| Page Range | 26437-26816 | |
| FR Document |
| Page and Subject | |
|---|---|
| 80 FR 26815 - Continuation of the National Emergency With Respect to Actions of the Government of Syria | |
| 80 FR 26559 - Farm Credit Administration Board; Sunshine Act; Regular Meeting | |
| 80 FR 26616 - Request for Comments of a Previously Approved Information Collection: U.S. Merchant Marine Academy Candidate Application for Admission | |
| 80 FR 26616 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel PINEAPPLE PRINCESS; Invitation for Public Comments | |
| 80 FR 26614 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel ARTHUR'S WAY; Invitation for Public Comments | |
| 80 FR 26614 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel SURYA; Invitation for Public Comments | |
| 80 FR 26523 - Ongoing Equivalence Verifications of Foreign Food Regulatory Systems | |
| 80 FR 26615 - Requested Administrative Waiver of the Coastwise Trade Laws: Vessel ANATOLYA; Invitation for Public Comments | |
| 80 FR 26638 - Open Meeting of the Taxpayer Advocacy Panel Toll-Free Phone Line Project Committee | |
| 80 FR 26618 - Open Meeting of the Taxpayer Advocacy Panel Taxpayer Communications Project Committee | |
| 80 FR 26637 - Open Meeting of the Taxpayer Advocacy Panel Taxpayer Assistance Center Improvements Project Committee | |
| 80 FR 26637 - Open Meeting of the Taxpayer Advocacy Panel Special Projects Committee | |
| 80 FR 26637 - Open Meeting of the Taxpayer Advocacy Panel Notices and Correspondence Project Committee | |
| 80 FR 26618 - Open Meeting of the Taxpayer Advocacy Panel Tax Forms and Publications Project Committee | |
| 80 FR 26538 - Foreign-Trade Zone 82-Mobile, Alabama; Application for Reorganization and Expansion Under Alternative Site Framework | |
| 80 FR 26537 - Foreign-Trade Zone (FTZ) 82-Mobile, Alabama; Notification of Proposed Production Activity; Outokumpu Stainless USA, LLC (Stainless Steel Products); Calvert, Alabama | |
| 80 FR 26539 - Foreign-Trade Zone (FTZ) 148-Knoxville, Tennessee; Notification of Proposed Production Activity; CoLinx, LLC (Bearing Units); Crossville, Tennessee | |
| 80 FR 26637 - Open Meeting of the Taxpayer Advocacy Panel Joint Committee | |
| 80 FR 26541 - Pure Magnesium From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2013-2014 | |
| 80 FR 26558 - Proposed Information Collection Request; Comment Request; Part 70 State Operating Permit Program (Renewal) | |
| 80 FR 26518 - Chemical Substances When Manufactured or Processed as Nanoscale Materials; TSCA Reporting and Recordkeeping Requirements; Notice of Public Meeting | |
| 80 FR 26555 - Pesticide Emergency Exemptions; Agency Decisions and State and Federal Agency Crisis Declarations | |
| 80 FR 26618 - Quarterly Publication of Individuals, Who Have Chosen To Expatriate, as Required by Section 6039G | |
| 80 FR 26554 - Agency Information Collection Activities; Proposed Collection; Comment Request | |
| 80 FR 26561 - Office of Engineering and Technology and Wireless Telecommunications Bureau Seeks Information on Current Trends in LTE-U and LAA Technology | |
| 80 FR 26587 - Notice of Information Collection | |
| 80 FR 26568 - Agency Information Collection Activities: Submission for OMB Review; Comment Request | |
| 80 FR 26572 - Agency Information Collection Activities; Proposed Collection; Public Comment Request | |
| 80 FR 26546 - Proposed Information Collection; Comment Request; Socioeconomic Survey-Manell-Geus (Guam) | |
| 80 FR 26551 - Judicial Proceedings Since Fiscal Year 2012 Amendments Panel (Judicial Proceedings Panel); Notice of Federal Advisory Committee Meeting | |
| 80 FR 26571 - Agency Information Collection Activities; Proposed Collection; Public Comment Request | |
| 80 FR 26582 - Announcement of National Geospatial Advisory Committee Meeting | |
| 80 FR 26559 - Environmental Impact Statements; Notice of Availability | |
| 80 FR 26511 - Safety Zone for Fireworks Display, Patapsco River, Inner Harbor; Baltimore, MD | |
| 80 FR 26514 - Safety Zones; Misery Challenge, Manchester Bay, Manchester, MA | |
| 80 FR 26442 - Drawbridge Operation Regulation; Navesink (Swimming) River, Middletown and Rumson, NJ | |
| 80 FR 26445 - Safety Zone; Marine Safety Unit Savannah Safety Zone for Heavy Weather and Other Natural Disasters, Savannah Captain of the Port Zone, Savannah, GA | |
| 80 FR 26443 - Safety Zone, Pamlico River; Washington, NC | |
| 80 FR 26448 - Significant New Use Rules on Certain Chemical Substances | |
| 80 FR 26464 - Grants for Education Programs in Occupational Safety and Health | |
| 80 FR 26566 - Medicare Program; Request for an Exception to the Prohibition on Expansion of Facility Capacity Under the Hospital Ownership and Rural Provider Exceptions to the Physician Self-Referral Prohibition | |
| 80 FR 26584 - Notice of Availability of a Final Environmental Impact Statement for the Cle Elum Pool Raise Project, Kittitas County, Washington | |
| 80 FR 26584 - Notice of Public Meeting for the Glen Canyon Dam Adaptive Management Work Group; Correction | |
| 80 FR 26522 - Notice of Intent To Grant Exclusive License | |
| 80 FR 26565 - Combustion Store Limited v. UniGroup Worldwide-UTS; Notice of Filing of Complaint and Assignment | |
| 80 FR 26547 - Procurement List Additions | |
| 80 FR 26548 - Procurement List; Proposed Additions and Deletions | |
| 80 FR 26638 - Agency Information Collection (Claim for Disability Insurance Benefits, Government Life Insurance) Activity Under OMB Review | |
| 80 FR 26640 - Proposed Information Collection (Post-Engagement) Activity: Comment Request | |
| 80 FR 26639 - Agency Information Collection (Application in Acquiring Specially Adapted Housing or Special Home Adaptation Grant) Activity Under OMB Review | |
| 80 FR 26523 - Notice of Decision To Authorize the Interstate Movement of Sea Asparagus Tips From Hawaii Into the Continental United States | |
| 80 FR 26612 - Qualification of Drivers; Exemption Applications; Epilepsy and Seizure Disorders | |
| 80 FR 26640 - Agency Information Collection (Intent To File a Claim for Compensation and/or Pension, or Survivors Pension and/or DIC) Activity Under OMB Review | |
| 80 FR 26610 - Qualification of Drivers; Application for Exemptions; Hearing | |
| 80 FR 26639 - Agency Information Collection (Supplement to VA Forms 21P-534, 534a, & 534EZ) Activity Under OMB Review | |
| 80 FR 26545 - New England Fishery Management Council; Public Meeting | |
| 80 FR 26546 - Gulf of Mexico Fishery Management Council; Public Meeting | |
| 80 FR 26545 - Western Pacific Fishery Management Council; Public Meeting | |
| 80 FR 26638 - Submission for OMB Review; Comment Request | |
| 80 FR 26618 - Chicago Central & Pacific Railroad Company-Abandonment Exemption-in Pottawattamie County, Iowa, and Douglas County, NE | |
| 80 FR 26585 - Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public Interest | |
| 80 FR 26617 - International Standards on the Transport of Dangerous Goods | |
| 80 FR 26549 - Proposed Collection; Comment Request | |
| 80 FR 26552 - Privacy Act of 1974; System of Records | |
| 80 FR 26575 - Announcement of Requirements and Registration for the Opioid Overdose Prevention Challenge | |
| 80 FR 26577 - Announcement of Requirements and Registration for Offender Reintegration Toolkit Challenge | |
| 80 FR 26568 - Advisory Commission on Childhood Vaccines; Notice of Meeting | |
| 80 FR 26522 - Submission for OMB Review; Comment Request | |
| 80 FR 26554 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Fulbright-Hays Seminars Abroad Program Application Package | |
| 80 FR 26500 - Notional Principal Contracts; Swaps With Nonperiodic Payments | |
| 80 FR 26437 - Notional Principal Contracts; Swaps With Nonperiodic Payments | |
| 80 FR 26560 - Information Collection Being Reviewed by the Federal Communications Commission | |
| 80 FR 26563 - Information Collections Being Submitted for Review and Approval to the Office of Management and Budget | |
| 80 FR 26564 - Information Collection Being Submitted for Review and Approval to the Office of Management and Budget | |
| 80 FR 26467 - Addresses of Headquarters Offices | |
| 80 FR 26559 - Notice of Open Meeting of the Advisory Committee of the Export-Import Bank of the United States (Ex-Im Bank) | |
| 80 FR 26595 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, to the List and Trade Shares of the Principal EDGE Active Income ETF Under NYSE Arca Equities Rule 8.600 | |
| 80 FR 26588 - New Postal Product | |
| 80 FR 26589 - Request for Scientific Advisory Committee Nominations | |
| 80 FR 26552 - National Commission on the Future of the Army; Notice of Federal Advisory Committee Meeting | |
| 80 FR 26590 - Request for Steering Committee Nominations | |
| 80 FR 26583 - National Register of Historic Places; Notification of Pending Nominations and Related Actions | |
| 80 FR 26539 - Education Trade Mission to Africa, March 7-10, 2016 | |
| 80 FR 26607 - Request for Comments on Additional Participants in Trade in Services Agreement | |
| 80 FR 26447 - International Mailing Services: Approved Price Changes | |
| 80 FR 26589 - Product Change-Priority Mail Express and Priority Mail Negotiated Service Agreement | |
| 80 FR 26573 - Center for Scientific Review; Notice of Closed Meetings | |
| 80 FR 26574 - National Center for Advancing Translational Sciences; Notice of Meetings | |
| 80 FR 26575 - National Institute of Biomedical Imaging and Bioengineering; Notice of Closed Meeting | |
| 80 FR 26574 - National Institute on Minority Health and Health Disparities; Notice of Meeting | |
| 80 FR 26517 - Rules for Automatic Closure of Inactive Dockets | |
| 80 FR 26582 - Notice of Request for Nominees for the U.S. Extractive Industries Transparency Initiative Advisory Committee | |
| 80 FR 26593 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for NYSE Arca Integrated Feed To Add a Late Fee In Connection With Failure To Submit the Non-Display Use Declaration | |
| 80 FR 26601 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Automated Improvement Mechanism Order Allocation | |
| 80 FR 26591 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Change Amending NYSE Arca Equities Rule 5.2(j)(3), Commentary .02 Relating to the Listing of Investment Company Units Based on Municipal Bond Indexes | |
| 80 FR 26599 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change Relating to Rules 6.74A and 6.74B | |
| 80 FR 26599 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Fees for NYSE BBO and NYSE Trades To Add a Late Fee In Connection With Failure To Submit the Non-Display Use Declaration | |
| 80 FR 26752 - Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing of a Proposed Rule Change Consisting of Proposed New Rule G-42, on Duties of Non-Solicitor Municipal Advisors, and Proposed Amendments to Rule G-8, on Books and Records To Be Made by Brokers, Dealers, Municipal Securities Dealers, and Municipal Advisors | |
| 80 FR 26542 - Call for Applications for the International Buyer Program Select Service for Calendar Year 2016 | |
| 80 FR 26605 - Agency Information Collection Activities: Proposed Request | |
| 80 FR 26606 - Commission Meeting | |
| 80 FR 26586 - Certain Vision-Based Driver Assistance System Cameras and Components Thereof; Notice of Request for Statements on the Public Interest | |
| 80 FR 26569 - Recruitment of Sites for Assignment of Corps Personnel Obligated Under the National Health Service Corps Scholarship Program | |
| 80 FR 26464 - Organ Procurement and Transplantation: Implementation of the HIV Organ Policy Equity Act | |
| 80 FR 26586 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Revision of an Approved Collection; Office on Violence Against Women Solicitation Template | |
| 80 FR 26544 - Proposed Information Collection; Comment Request; NOAA Restoration Center Performance Progress Report | |
| 80 FR 26573 - National Committee on Vital and Health Statistics: Meeting | |
| 80 FR 26461 - Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Infrastructure Requirements for the 2010 Nitrogen Dioxide and 2012 Fine Particulate Matter National Ambient Air Quality Standards | |
| 80 FR 26484 - Airworthiness Directives; BAE SYSTEMS (Operations) Limited Airplanes | |
| 80 FR 26475 - Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards for Dedicated-Purpose Pool Pumps; Request for Information | |
| 80 FR 26547 - Title: National Medal of Technology and Innovation Nomination Evaluation Committee Meeting | |
| 80 FR 26492 - Airworthiness Directives; Airbus Airplanes | |
| 80 FR 26487 - Airworthiness Directives; Airbus Airplanes | |
| 80 FR 26490 - Airworthiness Directives; Bombardier, Inc. Airplanes | |
| 80 FR 26519 - Drug- and Alcohol-Free Workforce and Mission Critical Systems Personnel Reliability Program | |
| 80 FR 26644 - Hazardous Materials: Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains | |
| 80 FR 26550 - Record of Decision for the Modernization and Repair of Piers 2 and 3, Military Ocean Terminal Concord, CA | |
| 80 FR 26608 - Notice of Final Federal Agency Actions on Proposed Highway in California | |
| 80 FR 26496 - Proposed Revocation of Class D and E Airspace; Independence, KS | |
| 80 FR 26579 - Federal Property Suitable as Facilities To Assist the Homeless | |
| 80 FR 26497 - Proposed Establishment and Amendment of Class E Airspace; Bremerton, WA | |
| 80 FR 26463 - Partial Withdrawal of Technical Amendments Related to: Tier 3 Motor Vehicle Fuel and Quality Assurance Plan Provisions | |
| 80 FR 26534 - Privacy Act of 1974, New System of Records | |
| 80 FR 26499 - Public Information, Freedom of Information Act and Privacy Act Regulations | |
| 80 FR 26469 - Blueberry Promotion, Research and Information Order; Expanding the Membership of the U.S. Highbush Blueberry Council and Other Changes | |
| 80 FR 26788 - Value-Added Producer Grant Program | |
| 80 FR 26528 - Inviting Applications for Value-Added Producer Grants | |
| 80 FR 26608 - Notice of Final Federal Agency Actions on Proposed Transportation Projects in Florida | |
| 80 FR 26501 - Controlled Unclassified Information |
Agricultural Marketing Service
Agricultural Research Service
Animal and Plant Health Inspection Service
Food Safety and Inspection Service
Rural Business-Cooperative Service
Rural Utilities Service
Foreign-Trade Zones Board
International Trade Administration
National Oceanic and Atmospheric Administration
Patent and Trademark Office
Army Department
Centers for Medicare & Medicaid Services
Health Resources and Services Administration
National Institutes of Health
Public Health Service
Substance Abuse and Mental Health Services Administration
Coast Guard
Fish and Wildlife Service
Geological Survey
National Park Service
Reclamation Bureau
Information Security Oversight Office
Federal Aviation Administration
Federal Highway Administration
Federal Motor Carrier Safety Administration
Maritime Administration
Pipeline and Hazardous Materials Safety Administration
Surface Transportation Board
Internal Revenue Service
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Internal Revenue Service (IRS), Treasury.
Final and temporary regulations.
This document contains final and temporary regulations amending the treatment of nonperiodic payments made or received pursuant to certain notional principal contracts. These regulations provide that, subject to certain exceptions, a notional principal contract with a nonperiodic payment, regardless of whether it is significant, must be treated as two separate transactions consisting of one or more loans and an on-market, level payment swap. This document also contains temporary regulations regarding an exception from the definition of United States property. These regulations affect parties making and receiving payments under notional principal contracts, including United States shareholders of controlled foreign corporations and tax-exempt organizations. The text of the temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking (REG-102656-15) on this subject in the Proposed Rules section in this issue of the
Regarding the regulations under section 446, Alexa T. Dubert or Anna H. Kim at (202) 317-6895; regarding the regulations under section 956, Kristine A. Crabtree at (202) 317-6934 (not toll-free numbers).
On October 14, 1993, the Treasury Department and the IRS published final regulations (TD 8491) under section 446(b) of the Internal Revenue Code (Code) in the
A nonperiodic payment commonly arises when a party to an NPC makes below-market periodic payments or receives above-market periodic payments under the terms of the contract. A party making below-market periodic payments or receiving above-market periodic payments would also typically be required to make an upfront payment to the counterparty to compensate for the off-market coupon payments specified in the contract. For example, if A and B enter into an off-market interest rate swap the terms of which require A to make periodic below-market, fixed rate payments to B in exchange for A receiving periodic on-market, floating-rate payments from B, then A typically will compensate B for receiving the below-market fixed rate payments by making an upfront payment at the outset of the interest rate swap so that the present value of the fixed rate leg of the swap will equal the present value of the floating rate leg of the swap.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Public Law 111-203, 124 Stat. 1376, Title VII (the Dodd-Frank Act), among other things: (1) Provides for the registration and comprehensive regulation of swap dealers and major swap participants; (2) imposes clearing and trade execution requirements on many standardized swap contracts; (3) creates rigorous recordkeeping and real-time reporting regimes; and (4) enhances rulemaking and enforcement authority of various federal regulators with respect to entities and intermediaries within their jurisdiction. As part of implementing the Dodd-Frank Act, the Commodity Futures Trading Commission (CFTC) has mandated that certain swap contracts (cleared contracts), including swaps that are NPCs under § 1.446-3, be cleared through U.S.-registered derivatives clearing organizations. The Securities and Exchange Commission (SEC) has not yet mandated clearing of any security-based swaps through clearing agencies (which, together with derivatives clearing organizations, are referred to herein as U.S.-registered clearinghouses).
To facilitate clearing and exchange trading, cleared contracts generally have standardized terms, which often give rise to upfront payments. For example, a Market Agreed Coupon interest rate swap (MAC) has standardized terms, including a standardized coupon rate (or fixed rate). Because the fixed rate is set in advance, it is unlikely that the fixed rate will equal the market rate on the start date of the MAC. Consequently, except for the rare instance when the market rate for a particular MAC equals the fixed rate, a MAC with a standardized coupon rate will be off-market and will require an upfront payment to equalize the present value of the payment obligations under the contract.
Certain over-the-counter markets in swap contracts not subject to clearing with U.S.-registered clearinghouses (uncleared contracts) also have voluntarily begun to adopt terms similar to the MAC, including pre-defined, market-agreed start and end dates, payment dates, and fixed coupons to achieve greater standardization of
As part of establishing a risk-management framework, the SEC, CFTC, and certain other federal regulators (collectively, the Regulators) are required by the Dodd-Frank Act to propose and adopt collateral requirements for cleared contracts and certain uncleared contracts. These requirements are typically referred to as “margin” requirements in the context of contracts between entities that are regulated by the Regulators (regulated entities) and, in these temporary regulations, the term “margin” is used in the context of cleared and uncleared contracts between regulated entities and the term “collateral” is used in the context of uncleared contracts between unregulated entities.
U.S.-registered clearinghouses manage credit risk (the risk of counterparty default) in part by requiring that each party to a cleared contract provide various types of margin in an amount that fully collateralizes the credit risk on the contract. Because credit risk starts at the inception of the contract and continues throughout the term of the contract, the requirement to exchange margin sufficient to fully collateralize credit risk begins when the parties enter into the contract. To ensure that credit risk on the contract is fully collateralized, the contract is marked to market on a daily basis (beginning on the day the contract is entered into) and margin is exchanged by the parties based on the mark-to-market value.
For example, if A and B enter into a cleared off-market interest rate swap contract the terms of which require A to make periodic below-market, fixed rate payments to B in exchange for A receiving periodic on-market, floating-rate payments from B, then A will make an upfront payment to the clearinghouse (to be passed on to B) so that the present value of the fixed rate leg of the swap will equal the present value of the floating rate leg of the swap. A has credit risk with respect to that payment because, if the clearinghouse (or A's clearing member) were to default, A may not receive the full benefit of receiving on-market, floating rate payments in exchange for making below-market fixed rate payments for the term of the contract. When the U.S.-registered clearinghouse makes the upfront payment to B, the U.S.-registered clearinghouse similarly has credit risk with respect to B (or B's clearing member). To eliminate the credit risk to A and B, the parties are required to post margin. More specifically, B (the ultimate recipient of the upfront payment) is required to make a payment of initial variation margin to the U.S.-registered clearinghouse, generally no later than the end of the business day on which the upfront payment is made, in an amount that is equal (or substantially equal) to the amount of the upfront payment.
In addition to initial variation margin, U.S.-registered clearinghouses manage credit risk by requiring that each party to a cleared contract provide daily variation margin. Daily variation margin is a cash payment made on a daily or intra-day basis between the counterparties to a contract to protect against the risk of counterparty default. The rules of U.S.-registered clearinghouses generally require that daily variation margin be paid in an amount equal to the change in the fair market value of the contract (the mark-to-market value). Thus, A and B will continue to mark to market the cleared contract and exchange daily variation margin based on those values on a daily basis for the entire term of the contract.
The margin requirements proposed by the Regulators for uncleared contracts are expected to appropriately address the credit risk posed by a counterparty that is a regulated entity and the risks associated with an uncleared contract and are expected to be as stringent as those required for cleared contracts.
The Dodd-Frank Act has led to significant changes in market practices for cleared and uncleared contracts, including the increased volume of cleared and uncleared contracts with upfront payments. Under the 1993 Regulations, the parties to an NPC with an upfront payment are required to determine whether the upfront payment is a significant nonperiodic payment. If the payment is significant, the embedded loan rule will apply. In addition, under the 1993 Regulations, for purposes of section 956 (regarding United States property), the Commissioner may treat any nonperiodic payment, whether or not significant, as one or more loans.
On May 11, 2012, the Treasury Department and the IRS published temporary regulations under section 956 (TD 9589) in the
In addition, commenters have argued that receiving an upfront payment and posting cash margin back to the payor of the upfront payment lacks the most important attribute of indebtedness because the recipient lacks discretion as to the payment's use. Commenters also have raised concerns of increased compliance burdens arising from withholding and information reporting resulting from the increasing number of upfront payments treated as loans. Commenters specifically cite the difficulty of satisfying information reporting on upfront payments arising from cleared contracts because a U.S-registered clearinghouse is interposed between the first party and second party once a contract is submitted and accepted for clearing.
Commenters also have raised concerns that receipt by a tax-exempt organization of an upfront payment arising from entering into a standardized cleared or uncleared contract (the loan separated from the on-market swap under the embedded loan rule) may cause income earned on the tax-exempt organization's deployment of the upfront payment to constitute unrelated business taxable income under the debt-financed property rules of section 514. Finally, commenters have requested that the exception in the Section 956 Regulations be extended to uncleared contracts with upfront payments with respect to which full initial variation margin is posted.
The text of these temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section of this issue of the
Because excepting non-significant nonperiodic payments from the embedded loan rule is not functioning as a rule of administrative convenience as intended, these temporary regulations eliminate that exception. Instead, other than contracts for which there is an explicit exception, the temporary regulations treat all notional principal contracts that have nonperiodic payments as including one or more loans. The Treasury Department and the IRS have determined that, unless an exception applies, the economic loan that is inherent in a nonperiodic payment should be taxed as one or more loans, and that it is reasonable to require taxpayers to separate the loan or loans from an NPC in the case of any nonperiodic payment, regardless of the relative size of such payment. Taxpayers may implement this change upon publication in the
The temporary regulations provide two independent exceptions from the embedded loan rule. First, except for purposes of sections 514 and 956, the temporary regulations provide an exception for a nonperiodic payment made under an NPC with a term of one year or less (short-term exception).
Second, the temporary regulations provide an exception for certain NPCs with nonperiodic payments that are subject to prescribed margin or collateral requirements. The embedded loan rule is intended to address situations when one party to a contract provides cash to the counterparty and is compensated for that cash with a direct or indirect interest payment. The Treasury Department and the IRS have concluded, however, that the same concerns do not exist when a party pays or receives an upfront payment and must immediately collect or post an equivalent amount of cash margin or collateral. Accordingly, in those circumstances, the Treasury Department and the IRS have determined that the embedded loan rule should not apply to the upfront payment.
In order to qualify for the exception, the regulations require both that the margin or collateral posted and collected be paid in cash and that the parties to the contract be required to post and collect margin or collateral in an amount that fully collateralizes the mark-to-market exposure on the contract (including the exposure on the nonperiodic payment) on a daily basis for the entire term of the contract. The mark-to-market exposure on a cleared contract will be fully collateralized only if the contract is subject to both initial variation margin in an amount equal to the nonperiodic payment (except for variances permitted by intraday price changes) and daily variation margin in an amount equal to the daily change in the fair market value of the contract, and on an uncleared contract if it is subject to equivalent margin or collateral requirements (full margin exception). A taxpayer may use the full margin exception without regard to whether the contract qualifies for the short-term exception.
The Treasury Department and the IRS request comments on whether there are other circumstances in which the embedded loan rule should not apply. For example, there may be circumstances in which time value is appropriately accounted for under the contract because applying the embedded loan rule would not alter the tax consequences of the contract. In particular, the Treasury Department and the IRS request comments on whether it is necessary to require taxpayers to apply the embedded loan rule to NPCs with nonperiodic payments that are subject to mark-to-market accounting.
Finally, the Treasury Department and the IRS request comments on all other aspects of the temporary and proposed rules, including but not limited to any anticipated effects on market participants' behavior, the applicability of the full margin exception only in cases in which cash margin is posted, or possible effects on the goal of the Dodd-Frank Act to encourage centralized clearing of swaps.
The temporary regulations under section 956 provide an exception to the definition of United States property for certain obligations of United States persons arising from upfront payments made with respect to notional principal contracts that qualify for the full margin exception to the embedded loan rule in the temporary regulations under section 446. To qualify for the United States property exception, the upfront payment must be made by a controlled foreign corporation (as defined in section 957(a)) that is either a dealer in
It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13653. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small entities.
The principal authors of these regulations are Alexa T. Dubert and Anna H. Kim of the Office of Associate Chief Counsel (Financial Institutions and Products). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is amended as follows:
26 U.S.C. 7805 * * *
The revisions and addition to read as follows:
(g) * * *
(4) [Reserved]. For further guidance, see § 1.446-3T(g)(4).
(6) * * *
(j)
(2) [Reserved]. For further guidance, see § 1.446-3T(j)(2).
(k) [Reserved]. For further guidance, see § 1.446-3(k).
(a) through (g)(3) [Reserved]. For further guidance, see § 1.446-3(a) through (g)(3).
(4)
(ii)
(
(B)
(
(
(C)
(
(
(5) [Reserved]. For further guidance, see § 1.446-3(g)(5).
(6)
(ii) The exceptions in paragraphs (g)(4)(ii)(A) and (B) of this section do not apply. Under paragraph (g)(4)(i) of this section, the transaction is recharacterized as consisting of both a $15,163,147 loan from M to N that N repays in installments over the term of the contract and an interest rate swap between M and N in which M immediately pays the installment payments on the loan back to N as part of its fixed payments on the swap in exchange for the LIBOR payments by N.
(iii) The upfront payment is recognized over the life of the contract by treating the $15,163,147 as a loan that will be repaid with level payments over five years. Assuming a constant yield to maturity and annual compounding at 10%, M and N account for the principal and interest on the loan as follows:
(iv) M recognizes interest income, and N claims an interest deduction, each taxable year equal to the interest component of the deemed installment payments on the loan. These interest amounts are not included in the parties' net income or net deduction from the swap contract under § 1.446-3(d). The principal components are needed only to compute the interest component of the level payment for the following period and do not otherwise affect the parties' net income or net deduction from this contract.
(v) N also makes swap payments to M based on LIBOR and receives swap payments from M at a fixed rate that is equal to the sum of the stated fixed rate and the rate calculated by dividing the deemed level annual payments on the loan by the notional principal amount. Thus, the fixed rate on this swap is 10%, which is the sum of the stated rate of 6% and the rate calculated by dividing the annual loan payment of $4,000,000 by the notional principal amount of $100,000,000, or 4%. Using the methods provided in § 1.446-3(e)(2), the fixed swap payments from M to N of $10,000,000 (10% of $100,000,000) and the LIBOR swap payments from N to M are included in the parties' net income or net deduction from the contract for each taxable year.
(ii) Because the contract is subject to initial variation margin in an amount equal to the upfront payment and daily variation margin in an amount equal to the change in the fair market value of the contract on a daily basis for the entire term of the contract, the contract is described in paragraph (g)(4)(ii)(B)(
(ii) Because the contract is required to be collateralized in an amount equal to the upfront payment and changes in the fair market value of the contract on a daily basis for the entire term of the contract, the contract is described in paragraph (g)(4)(ii)(B)(
(h) through (j)(1) [Reserved]. For further guidance, see § 1.446-3(h) through (j)(1).
