
7 U.S.C. 7481-7491 and 7 U.S.C. 7401.
(b) Persons that operate under an approved National Organic Program (7 CFR part 205) (NOP) organic handling system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a processor regardless of whether the agricultural commodity subject to the exemption is processed by a person that also processes conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The processor maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any processor so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
The revisions and addition read as follows:
(b) Persons eligible for an organic assessment exemption as provided in § 1215.52(b) may apply for such an exemption by submitting a request to the Board on an
(c) A processor request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant processes organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) Upon receipt of an application, the Board shall determine whether an exemption may be granted and issue a Certificate of Exemption to the processor within 30 calendar days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
(a) A producer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OPFA (7 CFR part 205); and
(4) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) In order to apply for this exemption, an eligible peanut producer shall submit a request to the Board on an
(c) A producer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid organic certificate issued under the OFPA and the NOP;
(3) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a producer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
7 U.S.C. 7411-7425; 7 U.S.C. 7401.
(d)
(i) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(ii) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a manufacturer regardless of whether the agricultural commodity subject to the exemption is manufactured by a person that also manufactures conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(iii) The manufacturer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(iv) Any manufacturer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(2) To apply for exemption under this section, an eligible manufacturer shall submit a request to the Board on an
(3) A manufacturer request for exemption shall include the following:
(i) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(ii) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(iii) Certification that the applicant manufactures organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(iv) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(v) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(vi) Such other information as may be required by the Board, with the approval of the Secretary.
(4) If a manufacturer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the manufacturer within 30 calendar days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(5) An importer who imports softwood lumber that is eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” softwood lumber on an
(6) If Customs collects the assessment on exempt product under paragraph (d)(5) of this section that is identified as “organic” by a number in the Harmonized Tariff Schedule, the Board must reimburse the exempt importer the assessments paid upon receipt of such assessments from Customs. For all other exempt organic product for which Customs collects the assessment, the importer may apply to the Board for a reimbursement of assessments paid, and the importer must submit satisfactory proof to the Board that the importer paid the assessment on exempt organic product.
(7) The exemption will apply immediately following the issuance of a Certificate of Exemption.
7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
The revisions and additions read as follows:
(c) A producer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(d) To apply for exemption under this section, a producer shall submit a request to the Council on an
(e) A producer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Council, with the approval of the Secretary.
(f) If a producer complies with the requirements of this section, the Council will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Council will notify the applicant of the reason(s) for disapproval within the same timeframe.
(g) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments on those products. Such importer may submit documentation to the Council and request an exemption from assessment on certified “organic” or “100 percent organic” blueberries on an
(j) Importers who are exempt from payment of assessments shall be eligible for reimbursement of assessments collected by Customs and may apply to the Council for a reimbursement of such assessments paid. No interest will be paid on assessments collected by Customs. Requests for reimbursement shall be submitted to the Council within 90 days of the last day of the year the blueberries were actually imported.
7 U.S.C. 7801-7813 and 7 U.S.C. 7401.
(a) A producer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) To apply for exemption under this section, an eligible Hass avocado producer shall submit a request to the Board on an
(c) A producer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a producer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(f) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments on those products. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” Hass avocados on an
7 U.S.C. 6301-6311 and 7 U.S.C. 7401.
(a) A producer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer maintains a valid certificate of organic operation as issued
(4) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) To apply for an exemption under this section, the producer shall submit a request to the Board on an
(c) A producer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a producer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
(g) A producer or importer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production or handling system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP), or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer or importer regardless of whether the agricultural commodity subject to the exemption is produced or imported by a person that also produces or imports conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer or importer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any producer or importer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(h) To apply for an exemption under this section, the applicant shall submit a request to the Board on an
(i) A producer or importer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant produces or imports organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(j) If the applicant complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer or importer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
7 U.S.C. 7411-7425; 7 U.S.C. 7401.
(b)
(i) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(ii) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a manufacturer regardless of whether the agricultural commodity subject to the exemption is manufactured by a person that also manufactures conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(iii) The manufacturer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(iv) Any manufacturer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(2) To apply for exemption under this section, an eligible manufacturer shall submit a request to the Board on an
(3) A manufacturer request for exemption shall include the following:
(i) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(ii) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(iii) Certification that the applicant manufactures organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(iv) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(v) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(vi) Such other information as may be required by the Board, with the approval of the Secretary.
(4) If a manufacturer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the manufacturer within 30 calendar days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(5) An importer who imports paper and paper-based packaging that is eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” paper and paper-based packaging on an
(6) If Customs collects the assessment on exempt product under paragraph (b)(5) of this section that is identified as “organic” by a number in the Harmonized Tariff Schedule, the Board must reimburse the exempt importer the assessments paid upon receipt of such assessments from Customs. For all other exempt organic product for which Customs collects the assessment, the importer may apply to the Board for a reimbursement of assessments paid, and the importer must submit satisfactory proof to the Board that the importer paid the assessment on exempt organic product.