(2)
(k)
(b) * * *
(1) * * *
(xi) An obligation of a United States person arising from a nonperiodic payment by a controlled foreign corporation (within the meaning of section 957(a)) with respect to a notional principal contract described in § 1.446-3T(g)(4)(ii)(B)(
(A) The controlled foreign corporation that makes the nonperiodic payment is either a dealer in securities (within the meaning of section 475(c)(1)) or a dealer in commodities; and
(B) The conditions set forth in § 1.446-3T(g)(4)(ii)(C)(
(C)
(ii) Because the contract is subject to initial variation margin in an amount equal to the upfront payment and daily variation margin in an amount equal to the change in the fair market value of the contract on a daily basis for the entire term of the contract, the contract is described in § 1.446-3T(g)(4)(ii)(B)(
(ii) Because the contract is subject to initial variation margin in an amount equal to the upfront payment and daily variation margin in an amount equal to the change in the fair market value of the contract on a daily basis for the entire term of the contract, the contract is described in § 1.446-3T(g)(4)(ii)(B)(
(f)
(g)
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the operation of the Oceanic Bridge across the Navesink (Swimming) River, mile 4.5, between Middletown and Rumson, New Jersey. This deviation allows the bridge owner to perform structural repairs at the bridge. This deviation allows the bridge to open only one of the two moveable spans for passage of vessels traffic. This temporary deviation would help facilitate repairs to the bascule span bearing while continuing to meet the reasonable needs of navigation.
This deviation is effective from May 26, 2015 through June 12, 2015.
The docket for this deviation, [USCG-2015-0366] is
If you have questions on this temporary deviation, call or email Mr. Joe M. Arca, Project Officer, First Coast Guard District, telephone (212) 514-4336,
The Oceanic Bridge across Navesink (Swimming) River, mile 4.5, between Middletown and Rumson, New Jersey, has a vertical clearance in the closed position of 22 feet at mean high water and 25 feet at mean low water, and horizontal clearance of 75 feet. The existing bridge operating regulations are found at 33 CFR 117.734.
The waterway is transited by seasonal recreational vessels of various sizes.
The bridge owner, Monmouth County, requested a temporary deviation from the normal operating schedule to facilitate repairs to the bascule span bearing.
Under this temporary deviation the Oceanic Bridge shall open on signal, except that, from May 26, 2015 through June 12, 2015, only one of the two moveable spans need open for the passage of vessels traffic.
There are no alternate routes for vessel traffic.
The Coast Guard will inform the users of the waterways through our Local and Broadcast Notice to Mariners of the change in operating schedule for the bridges so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone on the Pamlico River in Washington, NC. This action is necessary to protect the life and property of the maritime public from the hazards posed by fireworks displays. Entry into or movement within the safety zone during the enforcement period is prohibited without approval of the Captain of the Port or his designated Representative.
This rule is effective from 8:30 p.m. to 9:30 p.m. on May 25, 2015.
Documents mentioned in this preamble are part of docket [USCG-2015-0287]. To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email LT Derek J. Burrill, Waterways Management Division Chief, Sector North Carolina, Coast Guard; telephone (910) 772-2230, email
The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because immediate action is required to provide for the safety of mariners on the navigable waters during the fireworks display on May 25, 2015. Delaying the effective date for comment would be contrary to the public interest, since immediate action is needed to ensure protection of persons and vessels transiting the area.
For similar reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The legal basis for this rule is 33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; and DHS Delegation No. 0170.1, which collectively authorize the Coast Guard to propose, establish, and define regulatory safety zones.
The purpose of this safety zone is to protect mariners and the public from hazards to navigation associated with the fireworks displays on Pamlico River in Washington, NC on May 25, 2015.
On May 25, 2015, the Washington Harbor District Alliance will sponsor a fireworks display for the “Memorial Day Event” at a position located on the southwest shore of the Pamlico River in Washington, NC at latitude 35°32′25″ N longitude 077°03′42″ W. The fireworks debris fallout area will extend over the navigable waters of the Pamlico River. Due to the need to protect mariners and spectators from the hazards associated with the fireworks display, including accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris, vessel traffic will be temporarily restricted from transiting within the fireworks launch and fallout area. This safety zone will be established and enforced from 8:30 p.m. to 9:30 p.m. on May 25, 2015.
Access to the safety zone will be restricted during the specified date and times. Except for vessels authorized by the Captain of the Port or his Representative, no person or vessel may enter or remain in the regulated area. The Captain of the Port will give notice
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.
Although this safety zone restricts vessel traffic through the regulated area, the effect of this rule will not be significant because: (i) This rule is of limited size and duration, and (ii) this rule will be well publicized to allow mariners to make alternative plans for transiting the affected area.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
This rule will affect the following entities, some of which might be small entities: The owners or operators of vessels intending to transit or anchor in waters of the Pamlico River within a 300 yard radius of latitude 35°32′25″ N, longitude 077°03′42″ W position during the enforcement period.
This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: (i) The safety zone is of limited size and duration, and (ii) maritime advisories will be issued in advance allowing mariners to adjust their plans accordingly.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) The Captain of the Port, North Carolina or his designated Representative can be reached at telephone number (910) 343-3882.
(3) The Coast Guard vessels enforcing the safety zone can be contacted on VHF-FM marine band radio channel 13 (165.65 Mhz) and channel 16 (156.8 Mhz).
(d)
Coast Guard, DHS.
Final rule.
The Coast Guard is establishing a safety zone throughout the Marine Safety Unit Savannah Captain of the Port Zone. This action is necessary to consolidate, clarify, and otherwise modify safety regulations to better meet safety needs within the ports of Savannah and Brunswick. This action establishes safety zones in the event of natural or manmade disasters affecting navigable waterways within the Marine Safety Unit Savannah Captain of the Port Zone.
This rule is effective on June 1, 2015.
Documents mentioned in this preamble are part of docket USCG-2014-1017. To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Lieutenant Christopher D. McElvaine, U.S. Coast Guard Marine Safety Unit Savannah at (912) 652-4353 or email at
On February 27, 2015, we published a notice of proposed rulemaking entitled Safety Zone; Marine Safety Unit Savannah Safety Zone for Heavy Weather and Other Natural Disasters, Savannah Captain of the Port Zone, Savannah, GA. We received one public comment in support of the safety zone. No public meeting was requested, and none was held. No other documents were published as part of this rulemaking.
The legal basis for this rule is the Coast Guard's authority to establish regulated navigation areas and other limited access areas: 33 U.S.C. 1231; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 160.5; Department of Homeland Security Delegation No. 0170.1.
The purpose of these regulations is to ensure the safety of life on navigable waters of the United States through the addition of regulations in the event of natural and other disasters.
The Coast Guard is establishing a temporary safety zone throughout the Marine Safety Unit Savannah Captain of the Port Zone. This action is necessary to consolidate, clarify, and otherwise modify safety and security zone regulations within the Ports of Savannah and Brunswick. This action would establish a safety zone in the event of a disaster affecting navigable waterways within the Marine Safety Unit Savannah Captain of the Port Zone.
Only one positive comment was received in support of the regulation. No changes were made in the rule making.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses of these statutes or executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs
The regulations that are being added are not expected to have a significant regulatory impact due to the infrequency of use for the safety zone.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rule. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This safety zone would not have a significant impact on a substantial number of small entities for the following reasons: The safety zone would be activated and subject to enforcement only during the event of natural or other disasters.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule would not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves waterway use restrictions that would be otherwise published as a Temporary Final Rule within the Savannah Captain of the Port Zone. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(1)
(2)
(3) All coordinates are North American Datum 1983.
(b)
(2)
(3)
(c)
(2)
(3)
(4) Persons and vessels desiring to enter, transit through, anchor in, or remain in the regulated area may contact the Captain of the Port Savannah via telephone at (912)-247-0073, or a designated representative via VHF radio on channel 16, to request authorization. If authorization to enter, transit through, anchor in, or remain in the regulated area is granted by the Captain of the Port Savannah or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Savannah or a designated representative.
(5) Coast Guard Marine Safety Unit Savannah will attempt to notify the maritime community of periods during which these safety zones will be in effect via Broadcast Notice to Mariners or by on-scene designated representatives.
(6) The Coast Guard will provide notice of the regulated area via Broadcast Notice to Mariners or by on-scene designated representatives.
(7) This regulation does not apply to authorized law enforcement agencies operating within the regulated area.
Postal Service
Notice of approval of price changes for international mailing services.
On Friday, January 23, 2015, the Postal Service published a notice in the
Paula Rabkin at 202-268-2537.
On January 15, 2015, the Postal Service filed a notice of international mailing services price adjustment with the PRC, effective on April 26, 2015. On January 23, 2015, the USPS
As prescribed in the PRC's Order No.2365, issued on February 24, 2015, Order No. 2388, issued on March 10, 2015, and Order No. 2461, issued on April 30, 2015, in Docket No. R2015-4, the PRC found that the prices in the Postal Service's notice that was published on January 23, 2015, may go into effect on May 31, 2015. The new prices will accordingly be posted in Notice 123, on
Environmental Protection Agency (EPA).
Direct final rule.
EPA is promulgating significant new use rules (SNURs) under the Toxic Substances Control Act (TSCA) for 25 chemical substances which were the subject of premanufacture notices (PMNs). Nine of these chemical substances are subject to TSCA section 5(e) consent orders issued by EPA. This action requires persons who intend to manufacture (including import) or process any of these 25 chemical substances for an activity that is designated as a significant new use by this rule to notify EPA at least 90 days before commencing that activity. The required notification will provide EPA with the opportunity to evaluate the intended use and, if necessary, to prohibit or limit that activity before it occurs.
This rule is effective on July 7, 2015. For purposes of judicial review, this rule shall be promulgated at 1 p.m. (e.s.t.) on May 22, 2015.
Written adverse or critical comments, or notice of intent to submit adverse or critical comments, on one or more of these SNURs must be received on or before June 8, 2015 (see Unit VI. of the
For additional information on related reporting requirement dates, see Units I.A., VI., and VII. of the
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2014-0908, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
You may be potentially affected by this action if you manufacture, process, or use the chemical substances contained in this rule. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Manufacturers or processors of one or more subject chemical substances (NAICS codes 325 and 324110),
This action may also affect certain entities through pre-existing import certification and export notification rules under TSCA. Chemical importers are subject to the TSCA section 13 (15 U.S.C. 2612) import certification requirements promulgated at 19 CFR 12.118 through 12.127 and 19 CFR 127.28. Chemical importers must certify that the shipment of the chemical substance complies with all applicable rules and orders under TSCA. Importers of chemicals subject to these SNURs must certify their compliance with the SNUR requirements. The EPA policy in support of import certification appears at 40 CFR part 707, subpart B. In addition, any persons who export or intend to export a chemical substance that is the subject of a proposed or final rule are subject to the export notification provisions of TSCA section 12(b) (15 U.S.C. 2611(b)) (see § 721.20), and must comply with the export notification requirements in 40 CFR part 707, subpart D.
1.
2.
EPA is promulgating these SNURs using direct final procedures. These SNURs will require persons to notify EPA at least 90 days before commencing the manufacture or processing of a chemical substance for any activity designated by these SNURs as a significant new use. Receipt of such notices allows EPA to assess risks that may be presented by the intended uses and, if appropriate, to regulate the proposed use before it occurs. Additional rationale and background to these rules are more fully set out in the preamble to EPA's first direct final SNUR published in the
Section 5(a)(2) of TSCA (15 U.S.C. 2604(a)(2)) authorizes EPA to determine that a use of a chemical substance is a
General provisions for SNURs appear in 40 CFR part 721, subpart A. These provisions describe persons subject to the rule, recordkeeping requirements, exemptions to reporting requirements, and applicability of the rule to uses occurring before the effective date of the rule. Provisions relating to user fees appear at 40 CFR part 700. According to § 721.1(c), persons subject to these SNURs must comply with the same SNUN requirements and EPA regulatory procedures as submitters of PMNs under TSCA section 5(a)(1)(A). In particular, these requirements include the information submission requirements of TSCA section 5(b) and 5(d)(1), the exemptions authorized by TSCA section 5(h)(1), (h)(2), (h)(3), and (h)(5), and the regulations at 40 CFR part 720. Once EPA receives a SNUN, EPA may take regulatory action under TSCA section 5(e), 5(f), 6, or 7 to control the activities for which it has received the SNUN. If EPA does not take action, EPA is required under TSCA section 5(g) to explain in the
Section 5(a)(2) of TSCA states that EPA's determination that a use of a chemical substance is a significant new use must be made after consideration of all relevant factors, including:
• The projected volume of manufacturing and processing of a chemical substance.
• The extent to which a use changes the type or form of exposure of human beings or the environment to a chemical substance.
• The extent to which a use increases the magnitude and duration of exposure of human beings or the environment to a chemical substance.
• The reasonably anticipated manner and methods of manufacturing, processing, distribution in commerce, and disposal of a chemical substance.
In addition to these factors enumerated in TSCA section 5(a)(2), the statute authorized EPA to consider any other relevant factors.
To determine what would constitute a significant new use for the 25 chemical substances that are the subject of these SNURs, EPA considered relevant information about the toxicity of the chemical substances, likely human exposures and environmental releases associated with possible uses, and the four bulleted TSCA section 5(a)(2) factors listed in this unit.
EPA is establishing significant new use and recordkeeping requirements for 25 chemical substances in 40 CFR part 721, subpart E. In this unit, EPA provides the following information for each chemical substance:
• PMN number.
• Chemical name (generic name, if the specific name is claimed as CBI).
• Chemical Abstracts Service (CAS) Registry number (assigned for non-confidential chemical identities).
• Basis for the TSCA section 5(e) consent order or the basis for the TSCA non-section 5(e) SNURs (
• Tests recommended by EPA to provide sufficient information to evaluate the chemical substance (see Unit VIII. for more information).
• CFR citation assigned in the regulatory text section of this rule.
The regulatory text section of this rule specifies the activities designated as significant new uses. Certain new uses, including production volume limits (
This rule includes nine PMN substances (P-12-115, P-12-116, P-13-568, P-13-646, P-13-647, P-13-648, P-13-649, P-13-678, and P-13-679) that are subject to “risk-based” consent orders under TSCA section 5(e)(1)(A)(ii)(I) where EPA determined that activities associated with the PMN substances may present unreasonable risk to human health or the environment. Those consent orders require protective measures to limit exposures or otherwise mitigate the potential unreasonable risk. The so-called “TSCA section 5(e) SNURs” on these PMN substances are promulgated pursuant to § 721.160, and are based on and consistent with the provisions in the underlying consent orders. The TSCA section 5(e) SNURs designate as a “significant new use” the absence of the protective measures required in the corresponding consent orders.
This rule also includes SNURs on 16 PMN substances that are not subject to consent orders under TSCA section 5(e). In these cases, for a variety of reasons, EPA did not find that the use scenario described in the PMN triggered the determinations set forth under TSCA section 5(e). However, EPA does believe that certain changes from the use scenario described in the PMN could result in increased exposures, thereby constituting a “significant new use.” These so-called “TSCA non-section 5(e) SNURs” are promulgated pursuant to § 721.170. EPA has determined that every activity designated as a “significant new use” in all TSCA non-section 5(e) SNURs issued under § 721.170 satisfies the two requirements stipulated in § 721.170(c)(2),
1. Manufacturing, processing, or use of the PMN substance P-12-115 only as a chemical intermediate to prepare an interfacial tension reducer for enhanced oil recovery.
2. Manufacturing, processing, or use of the PMN substance identified as P-12-116 and P-13-568 only as an interfacial tension reducer for enhanced oil recovery or for the specific confidential enhanced oil recovery applications described in the consent order for PMN P-13-568.
3. No predictable or purposeful release of the PMN substances from manufacturing, processing or use into the waters of the United States that result in surface water concentrations exceeding 4 ppb.
4. Individual aggregate production volume limits for the PMN substance identified as P-12-116 and P-13-568 shall not exceed the confidential production limit identified in the consent order for PMN P-13-568.
5. Establishment and use of a hazard communication program, including environmental hazard precautionary statements on each label and the MSDS for the PMN substance P-12-115.
6. Establishment and use of a hazard communication program, including human health and environmental hazard precautionary statements on each label and the MSDS for the PMN substance identified as P-12-116 and P-13-568.
The SNUR designates as a “significant new use” the absence of these protective measures.
1. Risk notification. If as a result of the test data required, the company becomes aware that the PMN substances may present a risk of injury to human health or the environment, the company must incorporate this new information, and any information on methods for protecting against such risk into a Material Safety Data Sheet (MSDS), within 90 days.
2. Submission of certain physical/chemical property and environmental fate testing prior to exceeding the confidential production volume limits of the PMN substances specified in the consent order.
3. Recording and reporting of certain fluorinated impurities in the starting raw material; and manufacture of the PMN substances not to exceed the maximum established impurity levels of certain fluorinated impurities.
The SNUR designates as a “significant new use” the absence of these protective measures.
During review of the PMNs submitted for the chemical substances that are subject to these SNURs, EPA concluded that for 9 of the 25 chemical substances, regulation was warranted under TSCA section 5(e), pending the development of information sufficient to make reasoned evaluations of the health or environmental effects of the chemical substances. The basis for such findings is outlined in Unit IV. Based on these findings, TSCA section 5(e) consent orders requiring the use of appropriate exposure controls were negotiated with the PMN submitters. The SNUR
In the other 16 cases, where the uses are not regulated under a TSCA section 5(e) consent order, EPA determined that one or more of the criteria of concern established at § 721.170 were met, as discussed in Unit IV.
EPA is issuing these SNURs for specific chemical substances which have undergone premanufacture review because the Agency wants to achieve the following objectives with regard to the significant new uses designated in this rule:
• EPA will receive notice of any person's intent to manufacture or process a listed chemical substance for the described significant new use before that activity begins.
• EPA will have an opportunity to review and evaluate data submitted in a SNUN before the notice submitter begins manufacturing or processing a listed chemical substance for the described significant new use.
• EPA will be able to regulate prospective manufacturers or processors of a listed chemical substance before the described significant new use of that chemical substance occurs, provided that regulation is warranted pursuant to TSCA sections 5(e), 5(f), 6, or 7.
• EPA will ensure that all manufacturers and processors of the same chemical substance that is subject to a TSCA section 5(e) consent order are subject to similar requirements.
Issuance of a SNUR for a chemical substance does not signify that the chemical substance is listed on the TSCA Chemical Substance Inventory (TSCA Inventory). Guidance on how to determine if a chemical substance is on the TSCA Inventory is available on the Internet at
EPA is issuing these SNURs as a direct final rule, as described in § 721.160(c)(3) and § 721.170(d)(4). In accordance with § 721.160(c)(3)(ii) and § 721.170(d)(4)(i)(B), the effective date of this rule is July 7, 2015 without further notice, unless EPA receives written adverse or critical comments, or notice of intent to submit adverse or critical comments before June 8, 2015.
If EPA receives written adverse or critical comments, or notice of intent to submit adverse or critical comments, on one or more of these SNURs before June 8, 2015, EPA will withdraw the relevant sections of this direct final rule before its effective date. EPA will then issue a proposed SNUR for the chemical substance(s) on which adverse or critical comments were received, providing a 30-day period for public comment.
This rule establishes SNURs for a number of chemical substances. Any person who submits adverse or critical comments, or notice of intent to submit adverse or critical comments, must identify the chemical substance and the new use to which it applies. EPA will not withdraw a SNUR for a chemical substance not identified in the comment.
To establish a significant new use, EPA must determine that the use is not ongoing. The chemical substances subject to this rule have undergone premanufacture review. In cases where EPA has not received a notice of commencement (NOC) and the chemical substance has not been added to the TSCA Inventory, no person may commence such activities without first submitting a PMN. Therefore, for chemical substances for which an NOC has not been submitted EPA concludes that the designated significant new uses are not ongoing.
When chemical substances identified in this rule are added to the TSCA Inventory, EPA recognizes that, before the rule is effective, other persons might engage in a use that has been identified as a significant new use. However, TSCA section 5(e) consent orders have been issued for 9 of the 25 chemical substances, and the PMN submitters are prohibited by the TSCA section 5(e) consent orders from undertaking activities which would be designated as significant new uses. The identities of 21 of the 25 chemical substances subject to this rule have been claimed as confidential and EPA has received no post-PMN
Therefore, EPA designates May 8, 2015 as the cutoff date for determining whether the new use is ongoing. Persons who begin commercial manufacture or processing of the chemical substances for a significant new use identified as of that date would have to cease any such activity upon the effective date of the final rule. To resume their activities, these persons would have to first comply with all applicable SNUR notification requirements and wait until the notice review period, including any extensions, expires. If such a person met the conditions of advance compliance under § 721.45(h), the person would be considered exempt from the requirements of the SNUR. Consult the
EPA recognizes that TSCA section 5 does not require developing any particular test data before submission of a SNUN. The two exceptions are:
1. Development of test data is required where the chemical substance subject to the SNUR is also subject to a test rule under TSCA section 4 (see TSCA section 5(b)(1)).
2. Development of test data may be necessary where the chemical substance has been listed under TSCA section 5(b)(4) (see TSCA section 5(b)(2)).
In the absence of a TSCA section 4 test rule or a TSCA section 5(b)(4) listing covering the chemical substance, persons are required only to submit test data in their possession or control and to describe any other data known to or reasonably ascertainable by them (see 40 CFR 720.50). However, upon review of PMNs and SNUNs, the Agency has the authority to require appropriate testing. In cases where EPA issued a TSCA section 5(e) consent order that requires or recommends certain testing, Unit IV. lists those tests. Unit IV. also lists recommended testing for TSCA non-section 5(e) SNURs. Descriptions of tests are provided for informational purposes. EPA strongly encourages persons, before performing any testing, to consult with the Agency pertaining to protocol selection. To access the OCSPP test guidelines referenced in this document electronically, please go to
In the TSCA section 5(e) consent orders for several of the chemical substances regulated under this rule, EPA has established production volume limits in view of the lack of data on the potential health and environmental risks that may be posed by the significant new uses or increased exposure to the chemical substances. These limits cannot be exceeded unless the PMN submitter first submits the results of toxicity tests that would
The recommended tests specified in Unit IV. may not be the only means of addressing the potential risks of the chemical substance. However, submitting a SNUN without any test data may increase the likelihood that EPA will take action under TSCA section 5(e), particularly if satisfactory test results have not been obtained from a prior PMN or SNUN submitter. EPA recommends that potential SNUN submitters contact EPA early enough so that they will be able to conduct the appropriate tests.
SNUN submitters should be aware that EPA will be better able to evaluate SNUNs which provide detailed information on the following:
• Human exposure and environmental release that may result from the significant new use of the chemical substances.
• Potential benefits of the chemical substances.
• Information on risks posed by the chemical substances compared to risks posed by potential substitutes.
By this rule, EPA is establishing certain significant new uses which have been claimed as CBI subject to Agency confidentiality regulations at 40 CFR part 2 and 40 CFR part 720, subpart E. Absent a final determination or other disposition of the confidentiality claim under 40 CFR part 2 procedures, EPA is required to keep this information confidential. EPA promulgated a procedure to deal with the situation where a specific significant new use is CBI, at 40 CFR 721.1725(b)(1).
Under these procedures a manufacturer or processor may request EPA to determine whether a proposed use would be a significant new use under the rule. The manufacturer or processor must show that it has a
If EPA determines that the use identified in the
According to § 721.1(c), persons submitting a SNUN must comply with the same notification requirements and EPA regulatory procedures as persons submitting a PMN, including submission of test data on health and environmental effects as described in 40 CFR 720.50. SNUNs must be submitted on EPA Form No. 7710-25, generated using e-PMN software, and submitted to the Agency in accordance with the procedures set forth in 40 CFR 720.40 and § 721.25. E-PMN software is available electronically at
EPA has evaluated the potential costs of establishing SNUN requirements for potential manufacturers and processors of the chemical substances subject to this rule. EPA's complete economic analysis is available in the docket under docket ID number EPA-HQ-OPPT-2014-0908.
This action establishes SNURs for several new chemical substances that were the subject of PMNs, or TSCA section 5(e) consent orders. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled
According to PRA (44 U.S.C. 3501
The information collection requirements related to this action have already been approved by OMB pursuant to PRA under OMB control number 2070-0012 (EPA ICR No. 574). This action does not impose any burden requiring additional OMB approval. If an entity were to submit a SNUN to the Agency, the annual burden is estimated to average between 30 and 170 hours per response. This burden estimate includes the time needed to review instructions, search existing data sources, gather and maintain the data needed, and complete, review, and submit the required SNUN.
Send any comments about the accuracy of the burden estimate, and any suggested methods for minimizing respondent burden, including through the use of automated collection
On February 18, 2012, EPA certified pursuant to RFA section 605(b) (5 U.S.C. 601
1. A significant number of SNUNs would not be submitted by small entities in response to the SNUR.
2. The SNUR submitted by any small entity would not cost significantly more than $8,300.
A copy of that certification is available in the docket for this action.
This action is within the scope of the February 18, 2012 certification. Based on the Economic Analysis discussed in Unit XI. and EPA's experience promulgating SNURs (discussed in the certification), EPA believes that the following are true:
• A significant number of SNUNs would not be submitted by small entities in response to the SNUR.
• Submission of the SNUN would not cost any small entity significantly more than $8,300.
Therefore, the promulgation of the SNUR would not have a significant economic impact on a substantial number of small entities.
Based on EPA's experience with proposing and finalizing SNURs, State, local, and Tribal governments have not been impacted by these rulemakings, and EPA does not have any reasons to believe that any State, local, or Tribal government will be impacted by this action. As such, EPA has determined that this action does not impose any enforceable duty, contain any unfunded mandate, or otherwise have any effect on small governments subject to the requirements of UMRA sections 202, 203, 204, or 205 (2 U.S.C. 1501
This action will not have a substantial direct effect on 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, as specified in Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999).
This action does not have Tribal implications because it is not expected to have substantial direct effects on Indian Tribes. This action does not significantly nor uniquely affect the communities of Indian Tribal governments, nor does it involve or impose any requirements that affect Indian Tribes. Accordingly, the requirements of Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), do not apply to this action.
This action is not subject to Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because this is not an economically significant regulatory action as defined by Executive Order 12866, and this action does not address environmental health or safety risks disproportionately affecting children.
This action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), because this action is not expected to affect energy supply, distribution, or use and because this action is not a significant regulatory action under Executive Order 12866.
In addition, since this action does not involve any technical standards, NTTAA section 12(d) (15 U.S.C. 272 note), does not apply to this action.
This action does not entail special considerations of environmental justice related issues as delineated by Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Reporting and recordkeeping requirements.
Environmental protection, Chemicals, Hazardous substances, Reporting and recordkeeping requirements.
Therefore, 40 CFR parts 9 and 721 are amended as follows:
7 U.S.C. 135
15 U.S.C. 2604, 2607, and 2625(c).
(a)
(2) The significant new uses are:
(i)
(ii)
(iii)
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii)
(iii)
(b)
(1)
(2)
(3)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(A) If as a result of the test data required under the TSCA section 5(e) consent order for the substances, the employer becomes aware that the substances may present a risk of injury to human health or the environment, the employer must incorporate this new information, and any information on methods for protecting against such risk, into a MSDS as described in § 721.72(c) within 90 days from the time the employer becomes aware of the new information. If the substance(s) are not being manufactured, processed, or used in the employer's workplace, the employer must add the new information to a MSDS before the substance(s) are reintroduced into the workplace.
(B) The employer must ensure that persons who will receive the PMN substance(s) from the employer, or who have received the PMN substance(s) from the employer within 5 years from the date the employer becomes aware of the new information described in paragraph (a)(2)(i)(A) of this section, are provided an MSDS containing the information required under paragraph (a)(2)(i)(A) of this section within 90 days from the time the employer becomes aware of the new information.
(ii)
(b)
(1)
(2)
(3)
(a)
(2) The significant new uses are:
(i)
(A) If as a result of the test data required under the TSCA section 5(e) consent order for the substances, the employer becomes aware that the substances may present a risk of injury to human health or the environment, the employer must incorporate this new information, and any information on methods for protecting against such risk, into a MSDS as described in § 721.72(c) within 90 days from the time the employer becomes aware of the new information. If the substance(s) are not being manufactured, processed, or used in the employer's workplace, the employer must add the new information to a MSDS before the substance(s) are reintroduced into the workplace.
(B) The employer must ensure that persons who will receive the PMN substance(s) from the employer, or who have received the PMN substance(s) from the employer within 5 years from the date the employer becomes aware of the new information described in paragraph (a)(2)(i)(A) of this section, are provided an MSDS containing the information required under paragraph (a)(2)(i)(A) of this section within 90 days from the time the employer becomes aware of the new information.
(ii)
(b)
(1)
(2)
(3)
(a)
(2) The significant new uses are:
(i)
(A) If as a result of the test data required under the TSCA section 5(e) consent order for the substance, the employer becomes aware that the substance may present a risk of injury to human health or the environment, the employer must incorporate this new information, and any information on methods for protecting against such risk, into a MSDS as described in § 721.72(c) within 90 days from the time the employer becomes aware of the new information. If the substance is not being manufactured, processed, or used in the employer's workplace, the employer must add the new information to a MSDS before the substance is reintroduced into the workplace.
(B) The employer must ensure that persons who will receive the PMN substance from the employer, or who have received the PMN substance from the employer within 5 years from the date the employer becomes aware of the new information described in paragraph (a)(2)(i)(A) of this section, are provided an MSDS containing the information required under paragraph (a)(2)(i)(A) of this section within 90 days from the time the employer becomes aware of the new information.
(ii)
(b)
(1)
(2)
(3)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii)
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(3)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
(3)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
(b)
(1)
(2)
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is approving portions of two State Implementation Plan (SIP) revisions submitted by the Commonwealth of Pennsylvania through the Pennsylvania Department of Environmental Protection (PADEP) pursuant to the Clean Air Act (CAA). Whenever new or revised national ambient air quality standards (NAAQS) are promulgated, the CAA requires states to submit a plan for the implementation, maintenance, and enforcement of such NAAQS. The plan is required to address basic program elements, including, but not limited to regulatory structure, monitoring, modeling, legal authority, and adequate resources necessary to assure attainment and maintenance of the standards. These elements are referred to as infrastructure requirements. PADEP made two separate SIP submittals addressing the infrastructure requirements for the 2010 nitrogen dioxide (NO
This final rule is effective on June 8, 2015.
EPA has established a docket for this action under Docket ID Number EPA-R03-OAR-2014-0910. All documents in the docket are listed in the
Rose Quinto, (215) 814-2182, or by email at
On February 6, 2015 (80 FR 6672), EPA published a notice of proposed rulemaking (NPR) for the Commonwealth of Pennsylvania proposing approval of Pennsylvania's SIP submittals to satisfy several requirements of section 110(a)(2) of the CAA for the 2010 NO
In the NPR, EPA also proposed approval of Pennsylvania's July 15, 2014 SIP submittals for certain requirements of CAA section 110(a)(2) for the 2008 ozone and 2010 sulfur dioxide (SO
The rationale supporting EPA's approval of Pennsylvania's July 15, 2014 infrastructure SIP submittals for the 2010 NO
EPA is approving as a revision to the Pennsylvania SIP, Pennsylvania's July 15, 2014 infrastructure SIP submittals which provide the basic program elements specified in section 110(a)(2)(A), (B), (C), (D)(i)(II)(PSD),
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 7, 2015. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action.
This action pertaining to Pennsylvania's section 110(a)(2) infrastructure elements for the 2010 NO
Environmental protection, Air pollution control, Incorporation by reference, Sulfur dioxide, Reporting and recordkeeping requirements.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(e) * * *
(1) * * *
Environmental Protection Agency (EPA).
Partial withdrawal of direct final rule.
Because EPA received adverse comment on certain elements of the Tier 3 Amendments direct final rule published on February 19, 2015, we are withdrawing those elements of the direct final rule. EPA intends to consider the comments received and proceed with a new final rule for the withdrawn elements. The remaining elements will go into effect pursuant to the direct final rule.
Effective May 5, 2015, EPA withdraws the amendments to 40 CFR 80.1453, 80.1616, and 80.1621 published at 80 FR 9078 on February 19, 2015.
Julia MacAllister, Office of Transportation and Air Quality, Assessment and Standards Division, 2000 Traverwood Drive, Ann Arbor, Michigan 48105; telephone number: 734-214-4131; email address:
We stated in the Tier 3 Technical Amendments direct final rule published on February 19, 2015 (80 FR 9078) that if we received adverse comment by April 6, 2015, as to any part of the direct final rule, those parts would be withdrawn by publishing a timely notice in the
First, 40 CFR 80.1453: In the Renewable Fuel Standard (RFS) Quality Assurance Program (QAP) Rule (79 FR 42078, July 18, 2014), EPA added additional product transfer document (PTD) requirements for renewable fuels that informed parties that took ownership of the renewable fuel that they would need to (a) use the fuel as it was intended,
Second, 40 CFR 80.1616: The direct final rule included some clarifying language for when credits expire and are reported. We received a comment advocating for small refiners and small volume refineries to be allowed to use credits past January 1, 2020—to effectively receive a small refiner- and small volume refinery-specific period of lead time before these parties must comply with the Tier 3 sulfur standards. Although it is not clear whether this comment is germane to the provisions of the direct final rule, in light of the short time frame for withdrawal of the direct final rule, we have decided to treat this as an adverse comment on the amended rulemaking provisions and we therefore are withdrawing the proposed changes to 40 CFR 80.1616.
Third, 40 CFR 80.1621: Following publication of the Tier 3 Final Rule (79 FR 23414, April 28, 2014) we were contacted by some refiners to clarify if/when small volume refineries could be disqualified, because there was language inadvertently deleted from the regulatory text as part of the Tier 3 final rule. In re-inserting this text in the direct final rule, we clarified that small volume refinery disqualification was akin to small refiner disqualification. We received adverse comment raising the issue that the new wording is confusing because it does not explicitly state exactly when and under which circumstances that disqualification could occur, and also that the term “small refinery” was used instead of the correct term “small volume refinery”. In this action we are withdrawing all changes to 40 CFR 80.1621.
EPA published a parallel proposed rule on the same day as the direct final rule. The proposed rule invited comment on the substance of the direct final rule. EPA intends to consider the comments received and proceed with a new final rule. As stated in the parallel proposal, EPA does not plan to institute a second comment period for the proposed action with respect to the provisions that are withdrawn by this notice.
The amendments for which we did not receive adverse comment are not being withdrawn and will become
Accordingly, the amendments to 40 CFR 80.1453, 80.1616 and 80.1621 on February 19, 2015 (80 FR 9078), are withdrawn as of May 5, 2015.
Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Diesel fuel, Fuel additives, Gasoline, Imports, Incorporation by reference, Labeling, Motor vehicle pollution, Penalties, Petroleum, Reporting and recordkeeping requirements.
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Final rule.
This final rule amends the regulations implementing the National Organ Transplant Act of 1984, as amended, (NOTA) pursuant to statutory requirements of the HIV Organ Policy Equity Act (HOPE Act), enacted in 2013. In accordance with the mandates of the HOPE Act, this regulation removes the current regulatory provision that requires the Organ Procurement Transplantation Network (OPTN) to adopt and use standards for preventing the acquisition of organs from individuals known to be infected with human immunodeficiency virus (HIV).
In its place, this regulation includes new requirements that organs from individuals infected with HIV may be transplanted only into individuals who are infected with HIV before receiving such organs and who are participating in clinical research approved by an institutional review board, as provided by regulation. The only exception to this requirement of participation in such clinical research is if the Secretary publishes a determination in the future that participation in such clinical research, as a requirement for transplants of organs from individuals infected with HIV, is no longer warranted.
In addition, this regulatory change establishes that OPTN standards must ensure that any HIV-infected transplant recipients are participating in clinical research in accordance with the research criteria to be published by the Secretary. Alternately, if and when the Secretary determines that participation in such clinical research should no longer be a requirement for transplants with organs from donors infected with HIV to individuals infected with HIV, the regulation mandates that the OPTN adopt and use standards of quality, as directed by the Secretary, consistent with the law and in a way that ensures the changes will not reduce the safety of organ transplantation.
This final rule is effective June 8, 2015.
Robert W. Walsh, Director, Division of Transplantation, Healthcare Systems Bureau, Health Resources and Services Administration, 5600 Fishers Lane, Room 8W37, Rockville, MD 20857; or by telephone (301) 443-7577.
The U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration's (HRSA), Healthcare Systems Bureau (HSB), Division of Transplantation (DoT) is responsible for overseeing the operation of the nation's Organ Procurement and Transplantation Network (OPTN), which has responsibilities including the equitable allocation of donor organs for transplantation. The allocation of organs is guided by organ allocation policies developed by the OPTN in accordance with the regulations governing the operation of the OPTN (sometimes referred to as the “OPTN final rule” and herein referred to as “OPTN regulations”) (42 CFR part 121). The OPTN is also charged with developing policies on many subjects, including standards of quality pertaining to organs procured for use in transplantation. In addition to the efficient and effective allocation of donor organs through the OPTN, the Secretary also supports efforts to increase the supply of donor organs made available through transplantation.
Prior to the enactment of the HOPE Act, Public Law 113-51 (November 21, 2013), NOTA required the OPTN to adopt and use standards of quality for preventing the acquisition of organs from individuals known to be infected with HIV. This requirement was further incorporated into regulation at 42 CFR 121.6(b). Thus, OPTN members were prohibited from transplanting organs from individuals known to be infected with HIV into patients (including patients infected with HIV).
The HOPE Act made an important change with respect to the transplantation of organs from individuals infected with HIV. Pursuant to the HOPE Act, organs from individuals infected with HIV may be transplanted so long as two sets of requirements are satisfied. First, organs from individuals infected with HIV may be transplanted only into individuals who were infected with HIV prior to receiving such an organ.
Second, transplants from individuals infected with HIV are subject to one of two oversight frameworks. Specifically, under the initial framework envisioned by the HOPE Act, all recipients of organs from individuals infected with HIV must be participating in clinical research approved by an institutional review board under research criteria to be published by the Secretary as described in the HOPE Act and the standards of quality implemented by the OPTN pursuant to the HOPE Act. Based on this change, all transplant centers conducting such clinical research will be required to comply with research criteria published by the Secretary under subsection (a) of section 377E of the Public Health Service Act, as amended. Alternately, if the Secretary determines that participation in such clinical research is no longer warranted as a requirement for transplants of organs from individuals infected with HIV, the Secretary will publish such a determination. The Secretary must then, consistent with the HOPE Act, direct the OPTN to revise its standards, consistent
As noted above, the HOPE Act directs the Secretary to develop and publish criteria for the conduct of research relating to transplantation of organs from donors infected with HIV into individuals who are infected with HIV before receiving an HIV-infected organ. These research criteria will be published in a separate document and public comments will be solicited on such research criteria.
The HOPE Act also requires the OPTN to revise standards of quality for the acquisition and transportation of donated HIV-infected organs to the extent determined necessary by the Secretary to allow the conduct of research in accordance with the research criteria published by the Secretary (unless and until such time that the Secretary publishes a determination that participation in such clinical research is no longer warranted for transplants involving organs from donors infected with HIV).
Consistent with these directives, the HOPE Act directs the Secretary to revise current regulations (specifically, 42 CFR 121.6) that direct the OPTN to adopt and use standards for preventing the acquisition of organs from individuals infected with HIV, which effectively prevent the conduct of research relating to the transplantation of organs procured from individuals infected with HIV into recipients infected with HIV. The HOPE Act mandates that such regulatory revisions are to be made not later than two years after the date of enactment of the HOPE Act. That two year period will end on November 21, 2015. The Department is issuing this final rule under that statutory directive.
The Department issues this final rule to fulfill the HOPE Act's mandate that the Secretary amend 42 CFR part 121 to permit the conduct of research involving the transplantation of organs from individuals infected with HIV into persons who are infected with HIV. This final rule removes the current regulatory prohibition against such transplants and makes clear that HIV-infected transplants may occur provided all of the HOPE Act's requirements are satisfied.
Although the HOPE Act also provides the Secretary with discretion to determine what criteria should apply to the conduct of such research, the Secretary is not promulgating such research criteria as part of this regulation. As noted above, the Secretary will publish such research criteria in a separate publication. The purpose of this regulation is to modify the regulations governing the operation of the OPTN to make such regulations consistent with the framework set forth in the HOPE Act.
Once this regulation is effective, the OPTN regulations will provide that organs from individuals infected with HIV may be transplanted only into individuals who are infected with HIV before receiving such organ(s). Thus, the OPTN final rule will not permit the transplantation of organs from individuals infected with HIV into individuals who are not infected with HIV. In addition, organs from individuals infected with HIV may only be transplanted into recipients who are participating in clinical research approved by an institutional review board, as defined in 45 CFR part 46, under the forthcoming research criteria to be published by the Secretary until such time that the Secretary publishes a determination that participation in such clinical research, as a requirement for transplants of organs from individuals infected with HIV, is no longer warranted. If the Secretary publishes such a determination, that transplants of organs from individuals infected with HIV can occur outside of the Secretary's research criteria, she will do so using appropriate procedures (
In accordance with the provisions of the Administrative Procedure Act, 5 U.S.C. 553(b)(3)(B), agencies are permitted to waive the use of notice and comment procedures in issuing regulations when such agencies, for good cause, find that notice and public comment procedures are impracticable, unnecessary, or contrary to the public interest and when agencies incorporate their findings and a brief explanation of their rationale in such regulations. The amendment to 42 CFR 121.6 made by this regulation is required by the HOPE Act. 42 U.S.C. 274f-5(b)(2). Because the changes made by this rule directly implement changes to the governing statute made by the HOPE Act, and because the Secretary is not undertaking discretionary rulemaking concerning the OPTN (but is instead directly following mandated changes in the law), the Secretary has determined, under 5 U.S.C. 553, that it is unnecessary and impracticable to follow proposed rulemaking procedures in this instance.
Thus, the Secretary is waiving the public notice and comment procedures in the interest of implementing the changes set forth in the HOPE Act, to enable persons infected with HIV to receive organs from individuals infected with HIV as long as all of the requirements set forth in the HOPE Act are satisfied and to enable the OPTN to revise its standards of quality, consistent with the HOPE Act.
Executive Order 12866 requires that all regulations reflect consideration of alternatives, costs, benefits, incentives, equity, and available information. Regulations require special analysis if they are found to be “significant” because of their cost, adverse effects on the economy, inconsistency with other agency actions, budgetary impact, or the raising of novel legal or policy issues. In addition, the Regulatory Flexibility Act of 1980 (RFA) requires that agencies analyze regulatory proposals to determine whether they create a significant economic impact on a substantial number of small entities. If a rule has a significant economic effect on a substantial number of small entities, the Secretary must specifically consider the economic effect of a rule on small entities and analyze regulatory options. “Small entity” is defined in the RFA as “having the same meaning as the terms `small business,' `small
The Secretary has determined that minimal resources are required to implement the requirements in this rule because the initial phase of implementation, after the Secretary develops research criteria, will be the conduct of research involving transplants of organs from HIV-infected donors into HIV-infected recipients. As such, the change in standards of quality will initially only impact Organ Procurement Organizations and transplant hospitals choosing to enroll patients in research protocols. In addition, the number of HIV-infected transplants, and the number of institutions performing HIV-infected transplants, will be small. Cost and burden estimates refer to the research phase of implementation only. Should the Secretary determine, after reviewing the results of scientific research, that the standards of quality referenced above should be modified for the entire transplant system, the Secretary will, in accordance with the HOPE Act, direct the OPTN to revise such standards, consistent with applicable law and in a way that ensures the changes will not reduce the safety of organ transplantation. At that time, the Secretary may revise the Department's impact analysis. Therefore, in accordance with the RFA and the Small Business Regulatory Flexibility Act of 1996, which amended the RFA, the Secretary certifies that this rule will not have a significant impact on a substantial number of small entities.
The Secretary also has determined that this rule does not meet the criteria for an economically significant rule as defined by Executive Order 12866 and will have no major effect on the economy or Federal expenditures. The Department has determined that this rule is not a major rule within the meaning of the statute providing for Congressional Review of Agency Rulemaking, 5 U.S.C. 801. Similarly, it will not have effects on State, local, and tribal governments or on the private sector such as to require consultation under the Unfunded Mandates Reform Act of 1995. This rule is not being treated as a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rule has not been reviewed by the Office of Management and Budget.
The provisions of this rule will not affect the following elements of family well-being: Family safety, family stability, marital commitment; parental rights in the education, nurture, and supervision of their children; family functioning, disposable income, or poverty; or the behavior and personal responsibility of youth, as determined under section 654(c) of the Treasury and General Government Appropriations Act of 1999. As stated above, this rule modifies the regulations governing the OPTN based on legal authority.
This rule has the effect of fulfilling the HOPE Act's statutory mandate requiring the Secretary to amend OPTN regulations to permit the conduct of research involving the transplantation of organs from individuals infected with HIV into persons who are infected with HIV. This final rule removes the current regulatory prohibition against HIV-infected transplants and makes clear that HIV-infected transplants may occur so long as all of the requirements described in the HOPE Act are satisfied. OPTN members will be required to comply with requirements set forth in the OPTN final rule, including those pertaining to data submission as set forth in 42 CFR part 121, as applied to organs recovered from HIV-infected individuals.
The Department has determined that at this time, the amendment described in this rule imposes minimal additional data collection requirements beyond those already imposed by current regulations, which have been approved by the Office of Management and Budget. The current data collection requirements in the OPTN final rule approved by the OMB under the Paperwork Reduction Act of 1995 and assigned control numbers OMB No. 0915-0157 (for organ donors, candidates, and recipients) and OMB No. 0915-0184 (for OPTN membership application data) will be only slightly impacted by this rule. Current OPTN forms already include information about HIV testing and a donor's HIV status. HRSA anticipates that OPTN candidate registration forms will be updated in the future to include a question regarding the candidate's participation in research studies conducted under the authority of the Act. In addition, certain OMB-approved forms will be updated in the future to include results of HIV blood tests using Nucleic Acid Test (NAT) methodology. However, the inclusion of this information is not based upon the regulatory changes made by the HOPE Act, but is instead responsive to revised Public Health Service guidelines published in 2013. The burden for this data collection is anticipated to be small given the projected number of research participants (<1% of annual transplants at the outset). Finally, it is possible that the OPTN will conduct additional data collections to implement the changes in law created by the Act. For example, when the Secretary publishes research criteria under the Act, it is possible that such criteria will make recommendations concerning data that would be helpful for the Secretary to review in assessing research on transplants involving organs from individuals infected with HIV. In that event, the Department may choose to incorporate some of those data elements into OPTN forms and data collection. Alternately, the OPTN may determine independently that it wishes to capture additional data with respect to OPTN members participating in research under the HOPE Act. This rule reflects the Department's current assessment as to the likely data collections that will be imposed by virtue of this regulation. If, in the future, the Department or the OPTN determine that additional data should be collected in implementation of this regulation, the Department will notify the public of any proposed data collections and solicit comments consistent with the Paperwork Reduction Act.
The estimated number of respondents included in the table below is based on the current number of OPTN transplant hospital members. The number of transplant hospital members will vary as new members are approved for OPTN membership, and/or members relinquish their OPTN membership when a member ceases activity related to organ transplantation. As such, while the total burden hours may change slightly from the estimate below, the table below is an accurate representation of the current estimated annual reporting burden.
The estimated annual reporting burden is as follows:
Health care, Hospitals, Organ transplantation, Reporting and recordkeeping requirements.
Therefore, for the reasons stated in the preamble, the Department of Health and Human Services amends 42 CFR part 121 as follows:
Sections 215, 371-76, and 377E of the Public Health Service Act (42 U.S.C. 216, 273-274d, 274f-5); sections 1102, 1106, 1138 and 1871 of the Social Security Act (42 U.S.C. 1302, 1306, 1320b-8, and 1395hh); and section 301 of the National Organ Transplant Act, as amended (42 U.S.C. 274e).
(b)
(i) Are infected with HIV before receiving such organ(s); and
(ii)(A) Are participating in clinical research approved by an institutional review board, as defined in 45 CFR part 46, under the research criteria published by the Secretary under subsection (a) of section 377E of the Public Health Service Act, as amended; or
(B) The Secretary has published, through appropriate procedures, a determination under section 377E(c) of the Public Health Service Act, as amended, that participation in such clinical research, as a requirement for transplants of organs from individuals infected with HIV, is no longer warranted.
(2) Except as provided in paragraph (b)(3) of this section, the OPTN shall adopt and use standards of quality with respect to organs from individuals infected with HIV to the extent the Secretary determines necessary to allow the conduct of research in accordance with the criteria described in paragraph (b)(1)(ii)(A) of this section.
(3) If the Secretary has determined under paragraph (b)(1)(ii)(B) of this section that participation in clinical research is no longer warranted as a requirement for transplants of organs from individuals infected with HIV, the OPTN shall adopt and use standards of quality with respect to organs from individuals infected with HIV as directed by the Secretary, consistent with 42 U.S.C. 274, and in a way that ensures the changes will not reduce the safety of organ transplantation.
Fish and Wildlife Service, Interior.
Final rule; technical amendment.
On July 29, 2014, the U.S. Fish and Wildlife Service (we) published a final rule to update the addresses of our headquarters offices in our regulations. We inadvertently omitted two necessary address changes. We make those changes in this document.
Effective May 8, 2015.
Anissa Craghead, 703-358-2445.
We relocated our headquarters offices from Arlington, Virginia, to Falls Church, Virginia, on July 28, 2014. To ensure regulated entities and the general public have accurate contact information for the Service's offices, on July 29, 2014, we published a final rule (79 FR 43961) to update our headquarters addresses throughout our regulations. We inadvertently omitted two necessary address changes in the regulations at 50 CFR 10.21. We make those changes in this document.
Exports, Fish, Imports, Law enforcement, Plants, Transportation, Wildlife.
Accordingly, we amend part 10 of subchapter A of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 668a-d, 703-712, 742a-j-l, 1361-1384, 1401-1407, 1531-1543, 3371-3378; 18 U.S.C. 42; 19 U.S.C. 1202.
(a) Mail forwarded to the Director for law enforcement purposes should be addressed to Chief, Office of Law Enforcement, at the address provided at 50 CFR 2.1(b).
(b) Mail sent to the Director regarding permits for the Convention on International Trade in Endangered Species of Wild Fauna and Fauna (CITES), injurious wildlife, Wild Bird
Agricultural Marketing Service, USDA.
Proposed rule.
This proposal invites comments on expanding the membership of the U.S. Highbush Blueberry Council (Council) under the Blueberry Promotion, Research and Information Order (Order). The Council administers the Order with oversight by the U.S. Department of Agriculture (USDA). This proposal would increase the number of Council members from 16 to 20, adding two producers, one importer, and one exporter. This would help ensure that the Council reflects the geographical distribution of domestic blueberry production and imports into the United States. This proposal would also add eligibility requirements for the public member, clarify the Council's nomination procedures and its ability to serve the diversity of the industry, and increase the number of members needed for a quorum. This proposal also invites comments on prescribing late payment and interest charges for past due assessments. These changes would help facilitate program administration. All of these actions were unanimously recommended by the Council.
Comments must be received by July 7, 2015.
Interested persons are invited to submit written comments concerning this proposal. Comments may be submitted on the Internet at:
Maureen T. Pello, Marketing Specialist, Promotion and Economics Division, Fruit and Vegetable Program, AMS, USDA, P.O. Box 831, Beavercreek, Oregon, 97004; telephone: (503) 632-8848; facsimile (202) 205-2800; or electronic mail:
This proposal is issued under the Order (7 CFR part 1218). The Order is authorized under the Commodity Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).
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 (OMB) has waived the review process.
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 would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications.
This proposal has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. Section 524 of the 1996 Act (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.
Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject to an order may file a written petition with USDA stating that an order, any provision of an order, or any obligation imposed in connection with an order, is not established in accordance with the law, and request a modification of an order or an exemption from an order. Any petition filed challenging an order, any provision of an order, or any obligation imposed in connection with an order, shall be filed within two years after the effective date of an order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The 1996 Act provides that the district court of the United States for any district in which the petitioner resides or conducts business shall have the jurisdiction to review a final ruling on the petition, if the petitioner files a complaint for that purpose not later than 20 days after the date of the entry of USDA's final ruling.
This proposal invites comments on expanding the membership of the Council under the Order. The Council administers the Order with oversight by USDA. Under the program, assessments are collected from domestic producers and importers and used for research and promotion projects designed to increase the demand for highbush blueberries. This proposal would increase the number of Council members from 16 to 20, adding two producers, one importer, and one exporter. This would help ensure that the Council reflects the geographical distribution of domestic blueberry production and imports into the United States. This proposal would also add eligibility requirements for the public member, clarify the Council's nomination procedures and its ability to serve the diversity of the industry, and increase the number of members needed for a quorum. This proposal also invites
Section 1218.40(a) of the Order currently specifies that the Council be composed of no more than 16 members and alternates appointed by the Secretary of Agriculture (Secretary). Ten of the 16 members and alternates are producers. One producer member and alternate are from each of the following regions within the United States: Region #1 Western Region; Region #2 Midwest Region; Region #3 Northeast Region; and Region #4 Southern Region. One producer member and alternate are from each of the top six blueberry producing states, based upon the average of the total tons produced over the previous three years. Currently, these states include Michigan, Oregon, Washington, Georgia, New Jersey, and California. Average tonnage is based upon production and assessment figures generated by the Council.
Of the remaining six Council members and alternates, three members and alternates are importers. One member and alternate must be an exporter, defined in section 1218.40 as a blueberry producer currently shipping blueberries into the United States from the largest foreign blueberry production area, based on a three-year average (currently Chile). One member and alternate must be a first handler, defined in section 1218.40 as a United States based independent or cooperative organization which is a producer/shipper of domestic blueberries. Finally, one member and alternate must represent the public.
Section 1218.40(b) of the Order specifies that, at least once every five years, the Council will review the geographical distribution of the production of blueberries in the United States and the quantity of imports. The review is conducted through an audit of state crop production figures and Council assessment records. If warranted, the Council will recommend to the Secretary that its membership be altered to reflect changes in the geographical distribution of domestic blueberry production and the quantity of imports. If the level of imports increases, importer members and alternates may be added to the Council.
The Council met on October 3, 2014, and reviewed domestic production and assessment data for the pasts three years (2011-2013). This data for the top blueberry producing states is summarized in Table 1 below.
As shown
Since the Council's inception in 2001 and continuing until 2006, there were five state positions on the Council; producers from Michigan, Oregon, Georgia, New Jersey, and North Carolina held those five positions. In 2006, a sixth state position was added to the Council, with the State of Washington earning a seat (71 FR 44553; August 7, 2006). Production shifted in the coming years, and by 2014, California became the sixth top blueberry producing state and earned a position on the Council, with its 3-year average production surpassing that of North Carolina.
After reviewing state production data, the Council recommended revising its membership so that one producer member and alternate from each of the top eight producing blueberry states have seats on the Council, based upon the average of the total tons produced over the previous 3 years. Thus, the number of state positions on the Council would be increased from six to eight. Based upon recent production figures, this would allow North Carolina and Florida to each have a state member and alternate seat on the Council. Section 1218.40(a)(2) would be revised accordingly.
The Council also reviewed import data and compared it to domestic data. Table 2 below shows the domestic (U.S.) production figures and quantity of imports from 2011-2013 as well as assessments paid for domestic and imported blueberries for those years. The table also shows the 3-year average of domestic production, imports and assessments paid for 2011-2013.
As shown
The Council also reviewed import data by country. Table 3 below shows the quantity of imports by country from 2011-2013 as well as the 3-year average.
As shown
Regarding membership on the Council, representatives from Canada were the exporter member and alternate from the time of the Council's inception and continuing through 2009. Since 2010, representatives from Chile have been the exporter member and alternate on the Council.
Upon reviewing import data, the Council recommended adding one importer member and one alternate to its membership. This would increase the number of importer positions from three to four. The Council also recommended adding one exporter member and one alternate to its membership to represent foreign producers currently shipping blueberries into the United States from the second largest foreign blueberry production area, based on a 3-year average. This would increase the number of exporter positions from one to two, allowing exporters from both Chile and Canada to be represented on the Council. Section 1218.40(a) of the Order is proposed to be amended accordingly.
Thus, the number of Council members would increase from 16 to 20. Of the 20 members, 12 would be domestic producers, 4 would be importers, 2 would be exporters, and 1 each would be a handler and public member. Of the 18 Council members representing domestic producers, importers and exporters, 66.7 percent would represent the domestic industry and 33.3 percent of the Council would represent imports or foreign production. This would realign the Council's membership to better reflect the geographic distribution of domestic and imported blueberries.
The Council reviewed other Order provisions regarding its membership and operations. The Council recommended revising paragraph (a)(6) of section 1218.40 to clarify eligibility requirements for the public member and alternate member positions. Specifically, the Council recommended that the public member and alternate not be a blueberry producer, handler, importer, exporter or have a financial interest in the production, sales, marketing or distribution of blueberries.