(7) The exemption will apply immediately following the issuance of a Certificate of Exemption.
7 U.S.C. 4801-4819 and 7 U.S.C. 7401.
(a) A producer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) To apply for exemption under this section, a producer shall submit a request to the Board on an
(c) A producer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a producer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(g) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments on those products. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” porcine animals or pork and pork products on an
(i) An importer who is exempt from payment of assessments under paragraph (g) of this section shall be eligible for reimbursement of assessments collected by Customs on certified “organic” or “100 percent organic” porcine animals or pork and pork products and may apply to the Secretary for a reimbursement. The importer would be required to submit satisfactory proof to the Secretary that the importer paid the assessment on exempt organic products.
7 U.S.C. 2701-2718 and 7 U.S.C. 7401.
(b)
(i) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(ii) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(iii) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522)(OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(iv) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(2) To apply for exemption under this section, a producer shall submit a request to the Board on an
(3) A producer request for exemption shall include the following:
(i) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(ii) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(iii) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(iv) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(v) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(vi) Such other information as may be required by the Board, with the approval of the Secretary.
(4) If a producer complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
(5) The producer shall provide a copy of the Certificate of Exemption to each handler to whom the producer sells eggs. The handler shall maintain records showing the exempt producer's name and address and the exemption number assigned by the Board.
(6) The exemption will apply at the first reporting period following the issuance of the Certificate of Exemption.
7 U.S.C. 2901-2911 and 7 U.S.C. 7401.
(a) A producer who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer regardless of whether the agricultural commodity subject to the exemption is produced by a person that also produces conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any producer so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) To apply for exemption under this section, a producer shall submit a request to the Board or QSBC on an
(c) A producer request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant produces organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a producer complies with the requirements of this section, the Board or QSBC will grant an assessment exemption and issue a Certificate of Exemption to the producer within 30 days. If the application is disapproved, the Board or QSBC will notify the applicant of the reason(s) for disapproval within the same timeframe.
(g) An importer who imports products that are eligible to be labeled as “organic” or “100 percent organic” under the NOP, or certified as “organic” or “100 percent organic” under a U.S. equivalency arrangement established under the NOP, may be exempt from the payment of assessments on those products. Such importer may submit documentation to the Board and request an exemption from assessment on certified “organic” or “100 percent organic” cattle or beef and beef products on an
(i) An importer who is exempt from payment of assessments under paragraph (g) of this section shall be eligible for reimbursement of assessments collected by Customs on certified “organic” or “100 percent organic” cattle or beef and beef products and may apply to the Secretary for a reimbursement. The importer would be required to submit satisfactory proof to the Secretary that the importer paid the assessment on exempt organic products.
7 U.S.C. 7411-7425 and 7 U.S.C. 7401.
(a) A producer, seed stock producer, feeder, handler, or exporter who operates under an approved National Organic Program (7 CFR part 205) (NOP) organic production or handling system plan may be exempt from the payment of assessments under this part, provided that:
(1) Only agricultural products certified as “organic” or “100 percent organic” (as defined in the NOP) are eligible for exemption;
(2) The exemption shall apply to all certified “organic” or “100 percent organic” (as defined in the NOP) products of a producer, handler, or exporter regardless of whether the agricultural commodity subject to the exemption is produced, handled, or exported by a person that also produces, handles, or exports conventional or nonorganic agricultural products of the same agricultural commodity as that for which the exemption is claimed;
(3) The producer, handler, or exporter maintains a valid certificate of organic operation as issued under the Organic Foods Production Act of 1990 (7 U.S.C. 6501-6522) (OFPA) and the NOP regulations issued under OFPA (7 CFR part 205); and
(4) Any person so exempted shall continue to be obligated to pay assessments under this part that are associated with any agricultural products that do not qualify for an exemption under this section.
(b) To apply for exemption under this section, the person shall submit a request to the Board on an
(c) The request for exemption shall include the following:
(1) The applicant's full name, company name, address, telephone and fax numbers, and email address;
(2) Certification that the applicant maintains a valid certificate of organic operation issued under the OFPA and the NOP;
(3) Certification that the applicant produces, handles, or exports organic products eligible to be labeled “organic” or “100 percent organic” under the NOP;
(4) A requirement that the applicant attach a copy of their certificate of organic operation issued by a USDA-accredited certifying agent under the OFPA and the NOP;
(5) Certification, as evidenced by signature and date, that all information provided by the applicant is true; and
(6) Such other information as may be required by the Board, with the approval of the Secretary.
(d) If a person complies with the requirements of this section, the Board will grant an assessment exemption and issue a Certificate of Exemption to the applicant within 30 days. If the application is disapproved, the Board will notify the applicant of the reason(s) for disapproval within the same timeframe.
Category | Regulatory Information | |
Collection | Federal Register | |
sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
Publisher | Office of the Federal Register, National Archives and Records Administration |