The Council also recommended adding language to the Order to clarify its ability to serve the diversity of the industry. The Council recommended adding a new paragraph (c) to section 1218.40 to specify that, when the industry makes recommendations for nominees to serve on the Council, it should take into account the diversity of the population served and the knowledge, skills, and abilities of the members to serve a diverse population, size of the operations, methods of production and distribution, and other distinguishing factors to ensure that the recommendations of the Council take into account the diverse interest of persons responsible for paying assessments, and others in the marketing chain, if appropriate.
The Council recommended minor revisions to section 1218.41 of the Order regarding nominations and appointments. The procedures to nominate state and regional producers, as well as importers, exporters, first handlers, and public members would
The Council also recommended adding language to section 1218.41 to expand the number of nominees submitted to the Secretary for consideration. Paragraph (a) of section 1218.41 currently provides that, when a state has a blueberry commission or marketing order in place, the state commission or committee will nominate members to serve on the Council. At least two nominees must be recommended to the Secretary for each member and each alternate position. The Council recommended that other qualified persons who are interested in serving in the respective state positions but are not nominated by their State marketing order or commission be designated by the State organization and/or Council as additional nominees for consideration by the Secretary. Section 1218.41(a) would be revised accordingly.
Likewise, paragraph (d) of section 1218.41 currently provides that nominations for the importer, exporter, first handler, and public member positions be made by the Council. Two nominees for each member and each alternate position are submitted to the Secretary for consideration. The Council recommended that other qualified persons who are interested in serving in these positions but are not recommended by the Council be designated by the Council as additional nominees for consideration by the Secretary. The current paragraph (d) in section 1218.41 would be modified accordingly and would become paragraph (c).
The Council also recommended adding a new paragraph (d) to section 1218.41 to specify that producer, handler and importer nominees must be in compliance with the Order's provisions regarding the payment of assessments and filing of reports. This would help ensure that only persons in compliance with the Order's obligations serve on the Council. Further, this section would clarify that producer and importer nominees must produce or import, respectively, 2,000 pounds or more of highbush blueberries annually. This would bring the Order in line with how the program has been administered since its inception. Section 1218.41 is proposed to be revised accordingly.
The Council recommended revisions to section 1218.45 regarding procedures. First, the Council recommended increasing the number of members needed for a quorum. Paragraph (a) of section 1218.45 currently specifies that nine members are needed for a quorum, which is a majority of the current 16-member Council. Increasing the number of Council members to 20 warrants increasing the number members needed for a quorum to 11, which would be a majority of the proposed 20-member Council.
The Council also recommended adding flexibility to its procedures so that members participating in Council meetings may cast votes on issues either in person or by electronic or other means as deemed appropriate. Specifically, a new paragraph (f) would be added to section 1218.45 to specify that all votes at meetings of the Council and committees may be cast in person or by electronic voting or other means as the Council and Secretary deem appropriate to allow members participating by telephone or other electronic means to cast votes.
The Order specifies that the funds to cover the Council's expenses shall be paid from assessments on producers and importers, donations from persons not subject to assessments and from other funds available to the Council. First handlers are responsible for collecting and submitting reports and producer assessments to the Council. Handlers must also maintain records necessary to verify their reports. Importers are responsible for paying assessments to the Council on highbush blueberries imported into the United States through the U.S. Customs and Border Protection (Customs). The Order also provides for two exemptions. Producers and importers who produce or import less than 2,000 pounds of blueberries annually, and producers and importers of 100 percent organic blueberries are exempt from the payment of assessments.
Section 1218.52(e) of the Order specifies that all assessment payments and reports must be submitted to the office of the Council. Assessments on imported blueberries are collected by Customs prior to entry into the United States. Assessments on domestic blueberries for a crop year must be received by the Council no later than November 30 of that year. A late payment charge shall be imposed on any handler who fails to remit to the Council, the total amount for which any such handler is liable on or before the due date established by the Council. In addition to the late payment charge, an interest charge shall be imposed on the outstanding amount for which the handler is liable. The rate of interest must be prescribed in regulations issued by the Secretary.
Assessment funds are used for research and promotion activities that are intended to benefit all industry members. Thus, it is important that all assessed entities pay their assessments in a timely manner. Entities who fail to pay their assessments on time may reap the benefits of Council programs at the expense of others. In addition, they may utilize funds for their own use that should otherwise be paid to the Council to finance Council programs.
The Council recommended prescribing rates of late payment and interest charges for past due assessments in the Order's regulations. A late payment charge would be imposed upon handlers who fail to pay their assessments to the Council within 30 calendar days of the date when assessments are due. This one-time late payment charge would be 5 percent of the assessments due before interest charges have accrued.
Additionally, interest at a rate of 1 percent per month on the outstanding balance, including any late payment and accrued interest, would be added to any accounts for which payment has not been received within 30 calendar days of the date when assessments are due. Interest would continue to accrue monthly until the outstanding balance is paid to the Council.
This action is expected to help facilitate program administration by providing an incentive for entities to remit their assessments in a timely manner, with the intent of creating a fair and equitable process among all assessed entities. Accordingly, a new Subpart C would be added to the Order for provisions implementing the blueberry Order, and a new section 1218.520 would be added to Subpart C. Late payment charges and interest on past due assessments are not applicable for assessments on imported blueberries because the assessments are collected by Customs at the time of entry.
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS is required to examine the impact of the proposed rule on small entities. Accordingly, AMS has considered the economic impact of this action on such entities.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened. The Small Business Administration defines, in 13
There are approximately 2,000 domestic producers, 80 first handlers and 200 importers of highbush blueberries covered under the program. Dividing the highbush blueberry crop value for 2013, $715,958,000,
Regarding value of the commodity, as mentioned above, based on 2013 NASS data, the value of the domestic highbush blueberry crop was about $716 million. According to Customs data, the value of 2013 imports was about $563 million.
This proposal invites comments on amending sections 1218.40, 1218.41 and 1218.45 of the Order regarding Council membership, nominations, and procedures, respectively. The Council administers the Order with oversight by USDA. Under the program, assessments are collected from domestic producers and importers and used for research and promotion projects designed to increase the demand for highbush blueberries. This proposal would increase the number of Council members from 16 to 20, adding two producers, one importer, and one exporter. This would help ensure that the Council reflects the geographical distribution of domestic blueberry production and imports into the United States. Authority for this action is provided in section 1218.40(b) of the Order and section 515(b) of the 1996 Act.
This proposal would also prescribe charges for past due assessments under the Order. A new section 1218.520 would be added to the Order specifying a one-time late payment charge of 5 percent of the assessments due and interest at a rate of 1 percent per month on the outstanding balance, including any late payment and accrued interest. This section would be included in a new Subpart C—Provisions for Implementing the Blueberry Promotion, Research and Information Order. Authority for this action is provided in section 1218.52(e) of the Order and section 517(e) of the 1996 Act.
Regarding the economic impact of the proposed rule on affected entities, expanding the Council membership and other proposed changes to the Order's membership provisions impose no additional costs on industry members. Eligible producers, importers and exporters interested in serving on the Council would have to complete a background questionnaire. Those requirements are addressed later in this proposal in the section titled
Prescribing charges for past due assessments imposes no additional costs on handlers who pay their assessments on time. It merely provides an incentive for entities to remit their assessments in compliance with the Order. For all entities who are delinquent in paying assessments, both large and small, the charges would be applied the same. As for the impact on the industry as a whole, this action would help facilitate program administration by providing an incentive for entities to remit their assessments in a timely manner, with the intent of creating a fair and equitable process among all assessed entities.
Additionally, as previously mentioned, the Order also provides for two exemptions. Producers and importers who produce or import less than 2,000 pounds of blueberries annually, and producers and importers of 100 percent organic blueberries are exempt from the payment of assessments. Of the 2,000 producers, it is estimated that 1,860 producers and 180 importers produce or import over the 2,000-pound threshold and pay assessments under the program.
Regarding alternatives, the Council has been reviewing its membership and contemplating adding new members to reflect changes in the geographic distribution of blueberries for the past few years. As previously mentioned, in 2014, California became the sixth top blueberry producing state, which earned that state a member and alternate seat on the Council, while North Carolina lost its member and alternate seat. The Council formed a subcommittee that considered various options. One option was to eliminate the four regional producer positions and allocate nine seats to producers representing the nine top producing blueberry states and one seat to a producer representing all other producing states (producer at-large). Another option considered was to increase the number of state producer positions from six to seven so that North Carolina would have a seat. The Council also considered maintaining the status quo. Ultimately the Council recommended revising the Order so that the top eight producing blueberry states would be represented on the Council.
The Council also considered adding two importers rather than one importer and one exporter to its membership. However, upon reviewing the import statistics, the Council concluded that it was important to have foreign producer representation from the top two countries shipping blueberries into the United States represented on the Council. Thus, the Council recommended adding one importer and one exporter member and alternates to the Council.
Regarding requirements for late assessments, the Council considered not prescribing rates for late charges and interest. However, the Council concluded that the rates should be codified along with the applicable date when charges would be applied so that the Order is clear on what is required. Additionally, the 1996 Act requires that the rates be prescribed by the Secretary.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection and recordkeeping requirements that are imposed by the Order have been approved previously under OMB control number 0581-0093. Eligible producers, importers, exporters, handlers, and public members interested in serving on the Council must complete a background questionnaire (Form AD-755) to verify their eligibility. This proposed rule would not result in a change to the information collection and recordkeeping requirements previously approved and would impose no additional reporting and recordkeeping burden on blueberry producers, importers, exporters, handlers or public members.
As with all Federal promotion programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. Finally, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule.
AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other
Regarding outreach efforts, this action was discussed by the Council at meetings in October 2012 and in 2013 and at executive and subcommittee meetings held in 2014. The Council met in October 2014 and unanimously made its recommendation. All of the Council's meetings are open to the public and interested persons are invited to participate and express their views.
We have performed this initial RFA analysis regarding the impact of the proposed rule on small entities and we invite comments concerning the potential effects of this action.
While this proposed rule set forth below has not received the approval of USDA, it has been determined that it is consistent with and would effectuate the purposes of the 1996 Act.
A 60-day comment period is provided to allow interested persons to respond to this proposal. All written comments received in response to this proposed rule by the date specified will be considered prior to finalizing this action.
Administrative practice and procedure, Advertising, Blueberry promotion, Consumer information, Marketing agreements, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, 7 CFR part 1218 is proposed to be amended as follows:
7 U.S.C. 7411-7425; 7 U.S.C. 7401.
(a)
(2) One producer member and alternate from each of the top eight blueberry producing states, based on the average of the total tons produced over the previous three years. Average tonnage will be based upon production and assessment figures generated by the Council.
(3) Four importers and alternates.
(4) Two exporters and alternates will be filled by foreign blueberry producers currently shipping blueberries into the United States from the two largest foreign blueberry production areas, respectively, based on a three-year average.
(6) One public member and alternate. The public member and alternate public member may not be a blueberry producer, handler, importer, exporter, or have a financial interest in the production, sales, marketing or distribution of blueberries.
(c)
(a)
(2) Nomination and election of state representatives where no commission or order is in place will be handled by the Council staff. The Council staff will seek nominations for members and alternates from the specific states. Nominations will be returned to the Council office and placed on a ballot which will then be sent to producers in the state for a vote. The final nominee for member will have received the highest number of votes cast. The person with the second highest number of votes cast will be the final nominee for alternate. The persons with the third and fourth highest number of votes cast will be designated as additional nominees for consideration by the Secretary.
(b)
(c) Nominations for the importer, exporter, first handler, and public member positions will be made by the Council. Two nominees for each member and each alternate position will be recommended to the Secretary for consideration. Other qualified persons interested in serving in these positions but not recommended by the Council will be designated by the Council as additional nominees for consideration by the Secretary.
(d) Producer, handler and importer nominees must be in compliance with the Order's provisions regarding payment of assessments and filing of reports. Further, producers and importers must produce or import, respectively, 2,000 pounds or more of highbush blueberries annually.
(e) From the nominations, the Secretary shall select the members and alternate members of the Council.
(a) At a Council meeting, it will be considered a quorum when a minimum of 11 members, or their alternates serving in their absence, are present.
(f) All votes at meetings of the Council and committees may be cast in person or by electronic voting or other means as the Council and Secretary deem appropriate to allow members participating by telephone or other electronic means to cast votes.
(1) A late payment charge will be imposed on any handler who fails to make timely remittance to the Council of the total assessments for which they are liable. The late payment will be imposed on any assessments not received within 30 calendar days of the date when assessments are due. This one-time late payment charge will be 5 percent of the assessments due before interest charges have accrued.
(2) In addition to the late payment charge, 1 percent per month interest on the outstanding balance, including any late payment and accrued interest, will be added to any accounts for which payment has not been received within 30 calendar days of the date when assessments are due. Interest will continue to accrue monthly until the outstanding balance is paid to the Council.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Request for information (RFI).
The U.S. Department of Energy (DOE) is requesting information to inform a potential rulemaking to consider new energy conservation standards for dedicated-purpose pool pumps. Pumps, which are already covered equipment under the Energy Policy and Conservation Act of 1975, as amended (EPCA), come in a variety of forms—including dedicated-purpose pool pumps. This RFI seeks to solicit information to help DOE determine the feasibility of developing energy conservation standards and an appropriate test procedure for this equipment. This RFI outlines the potential scope that could be involved in regulating dedicated-purpose pool pumps, possible industry-based testing methods that could be used to evaluate the efficiency of this equipment, and the types of information that would be needed in analyzing the potential for setting standards for this equipment. This RFI also solicits the public for information to help inform DOE's efforts in evaluating the prospect of regulating this equipment.
Written comments and information are requested on or before June 22, 2015.
Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at:
(1)
(2)
(3)
(4)
Requests for additional information may be sent to Mr. John Cymbalsky, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-7935. Email:
Mr. Michael Kido, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-8145. Email:
For information on how to submit or review public comments, contact Ms. Brenda Edwards, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-2945. Email:
Title III, Part C
While pumps are treated as a type of covered equipment, EPCA does not define what a pump is. To address this issue, DOE recently published a notice of proposed rulemaking (“NOPR”) that would establish definitions and test procedures for pumps. That proposal (hereafter “the pumps test procedure NOPR”), proposed to define dedicated-purpose pool pumps to be a category of pump. 80 FR 17586, 17641 (April 1, 2015).
Currently, no Federal energy conservation standards exist for any types of pumps, including dedicated-purpose pool pumps (
Prior to issuing a proposed rulemaking to establish energy conservation standards for a given type of product or equipment, DOE typically issues a Framework document, in which DOE describes the issues, analyses, and process that it is considering for the development of energy conservation standards. After receiving comment on the Framework document, DOE typically prepares a preliminary analysis and associated preliminary Technical Support Document (“TSD”). The preliminary analysis provides interested parties with an initial draft of potential energy conservation standard levels that DOE may consider along with their potential impacts on consumers, manufacturers, and the nation.
Following these steps, DOE would publish a NOPR to propose a new or amended conservation standard. As with the prior steps outlined above, DOE would afford interested parties an opportunity to provide oral and written comment on the proposal. See generally 42 U.S.C. 6295(p) and 6316(a). The NOPR presents DOE's proposed energy conservation standard levels and a summary of both the burdens and benefits of the proposed standards, pursuant to 42 U.S.C. 6295(o)(2)(B)(i) and 6313(a). The details of DOE's standards analysis are provided in an accompanying TSD. After receiving and considering comments on the NOPR, DOE may issue a final rule that would prescribe new energy conservation standards. The analysis of any final standards would also be contained in a TSD accompanying the final rule.
In a test procedure rulemaking, DOE prepares a NOPR and provides interested parties an opportunity to present oral and written comments, data, information, views and arguments with respect to such test procedure. (42 U.S.C. 6314(b)) DOE takes into account relevant information and comments submitted by interested parties and will adopt any new test procedures, including relevant sampling provisions and rating information, in a test procedure final rule.
With respect to the dedicated-purpose pool pumps at issue, DOE is considering, but has not yet decided, to use an alternative rulemaking approach to the one described above. In particular, DOE is considering pursuing a negotiated rulemaking. In DOE's experience, a negotiated rulemaking can be an efficient and effective mechanism for establishing test procedures and energy conservation standards for commercial equipment, especially for equipment that has not previously been subject to Federal standards. Using this approach, DOE would engage in discussions with interested parties (in lieu of the Framework document and preliminary analysis stages) to help frame and develop the specifics of the NOPR, which would be subject to public comment prior to the issuance of a final rule.
Should DOE decide to initiate a rulemaking to explore new energy conservation standards for dedicated-purpose pool pumps, DOE is required to follow certain statutory criteria. EPCA requires that any new or amended energy conservation standard be designed to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 6316(a)) To determine whether a standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens by considering, to the greatest extent practicable, seven factors. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(a)) These factors, as well as the series of analyses DOE conducts to fulfill these requirements, are shown in Table I.1
DOE reviewed several existing and proposed regulatory and voluntary energy conservation programs for pool pumps. These programs are described below.
The California Energy Commission (CEC) first issued standards for residential pool pumps under the California Code of Regulations 2006.
The CEC's current standard has prescriptive design requirements instead of performance based regulations for residential pool pump and motor combinations. See Cal. Code Regs., tit. 20, § 1605.3, subd. (g)(5). The CEC defines “residential pool pump and motor combination” as a residential pool pump motor coupled to a residential pool pump. “Residential pool pump” is defined as an impeller attached to a motor that is used to circulate and filter pool water in order to maintain clarity and sanitation. “Residential pool pump motor” refers to a motor that is used as a replacement residential pool pump motor or as part of a residential pool pump and motor combination. (Motors used in these applications are electrically-driven.) The CEC imposes a design standard that prohibits the use of split phase start
The CEC also prescribes design requirements for pump controls. Pump motor controls that are manufactured on or after January 1, 2008, and are sold for use with a pump that has two or more speeds are required to be capable of operating the pool pump at a minimum of two speeds. The default circulation speed setting shall be no more than one-half of the motor's maximum rotation rate, and high speed overrides should be temporary and not for a period exceeding 24 hours. (
In addition to these prescriptive design requirements, the CEC also requires manufacturers of residential pool pump and motor combinations and manufacturers of replacement residential pool pump motors
DOE understands that the CEC is considering revising its pool pump regulations. A recent report by the CEC, “Analysis of Standards Proposal for Residential Swimming Pool and Portable Spa Equipment,”
The ENERGY STAR®
The ENERGY STAR specifications for residential pool pumps establish a required EF for the equipment. EF is defined as the volume of water pumped in gallons, divided by the electrical energy consumed by the pump motor while pumping that water. The EF rating is established separately for single-speed and multi-speed pumps, as shown in Table II.1.
Regarding multi-speed pumps, ENERGY STAR specifically excludes multi-speed pumps with manual pump controls that are not sold ready to connect to external pump controls. ENERGY STAR also differentiates between variable-speed pumps that can operate at continuously variable speeds and variable-flow pumps that are equipped with controls that can continuously vary speed to control flow.
Effective on January 1, 2013, the Consortium for Energy Efficiency (CEE) established voluntary testing, rating, and labeling requirements to encourage the market penetration of high-efficiency swimming pool pumps and pool pump controllers.
CEE's performance requirements for pool pump controls feature two tiers, with similar requirements to those adopted by the CEC. Under the CEE program, a pool pump control must:
(1) have the ability to operate the pool pump at either two (for tier 1) or more than two (for tier 2) speeds;
(2) contain a default filtration speed that is no more than one-half of the motor's maximum rotation speed; and
(3) contain a default setting that returns the pool pump to the lowest user preset speed within one cycle, or 24 hours.
The Australia state and territory governments and the New Zealand government operate the Energy Rating Labeling Program. The Energy Rating program established the voluntary Energy Rating Labeling Program for swimming pool pump-units in April 2010.
(1) Applies to pumps intended to be used in swimming pools and spa pools;
(2) covers all single-phase pumps that are capable of a flow rate equal to or greater than 120 L/min (32 gpm);
(3) applies to single-speed, dual-speed, multi-speed, and variable-speed pumps with an input power of less than or equal to 2500 W for any of the available speeds;
(4) covers pumps for the circulation of water through pool filters, sanitization devices, cleaning devices, water heaters (including solar), and pumps for circulation of water through spa or jet outlets or other features forming part of the pool;
(5) covers newly manufactured pumps that form part of a complete new pool installation or intended for sale as replacements for existing pools; and
(6) covers all water-retaining structures designed for human use—
(i) that are capable of holding more than 680 liters of water
(ii) that incorporate, or are connected to, equipment that is capable of filtering and heating any water contained in it and injecting air bubbles or water into it under pressure so as to cause water turbulence.
The minimum energy performance standard (MEPS) in part 2 of AS 5102-2009 is stated in terms of a minimum EF. Specifically, the current MEPS is 8 liters/watt-hour (2.09 gallons/Wh).
The European Union is considering regulations for private and public pool pumps. In 2014, the European Commission completed a study on pumps for private and public swimming pools, along with other pump products under the Ecodesign Directive.
The CIP Working Group recommended that DOE initiate a separate rulemaking for dedicated-purpose pool pumps. (Docket No. EERE-2013-BT-NOC-0039, No. 92) Therefore, in the pumps test procedure NOPR, DOE proposed to explicitly define the category of pumps referred to as dedicated-purpose pool pumps, based on their distinct construction and resulting operational characteristics and utility, and also proposed that the test procedure proposed in the NOPR would not address or be applicable to such pumps.
In considering the establishment of test procedures and energy conservation standards for dedicated-purpose pool pumps, DOE would first establish the criteria specifying the scope of applicable equipment that would be regulated, including physical characteristics, operating parameters, equipment types, and equipment configuration.
In the pumps test procedure NOPR, DOE proposed a new definition for dedicated-purpose pool pumps. DOE intended for this definition to apply to pumps used to circulate water through the filtration system in a stationary pool. Based on input from interested parties provided during the negotiated rulemaking process (Docket No. EERE-2013-BT-NOC-0039, No. 62 at p. 195), DOE used the presence of an integrated basket strainer to differentiate dedicated-purpose pool pumps from other end suction close-coupled (ESCC) and end suction frame-mounted (ESFM) pumps that may otherwise be within the scope of the pumps test procedure NOPR. 80 FR at 17597. The proposed definition would treat an end suction pump designed specifically to circulate water in a pool and that includes an integrated basket strainer as a dedicated-purpose pool pump. See 80 FR at 17641.
DOE's preliminary review of industry literature indicates that although most models marketed as pool pumps are sold with an integrated basket strainer, some are sold without one. Of the models sold without a basket strainer, most are configured to accept a basket strainer that is sold separately.
DOE notes that non-self-priming end suction pumps that are used in pool applications but are sold without an integrated basket strainer and are ≥1 hp will meet the definition of either an ESCC or ESFM pump as proposed in the pumps test procedure NOPR. 80 FR at 17641 (April 1, 2015). DOE also notes that self-priming pumps of any hp, and <1 hp pool pumps sold without an integrated basket strainer, would not meet the proposed definition of an ESCC or ESFM pump.
The definition of dedicated-purpose pool pumps proposed in the pumps test procedure NOPR is not limited by operational parameters or characteristics. However, DOE may consider limiting the scope of any applicable dedicated-purpose pool pump regulations based on certain operating characteristics, including motor phase (single- versus multi-phase) and horsepower (hp) (THP or rated nameplate hp; minimum or maximum hp).
DOE's review of regulatory and voluntary programs indicates that some programs include maximum and minimum hp limits, as well as phase limitations. For example, the ENERGY STAR pool pump specification is only applicable to single-phase residential inground pool pumps that have a hp rating of between >0.5 and ≥4 THP. Aside from phase and THP limits, no other distinguishing characteristics have been identified.
DOE reviewed available product literature and found that dedicated-purpose pool pumps that meet the definition proposed in the pumps test procedure NOPR 80 FR 17586, 17641 (April 1, 2015) typically range from 0.5 to 5 hp, although DOE identified some pool pumps as large as 20 hp. DOE's research identified three-phase pool pumps as small as 2 hp and single-phase pool pumps as large as 10 hp. DOE notes that if this potential rulemaking establishes limitations on the phase and/or hp of dedicated-purpose pool pumps, a subset of pumps (
Pools pumps can be classified either by the rated hp (also referred to as “nameplate hp”) or the THP (also known as “service factor hp”) of the motor with which the pump is sold. Rated hp refers to the output power of the motor, as stated by the manufacturer, at a specified rotational speed, voltage, and frequency. Alternatively, THP is a characterization of the maximum continuous load the motor is designed to serve at nominal rating conditions. THP can be calculated as a product of the rated hp and the service factor. The service factor is defined as a scalar quantity that indicates the percentage beyond the rated hp that a pump motor may continuously operate without exceeding its allowable insulation class temperature limit. (For example, a 5 hp motor rated with a service factor of 1.25 can safely operate at 6.25 hp without incurring heat-related damage.) When determining service factor, other operating parameters, such as rated voltage, frequency, and ambient temperature, must be within the normal operating range.
DOE identified several different pool pump types or classifications used by the industry. These include inground and aboveground pool pumps, inflatable pool pumps, auxiliary pumps, spa pumps, and several other types of pumps.
(a) Inground and Aboveground Pool Pumps
Dedicated-purpose pool pumps serve both inground pools and aboveground pools. DOE research has indicated that for inground pools, dedicated-purpose pool pumps are required to be self-priming. As such, the industry appears to refer to self-priming pool pumps as “inground pool pumps” in their marketing literature. These “inground pool pumps” typically are designed to provide higher hydraulic heads
ENERGY STAR differentiates inground versus aboveground pools based on their application in residential swimming pools with dimensions as defined in American National Standards Institute (ANSI)/National Spa and Pool Institute (NSPI)-5 (ANSI/NSPI-5 2003), “Standard for Residential Inground Swimming Pools,” and ANSI/APSP-4 2007, “Standard for Aboveground/Onground Residential Swimming Pools,” respectively.
The ENERGY STAR pool pumps framework
DOE has identified a type of pump, sometimes classified as an inflatable pool pump, which is sold with an integrated filter system. The pump, motor, and basket strainer portion of these products appear to be similar to inground or aboveground pool pumps. This similarity in design indicates that the portion of the product not including the filter system may meet the current definition of a dedicated-purpose pool pump, as proposed in the pumps test procedure NOPR. 80 FR at 17641.
DOE's research indicates that certain types of pumps are used to drive auxiliary pool equipment, such as pool cleaners, spas, and water features. In the industry, these pumps may be referred to as “specialty,” “booster,” or “auxiliary” pumps. The ENERGY STAR pool pump specification defines auxiliary pumps as those pumps which are not used primarily for pool filtration and water recirculation.
Limited data are available on these types of pumps. A review of the market indicates that these pumps do not have an integrated basket strainer, and thus would not meet the definition of dedicated-purpose pool pump as proposed in the pumps test procedure NOPR. 80 FR at 17641. However, DOE's research suggests that most auxiliary pumps may be small ESCC pumps. As such, those that are 1 hp or greater would fall within the scope of DOE's recently proposed pumps test procedure. (80 FR 17586 (April 1, 2015)).
DOE notes that spa pumps are similar to auxiliary pumps in that they are small ESCC pumps without an integrated basket strainer. ENERGY STAR defines “residential spa pump” as a pump intended for installation in a non-permanently installed residential spa as defined in ANSI/NSPI-6 (ANSI/NSPI-6 1999), “Standard for Portable Spas.” ENERGY STAR also clarified that such pumps are sometimes referred to as a hot tub pump, but do not include jetted bathtub pumps.
DOE's research indicates that a type of pump commonly known as a “pool cover pump” is often classified by the industry as a pool pump. These pool cover pumps are typically submersible or sump pumps, and therefore they do not meet the definition of dedicated-purpose pool pump as proposed in the pumps test procedure NOPR. 80 FR at 17641.
DOE has also identified solar-powered and “bottom feeder” pool pumps available for sale. These pumps are typically very small (less than 1/4 hp) and are also submersible. These pumps would not meet the definition proposed in the pumps test procedure NOPR. 80 FR at 17641.
Some types of pumps can be differentiated by the configuration in which the pump is sold, either as a bare pump, with a motor, or with a motor and controls.
In the pumps test procedure NOPR, DOE proposed to differentiate pumps considered in the scope of that rulemaking based on the configuration in which the pump is sold. These configurations include: the bare pump, the bare pump with an electric motor, and the bare pump with an electric motor and continuous or non-continuous controls. 80 FR at 17627. The pumps test procedure NOPR proposed unique but comparable test methods and rating metrics that are applicable to a pump based on its sale configuration. Id. To achieve this differentiation, DOE proposed a series of definitions based on the CIP Working Group recommendations (Docket No. EERE-2013-BT-NOC-0039, No. 92 at p. 1):
(1) “Pump” means equipment designed to move liquids (which may include entrained gases, free solids, and totally dissolved solids) by physical or mechanical action and includes a bare pump and, if included by the manufacturer at the time of sale, mechanical equipment, driver, and controls.
(2) “Bare pump” means a pump excluding mechanical equipment, driver, and controls.
(3) “Mechanical equipment” means any component that transfers energy from a driver to a bare pump.
(4) “Driver” means the machine providing mechanical input to drive a bare pump directly or through the use of mechanical equipment. Examples include, but are not limited to, an electric motor, internal combustion engine, or gas/steam turbine.
(5) “Control” means any device that can be used to operate the driver. Examples include, but are not limited to, continuous or non-continuous speed controls, schedule-based controls, on/off switches, and float switches.
DOE's research indicates that most dedicated-purpose pool pumps are
Dedicated-purpose pool pumps can also be sold with different types of controls that allow for the variation of motor speed at part load conditions. Specifically, dedicated-purpose pool pumps can be paired with multi-speed motors or variable-speed controls. The CEC established definitions of two-speed motors and variable-speed motors, while ENERGY STAR established definitions for multi-speed pumps, variable-speed pumps, and variable-flow pumps (flow controlled variable-speed pumps; see section II.A.2).
In the pumps test procedure NOPR, DOE proposed definitions of continuous controls and non-continuous controls to distinguish between controls with discrete speed options (
• “Continuous Control” means a control that adjusts the speed of the pump driver continuously over the driver operating speed range in response to incremental changes in the required pump flow, head, or power output.
• “Non-Continuous Control” means a control that adjusts the speed of a driver to one of a discrete number of non-continuous preset operating speeds, and does not respond to incremental reductions in the required pump flow, head, or power output.
These definitions may also be relevant to dedicated-purpose pool pumps.
Related to considering potential energy conservation standards for dedicated-purpose pool pumps, DOE is also considering potential test procedures and rating metrics for dedicated-purpose pool pumps. Manufacturers of covered equipment use DOE test produces and rating metrics as the basis for (1) certifying to DOE that their equipment complies with any applicable energy conservation standards adopted under EPCA, (42 U.S.C. 6295(s) and 6316(a)(1)), and (2) making representations about the efficiency of that equipment. (42 U.S.C. 6314(d))
To inform DOE's consideration of test procedures and rating metrics, DOE reviewed the pool pump test procedures that are established or referenced by the existing regulatory and voluntary programs that are discussed in section II.A. The rating metrics and testing requirements for each of these programs are summarized in Table II.3.
As discussed in section II.A.1, the CEC regulations established prescriptive design requirements for residential pool pumps that focused on the motor and controls with which the pool pump is sold.
Although the CEC does not currently regulate pool pumps on a performance basis, the regulations require reporting certain performance information when certifying a pool pump under the Title 20 regulations. Cal. Code Regs., tit. 20, § 1606, subd. (a)(3). For example, pool pump efficiency must be measured in accordance with the Hydraulic Institute's (HI) Standard 1.6 (ANSI/HI 1.6-2000), “American National Standard for Centrifugal Pump Tests” and a manufacturer must report that its pool pump has been tested in accordance with this testing standard. Similarly, a manufacturer must test the performance of its pool pump along three representative system curves, known as curves A, B, and C. Cal. Code Regs., tit. 20, § 1604, subd. (g)(3).
The test requirements for ENERGY STAR and CEE are harmonized with those adopted by the CEC.
The test requirements for the Australia and New Zealand energy rating program are defined in part 1 of AS 5102-2009, “Performance of household electrical appliances—Swimming pool pump—units: Energy consumption and energy performance.” Part 1 of the AS 5102-2009 test procedure is similar to the CEC testing requirements, but includes a different test setup and different measurement requirements. In addition, part 1 of AS 5102-2009 only requires rating along a new curve D.
In all of these test methods, the pump head is adjusted until the flow and head lie on the specified system curve. EF is then calculated at various rating points and speeds for multi- and variable-speed pumps as the ratio of flow over power, and is expressed in units of gal/Wh.
DOE recently proposed a test procedure for pumps that would incorporate by reference the Hydraulic Institute's (HI) Standard 40.6-2014, “Methods for Rotodynamic Pump Efficiency Testing,” as the basis for establishing the tested performance of a bare pump, pump with motor, or pump with motor and controls. 80 FR at 17642. DOE's proposed test procedure for pumps also includes additional calculations and default assumptions necessary to determine the constant load pump energy index (PEI
To help inform DOE's decision of whether to regulate dedicated-purpose pool pumps, DOE seeks a variety of different types of information. If DOE chooses to regulate this equipment, the information collected in this RFI will also inform a number of analyses that are required to support an energy conservation standard rulemaking. Table I.1 provides a summary of these analyses. To this end, DOE seeks detailed data regarding the following aspects:
DOE will accept comments, data, and information regarding this RFI and other matters relevant to DOE's consideration of any energy conservation standards for dedicated-purpose pool pumps by June 22, 2015. After the close of the comment period, DOE will begin collecting data, conducting the analyses, and reviewing the public comments. These actions will be taken to aid in the consideration of a rulemaking for dedicated-purpose pool pumps.
A link to the docket Web page can be found at:
For information on how to submit a comment, or review other public comments and the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by email:
DOE considers public participation to be a very important part of the process for developing test procedures. DOE actively encourages the participation and interaction of the public during the comment period in each stage of the rulemaking process. Interactions with and between members of the public provide a balanced discussion of the issues and assist DOE in the rulemaking process. Anyone who wishes to be added to the DOE mailing list to receive future notices and information about this rulemaking should contact Ms. Brenda Edwards at (202) 586-2945, or via email at
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2011-21-06 for all BAE SYSTEMS (Operations) Limited Model 4101 airplanes. AD 2011-21-06 currently requires revising the maintenance program. Since we issued AD 2011-21-06, we have determined that the life limit of certain main landing gear components must be reduced, and certain post-repair inspections of critical structure are necessary. This proposed AD would require a new revision of the maintenance/inspection program. We are proposing this AD to prevent failure of certain structurally significant items,
We must receive comments on this proposed AD by June 22, 2015.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact BAE SYSTEMS (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email
You may examine the AD docket on the Internet at
Todd Thompson, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone: 425-227-1175; 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
On September 23, 2011, we issued AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011). AD 2011-21-06 requires actions intended to address an unsafe condition on BAE SYSTEMS (Operations) Limited Model 4101 airplanes.
Since we issued AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011), we have determined that the life limit of certain main landing gear components must be reduced, and new inspections of certain repairs that affect fatigue strength of critical structure must be added to the maintenance/inspection program.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0043, dated February 21, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:
The Jetstream J41 Aircraft Maintenance Manual (AMM), includes the following chapters:
05-10-10 “Airworthiness Limitations”,
05-10-20 “Certification Maintenance Requirements”, and,
05-10-30 “Critical Design Configuration Control Limitations (CDCCL)—Fuel System”.
The maintenance tasks and limitations contained in these chapters have been identified as mandatory actions for continued airworthiness and EASA issued AD 2010-0098 [dated May 27, 2010 (
Since that [EASA] AD was issued, BAE Systems (Operations) Ltd issued Revision 37 of the AMM amending Chapter 05-10-10 to revise and reduce the life limit of certain main landing gear components. In addition, Revision 38 of the AMM was issued to amend Chapters 05-10-00 and 05-10-10 introducing inspections to be accomplished after implementation of some repairs affecting fatigue strength of critical structure. Failure to comply with the new and more restrictive actions could result in an unsafe condition.
For the reasons described above, this [EASA] AD, which supersedes EASA AD 2010-0098, requires implementation of the maintenance requirements and/or airworthiness limitations as specified in the defined parts of Chapter 05 of the AMM at Revision 38.
The unsafe condition is the failure of certain structurally significant items, including the main landing gear and nose landing gear, which could result in reduced structural integrity of the airplane; and fuel vapor ignition sources, which could result in a fuel tank explosion and consequent loss of the airplane. You may examine the MCAI in the AD docket on the Internet at
BAE SYSTEMS (Operations) Limited has issued Subjects 05-10-10, “Airworthiness Limitations”; 05-10-20, “Certification Maintenance Requirements”; and 05-10-30, “Critical Design Configuration Control Limitations (CDCCL)—Fuel System”; of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited J41 AMM, Revision 38, dated September 15, 2013, which describe procedures for inspections of structurally significant items and the fuel system. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. 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
We estimate that this proposed AD affects 4 airplanes of U.S. registry.
The actions required by AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011), and retained in this proposed AD take about 1 work-hour per product, at an average labor rate of $85 per work-hour. Based on these figures, the estimated cost of the actions that are required by AD 2011-21-06 is $85 per product.
We also estimate that it would take about 1 work-hour 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 $340, or $85 per product.
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 June 22, 2015.
This AD replaces AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011).
This AD applies to all BAE SYSTEMS (Operations) Limited Model 4101 airplanes, certificated in any category.
Air Transport Association (ATA) of America Code 05.
This AD was prompted by the need to reduce the life limit of certain main landing gear components, and to add certain post-repair inspections of critical structure to the maintenance/inspection program. We are issuing this AD to prevent failure of certain structurally significant items, including the main landing gear and nose landing gear, which could result in reduced structural integrity of the airplane; and to prevent fuel vapor ignition sources, which could result in a fuel tank explosion and consequent loss of the airplane.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (i) of AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011), with no changes. Within 90 days after November 23, 2011 (the effective date of AD 2011-21-06): Revise the maintenance program by incorporating Subjects 05-10-10, “Airworthiness Limitations”; 05-10-20, “Certification Maintenance Requirements”; and 05-10-30, “Critical Design Configuration Control Limitations (CDCCL)—Fuel System”; of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited Jetstream Series 4100 Aircraft Maintenance Manual (AMM), Revision 35, dated February 15, 2011. The initial compliance times for the tasks are at the applicable times specified in paragraphs (g)(1), (g)(2), and (g)(3) of this AD. Doing the actions required by paragraph (i) of this AD terminates the requirements of this paragraph.
(1) For replacement tasks of life limited parts specified in Subject 05-10-10, “Airworthiness Limitations,” of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited Jetstream Series 4100 AMM, Revision 35, dated February 15, 2011: Prior to the applicable flight cycles (landings) or flight hours (flying hours) on the part specified in the “Mandatory Life Limits” column in Subject 05-10-10, or within 90 days after November 23, 2011 (the effective date of AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011)), whichever occurs later.
(2) For structurally significant item tasks specified in Subject 05-10-10, “Airworthiness Limitations,” of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited Jetstream Series 4100 AMM, Revision 35, dated February 15, 2011: Prior to the accumulation of the applicable flight cycles specified in the “Initial Inspection” column in Subject 05-10-10, or within 90 days after November 23, 2011 (the effective date of AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011)), whichever occurs later.
(3) For certification maintenance requirements tasks specified in Subject 05-10-20, “Certification Maintenance Requirements,” of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited Jetstream Series 4100 AMM, Revision 35, dated February 15, 2011: Prior to the accumulation of the applicable flight hours specified in the “Time Between Checks” column in Subject 05-10-20, or within 90 days after November 23, 2011 (the effective date of AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011), whichever occurs later; except for tasks that specify “first flight of the day” in the “Time Between Checks” column in Subject 05-10-20, the initial compliance time is the first flight of the next day after doing the revision required by paragraph (g) of this AD, or within 90 days after November 23, 2011 (the effective date of AD 2011-21-06), whichever occurs later.
This paragraph restates the requirements of paragraph (k) of AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011), with a new exception. Except as required by paragraph (i) of this AD, after accomplishing the revision required by paragraph (g) of this AD, no alternative actions (
Within 90 days after the effective date of this AD: Revise the maintenance or inspection program, as applicable, by incorporating Subjects 05-10-10, “Airworthiness Limitations”; 05-10-20, “Certification Maintenance Requirements”; and 05-10-30, “Critical Design Configuration Control Limitations (CDCCL)—Fuel System”; of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited J41 AMM, Revision 38, dated September 15, 2013. The initial compliance times for the tasks are at the applicable times specified in paragraphs (i)(1), (i)(2), and (i)(3) of this AD. Doing the actions required by this paragraph terminates the requirements of paragraph (g) of this AD.
(1) For replacement tasks of life limited parts specified in Subject 05-10-10, “Airworthiness Limitations,” of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited J41 AMM, Revision 38, dated September 15, 2013: Prior to the applicable flight cycles (landings) or flight hours (flying hours) on the part specified in the “Mandatory Life Limits” column in Subject 05-10-10, or within 90 days after the effective date of this AD, whichever occurs later.
(2) For structurally significant item tasks specified in Subject 05-10-10, “Airworthiness Limitations,” of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited J41 AMM, Revision 38, dated September 15, 2013: Prior to the accumulation of the applicable flight cycles specified in the “Initial Inspection” column in Subject 05-10-10, or within 90 days after the effective date of this AD, whichever occurs later.
(3) For certification maintenance requirements tasks specified in Subject 05-10-20, “Certification Maintenance Requirements,” of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited J41 AMM, Revision 38, dated September 15, 2013: Prior to the accumulation of the applicable flight hours specified in the “Time Between Checks” column in Subject 05-10-20, or within 90 days after the effective date of this AD, whichever occurs later; except for tasks that specify “first flight of the day” in the “Time Between Checks” column in Subject 05-10-20, the initial compliance time is the first flight of the next day after doing the revision required by paragraph (j) of this AD, or within 90 days the effective date of this AD, whichever occurs later.
After the maintenance or inspection program, as applicable, has been revised as required by paragraph (i) of this AD, no alternative actions (
This paragraph restates the provisions of paragraph (j) of AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011). This paragraph provides credit for actions required by paragraph (g) of this AD, if those actions were performed before November 23, 2011 (the effective date of AD 2011-21-06), in accordance with Subjects 05-10-10, “Airworthiness Limitations”; 05-10-20, “Certification Maintenance Requirements”; and 05-10-30, “Critical Design Configuration Control Limitations (CDCCL)—Fuel System”; of Chapter 05, “Airworthiness Limitations,” of the BAE Systems (Operations) Limited Jetstream Series 4100 AMM, Revision 33, dated February 15, 2010; which are not incorporated by reference in this AD.
The following provisions also apply to this AD:
(1)
(i) 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. The AMOC approval letter must specifically reference this AD.
(ii) AMOCs approved previously for AD 2011-21-06, Amendment 39-16829 (76 FR 64788, October 19, 2011), are not approved as AMOCs with this AD.
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2014-0043, dated February 21, 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 BAE SYSTEMS (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain Airbus Model A319, A320, and A321 series airplanes. This proposed AD was prompted by fatigue testing that determined fatigue damage could appear on clips, shear webs, and angles at certain rear fuselage sections and certain frames. This proposed AD is intended to complete certain mandated programs intended to support the airplane reaching its limit of validity (LOV) of the engineering data that support the established structural maintenance program. This proposed AD would require replacing the clips, the shear webs, and angles, including doing all applicable related investigative
We must receive comments on this proposed AD by June 22, 2015.
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 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
As described in FAA Advisory Circular 120-104 (
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0177, dated July 25, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A319, A320, and A321 series airplanes. The MCAI states:
During the A320 fatigue test campaign for Extended Service Goal (ESG), it was determined that fatigue damage could appear on the clips, shear webs and angles at rear fuselage section 19, on Frame (FR) 72 and FR74.
This condition, if not detected and corrected, could affect the structural integrity of the aeroplane.
To address this potential unsafe condition, Airbus developed a modification, which has been published through Airbus Service Bulletin (SB) A320-53-1266 for in-service application to allow aeroplanes to operate up to the new ESG limit.
For the reasons described above, this [EASA] AD requires replacement of the affected clips, shear webs and angles at rear fuselage section 19, FR72 and FR74 [including all applicable related investigative actions and repair if any cracking is found].
Related investigative actions include rotating probe testing for cracking of the fastener holes and high frequency eddy current inspections for cracking of the stringers. You may examine the MCAI in the AD docket on the Internet at
Airbus has issued Service Bulletin A320-53-1266, Revision 01, dated June 20, 2013. This service information describes procedures for replacing clips, shear webs, and angles at rear fuselage section 19, FR72 and FR74. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. 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.
We estimate that this proposed AD affects 44 airplanes of U.S. registry.
We also estimate that it would take about 110 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 $411,400, or $9,350 per product.
We have received no definitive data on the costs of required parts.
According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby
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 June 22, 2015.
None.
This AD applies to the airplanes identified in paragraphs (c)(1), (c)(2), and (c)(3) of this AD, certificated in any category, all manufacturer serial numbers, except those on which Airbus Modification 30975 has been embodied in production.
(1) Airbus Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.
(2) Airbus Model A320-211, -212, -214, -231, -232, and -233 airplanes.
(3) Airbus Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes.
Air Transport Association (ATA) of America Code 53, Fuselage.
This AD was prompted by fatigue testing that determined fatigue damage could appear on clips, shear webs, and angles at certain rear fuselage sections and certain frames. This AD is intended to complete certain mandated programs intended to support the airplane reaching its limit of validity (LOV) of the engineering data that support the established structural maintenance program. We are issuing this AD to prevent fatigue damage on the clips, shear webs, and angles, which could affect the structural integrity of the airplane.
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: Replace the clips, shear webs, and angles at rear fuselage section 19, frame (FR)72 and FR74, and do all applicable related investigative actions before further flight, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-53-1266, Revision 01, dated June 20, 2013. If any crack is found during any related investigative action required by this AD: Before further flight, 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).
(1) Before exceeding 48,000 flight cycles or 96,000 flight hours, whichever occurs first since the airplane's first flight.
(2) Within 30 days after the effective date of this AD.
For airplanes on which the replacement of clips, shear webs, and angles specified in Airbus Service Bulletin A320-53-1266 is done before accumulating 30,000 flight cycles or 60,000 flight hours, whichever occurred first since the airplane's first flight: Within 30,000 flight cycles or 60,000 flight hours, whichever occurs first after that replacement, do the replacement specified in paragraph (g) of this AD.
Except as required by paragraph (h) of this AD: This paragraph provides credit for the replacement required by paragraph (g) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-53-1266, dated January 11, 2013, which is not incorporated by reference in this AD.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2014-0177, dated July 25, 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, 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 Bombardier, Inc. Model BD-100-1A10 (Challenger 300) airplanes. This proposed AD was prompted by multiple reports of chafing found on an electrical wiring harness in the aft equipment bay, caused by contact between the wiring harness and a neighboring hydraulic line. This proposed AD would require an inspection, repair if necessary, and modification of the wiring harness installation to ensure that the wiring harness routing is correct and a minimum clearance between the wire and the hydraulic line is maintained. We are proposing this AD to detect and correct chafing on an electrical wiring harness, which could cause an electrical short circuit or lead to a malfunction of the flight control system, the engine indication system, or the hydraulic power control system, and adversely affect the continued safe operation and landing of the airplane.
We must receive comments on this proposed AD by June 22, 2015.
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 Bombardier, Inc., 400 Côte Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone: 514-855-5000; fax: 514-855-7401; email
You may examine the AD docket on the Internet at
Assata Dessaline, Aerospace Engineer, Avionics and Service Branch, ANE-172, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone: 516-228-7301; fax: 516-794-5531.
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
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2014-32, dated September 8, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model BD-100-1A10 (Challenger 300) airplanes. The MCAI states:
There have been multiple in-service reports of chafing found on an electrical wiring harness in the aft equipment bay. An investigation determined that the chafing was attributed to contact between the wiring harness and a neighboring hydraulic line. This chafing could cause an electrical short circuit or lead to a malfunction of the flight control system, the engine indication system, or the hydraulic power control system; which could adversely affect the continued safe operation and landing of the aeroplane.
This [Canadian] AD mandates the inspection [general visual inspection], rectification as required [repair of damage (including wear and chafing)], and modification of the wiring harness installation to ensure the correct wiring routing and a minimum clearance between the wire and the hydraulic line is maintained.
You may examine the MCAI in the AD docket on the Internet at
Bombardier, Inc. has issued Service Bulletin 100-24-24, dated June 6, 2014. The service information describes procedures for an inspection, repair if necessary, and modification to reroute wiring harness installation to prevent contact with the hydraulic 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
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 the same type design.
We estimate that this proposed AD affects 107 airplanes of U.S. registry.
We also estimate that it would take about 4 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Required parts would cost about $64 per product. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $43,228, or $404 per product.
We have received no definitive data that would enable us to provide 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.
According to the manufacturer, all 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 June 22, 2015.
None.
This AD applies to Bombardier, Inc. Model BD-100-1A10 (Challenger 300) airplanes, certificated in any category, having serial numbers 20003 through 20382 inclusive, 20384, and 20386.
Air Transport Association (ATA) of America Code 24, Electrical Power.
This AD was prompted by multiple reports of chafing found on an electrical wiring harness in the aft equipment bay, caused by contact between the wiring harness and a neighboring hydraulic line. We are issuing this AD to detect and correct chafing on an electrical wiring harness which could cause an electrical short circuit or lead to a malfunction of the flight control system, the engine indication system, or the hydraulic power control system; which could adversely affect the continued safe operation and landing of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Within 36 months after the effective date of this AD, do the actions required by paragraph (g)(1) and (g)(2) of this AD.
(1) Do a one-time general visual inspection to detect damage (including wear and chafing) of the wiring harness, in accordance with the Accomplishment Instructions of Bombardier, Inc. Service Bulletin 100-24-24, dated June 6, 2014. Repair any damage before further flight, in accordance with the Accomplishment Instructions of Bombardier, Inc. Service Bulletin 100-24-24, dated June 6, 2014; except, where Bombardier, Inc. Service Bulletin 100-24-24, dated June 6, 2014, specifies to contact Bombardier for repair instructions, repair using a method approved by the Manager, New York Aircraft Certification Office (ACO), ANE-170, FAA; or Transport Canada Civil Aviation (TCCA); or Bombardier, Inc.'s TCCA Design Approval Organization (DAO).
(2) Modify the wiring harness routing in accordance with the Accomplishment Instructions of Bombardier, Inc. Service Bulletin 100-24-24, dated June 6, 2014.
For the purposes of this AD, a general visual inspection is a visual examination of an interior or exterior area, installation, or assembly to detect obvious damage, failure, or irregularity. This level of inspection is made from within touching distance unless otherwise specified. A mirror may be necessary to ensure visual access to all surfaces in the inspection area. This level of inspection is made under normally available lighting conditions such as daylight, hangar lighting, flashlight, or droplight and may require removal or opening of access panels or doors. Stands, ladders, or platforms may be required to gain proximity to the area being checked.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2014-32, dated September 8, 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 Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone: 514-855-5000; fax: 514-855-7401; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2004-14-09, for certain Airbus Model A320-211, -212, and -231 airplanes. AD 2004-14-09 currently requires repetitive inspections for fatigue cracking of the lower surface panel on the wing center box, and repair if necessary; and modification of the lower surface panel on the wing center box, which constitutes terminating action for the repetitive inspections. Since we issued AD 2004-14-09, we have determined that, based on the average flight duration, the average weight of fuel at landing is higher than that defined for the analysis of the fatigue-related tasks; and that shot peening might have been improperly done on the chromic acid anodizing (CAA) protection, which would adversely affect fatigue crack protection. This proposed AD would reduce the compliance times for the repetitive inspections, and would require a repair for certain airplanes. We are proposing this AD to detect and correct fatigue cracking of the lower surface panel on the wing center box, which could result in reduced structural integrity of the airplane.
We must receive comments on this proposed AD by June 22, 2015.
You may send comments 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 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
On June 29, 2004, we issued AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004). AD 2004-14-09 requires actions intended to address an unsafe condition on the products listed above. AD 2004-14-09 superseded AD 98-22-05, Amendment 39-10851 (63 FR 56542, October 22, 1998).
Since we issued AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), we have determined that, based on the average flight duration, the average weight of fuel at landing is higher than that defined for the analysis of the fatigue-related tasks; and that shot peening might have been improperly done on the CAA protection, which would adversely affect fatigue crack protection.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0065, dated March 14,
During center fuselage certification full scale test, damage was found in the center wing box (CWB) lower surface panel.
This condition, if not detected and corrected, could affect the structural integrity of the CWB.
To prevent such damage, Airbus developed mod 22418 which consists in shot-peening of the lower panel in the related area. Mod 22418 has been embodied in production from aeroplane [manufacturer serial number] (MSN) 0359. For unmodified in-service aeroplanes, Airbus issued Service Bulletin (SB) A320-57-1082 to introduce repetitive High Frequency Eddy Current (HFEC) inspections on the external face of the center wing box lower panel between Frame (FR) 41 and FR42 to detect damage.
DGAC [Direction Générale de l'Aviation Civile] France issued AD 2002-342 [
Since that [DGAC] AD was issued, the results of a survey, carried out on the A320 fleet, highlighted some differences between the mission parameters, mainly on the weight of fuel at landing and on the average flight duration, which are higher than those defined for the analysis of the fatigue related tasks.
These findings have led to an adjustment of the A320 reference fatigue mission. Consequently, the threshold and intervals of these repetitive inspections have been revised and a new threshold figure expressed in flight hours (FH) has been established.
In addition, it has been identified that, on aeroplanes that have been modified in accordance with Airbus SB A320-57-1043 (Airbus mod 22418) at Revision 05 or an earlier Revision, the shot peening may have been improperly done on the Chromic Acid Anodizing (CAA) protection, which has no fatigue benefit effect. Therefore, the inspections per Airbus SB A320-57-1082 are required again on these aeroplanes.
Consequently, new shot-peening procedures with proper CAA protection removal instructions have been developed and their embodiment through Airbus SB A320-57-1043 Revision 06 cancels the repetitive inspections per Airbus SB A320-57-1082, as required by DGAC France AD 2002-342.
For the reasons described above, this new [EASA] AD retains the requirements of DGAC France AD 2002-342, which is superseded, but requires these actions to be accomplished within reduced thresholds and intervals. In addition, the optional terminating action provision (SB A320-57-1043) is amended by including reference to the SB at Revision 06.
You may examine the MCAI in the AD docket on the Internet at
Airbus has issued Service Bulletin A320-57-1043, Revision 06, dated December 5, 2013. This service bulletin describes procedures for shot peening in the radius of the milling step between stiffeners 13 and 14 near the fuel pump aperture.
Airbus has also issued Service Bulletin A320-57-1082, Revision 04, dated December 5, 2013. This service bulletin describes procedures for inspections for cracking of the lower surface panel on the wing center box.
The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. 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 the same type design.
We estimate that this proposed AD affects 46 airplanes of U.S. registry.
The actions that are required by AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), and retained in this proposed AD take about 25 work-hours per product, at an average labor rate of $85 per work-hour. Based on these figures, the estimated cost of the actions that were required by AD 2004-14-09 is $2,125 per product.
The new requirements of this proposed AD would add no additional economic burden.
We have received no definitive data that would enable us to provide 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.
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,
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by June 22, 2015.
This AD replaces AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004).
This AD applies to Airbus Model A320-211, -212, and -231 airplanes, certificated in any category, all manufacturer serial numbers, except those on which Airbus Modification 22418 has been embodied in production.
Air Transport Association (ATA) of America Code 57, Wings.
This AD was prompted by a determination that, based on the average flight duration, the average weight of fuel at landing is higher than that defined for the analysis of the fatigue-related tasks; and that shot peening might have been improperly done on the chromic acid anodizing (CAA) protection, which would adversely affect fatigue crack protection. We are issuing this AD to detect and correct fatigue cracking of the lower surface panel on the wing center box (WCB), which could result in reduced structural integrity of the airplane.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (a) of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), with no changes. Except as provided by paragraph (k) of this AD: Prior to the accumulation of 20,000 total flight cycles, or within 60 days after November 27, 1998 (the effective date of AD 98-22-05, Amendment 39-10851 (63 FR 56542, October 22, 1998)), whichever occurs later, perform a high frequency eddy current (HFEC) inspection to detect fatigue cracking of the lower surface panel on the WCB, in accordance with Airbus Service Bulletin A320-57-1082, Revision 01, dated December 10, 1997; or Revision 03, dated April 30, 2002. Repeat the HFEC inspection thereafter at intervals not to exceed 7,500 flight cycles until the actions required by paragraph (i) of this AD are accomplished.
This paragraph restates the requirements of paragraph (b) of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), with no changes. Except as provided by paragraph (j) of this AD, if any cracking is detected during any inspection required by paragraph (g) of this AD: Prior to further flight, repair in accordance with Airbus Service Bulletin A320-57-1082, Revision 01, dated December 10, 1997; or Revision 03, dated April 30, 2002. Accomplishment of the repair constitutes terminating action for the repetitive inspections required by paragraph (g) of this AD for the repaired area only.
This paragraph restates the requirements of paragraph (c) of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), with terminating action provided. Prior to the accumulation of 25,000 total flight cycles, or within 60 days after November 27, 1998 (the effective date of AD 98-22-05, Amendment 39-10851 (63 FR 56542, October 22, 1998)), whichever occurs later: Perform an HFEC inspection to detect fatigue cracking of the lower surface panel on the WCB, in accordance with Airbus Service Bulletin A320-57-1082, Revision 01, dated December 10, 1997; or Revision 03, dated April 30, 2002. Accomplishment of the initial inspection required by paragraph (p) of this AD constitutes terminating action for the inspection requirements of this paragraph.
(1) If no cracking is detected: Prior to further flight, modify the lower surface panel on the WCB, in accordance with Airbus Service Bulletin A320-57-1043, Revision 02, dated May 14, 1997; or Revision 05, dated April 30, 2002. Accomplishment of the modification constitutes terminating action for the requirements of paragraph (g) of this AD.
(2) Except as provided by paragraph (j) of this AD: If any cracking is detected, prior to further flight, repair in accordance with Airbus Service Bulletin A320-57-1082, Revision 01, dated December 10, 1997, or Revision 03, dated April 30, 2002; and modify any uncracked area, in accordance with Airbus Service Bulletin A320-57-1043, Revision 02, dated May 14, 1997, or Revision 05, dated April 30, 2002. Accomplishment of the repair of cracked area(s) and modification of uncracked area(s) constitutes terminating action for the requirements of paragraph (g) of this AD.
This paragraph restates the requirements of paragraph (d) of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), with no changes. If any cracking is detected during any inspection required by paragraph (h) or (i)(2) of this AD, and the applicable service bulletin specifies to contact Airbus for an appropriate action: Prior to further flight, repair using a method approved by the Manager, International Branch, ANM-116, FAA, Transport Airplane Directorate; or the Direction Générale de l'Aviation Civile (DGAC) (or its delegated agent).
This paragraph restates the provision of paragraph (e) of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), with no changes. The actions required by paragraph (g) of this AD are not required to be accomplished if the requirements of paragraph (i) of this AD are accomplished at the time specified in paragraph (g) of this AD.
This paragraph restates the requirements of paragraph (f) of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), with terminating action provided. For airplanes on which neither the inspection required by paragraph (g) of this AD, nor the modification required by paragraph (i)(1) of this AD has been done before August 13, 2004 (the effective date of AD 2004-14-09): Perform an HFEC inspection to detect fatigue cracking of the lower surface panel on the WCB, in accordance with Airbus Service Bulletin A320-57-1082, Revision 01, dated December 10, 1997; or Revision 03, dated April 30, 2002; at the later of the times specified in paragraphs (l)(1) and (l)(2) of this AD. Accomplishment of the inspection required by this paragraph terminates the requirements of paragraph (g) of this AD. Accomplishment of the initial inspection required by paragraph (p) of this AD terminates the inspection requirements of this paragraph.
(1) Prior to the accumulation of 13,200 total flight cycles or 39,700 total flight hours, whichever is first.
(2) Prior to the accumulation of 20,000 total flight cycles, or within 3,500 flight cycles after August 13, 2004 (the effective date of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004)), whichever is later.
This paragraph restates the requirements of paragraph (g) of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), with no changes. If no cracking is detected during the inspection required by paragraph (g) or (l) of this AD: Repeat the inspection required by paragraph (l) of this AD at the applicable time specified in paragraph (m)(1) or (m)(2) of this AD. Accomplishment of the modification required by paragraph (i)(1) of this AD terminates the requirements of this paragraph.
(1) For airplanes on which the inspections required by paragraph (g) of this AD have been initiated before August 13, 2004 (the effective date of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004)): Do the next inspection within 5,700 flight cycles after accomplishment of the last inspection, or within 1,800 flight cycles after
(2) For airplanes on which no inspection required by paragraph (g) of this AD has been done before August 13, 2004 (the effective date of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004)): Do the next inspection within 5,700 flight cycles after accomplishment of the inspection required by paragraph (l) of this AD. Repeat the inspection thereafter at intervals not to exceed 5,700 flight cycles.
This paragraph restates the requirements of paragraph (h) of AD 2004-14-09, Amendment 39-13718 (69 FR 41398, July 9, 2004), with no changes. If any cracking is detected during any inspection required by paragraph (l) or (m) of this AD, prior to further flight, repair in accordance with Airbus Service Bulletin A320-57-1082, Revision 01, dated December 10, 1997, or Revision 03, dated April 30, 2002; and modify any uncracked area, in accordance with Airbus Service Bulletin A320-57-1043, Revision 02, dated May 14, 1997, or Revision 05, dated April 30, 2002. Where Airbus Service Bulletin A320-57-1082 specifies to contact Airbus for an appropriate repair action: Prior to further flight, repair using a method approved by the Manager, International Branch, ANM-116, FAA, Transport Airplane Directorate; or the DGAC (or its delegated agent). Accomplishment of the repair of cracked area(s) and modification of uncracked area(s) constitutes terminating action for the requirements of paragraphs (g) through (n) of this AD.
For airplanes on which the actions described in Airbus Service Bulletin A320-57-1043 have not been accomplished, and on which a repair has been accomplished, as described in Airbus Service Bulletin A320-57-1082, dated October 31, 1996; Revision 01, dated December 10, 1997; Revision 02, dated July 26, 1999; or Revision 03, dated April 30, 2002: Within 30 days after the effective date of this AD, repair using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; the European Aviation Safety Agency (EASA); or Airbus's EASA design organization approval (DOA).
At the applicable time specified in paragraphs (p)(1) and (p)(2) of this AD: Do an HFEC inspection for cracking of the lower surface panel on the WCB, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-57-1082, Revision 04, dated December 5, 2013. Repeat the inspection of the lower surface panel on the WCB thereafter at intervals not to exceed 7,200 flight cycles or 14,400 flight hours, whichever occurs first. Accomplishment of the initial inspection required by this paragraph terminates the inspections required by paragraphs (g), (i), and (l) of this AD.
(1) For airplanes on which the actions described in Airbus Service Bulletin A320-57-1043 have not been done: At the later of the times specified in paragraphs (p)(1)(i) and (p)(1)(ii) of this AD.
(i) Before the accumulation of 20,700 flight cycles or 41,400 flight hours, whichever occurs first since first flight of the airplane.
(ii) Within 7,200 flight cycles or 14,400 flight hours, whichever occurs first after doing the most recent inspection as specified in Airbus Service Bulletin A320-57-1082, dated October 31, 1996; Revision 01, dated December 10, 1997; Revision 02, dated July 26, 1999; or Revision 03, dated April 30, 2002.
(2) For airplanes on which the actions specified in Airbus Service Bulletin A320-57-1043, dated February 16, 1993; Revision 01, dated June 14, 1996; Revision 02, dated May 14, 1997; Revision 03, dated October 24, 1997; Revision 04, dated March 15, 1999; or Revision 05, dated April 30, 2002; have been done: At the latest of the times specified in paragraphs (p)(2)(i), (p)(2)(ii), and (p)(2)(iii) of this AD.
(i) Within 7,200 flight cycles or 14,400 flight hours, whichever occurs first since doing the actions specified in Airbus Service Bulletin A320-57-1043.
(ii) Within 3,750 flight cycles or 7,500 flight hours, whichever occurs first after July 31, 2012 (as described in Airbus Service Bulletin A320-57-1082, Revision 04, dated December 5, 2013).
(iii) Within 850 flight cycles or 1,700 flight hours, whichever occurs first after the effective date of this AD.
If any crack is found during any inspection required by paragraph (p) of this AD: Before further flight, repair using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; the EASA; or Airbus's EASA DOA.
Modification of an airplane, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-57-1043, Revision 06, dated December 5, 2013, constitutes terminating action for the actions required by paragraph (p) of this AD.
This paragraph provides credit for applicable actions required by paragraphs (g) through (n) of this AD, if those actions were performed before the effective date of this AD using the applicable Airbus Service Information provided in paragraphs (s)(1) through (s)(8) of this AD.
(1) Airbus Service Bulletin A320-57-1043, dated February 16, 1993, which is not incorporated by reference in this AD.
(2) Airbus Service Bulletin A320-57-1043, Revision 01, dated June 14, 1996, which is not incorporated by reference in this AD.
(3) Airbus Service Bulletin A320-57-1043, Revision 02, dated May 14, 1997, which was incorporated by reference on November 27, 1998 (63 FR 56542, October 22, 1998).
(4) Airbus Service Bulletin A320-57-1043, Revision 03, dated October 24, 1997, which is not incorporated by reference in this AD.
(5) Airbus Service Bulletin A320-57-1043, Revision 04, dated May 15, 1999, which is not incorporated by reference in this AD.
(6) Airbus Service Bulletin A320-57-1082, Revision 01, dated December 10, 1997, which was incorporated by reference on November 27, 1998 (63 FR 56542, October 22, 1998).
(7) Airbus Service Bulletin A320-57-1082, Revision 02, dated July 26, 1999, which is not incorporated by reference in this AD.
(8) Airbus Service Bulletin A320-57-1082, Revision 03, dated April 30, 2002, which was incorporated by reference on August 13, 2004 (69 FR 41398, July 9, 2004).
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2014-0065, dated March 14, 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, 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.
Supplemental notice of proposed rulemaking (SNPRM).
This supplemental notice of proposed rulemaking proposes to remove Class D airspace and Class E surface area airspace at Independence Municipal Airport, Independence, KS. In an NPRM published in the
Comments must be received on or before June 22, 2015.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001. You must identify the docket number FAA-2014-0565/Airspace Docket No. 14-ACE-7, at the beginning of your comments. You may also submit comments through the Internet at
FAA Order 7400.9Y, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.9, Airspace Designations and Reporting Points, is published yearly and effective on September 15. For further information, you can contact the Airspace Policy and Regulations Group, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone: 202-267-8783.
Raul Garza, Jr., Central Service Center, Operations Support Group, Federal Aviation Administration, Southwest Region, 2601 Meacham Blvd., Fort Worth, TX 76137; telephone: 817-321-7654.
On September 25, 2014, the FAA published a NPRM to remove Class D airspace at Independence Municipal Airport, Independence, KS, as the air traffic control tower has closed (79 FR 57483). The comment period closed November 10, 2014. No comments were received. Subsequent to publication, the FAA reassessed the proposal to include the removal of the associated Class E surface area airspace at Independence Municipal Airport, Independence, KS. Also, the title section is amended to include Class E airspace. The FAA seeks comments on this SNPRM.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2014-0565/Airspace Docket No. 14-ACE-7.” The postcard will be date/time stamped and returned to the commenter.
An electronic copy of this document may be downloaded through the Internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see
Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking (202) 267-9677, to request a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.
This document proposes to amend FAA Order 7400.9Y, Airspace Designations and Reporting Points, dated August 6, 2014, and effective September 15, 2014. FAA Order 7400.9Y is publicly available as listed in the
This supplemental proposal proposes to amend Title 14, Code of Federal Regulations (14 CFR), Part 71 by removing Class D airspace and the associated Class E surface area airspace at Independence Municipal Airport, Independence, KS. The closing of the airport's air traffic control tower has made this action necessary. Also, the Title section is amended to read “Proposed Revocation of Class D and E Airspace; Independence, KS”.
Class D and E airspace areas are published in Paragraph 5000 and 6002, respectively, of FAA Order 7400.9Y, dated August 6, 2014, and effective September 15, 2014, which is incorporated by reference in 14 CFR 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore, (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); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend controlled airspace at Independence Municipal Airport, KS.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (Air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish and modify Class E airspace at Bremerton National Airport, Bremerton, WA, to accommodate new Standard Instrument Approach Procedures (SIAPs) at Bremerton National airport. The FAA is taking this action to enhance the safety and management of Instrument Flight Rules (IFR) operations for SIAPs at the airport.
Comments must be received on or before June 22, 2015.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590; telephone (202) 366-9826. You must identify FAA Docket No. FAA-2014-1067; Airspace Docket No. 14-ANM-15, at the beginning of your comments. You may also submit comments through the Internet at
FAA Order 7400.9Y, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.9, Airspace Designations and Reporting Points, is published yearly and effective on September 15. For further information, you can contact the Airspace Policy and Regulations Group, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone: 202-267-8783.
Steve Haga, Federal Aviation Administration, Operations Support Group, Western Service Center, 1601 Lind Avenue SW., Renton, WA 98057; telephone (425) 203-4563.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2014-1067/Airspace Docket No. 14-ANM-15.” The postcard
An electronic copy of this document may be downloaded through the Internet at
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking, (202) 267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.
This document proposes to amend FAA Order 7400.9Y, Airspace Designations and Reporting Points, dated August 6, 2014, and effective September 15, 2014. FAA Order 7400.9Y is publicly available as listed in the
The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by modifying Class E surface area airspace and establishing Class E airspace extending upward from 700 feet above the surface at Bremerton National Airport, Bremerton, WA. After a review of the airspace, the FAA found modification of the airspace necessary for the safety and management of aircraft departing and arriving under IFR operations at the airport. Class E surface area airspace would be adjusted to be defined from the Bremerton National Airport reference point versus the Kitsap NDB, with segments extending from the 4.1-mile radius of the airport to 7 miles southwest, and 6.1 miles northeast of the airport. Class E airspace extending upward from 700 feet above the surface would be established within a 6.1-mile radius of the airport, with segments extending from the 6.1-mile radius to 8.1 miles southwest, and 7.6 miles northeast of the airport.
Class E airspace designations are published in paragraph 6002, and 6005, respectively, of FAA Order 7400.9Y, dated August 6, 2014 and effective September 15, 2014, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.
The FAA has determined this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation (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); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified this proposed rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106, describes the authority for the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend controlled airspace at Bremerton National Airport, Bremerton, WA.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace within a 4.1-mile radius of Bremerton National Airport, and within 2 miles each side of the 33° bearing from the airport extending from the 4.1-mile radius to 6.1 miles northeast of the airport, and within 2 miles each side of the 213° bearing from the airport extending from the 4.1-mile radius to 6.1 miles southwest of the airport. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Airport/Facility Directory.
That airspace extending upward from 700 feet above the surface within 2 miles each side of the 33° bearing from Bremerton National Airport extending from 6.1-miles to 7.6 miles northeast of the airport, and within 2 miles each side of the 213° bearing from the airport extending from the 6.1-mile radius of the airport to 8.1 miles southwest of the airport.
Department of Commerce.
Notice of proposed rulemaking.
This rule proposes revisions to the Department of Commerce's (Department) regulations under the Privacy Act. The Privacy Act regulations are being updated to make technical changes to the applicable exemptions.
To be considered, written comments must be submitted on or before June 8, 2015.
Unless comments are received, the amended system of records will become effective as proposed on the date of publication of a subsequent notice in the
You may submit comments, identified by Regulatory Information Number (RIN) 0605-AA38, by any of the following methods:
•
•
•
Ms. Brenda Dolan, Departmental Freedom of Information & Privacy Act Officer, Office of Privacy and Open Government, U.S. Department of Commerce, 202-482-3258.
Personal identifying information and confidential business information identified and located as set forth above will be placed in the agency's public docket file, but not posted online. If you wish to inspect the agency's public docket file in person by appointment, please
This rule proposes revisions to the Department's regulations under the Privacy Act. In particular, the action will amend the Department's Privacy Act regulations regarding applicable exemptions to reflect new Department wide systems of records notices published since the last time the regulations were updated. The revisions of the Privacy Act regulations in subpart B of part 4 incorporate changes to the language of the regulations in the following provisions: § 4.33 (General exemptions); and § 4.34 (Specific exemptions).
For the reasons stated in the preamble, the Department of Commerce proposes to amend 15 CFR part 4 as follows:
5 U.S.C. 301; 5 U.S.C. 552; 5 U.S.C. 553; 31 U.S.C. 3717; 41 U.S.C. 3101; Reorganization Plan No. 5 of 1950.
(4)
(a)(1) Certain systems of records under the Act that are maintained by the Department may occasionally contain material subject to 5 U.S.C. 552a(k)(1), relating to national defense and foreign policy materials. The systems of records published in the
(b) The specific exemptions determined to be necessary and proper
(1) Exempt under 5 U.S.C. 552a(k)(1). The systems of records exempt hereunder appear in paragraph (a) of this section. The claims for exemption of COMMERCE/DEPT-12, COMMERCE/ITA-1, COMMERCE/NOAA-5, and COMMERCE/DEPT-25 under this paragraph are subject to the condition that the general exemption claimed in § 4.33(b) is held to be invalid.
(2)(i) Exempt under 5 U.S.C. 552a(k)(2). The systems of records exempt (some only conditionally), the sections of the Act from which exempted, and the reasons therefor are as follows:
(C) Fisheries Law Enforcement Case Files—COMMERCE/NOAA-5, but only on condition that the general exemption claimed in § 4.33(b)(2) is held to be invalid;
(F) Access Control and Identity Management System—COMMERCE/DEPT-25, but only on condition that the general exemption claimed in § 4.33(b)(4) is held to be invalid;
(4)(i) Exempt under 5 U.S.C. 552a(k)(5). The systems of records exempt (some only conditionally), the sections of the Act from which exempted, and the reasons therefor are as follows:
(A) Applications to U.S. Merchant Marine Academy (USMMA)—COMMERCE/MA-1;
(B) USMMA Midshipman Medical Files—COMMERCE/MA-17;
(C) USMMA Midshipman Personnel Files—COMMERCE/MA-18;
(D) USMMA Non-Appropriated Fund Employees—COMMERCE/MA-19;
(E) Applicants for the NOAA Corps—COMMERCE/NOAA-1;
(F) Commissioned Officer Official Personnel Folders—COMMERCE/NOAA-3;
(G) Conflict of Interest Records, Appointed Officials—COMMERCE/DEPT-3:
(H) Investigative and Inspection Records—COMMERCE/DEPT-12, but only on condition that the general exemption claimed in § 4.33(b)(3) is held to be invalid;
(I) Investigative Records— Persons within the Investigative Jurisdiction of the Department COMMERCE/DEPT-13;
(J) Litigation, Claims, and Administrative Proceeding Records—COMMERCE/DEPT-14; and
(K) Access Control and Identity Management System—COMMERCE/DEPT-25, but only on condition that the general exemption claimed in § 4.33(b)(4) is held to be invalid.
Internal Revenue Service (IRS), Treasury.
Withdrawal of notice of proposed rulemaking; notice of proposed rulemaking by cross-reference to temporary regulations.
In the Rules and Regulations section of this issue of the
Comments and requests for a public hearing must be received by August 6, 2015.
Send submissions to CC:PA:LPD:PR (REG-102656-15), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-102656-15), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224, or sent electronically via the Federal eRulemaking Portal at
Concerning the proposed regulations under section 446, Alexa T. Dubert or Anna H. Kim at (202) 317-6895; concerning the proposed regulations under section 956, Kristine A. Crabtree at (202) 317-6934; concerning submissions of comments or to request a public hearing, Oluwafunmilayo Taylor, (202) 317-6901 (not toll-free numbers).
On May 11, 2012, the Treasury Department and the IRS published temporary regulations under section 956 (TD 9589) in the
Final and temporary regulations in the Rules and Regulations section of this issue of the
It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13653. Therefore, a regulatory assessment is not required. It also has
Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the
The principal authors of these regulations are Alexa T. Dubert and Anna H. Kim of the Office of Associate Chief Counsel (Financial Institutions and Products). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, under the authority of 26 U.S.C. 7805, the notice of proposed rulemaking (REG-107548-11 and RIN 1545-BK10) that was published in the
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
26 U.S.C. 7805 * * *
The revisions read as follows:
(g) * * *
(4) [The text of the proposed amendment to § 1.446-3(g)(4) is the same as the text of § 1.446-3T(g)(4) published elsewhere in this issue of the
(6) * * *
[The text of proposed amendment to § 1.446-3(g)(6)
[The text of proposed amendment to § 1.446-3(g)(6)
[The text of proposed amendment to § 1.446-3(g)(6)
(j) * * *
(2) [The text of the proposed amendment to § 1.446-3(j)(2) is the same as the text of § 1.446-3T(j)(2) published elsewhere in this issue of the
(b)(1)(xi) [The text of this proposed amendment is the same as the text of § 1.956-2T(b)(1)(xi) published elsewhere in this issue of the
(f) [The text of this proposed amendment is the same as the text of § 1.956-2T(f) published elsewhere in this issue of the
Information Security Oversight Office, NARA.
Proposed rule.
As the Federal Government's Executive Agent for Controlled Unclassified Information (CUI), the Information Security Oversight Office (ISOO) of the National Archives and Records Administration (NARA) implements the Federal Government-wide CUI Program. As part of that responsibility, ISOO proposes this rule to establish policy for agencies on designating, safeguarding, disseminating, marking, decontrolling, and disposing of CUI, self-inspection and oversight requirements, and other facets of the Program.
Submit comments on or before July 7, 2015.
You may submit comments, identified by RIN 3095-AB80, by any of the following methods:
•
•
•
•
•
Kimberly Keravuori, by email at
Prior to Executive Order 13556, Controlled Unclassified Information, 75 FR 68675 (November 4, 2010) (the Order), more than 100 different markings for such information existed across the executive branch. This
As a result, the Order established the CUI Program to standardize the way the executive branch handles information that requires safeguarding or dissemination controls (excluding information that is classified under Executive Order 13526, Classified National Security Information, 75 FR 707 (December 29, 2009), or any predecessor or successor order; or the Atomic Energy Act of 1954 (42 U.S.C. § 2011,
To develop policy and provide oversight for the CUI Program, the Order also appointed NARA as the CUI Executive Agent. NARA has delegated this authority to the Director of ISOO, a NARA component.
Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (September 30, 1993), and Executive Order 13563, Improving Regulation and Regulation Review, 76 FR 23821 (January 18, 2011), 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). This proposed rule is “significant” under section 3(f) of Executive Order 12866 because it sets out a new program for Federal agencies. The Office of Management and Budget (OMB) has reviewed this regulation.
This review requires an agency to prepare an initial regulatory flexibility analysis and publish it when the agency publishes the proposed rule. This requirement does not apply if the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities (5 U.S.C. 603). NARA certifies, after review and analysis, that this proposed rule will not have a significant adverse economic impact on small entities. However, information on the number of small entities contracting, or wishing to contract, with the executive branch that have not already implemented appropriate information systems standards for handling CUI is unreported and difficult to collect, in part because it could reflect adversely on a contractor in other ways. As a result, while NARA believes from all available information that the economic impact would be minimal, if any, we are opening this issue to public comment in addition to the content of the proposed rule, in case reviewers have additional information to the contrary that was not available to NARA.
The CUI Program provides a unified system for handling unclassified information that requires safeguarding or dissemination controls, and sets consistent, executive branch-wide standards and markings for doing so. The CUI Program has established controls pursuant to and consistent with already-existing applicable law, Federal regulations, and Government-wide policy. However, because those authorities, as well as
The Order establishes that the CUI Executive Agent, designated as NARA, “shall develop and issue such directives as are necessary” to implement the CUI Program (Section 4b). NARA has delegated this authority to the Director of the Information Security Oversight Office (ISOO). Consistent with this tasking, and with the CUI Program's mission to establish uniform policies and practices across the Federal Government, NARA is issuing a regulation, to establish the required controls and markings Government-wide. There is no viable alternative to a rule for meeting the Order's mandate to establish consistent information security standards Government-wide. A regulation binds agencies throughout the executive branch to uniformly apply the Program's standard safeguards, markings, and disseminating and decontrol requirements. The proposed rule contains a consistent program that NARA developed in consultation with affected stakeholders, including private industry and Federal agencies. While developing this program, NARA conducted working group discussions and surveys, consolidated and streamlined current practices, and developed initial drafts that underwent both formal and informal agency comment and CUI Executive Agent comment adjudication for individual policy elements.
NARA believes that this proposed rule will benefit industry that contracts with the Federal Government, including small businesses. In the present contractor environment, differing requirements and conflicting guidance from agencies for the same types of information gives rise to confusion and inefficiencies for contractors working with more than one agency or handling information originating from different agencies. A single standard that de-conflicts requirements for contractors or potential contractors when contracting with multiple Government agencies will be simpler to execute and reduce costs. Because the regulation's uniform controls derive from already-required laws, regulations, and Government-wide policies, the standards are already ones with which businesses should be complying and the impact of the rule should be minimal or non-existent.
Those entities that currently do not implement information systems security controls for CUI consistent with requirements contained in the regulation will need to make changes and implement new practices, which could therefore have an impact on such businesses. Consistent with the Order, these requirements are based on applicable Government-wide standards and guidelines issued by the National Institute of Standards and Technology (NIST), and applicable policies established by OMB (Section 6a3). These standards, which OMB and NIST established, have been in effect for some time, and were not created by this proposed rule. Rather, the proposed rule requires use of these standards in the same way throughout the executive branch, thereby reducing current complexity for agencies and contractors. The potential impact on businesses currently not in compliance with these standards arises from the possibility that some might need to take actions to bring themselves into compliance with
NARA has taken steps, however, to alleviate the difficulty for contractors and small businesses of complying with information systems requirements, whether they already comply or will need to comply in future. Many of the security controls contained in the NIST guidelines are specific to Government systems, and thus have been difficult for contractors to implement with their own already-existing systems. This has also limited some businesses from competing for Federal contracts. Non-Federal systems are often built using different processes from the Government-specific ones outlined in the NIST guidelines, even while achieving the same standard of protection as set forth in the Federal Information Processing Standards (FIPS). NARA has therefore partnered with NIST to develop a special publication on applying the information systems security requirements in the contractor environment. Doing so should make it easier for businesses to comply with the standards using the systems they already have in place, rather than trying to use the Government-specific approaches currently described. This publication has already undergone one round of public comment as NIST SP-800-171 and is undergoing a second round of public comment until May 12, 2015; we expect to finalize it in June 2015.
The CUI Executive Agent is also planning a single Federal Acquisitions Regulation (FAR) clause that will apply the requirements of the proposed rule to the contractor environment and further promote standardization to benefit a substantial number of businesses, including small entities that may be struggling to meet the current range and type of contract clauses. In the process of this three-part plan (rule, NIST publication, standard FAR clause), businesses will not only receive streamlined and uniform requirements for any unclassified information security needs, but will have information systems requirements tailored to contractor systems, allowing the businesses to help develop the requirements and to be in compliance with Federal uniform standards with less difficulty than currently. Businesses that currently meet all standards will have a clearer and easier time doing so in the future with virtually no negative impact, and businesses that do not currently meet standards will be able to bring themselves into compliance more easily as well, thus reducing the potential impact coming into compliance would have on them.
Despite all of this, there may still be a significant impact on small businesses, related to bringing themselves into compliance with existing standards that will be applied uniformly under this rule. NARA does not have data on how many small businesses may be impacted by this rule, or to what degree, because such information on compliance with the standards involved is not tracked for small businesses. NARA therefore opens this topic for input from small businesses during the public comment period.
This proposed rule does not contain any information collection requirements subject to the Paperwork Reduction Act.
Review under Executive Order 13132 requires that agencies review regulations for Federalism effects on the institutional interest of states and local governments, and, if the effects are sufficiently substantial, prepare a Federal assessment to assist senior policy makers. This proposed rule will not have any direct effects on State and local governments within the meaning of the Executive Order. Therefore, no Federalism assessment is required.
Administrative practice and procedure, Archives and records, Controlled unclassified information, Freedom of information, Government in the Sunshine Act, Information, Information security, National security information, Open government, Privacy.
For the reasons stated in the preamble, NARA proposes to amend 32 CFR, Chapter XX, by adding part 2002 to read as follows:
E.O. 13556, 75 FR 68675, 3 CFR, 2010 Comp., pp. 267-270.
(a) This part describes the executive branch's Controlled Unclassified Information (CUI) Program (the CUI Program) and establishes policy for designating, handling, and decontrolling information that qualifies as CUI.
(b) The CUI Program standardizes the way the executive branch handles sensitive information that requires protection under laws, regulations, or Government-wide policies, but that does not qualify as classified under Executive Order 13526, Classified National Security Information, December 29, 2009 (3 CFR, 2010 Comp., p. 298), or the Atomic Energy Act of 1954 (42 U.S.C. 2011,
(c) Prior to the CUI Program, agencies often employed
(d) An executive branch-wide CUI policy balances the need to safeguard CUI with the public interest in sharing information appropriately and without unnecessary burdens.
(e) This part applies to all executive branch agencies that designate or handle information that meets the standards for CUI. This part also applies, by extension, to agency practices involving non-executive branch CUI recipients, as follows:
(1)
(2)
(f) This part rescinds Controlled Unclassified Information (CUI) Office Notice 2011-01: Initial Implementation Guidance for Executive Order 13556 (June 9, 2011).
(g) This part creates no right or benefit, substantive or procedural, enforceable by law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(h) Nothing in this part alters, limits, or supersedes a requirement stated in laws, regulations, or Government-wide policies. Where laws, regulations, or Government-wide policies articulate the requirements for protection of unclassified information, this part accommodates and recognizes those requirements as “CUI Specified.” However, where agency-specific policy or
(a) Section 2(c) of the Order designates NARA as the CUI Executive Agent to implement this Order and to oversee agency efforts to comply with the Order, this part, and the CUI Registry.
(b) NARA's Director of the Information Security Oversight Office (ISOO) performs the duties assigned to NARA as the CUI Executive Agent.
(a) The CUI Executive Agent:
(1) Develops and issues policy, guidance, and other materials, as needed, to implement the Order and this part, and to establish and maintain the CUI Program.
(2) Consults with affected agencies, State, local, Tribal, and private sector partners, and representatives of the public on matters pertaining to CUI.
(3) Establishes, convenes, and chairs the CUI Advisory Council (the Council) to address matters pertaining to the CUI Program. The CUI Executive Agent consults with affected agencies to develop and document the Council's structure and procedures, and submits the details to OMB for approval.
(4) Reviews and approves agency policies implementing this part before agencies issue them to ensure their consistency with the Order, this part, and the CUI Registry.
(
(6) Establishes a management and planning framework, including associated deadlines for phased implementation, based on agency compliance plans submitted pursuant to section 5(b) of the Order, and in consultation with affected agencies and the Office of Management and Budget (OMB).
(7) Approves categories and subcategories of CUI as needed and publishes them in the CUI Registry.
(8) Prescribes standards, procedures, guidance, and instructions for oversight
(9) Standardizes forms and procedures to implement the CUI Program.
(10) Considers and resolves, as appropriate, disputes, complaints, and suggestions about the CUI Program from entities in or outside the Government; and
(11) Reports to the President on implementation of the Order and the requirements of this part. This includes publishing a report on the status of agency implementation at least biennially, or more frequently at the discretion of the CUI Executive Agent.
(b) Agency heads:
(1) Ensure agency senior leadership support, and make adequate resources available to implement, manage, and comply with the CUI Program as administered by the CUI Executive Agent.
(2) Designate a CUI senior agency official responsible for ensuring agency implementation, management, and oversight of the CUI Program.
(3) Approve agency policies, as required, to implement the CUI Program.
(c) CUI senior agency officials:
(1) Must be at the Senior Executive Service level or equivalent;
(2) Direct and oversee the agency's CUI Program;
(3) Designate a CUI Program manager;
(4) Ensure the agency has CUI implementing policies and plans, as needed;
(5) Implement an education and training program pursuant to § 2002.20 of this part;
(6) Upon request of the CUI Executive Agent under section 5(c) of the Order, provide an update of CUI implementation efforts for subsequent reporting;
(7) Develop and implement the agency's self-inspection program;
(8) Establish a process to accept and manage challenges to CUI status, consistent with existing processes based in laws, regulations, and Government-wide policies; and
(9) Establish processes and criteria for reporting and investigating misuse of CUI.
(d) The Director of National Intelligence: After consultation with the heads of affected agencies and the Director of the Information Security Oversight Office, may issue directives to implement this part with respect to the protection of intelligence sources, methods, and activities. Such directives must be consistent with the Order, this part, and the CUI Registry.
(a) The CUI Executive Agent maintains the CUI Registry, which serves as the central repository for all information, guidance, policy, and requirements on handling CUI, including authorized CUI categories and subcategories, associated markings, and applicable decontrolling procedures.
(b) The CUI Registry:
(1) Is the sole authoritative repository for information on CUI except the Order and this part;
(2) Is publicly accessible;
(3) Includes citation(s) to laws, regulations, or Government-wide policies that form the basis for each category and subcategory; and
(4) Notes any sanctions or penalties for misuse of each category or subcategory of CUI that are included in applicable statutes or regulations.
(a) CUI categories and subcategories are the exclusive means of designating CUI throughout the executive branch. They identify unclassified information that requires safeguarding or dissemination controls, pursuant to and consistent with applicable laws, regulations, and Government-wide policies. Agencies may not control any unclassified information outside of the CUI Program.
(b) Agencies must designate CUI only by use of a category or subcategory approved by the CUI Executive Agent and published in the CUI Registry.
(a)
(2) Agency personnel must comply with policy in the Order, this part, and the CUI Registry, and review their agency's CUI policies for additional instructions. For categories designated as CUI Specified, employees must also follow the procedures in the underlying laws, regulations, or Government-wide policies that established the specific category or subcategory involved.
(3) Safeguarding measures that are authorized or accredited for classified information are also sufficient for safeguarding CUI.
(4) Pursuant to the Order and this part, and in consultation with affected agencies, the CUI Executive Agent issues safeguarding standards in the CUI Registry, and updates them as needed.
(b)
(1)
(2)
(ii) When the authorizing laws, regulations, or Government-wide policies for a specific CUI Specified category or subcategory is silent on a safeguarding or disseminating requirement, agencies must handle that requirement using the CUI Basic standards, unless this results in any treatment that is inconsistent with the CUI Specified authority. If such a conflict occurs, agencies follow the CUI Specified authority's requirements.
(c)
(2) When discussing CUI, you must reasonably ensure that unauthorized individuals cannot overhear the conversation.
(3) When outside a controlled environment, you must keep the CUI under your direct control or protect it with at least one physical barrier. You or the physical barrier must reasonably protect the CUI from unauthorized access or observation.
(4) Agencies must protect the confidentiality of CUI that is processed, stored, or transmitted on Federal information systems consistently with the security requirements and controls established in FIPS Publication 199, FIPS Publication 200, and NIST SP 800-53.
(d)
(2) We encourage you to use in-transit automated tracking and accountability tools when you send CUI.
(3) You may use interoffice or interagency mail systems to transport CUI.
(4) Mark packages that contain CUI to indicate that they are intended for the
(5) Do not put CUI markings on the outside of an envelope or package.
(e)
(2) When reproducing CUI documents on equipment such as printers, copiers, scanners, or fax machines, you must ensure that the equipment does not retain data or you must otherwise sanitize it in accordance with NIST SP 800-53.
(f)
(i) Your agency no longer needs the information; and
(ii) Records disposition schedules published or approved by NARA or other applicable laws, regulations, or Government-wide policies no longer require your agency to retain the records.
(2) When destroying CUI, including in electronic form, you must do so in a manner that makes it unreadable, indecipherable, and irrecoverable, using any of the following:
(i) Guidance for destruction in NIST SP 800-53, Security and Privacy Controls for Federal Information Systems and Organizations, and NIST SP 800-88, Guidelines for Media Sanitization;
(ii) Any method of destruction approved for Classified National Security Information, as delineated in 32 CFR 2001.47, Destruction, or any implementing or successor guidance; or
(iii) Any specific destruction methods required by laws, regulations, or Government-wide policies for that item.
(g) Information systems that process, store, or transmit CUI.
(1) Agencies must apply information system requirements to CUI that are consistent with already-required NIST standards and guidelines and OMB policies. The Federal Information Security Modernization Act (FISMA) of 2014, 44 U.S.C. 3541,
(2) Consistent with this already-established framework governing all Federal information systems, CUI is categorized at the moderate confidentiality impact level in accordance with FIPS Publication 199. Likewise, agencies must also apply the appropriate security requirements and controls from FIPS Publication 200 and NIST SP 800-53 consistently with any risk-based tailoring decisions. Agencies may increase the confidentiality impact level above moderate and apply additional security requirements and controls only internally; they may not require anyone outside the agency to use a higher impact level or more stringent security requirements and controls.
(a)
(i) Abides by the laws, regulations, or Government-wide policies that established the CUI category or subcategory;
(ii) Furthers a lawful Government purpose;
(iii) Is not restricted by an authorized limited dissemination control established by the CUI Executive Agent; and,
(iv) Is not otherwise prohibited by law.
(2) Agencies should impose controls only as necessary to abide by restrictions on access to CUI. Agencies may not impose controls that unlawfully or improperly restrict access to CUI.
(3) Prior to disseminating CUI, you must mark CUI according to marking guidance issued by the CUI Executive Agent.
(4) Non-executive branch entities may receive CUI directly from members of the executive branch or as sub-recipients from other non-executive branch entities.
(5) In order to disseminate CUI to a non-executive branch entity, you must have a reasonable expectation that the recipient will continue to control the information in accordance with the Order, this part, and the CUI Registry.
(6) When feasible, agencies should enter into a written agreement with any intended non-executive branch entity. At a minimum, such agreements must specify that:
(i) CUI remains under the legal control of the Federal Government and its misuse is subject to penalties permitted under applicable laws, regulations, or Government-wide policies;
(ii) Non-executive branch entities must handle CUI consistently with the Order, this part, and the CUI Registry; and
(iii) The non-executive branch entity must report any non-compliance with handling requirements to the disseminating agency's CUI senior agency official. When the disseminating agency is not the designating agency, the disseminating agency must notify the designating agency.
(b)
(2)
(i) The CUI Registry annotates CUI categories and subcategories that contain Specified controls.
(ii) In the absence of specific dissemination restrictions, agencies may disseminate and allow access to the CUI as they would for CUI Basic.
(3)
(ii) Use of limited dissemination controls to unnecessarily restrict access to CUI is contrary to the stated goals of the CUI Program. You may therefore use these controls only when it serves a lawful Government purpose, or you are required by laws, regulations, or Government-wide policies to do so.
(iii) You may apply limited dissemination controls to any CUI that is required or permitted to have restricted access by or to certain entities.
(iv) You may combine the approved limited dissemination controls listed in the CUI Registry to accommodate necessary practices.
(c)
(2) To disseminate CUI using systems or components that are subject to NIST guidelines and publications (
(a) Agencies may decontrol CUI that they have designated:
(1) When laws, regulations or Government-wide policies no longer require its control as CUI;
(2) In response to a request by an authorized holder to decontrol it, if the agency is the designating agency;
(3) When the designating agency decides to release it to the public by making an affirmative, proactive disclosure;
(4) When the agency releases it in accordance with an applicable information access statute, such as the Freedom of Information Act (FOIA);
(5) Consistent with any declassification action under Executive Order 13526 or any predecessor or successor order; or
(6) When a pre-determined event or date occurs, as described in the decontrol indicators section of this part.
(b) Decontrolling may occur automatically upon the occurrence of one of the conditions in paragraph (a) of this section, or through an affirmative decision by the designating agency.
(c) Only personnel that an agency authorizes may decontrol CUI.
(d) Decontrolling CUI relieves authorized holders from requirements to handle the information under the CUI Program, but does not constitute authorization for public release.
(e) Agencies should decontrol any CUI designated by their agency that no longer requires CUI controls as soon as practicable.
(f) You must remove or strike through with a single straight line all CUI markings when restating, paraphrasing, re-using, releasing to the public, or donating CUI to a private institution. Otherwise, you are not required to mark, review, or take other actions to indicate the CUI is no longer controlled.
(1) Agencies may establish policy that allows holders to remove or strike through only those markings on the first or cover page of the CUI.
(2) If you use the decontrolled CUI in a newly created document, you must remove all CUI markings for the decontrolled information.
(g) Once decontrolled, any public release of information that was formerly CUI must be in accordance with existing agency policies on the public release of information.
(h) You may request that the designating agency decontrol certain CUI. Agency heads or the CUI senior agency official must establish processes for handling CUI decontrol requests submitted by authorized holders.
(i) If an authorized holder publicly releases CUI in accordance with the designating agency's authorized procedures, the release constitutes decontrol of the information.
(j) Unauthorized disclosure of CUI does not constitute decontrol.
(k) You must not decontrol CUI in an attempt to conceal, circumvent, or mitigate an identified unauthorized disclosure.
(l) When laws, regulations, and Government-wide policies require specific decontrol procedures, you must follow such requirements.
(m) The Archivist of the United States may decontrol records transferred to the National Archives in accordance with § 2002.26 of this part, absent a specific agreement otherwise with the originating agency. The Archivist decontrols records to facilitate public access pursuant to 44 U.S.C. 2108 and NARA's regulations at 36 CFR parts 1235, 1250, and 1256.
(a)
(2) You must uniformly and conspicuously apply CUI markings to all CUI prior to disseminating it unless otherwise specifically permitted by the CUI Executive Agent or as provided below.
(3) The CUI Program prohibits using markings or practices not included in this part or the CUI Registry. Agencies must take active measures to discontinue use of any other markings, in accordance with guidance from the CUI Executive Agent. Agencies may not modify CUI Program markings or deviate from the method of use prescribed by the CUI Executive Agent in an effort to accommodate existing agency marking practices, except in extraordinary circumstances approved by the CUI Executive Agent.
(4) The designating agency determines that the information qualifies for CUI status and applies the appropriate CUI marking at the time of designation.
(5) You must not mark information as CUI to conceal illegality, negligence, ineptitude, or other disreputable circumstances embarrassing to any person, any agency, the Federal Government, or any partners thereof.
(6) The CUI Program does not require agencies to redact or re-mark documents that bear legacy markings. However, agencies must mark as CUI any information they derive from such documents and re-use in a new document, if the information qualifies as CUI.
(7) When marking is excessively burdensome, an agency's CUI senior agency official may approve waivers of all or some of the marking requirements for CUI designated within that agency. However, all CUI must be marked when disseminated outside of that agency.
(i) When CUI senior agency officials grant such waivers, they must still ensure that the agency appropriately safeguards and disseminates the CUI.
(ii) The CUI senior agency official must detail in each waiver the alternate protection methods the agency must employ to ensure protection of the CUI in question.
(iii) All such waivers apply to CUI only while in possession of employees of that agency.
(8) The lack of a CUI marking on information does not exempt the information from applicable handling requirements set forth in laws, regulations, or Government-wide policies.
(b)
(1)
(ii) If you include in the banner marking other authorized CUI markings in addition to the CUI control marking (as set out below), separate those elements from the CUI control marking by a single slash (“/”).
(2)
(ii) The CUI senior agency official may approve optional use of CUI category and subcategory markings for CUI Basic, through agency policy. The policy may also address whether to include these markings in the CUI banner marking. When the CUI senior agency official has approved CUI Basic category or subcategory markings through agency policy, you may include those markings in the CUI banner marking when multiple categories or subcategories are present.
(iii) You must use CUI category and subcategory markings for CUI Specified.
(iv) Include in the CUI banner marking all CUI Specified category or subcategory markings; other category or subcategory markings that may apply are optional.
(v) List category or subcategory markings in alphabetical order, using the approved abbreviations listed in the CUI Registry, and separate multiple categories or subcategories from each other by a single slash (“/”).
(3)
(ii) Designating agencies must establish agency policy that includes specific criteria for when, and by whom, they will allow the use of limited dissemination controls and control markings, and ensure the policy aligns with the requirements in § 2002.13(b)(3) of this part.
(iii) In accordance with its policy, the designating agency may apply limited dissemination control markings when it designates information as CUI and may approve later requests by authorized holders to apply them. Authorized holders may apply limited dissemination control markings only with the approval of the designating agency.
(iv) When including limited dissemination control markings in the CUI banner marking, use a double slash (“//”) to separate them from the previous element of the CUI banner marking (
(v) List limited dissemination control markings in alphabetical order, using the approved abbreviations listed in the CUI Registry, and separate them from each other by a single slash (“/”).
(c)
(2) The CUI banner marking must appear, at a minimum, at the top center of each page containing CUI.
(3) For non-document formats, the container or portion of the item that is first visible must carry the banner.
(d)
(i) The designator's agency (at a minimum); and
(ii) If not otherwise evident, the designating agency or office via a “Controlled by” line. For example, “Controlled by: Division 5, Department of Good Works.”
(2) The designation indicator must be readily apparent to authorized holders and may appear only on the first page or cover.
(e)
(2) When used, decontrolling indicators must use the format: “Decontrol On:” followed by a date or name of a specific event.
(3) If using a specific decontrolling date, list it in the format “YYYYMMDD.”
(i) Decontrol is presumed at midnight local time on the date indicated.
(ii) Authorized holders may consider specific items of CUI as decontrolled as of the date indicated, requiring no further review by, or communication with, the designator.
(4) If using a specific event after which the CUI is considered decontrolled:
(i) The event must be foreseeable and verifiable by any authorized holder (
(ii) State the event title in bullet format rather than a narrative statement; and
(iii) Include point of contact and preferred method of contact information in the decontrol indicator when using this method, to allow authorized holders to verify that a specified event has occurred.
(f)
(2) You may mark CUI only with portion markings approved by the CUI Executive Agent and listed in the CUI Registry.
(3) CUI portion markings consist of the following elements:
(i) The CUI control marking, which must be the acronym “CUI”;
(ii) CUI category/subcategory portion markings (if required); and
(iii) CUI limited dissemination control portion markings (if required).
(4) When using portion markings:
(i) You must indicate CUI portions by placing the required portion marking for each portion inside parentheses, immediately before the portion to which it applies (
(ii) CUI category and subcategory markings are optional for CUI Basic. Agencies should manage their use by means of agency policy.
(iii) You must portion mark both CUI and uncontrolled unclassified portions. Indicate the uncontrolled unclassified portions by using a “(U)” immediately preceding the portion to which it applies.
(5) In cases where portions consist of several segments, such as paragraphs, sub-paragraphs, bullets, and sub-bullets, and the control level is the same throughout, you may place a single portion marking at the beginning of the primary paragraph or bullet. However, if the portion includes different CUI categories or subcategories, you must portion mark all segments separately to avoid improper control of any one segment.
(6) Each portion must reflect the control level of that individual portion and not any other portions. If the information contained in a sub-paragraph or sub-bullet is a different CUI category or subcategory from its parent paragraph or parent bullet, this does not make the parent paragraph or parent bullet controlled at that same level.
(g)
(i) Portion mark all CUI to ensure that CUI portions can be distinguished from portions containing classified and uncontrolled unclassified information;
(ii) Include CUI Specified category and subcategory markings in the overall banner marking;
(iii) Include the CUI control marking (“CUI”) in the overall marking banner directly before the CUI category and subcategory markings (
(iv) Separate category and subcategory markings from each other by a single slash (
(v) Include all CUI limited dissemination controls with each CUI portion and in the CUI section of the overall classified marking banner, if applicable. Separate limited dissemination markings from each other by a single slash (“/”); and
(vi) Separate the entire CUI marking string for the CUI banner marking from other parts of the overall classified marking banner by using a double slash (“//”) on either end. However, if the CUI marking string is the final portion of the overall classified marking banner, do not use an ending double slash (“//”).
(2)
(ii) The decontrolling provisions of the Order do not apply to portions marked as containing RD or FRD.
(iii) Add “Not Applicable (or N/A) to RD/FRD portions” to the “Decontrol On” line for commingled documents.
(iv) Follow the requirements of 10 CFR part 1045 when extracting an RD or FRD portion for use in a new document.
(v) Follow the requirements of the Order, this part, and the CUI Registry if extracting a CUI portion for use in a new document.
(vi) The lack of declassification instructions for RD or FRD portions does not eliminate the requirement to process commingled documents for declassification in accordance with the Atomic Energy Act, or 10 CFR part 1045.
(h)
(2) The transmittal document must also include conspicuously on its face the following or similar instructions, as appropriate:
(i) “Upon Removal of Enclosure, This Document is Uncontrolled Unclassified Information”; or
(ii) “Upon Removal of Enclosure, This Document is (Control Level).”
(i)
(j)
(2) Agency heads may not authorize the use of supplemental administrative markings to establish safeguarding requirements or disseminating restrictions, or to designate the information as CUI.
(3) To be eligible for use with CUI, agencies must detail use and requirements for supplemental administrative markings in agency policy that is available to anyone who may come into possession of CUI carrying these markings.
(4) Do not incorporate or include supplemental administrative markings in the CUI markings.
(5) Supplemental administrative markings must not duplicate any CUI marking described in this part and the CUI Registry.
(k)
(a) In exigent circumstances, the agency head or the CUI senior agency official may waive the requirements established in this part or the CUI Registry for any CUI within the agency's possession or control, unless specifically prohibited by applicable laws, regulations, or Government-wide policies.
(b) When the circumstances requiring the waiver end, the agency must reinstitute the requirements for all CUI covered by the waiver.
(a) Agency policies pertaining to CUI do not apply to entities outside that agency unless the CUI Executive Agent approves their application and publishes them in the CUI Registry.
(b) Agencies may not include any requirements on handling CUI other than those contained in the Order, this part, or the CUI Registry when entering into contracts, treaties, or other agreements with entities outside of that agency.
(a) The agency head or CUI senior agency official must establish policies that address the means, methods, and frequency of agency CUI training.
(b) At a minimum, agencies must ensure that personnel who have access to CUI receive training on creating CUI, relevant CUI categories and subcategories, the CUI Registry, associated markings, and applicable safeguarding, disseminating, and decontrolling policies and procedures. Agencies must ensure that it trains employees on these matters when the employees first begin working for the agency and at least once every two years thereafter, at a minimum.
(c) The CUI Executive Agent may review agency training materials to ensure consistency and compliance with the Order, this part, and the CUI Registry.
(a) Agency heads must establish and maintain a self-inspection program to ensure compliance with the principles and requirements of the Order, this part, and the CUI Registry.
(b) The self-inspection program must include no less than annual periodic review and assessment of the agency's CUI program. The agency head or CUI senior agency official should determine frequency based on program needs and the degree of designation activity.
(c) The self-inspection program must include:
(1) Self-inspection methods, reviews, and assessments that serve to evaluate program effectiveness, measure the level of compliance, and monitor the progress of CUI implementation;
(2) Formats for documenting self-inspections and recording findings, when not prescribed by the CUI Executive Agent;
(3) Procedures by which to integrate lessons learned and best practices arising from reviews and assessments into operational policies, procedures, and training;
(4) A process for resolving deficiencies and taking corrective actions in an accountable manner; and
(5) Analysis and conclusions from the self-inspection program, documented on an annual basis and as requested by the CUI Executive Agent.
(a) Authorized holders of CUI who, in good faith, believe that its designation as CUI is improper or incorrect should notify the designating agency of this belief.
(b) Agency CUI senior agency officials must create a process within their agency to accept and manage challenges to CUI status. At a minimum, this process must include a timely response to the challenger that:
(1) Acknowledges receipt of the challenge;
(2) States an expected timetable for response to the challenger;
(3) Provides an opportunity for the challenger to define their rationale for belief that the CUI in question is inappropriately designated;
(4) Gives contact information for the official making the agency's decision in this matter; and
(5) Ensures that challengers are not subject to retribution for bringing such challenges.
(c) Until the challenge is resolved, continue to safeguard and disseminate the challenged CUI at the control level indicated in the markings.
(d) If a challenging party disagrees with the response to their challenge, that party may use the Dispute Resolution procedures described in § 2002.23 of this part.
(a) All parties to a dispute arising from implementation or interpretation of the Order, this part, or the CUI Registry should make every effort to resolve the dispute expeditiously. Disputes should be resolved within a reasonable, mutually acceptable time period, taking into consideration the mission, sharing, and protection requirements of the parties concerned.
(b) If parties to a dispute cannot reach a mutually acceptable resolution, either party may refer the matter to the CUI Executive Agent.
(c) The CUI Executive Agent is the impartial arbiter of the dispute and has the authority to render a decision on the dispute after consultation with all affected parties, unless laws, regulations, or Government-wide policies otherwise specifically govern requirements for the involved category or subcategory of information. If a party to the dispute is also a member of the Intelligence Community, the CUI Executive Agent must consult with the Office of the Director of National Intelligence beginning when the CUI Executive Agent receives the dispute for resolution.
(d) Until the dispute is resolved, continue to safeguard and disseminate any disputed CUI at the control level indicated in the markings.
(e) Per section 4(e) of the Order, parties may appeal the CUI Executive Agent's decision through the Director of OMB to the President for resolution.
(a) CUI senior agency officials establish agency processes and criteria for reporting and investigating misuse of CUI.
(b) The CUI Executive Agent reports findings on any incident involving misuse of CUI to the offending agency's CUI senior agency official or CUI Program manager for action, as appropriate.
(a) To the extent that agency heads are otherwise authorized to take administrative action against agency personnel who misuse CUI, agency CUI policy governing misuse should reflect that authority.
(b) Where laws, regulations, or Government-wide policies governing certain categories or subcategories of CUI specifically establishes sanctions, agencies must adhere to such sanctions.
(a) When feasible, agencies must decontrol records containing CUI prior to transferring them to NARA.
(b) When an agency cannot decontrol records before transferring them to NARA, the agency must:
(1) Indicate on a Transfer Request (TR) in NARA's Electronic Records Archives (ERA) or on an SF 258 paper transfer form, that the records should continue to be controlled as CUI (subject to NARA's regulations on transfer, public availability, and access; see 36 CFR parts 1235, 1250, and 1256); and
(2) For hard copy transfer, place the appropriate CUI marking on the outside of the container to indicate that it contains information designated as CUI.
(c) If the agency does not indicate the CUI status on both the container and the TR or SF 258, NARA may assume the information was decontrolled prior to transfer, regardless of any CUI markings on the actual records.
(a) The mere fact that information is designated as CUI has no bearing on determinations pursuant to any law requiring the disclosure of information or permitting disclosure as a matter of discretion.
(b) Accordingly, agencies must ensure that:
(1) They do not cite the FOIA as a CUI safeguarding or disseminating control authority for CUI; and
(2) Agency FOIA reviewers use FOIA release standards and exemptions to determine whether or not to release records in response to a FOIA request; they do not use CUI markings and designations as a dispositive factor in making a FOIA disclosure determination.
The fact that records are subject to the Privacy Act of 1974 does not mean that agencies must mark them as CUI. Consult agency guidance to determine which records may be subject to the Privacy Act. However, information contained in Privacy Act systems of records may be subject to controls under other CUI categories or subcategories and the agency may need to mark that information as CUI for that reason.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to establish a temporary safety zone encompassing certain waters of the Patapsco River. This action is necessary to provide for the safety of life on navigable waters during a fireworks display launched from a barge located within the Inner Harbor at Baltimore, MD, on July 2, 2015. This safety zone is intended to protect the maritime public in a portion of the Patapsco River.
Comments and related material must be received by the Coast Guard on or before May 15, 2015.
You may submit comments identified by docket number using any one of the following methods:
(1)
(2)
(3)
See the “Public Participation and Request for Comments” portion of the
If you have questions on this rule, call or email Mr. Ronald Houck, Sector Baltimore Waterways Management Division, Coast Guard; telephone 410-576-2674, email
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to
If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online at
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the
We do not now plan to hold a public meeting. But you may submit a request for one, using one of the methods specified under
This rule involves a fireworks display associated with an event that will take place in Baltimore, MD, on July 2, 2015. The launch site for the fireworks display is from a discharge barge located in the Patapsco River. The permanent safety zones listed in the Table to 33 CFR 165.506 do not apply to this event.
The legal basis and authorities for this rule are found in 33 U.S.C. 1231; 33 CFR 1.05-1 and 160.5; and Department of Homeland Security Delegation No. 0170.1., which collectively authorize the Coast Guard to propose, establish, and define regulatory safety zones. Fireworks displays are frequently held from locations on or near the navigable waters of the United States. The potential hazards associated with fireworks displays are a safety concern during such events. The purpose of this rule is to promote public and maritime safety during a fireworks display, and to protect mariners transiting the area from the potential hazards associated with a fireworks display, such as the accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. This rule is needed to ensure safety on the waterway before, during and after the scheduled event.
Under Armour will sponsor a fireworks display launched from a barge located in the Inner Harbor in Baltimore, MD, scheduled on July 2, 2015 at approximately 9:30 p.m.
Through this regulation, the Coast Guard proposes to establish a temporary safety zone. The proposed zone will encompass all waters of the Patapsco River, within a 300 yards radius of a fireworks discharge barge in approximate position latitude 39°16′56″ N, longitude 076°36′19″ W, located in the Inner Harbor at Baltimore, Maryland, MD. The temporary safety zone will be enforced from 8:30 p.m. through 10:30 p.m. on July 2, 2015.
The effect of this temporary safety zone will be to restrict navigation in the regulated area immediately before, during, and immediately after the fireworks display. Vessels will be allowed to transit the waters of the Patapsco River outside the safety zone.
This rule requires that entry into or remaining in this safety zone is prohibited unless authorized by the Coast Guard Captain of the Port Baltimore. All vessels underway within this safety zone at the time it is implemented are to depart the zone. To seek permission to transit the area of the safety zone, the Captain of the Port Baltimore can be contacted at telephone number 410-576-2693 or on Marine Band Radio VHF-FM channel 16 (156.8 MHz). Coast Guard vessels enforcing the safety zone can be contacted on Marine Band Radio VHF-FM channel 16 (156.8 MHz). Federal, state, and local agencies may assist the Coast Guard in the enforcement of the safety zone. The Coast Guard will issue notices to the maritime community to further publicize the safety zone and notify the public of changes in the status of the zone. Such notices will continue until the event is complete.
We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes or executive orders.
This proposed rule is not a significant regulatory action under section 3(f) of
Although this regulation would restrict access to this area, the effect of this proposed rule will not be significant because: (i) The safety zone will only be in effect from 8:30 p.m. through 10:30 p.m. on July 2, 2015, (ii) the Coast Guard will give advance notification via maritime advisories so mariners can adjust their plans accordingly, and (iii) although the safety zone will apply to certain portions of the Inner Harbor, smaller vessel traffic will be able to transit safely around the safety zone.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule will not have a significant economic impact on a substantial number of small entities. This proposed rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to operate or transit through or within, or anchor in, the safety zone during the enforcement period. This proposed safety zone will not have a significant economic impact on a substantial number of small entities for the reasons provided under Regulatory Planning and Review.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This proposed rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this proposed rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This proposed rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This proposed rule is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves establishing a temporary safety zone for a fireworks display. The fireworks are launched from navigable waters of the United States and may negatively impact the safety or other interests of waterway users and near shore activities in the event area. The activity includes fireworks launched
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(1) All persons are required to comply with the general regulations governing safety zones found in 33 CFR 165.23.
(2) Entry into or remaining in this zone is prohibited unless authorized by the Coast Guard Captain of the Port Baltimore. All vessels underway within this safety zone at the time it is implemented are to depart the zone.
(3) Persons desiring to transit the area of the safety zone must first obtain authorization from the Captain of the Port Baltimore or his designated representative. To seek permission to transit the area, the Captain of the Port Baltimore and his designated representatives can be contacted at telephone number 410-576-2693 or on Marine Band Radio VHF-FM channel 16 (156.8 MHz). The Coast Guard vessels enforcing this section can be contacted on Marine Band Radio VHF-FM channel 16 (156.8 MHz). Upon being hailed by a U.S. Coast Guard vessel, or other Federal, State, or local agency vessel, by siren, radio, flashing light, or other means, the operator of a vessel shall proceed as directed. If permission is granted, all persons and vessels must comply with the instructions of the Captain of the Port Baltimore or his designated representative and proceed as directed while within the zone.
(4)
(c)
(d)
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard is proposing to establish a temporary safety zone in Manchester Bay to be enforced during the Misery Challenge marine event, which will involve swimmers, kayakers, and stand-up paddlers. This safety zone would ensure the protection of the event participants, support vessels, and maritime public from the hazards associated with the event. Vessels will be prohibited from entering into, transiting through, mooring, or anchoring within this safety zone during periods of enforcement unless authorized by the Coast Guard Sector Boston Captain of the Port (COTP) or the COTP's designated representative.
Comments and related material must be received by the Coast Guard on or before June 8, 2015. Requests for public meetings must be received by the Coast Guard on or before May 15, 2015.
You may submit comments identified by docket number using any one of the following methods:
(1)
(2)
(3)
See the “Public Participation and Request for Comments” portion of the
If you have questions on this rule, contact Mr. Mark Cutter, Coast Guard Sector Boston Waterways Management Division, telephone 617-223-4000, email
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to
If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online at
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the
We do not now plan to hold a public meeting. But you may submit a request for one, using one of the methods specified under
This is a first time event with no regulatory history.
The legal basis for the proposed rule is
By establishing a temporary safety zone, the Coast Guard will ensure the protection of the event participants, support vessels, and maritime public from the hazards associated with the event.
For the reason discussed above, the COTP, Sector Boston, is proposing to establish a temporary safety zone in the navigable waters of Manchester Bay, Manchester, Massachusetts. This rule is necessary to ensure the protection of the event participants, support vessels, and maritime public from the hazards associated with the event. Vessels not associated with the event shall maintain a distance of at least 100 yards from the participants. Specific geographic locations are specified in the regulatory text. This rule will be effective on August 1, 2015, from 7:30 a.m. to 11:30 a.m.
We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes or executive orders.
This proposed rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.
We expect the economic impact of this rule to be minimal. This regulation may have some impact on the public, but that potential impact will likely be minimal for several reasons. First, this safety zone will be in effect for only 4 hours in the morning when vessel traffic is expected to be light. Second, vessels may enter or pass through the safety zone during an enforcement period with the permission of the COTP or the designated representative. Finally, the Coast Guard will provide notification to the public through Broadcast Notice to Mariners well in advance of the event.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule will not have a significant economic impact on a substantial number of small entities.
For all of the reasons discussed in the REGULATORY PLANNING AND REVIEW section, the Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for
This proposed rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this proposed rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This proposed rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This proposed rule is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a temporary safety zone. This rule may be categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. A preliminary environmental analysis checklist supporting this assessment is available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(1)
(2)
(b)
(1) No person or vessel may enter or remain in this safety zone without the permission of the Captain of the Port (COTP), Sector Boston the COTP's representatives. However, any vessel that is granted permission by the COTP or the COTP's representatives must proceed through the area with caution and operate at a speed no faster than that speed necessary to maintain a safe course, unless otherwise required by the Navigation Rules.
(2) Any person or vessel permitted to enter the safety zone shall comply with the directions and orders of the COTP or the COTP's representatives. Upon being hailed by a U.S. Coast Guard vessel by siren, radio, flashing lights, or other means, the operator of a vessel
(3) To obtain permissions required by this regulation, individuals may reach the COTP or a COTP representative via VHF channel 16 or 617-223-5757 (Sector Boston Command Center).
(c)
(d)
(e)
Postal Regulatory Commission.
Proposed rulemaking.
The Commission is proposing a rule which establishes procedures related to the automatic closure of inactive dockets. The primary purpose of the proposed rule is to simplify the docket closure process and reduce uncertainty over the status of inactive dockets. The Commission invites public comment on the proposal.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission establishes a rulemaking docket pursuant to the Postal Accountability and Enhancement Act (PAEA), Public Law 109-435, 120 Stat. 3198 (2006), which authorizes the Commission to develop rules and establish procedures that it deems necessary and proper to carry out Commission functions.
The primary purpose of this rulemaking is to establish procedures that would simplify the docket closure process by permitting automatic closure of a docket where there has been no activity in the docket for at least 12 months. The proposed rule would ensure that the information provided to the public concerning active dockets remains current. The proposed rule promotes sound and efficient administrative practice, and would serve the public interest by reducing uncertainty over the status of inactive dockets.
Currently, there are no regulations in place that allow for the automatic closure of an inactive docket. In recent years, the Commission has initiated closure of inactive dockets by issuing an order to that effect. For example, on January 29, 2015, the Commission issued an order closing Docket No. PI2012-1 after nearly two years of inactivity.
Proposed § 3001.44(a) sets an inactive period of 12 months as the triggering event for automatic docket closure. Proposed § 3001.44(b) provides interested persons with an opportunity to request that an inactive docket remain open at least 10 days prior to automatic closure. Proposed § 3001.44(c) provides interested persons with an opportunity to request that an automatically closed docket be reopened for good cause.
Interested persons are invited to provide written comments concerning the proposed rules. Comments are due no later than 30 days after the date of publication of this notice in the
Pursuant to 39 U.S.C. 505, Anne C. O'Connor is appointed to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in the above-captioned docket.
It is ordered:
1. Docket No. RM2015-8 is established for the purpose of receiving comments on the proposed changes to part 3001, as discussed in this Order.
2. Interested persons may submit comments no later than 30 days from the date of publication of this notice in the
3. Pursuant to 39 U.S.C. 505, Anne C. O'Connor is appointed to serve as Public Representative in this proceeding.
4. The Secretary shall arrange for publication of this Order in the
By the Commission.
I believe due process and transparency in public proceedings obliges a notice to the public when a
I would add the following language to the Proposed Rule: The Commission shall issue a public notice announcing the automatic closure of the docket, at the time of closure.
The rule would be improved and the Commission's commitment to openness and citizen participation would be enhanced if the Commission were to adopt in the Final Rule the additional step I had recommended.
Administrative practice and procedure, Postal Service.
For the reasons discussed in the preamble, the Commission proposes to amend chapter III of title 39 of the Code of Federal Regulations as follows:
39 U.S.C. 404(d); 503; 504; 3661.
(a) The Commission shall automatically close a docket in which there has been no activity of record by any interested party or participant for 12 consecutive months.
(b)
(c)
Environmental Protection Agency (EPA).
Notice of public meeting.
EPA is holding a public meeting during the comment period of the proposed rule that published in the
The meeting will be held on June 11, 2015, from 9:00 a.m. to 4:00 p.m. Requests to participate in the meeting must be received on or before June 1, 2015.
To request accommodation of a disability, please contact the technical person listed under
The meeting will be held at the East William Jefferson Clinton Building, Room 1153, 1201 Constitution Avenue NW., Washington, DC.
In the
Requests to participate in this meeting, as well as any requests for accommodation of a disability, should be submitted directly to the technical person listed under
Please remember that your comments must be submitted in accordance with the instructions in the proposed rule; must be identified by docket ID number EPA-HQ-OPPT-2010-0572; and must be received on or before July 6, 2015.
The docket for the proposed rule, identified by docket identification (ID) number EPA-HQ-OPPT-2010-0572, is available at
15 U.S.C. 2607(a).
National Aeronautics and Space Administration.
Proposed rule.
NASA is proposing to amend the NASA FAR Supplement (NFS) to remove requirements related to the discontinued Space Flight Mission Critical Systems Personnel Reliability Program and to revise requirements related to contractor drug and alcohol testing.
Interested parties should submit comments to NASA at the address below on or before July 7, 2015 to be considered in formulation of the final rule.
Interested parties may submit comments, identified by RIN number 2700-AE17 via the Federal eRulemaking Portal:
NASA is proposing to revise the NASA FAR Supplement (NFS) to remove policy at 1846.370 NASA contract clauses, and the related clause at 1852.246-70, Mission Critical Space System Personnel Reliability Program. Additionally, other revisions, partially related to the removal of the Mission Critical Space System Personnel Reliability Program, and to clarify and update the guidance, are proposed to Subpart 1823.5, Drug-Free Workplace, and the associated clause at 1852.223-74, Drug- and Alcohol-Free Workforce.
NASA discontinued the Mission Critical Space System Personnel Reliability Program (the Program) effective April 8, 2014. As stated at 79 FR 7391, the Agency conducted an analysis of its existing regulations and determined that 14 CFR part 1214, entitled “Space Flight Mission Critical Systems Personnel Reliability Program,” was obsolete and had been replaced by other measures to ensure that contractor employees assigned to mission-critical positions meet established screening requirements. Accordingly, NFS policy implementing the Program is no longer needed. However, the Program was linked to the prescription for the Drug- and Alcohol-Free Workforce clause which directed contracting officers to use the clause in all solicitations and contracts containing the clause at 1852.246-70, “Mission Critical Space Systems Personnel Reliability Program.” With the discontinuance of the Program, the prescription for this clause must be revised.
NASA's authority to require contractor alcohol and drug testing is derived from the Civil Space Employee Testing Act of 1991, Public Law 102-195, sec. 21, 105 Stat. 1616 to 1619. The Act states the success of the United States civil space program is contingent upon the safe and successful development and deployment of the many varied components of that program and that the greatest efforts must be expended to eliminate the abuse of alcohol and use of illegal drugs. To this end, NASA is authorized to prescribe regulations which require contractors to conduct preemployment, reasonable suspicion, random, and post-accident testing of contractor employees responsible for safety-sensitive, security, or national security functions for use, in violation of applicable law or Federal regulation, of alcohol or a controlled substance. While the NFS drug and alcohol testing requirements are partially tied to the Mission Critical Space System Personnel Reliability Program, rescission of the program does not remove the need for such testing. Furthermore, 14 CFR, subpart 1214.5, contained two key terms and their definitions that will be helpful to Agency contracting officers in determining which contracts should include the drug and alcohol testing requirements. These terms are “mission critical space system” and “mission critical positions/duties.” This rule proposes to add these terms to NFS 1823.570, Drug- and Alcohol-free Workplace, and the associated clause at 1852.223-74, Drug- and Alcohol-Free Workforce.
Two other terms, “employee” and “controlled substance,” are referenced, but not defined at 1823.570-1. These terms are defined at FAR 23.503. Additionally, NFS 1823.570-1 contained the statement, “The use of a controlled substance in accordance with the terms of a valid prescription, or other uses authorized by law shall not be subject to the requirements of 1823.570 to 1823.570-3 and the clause at 1852.223-74.” This exemption of a controlled substance used in accordance with the terms of a valid prescription, or other uses authorized by law was removed from the definitions and added to paragraph (c)(1) of the clause, so that contractors may easily see when use of a controlled substance may be permitted.
A revised section (b)(2) to the clause adds a reference to NASA Procedural Requirements (NPR) 3792.1, NASA's Plan for a Drug Free Workplace, Appendices A and B on “Testing Designated Positions” (TDPs) for federal employees, as a guide for contractors to use when determining if an employee is in a sensitive position and subject to drug and alcohol testing.
The most recent titles and references for the applicable Federal drug testing programs are added: “Mandatory Guidelines for Federal Workplace Drug Testing Programs” published by the Department of Health and Human Services 73 FR 71858 and the procedures in 49 CFR part 40, “Procedures for Transportation Workplace Drug and Alcohol Testing Programs. Additionally, the rule expands the list of drugs required to be tested for from “marijuana and cocaine” to add amphetamines, opiates and phencyclidine (PCP) in accordance with the Mandatory Guidelines for Federal Workplace Drug Testing Programs Mandatory Guidelines, Section 3.1, and 49 CFR 40.85.
Based on the Civil Space Employee Testing Act requirements, the current clause at 1852.223-74 requires contractors to conduct “post-accident” drug and alcohol testing. A new paragraph (5) is added to specify post-accident testing is required when the contractor determines the employee's actions are reasonably suspected of having caused or contributed to an accident resulting in death or personal injury requiring immediate hospitalization or damage to Government or private property estimated to exceed $20,000. Additionally, the contractor is advised that the contracting officer may request the results of this post-accident testing. The purpose of this is to inform any accident investigation NASA may conduct. The contractor is required to provide only information on whether the testing was conducted and whether results showed any evidence of drug or
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 rule is not a significant regulatory action under section 3(f) of Executive Order 12866. This proposed rule is not a major rule under 5 U.S.C. 804.
NASA does not expect this proposed rule to 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,
• This proposed rule amends the NFS to remove requirements related to the Mission Critical Space System Personnel Reliability Program which was discontinued effective April 8, 2014. The NFS contains a clause at 1852.246-70, Mission Critical Space System Personnel Reliability Program, which implemented the requirements of the Program on NASA contracts involving critical positions designated in accordance with 14 CFR 1214.5, Mission Critical Space System Personnel Reliability Program. With the discontinuance of the Program the clause is no longer necessary and is removed.
• NFS 1823.570-2, Contract clause, requires the contracting officer to insert the clause at 1852.223-74, Drug- and Alcohol-Free Workforce, in all solicitations and contracts containing the clause at 1852.246-70, “Mission Critical Space Systems Personnel Reliability Program.” With the discontinuance of the Program, the prescription for this is revised to remove the reference to the Program. However, because NASA's contractor drug and alcohol testing requirements are based on the statutory requirements of the Civil Space Employee Testing Act of 1991, Public Law 102-195, sec. 21, 105 Stat. 1616 to 1619, the terms “mission critical space systems” and “mission critical positions/duties,” previously used in the Program, are carried over to the drug and alcohol testing clause as a point of reference for defining contract personnel and contract functions which come under the civil space employee testing requirements. While the term “mission critical space systems” is carried over, the definition is revised from “The Space Shuttle and other critical space systems, including Space Station Freedom, designated Expendable Launch Vehicles (ELV's), designated payloads, Shuttle Carrier Aircraft and other designated resources that provide access to space” to “the collection of all space-based and ground-based systems used to conduct space missions or support activity in space, including, but not limited to, the crewed space system, space-based communication and navigation systems, launch systems, and mission/launch control.” The revised definition deletes obsolete references such as the “Space Station Freedom” and “Shuttle Carrier Aircraft” and characterizes the systems which are critical to NASA's space mission.
• The statement that use of a controlled substance in accordance with a valid prescription or otherwise authorized by law is moved from the definitions to 1823.570-1 to paragraph (c)(1) of the clause, so that contractors may readily see when use of a controlled substance may be permitted.
• A reference is added to NASA Procedural Requirements (NPR) 3792.1, NASA's Plan for a Drug Free Workplace, Appendices A and B on “Testing Designated Positions” (TDPs) for federal employees, as a guide for contractors to use when designating “sensitive” positions. This is intended as a guide and does not change the application of the policy.
• The clause contained an outdated
• The list of drugs required to be tested is revised from marijuana and cocaine to add amphetamines, opiates and phencyclidine (PCP) in accordance with the Mandatory Guidelines for Federal Workplace Drug Testing Programs Mandatory Guidelines, Section 3.1, and 49 CFR part 40 Section 40.85.
• A new paragraph (5) is added to specify that post-accident testing is required when the contractor determines the employee's actions are reasonably suspected of having caused or contributed to an accident resulting in death or personal injury requiring immediate hospitalization or damage to Government or private property estimated to exceed $20,000. Additionally, the contractor is informed that the contracting officer may request the results of this post-accident testing.
The proposed rule will not change the application of the clause. This proposed rule imposes no new reporting requirements. This proposed rule does not duplicate, overlap, or conflict with any other Federal rules. No alternatives were identified that would meet the objectives of the rule. Excluding small business concerns that may be subject to the rule would not be in the best interest of the small business concerns or the Government, because drug and alcohol testing of contractors performing functions related to mission critical space systems is statutorily mandated and is necessary in order to protect human life and the nation's civil space assets. NASA invites comments from small business concerns and other interested parties on the expected impact of this proposed rule on small entities. NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this proposed rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 and RIN number 2700-AE17 in correspondence.
The proposed rule does not contain 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.
Accordingly, 48 CFR parts 1823, 1846, and 1852 are proposed to be amended as follows:
42 U.S.C. 2473(c)(1)
“
“
The contracting officer shall insert the clause at 1852.223-74, “Drug- and Alcohol-Free Workforce,” in all solicitations and contracts exceeding $5 million in which work is performed by an employee in a sensitive position. However, the contracting officer shall not insert the clause at 1852.223-74 in solicitations and contracts for commercial items.
U.S.C. 2473(c)(1).
The contracting officer shall insert the clause at 1852.246-73, Human Space Flight Item, in solicitations and contracts for human space flight hardware and flight-related equipment if the highest available quality standards are necessary to ensure astronaut safety.
51 U.S.C. 20113(a) and 48 CFR chapter 1.
As prescribed in 1823.570-2, insert the following clause:
(a) Definitions.
“
“
(b) * * *
(2) In determining which positions to designate as “sensitive,” the contractor may use NASA Procedural Requirements (NPR) 3792.1, NASA's Plan for a Drug Free Workplace, Appendices A and B on “Testing Designated Positions” (TDPs) for Federal employees, as a guide for the criteria and in designating “sensitive” positions for contractor employees.
(3) This clause neither prohibits nor requires the Contractor to test employees in a foreign country. If the Contractor chooses to conduct such testing, this does not authorize the Contractor to violate foreign law in conducting such testing.
(4) The Contractor's program shall conform to the “Mandatory Guidelines for Federal Workplace Drug Testing Programs” published by the Department of Health and Human Services (73 FR 71858) and the procedures in 49 CFR part 40, “Procedures for Transportation Workplace Drug and Alcohol Testing Programs.”
(i) The Contractor shall test for the following drugs: Marijuana, Cocaine, Amphetamines, Opiates and Phencyclidine (PCP) in accordance with the Mandatory Guidelines for Federal Workplace Drug Testing Programs Mandatory Guidelines, Section 3.1, and 49 CFR 40.85.
(ii) The contractor shall comply with the requirements and procedures for alcohol testing at 49 CFR part 40.
(iii) The use of a controlled substance in accordance with the terms of a valid prescription, or other uses authorized by law shall not be subject to the requirements this clause.
(5) The contractor shall conduct post-accident testing when the contractor determines the employee's actions are reasonably suspected of having caused or contributed to an accident resulting in death or personal injury requiring immediate hospitalization or damage to Government or private property estimated to exceed $20,000. Upon request, the Contractor shall provide the results of post-accident testing to the Contracting Officer.
Agricultural Research Service, USDA.
Notice of intent.
Notice is hereby given that the U.S. Department of Agriculture, Agricultural Research Service, intends to grant to Washington State Crop Improvement Association of Pullman, Washington, an exclusive license to the variety of field pea described in Plant Variety Protection Certificate Application Number 201500303, “HAMPTON,” dated April 13, 2015.
Comments must be received on or before June 8, 2015.
Send comments to: USDA, ARS, Office of Technology Transfer, 5601 Sunnyside Avenue, Rm. 4-1174, Beltsville, Maryland 20705-5131.
Mojdeh Bahar of the Office of Technology Transfer at the Beltsville address given above; telephone: 301-504-5989.
The Federal Government's rights in this plant variety are assigned to the United States of America, as represented by the Secretary of Agriculture. It is in the public interest to so license this plant variety as Washington State Crop Improvement Association of Pullman, Washington has submitted a complete and sufficient application for a license. The prospective exclusive license will be royalty-bearing and 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 thirty (30) days from the date of this published Notice, the Agricultural Research Service receives written evidence and argument which establishes that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR 404.7.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to 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 should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW., Washington, DC 20503. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Animal and Plant Health Inspection Service, USDA.
Notice.
We are advising the public of our decision to authorize the interstate movement of fresh sea asparagus tips from Hawaii into the continental United States. Based on the findings of a pest list and a risk management document, which we made available to the public for review and comment through a previous notice, we have concluded that the application of one or more designated phytosanitary measures will be sufficient to mitigate the risks of introducing or disseminating plant pests or noxious weeds via the movement of fresh sea asparagus tips from Hawaii into the continental United States.
Effective May 8, 2015.
Mr. David Lamb, Senior Regulatory Policy Specialist, PPQ, APHIS, 4700 River Road, Unit 133, Riverdale, MD 20737-1231; (301) 851-2103.
Under the regulations in “Subpart—Regulated Articles From Hawaii and the Territories” (7 CFR 318.13-1 through 318.13-26, referred to below as the regulations), the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture prohibits or restricts the interstate movement of fruits and vegetables from Hawaii, Puerto Rico, the U.S. Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands to the continental United States to prevent the spread of plant pests and noxious weeds that occur in Hawaii and the territories.
Section 318.13-4 contains a performance-based process for approving the interstate movement of certain fruits and vegetables from Hawaii and the U.S. territories that, based on the findings of a pest risk analysis, can be safely moved subject to one or more of the six phytosanitary measures listed in § 318.13-4(b).
APHIS received a request from the Hawaii Department of Agriculture to allow the interstate movement of fresh sea asparagus tips (
In accordance with the process in § 318.13-4, we published a notice
We solicited comments on the pest list and RMD for 60 days ending on March 24, 2015. We received two comments by that date, from an organization of State plant regulatory agencies and a private citizen. Neither commenter opposed the action; however, one commenter asked for the scientific name and a general description of sea asparagus.
As stated in the RMD, sea asparagus (
Therefore, in accordance with § 318.13-4, we our announcing our decision to authorize the interstate movement of sea asparagus from Hawaii to the continental United States subject to the following phytosanitary measures:
• Sea asparagus tips must be moved interstate as commercial consignments only, and
• Each consignment is subject to pre-departure inspection in Hawaii prior to interstate movement to the continental United States.
These conditions will be listed in the Hawaii Fruits and Vegetables Manual (available at
7 U.S.C. 7701-7772 and 7781-7786; 7 CFR 2.22, 2.80, and 371.3.
Food Safety and Inspection Service, USDA.
Notice; response to comments.
The Food Safety and Inspection Service (FSIS) is responding to comments on the
Dr. Daniel Engeljohn, Assistant Administrator, Office of Policy and Program Development; Telephone: (202) 205-0495.
Imported meat, poultry, and egg products must meet all applicable statutory provisions and regulations, including standards for safety, wholesomeness, and labeling applicable to similar products produced in the United States (see 21 U.S.C. 620, 466, and 1046; 9 CFR 327.2, 381.196, and 590.910). Foreign meat, poultry, and egg products food regulatory systems may apply equivalent sanitary measures if those measures provide the same level of public health protection achieved by U.S. measures.
Any country can apply for eligibility to export meat, poultry, or egg products to the United States. Based on FSIS's review of the information and documentation that the country submits, FSIS decides whether the foreign country's food regulatory system meets all U.S. requirements in the same or an equivalent manner. This is the document analysis. If so, FSIS performs an on-site audit of the entire foreign meat, poultry, or egg products regulatory system. When both the document analysis and on-site audit show that the country's system is equivalent to that of the U.S., FSIS publishes a proposed rule in the
Once a country is determined to be eligible to export to the United States, FSIS continues to monitor that country's food regulatory system. In a notice published in the
FSIS uses the equivalence questionnaire, called the Self-Reporting Tool (SRT), to collect information for FSIS's document review of the food regulatory systems of countries that are listed in the regulations as eligible to export meat, poultry, or egg products to the United States as well as for the systems of countries interested in becoming eligible (78 FR 5409, January 25, 2013). A copy of the SRT is available on FSIS's Web site at
The SRT also includes questions for FSIS to use in assessing how frequently it is necessary to conduct on-site audits of the country after FSIS approves export to the United States. FSIS refers to these questions as level of advancement (LOA) questions. The LOA questions are clearly marked in the SRT as “used for scoring purposes.” In answering the LOA questions, foreign countries demonstrate the full extent to which they have developed and implemented an equivalent, systems-based approach to food safety regulation that achieves the U.S. level of protection. The SRT and LOA questions may change over time to reflect changes in the United States' inspection system and associated sanitary measures. As explained in the
In February 2013, FSIS posted more information on LOA questions and scoring in the supplementary document “Performance-Based Approach to Foreign Country Equivalence Verification Audits and Point-of-Entry (POE) Reinspections,” which is available on FSIS's Web site at
FSIS uses the results from the analysis of the LOA questions, previous on-site audits, and POE results to place exporting countries into one of three categories based on food safety performance, with corresponding audit frequencies: Well-performing countries are to be audited every three years; average-performing countries are to be audited every two years; and adequately-performing countries are to be audited every year.
FSIS received approximately 31 comments in response to the
On February 23, 2015, FSIS responded to comments on the Agency's document review process for determining and verifying initial and ongoing equivalence (80 FR 9428). FSIS announced that it had streamlined the SRT and launched a Web-based version within its Public Health Information System (PHIS) to more efficiently capture up-to-date information about foreign food regulatory systems.
A summary of the other issues raised by the commenters in response to the
Several commenters stated that FSIS should, at a minimum, conduct annual audits. These same commenters recommended that the scope and intensity of the annual audits should change, based on risk and the conditions in the country when auditors arrive. For example, these commenters stated that information provided through the SRT should provide information necessary for auditors to focus on particular areas of concern that auditors could adjust as appropriate, given actual conditions once they have arrived. The commenters asserted that this approach would ensure that FSIS was auditing foreign countries on a regular basis but would also allow them to devote finite resources to those areas of greatest concern.
Some commenters who stated that FSIS should audit foreign countries' food regulatory systems at least annually stated that FSIS reduced the number of on-site audits because of budget constraints.
One commenter stated that NACMPI never recommended that the Agency shift from annual on-site audits to periodic on-site audits. The commenter asserted that NACMPI recommended that FSIS continue to audit foreign country's food regulatory systems annually and consider risk in determining whether more frequent or more focused audits were necessary.
Another commenter stated that FSIS is not conducting on-site audits at a minimum frequency of once every three years for all countries that are exporting meat, poultry, or egg products to the United States.
Two commenters stated that food product recalls of imported products from foreign countries show that food safety issues have emerged since FSIS altered its audit frequency schedule. A few other commenters cited recent safety issues related to products produced in China (
FSIS may adjust the scope and intensity of audits based on risk and the conditions in the country when auditors arrive. In addition, for countries that FSIS has determined to be eligible to export product to the U.S., FSIS develops an audit plan based on prior concerns that FSIS has identified with the country's system, any relevant changes the country has made since the last audit, and recent information that the country has submitted to FSIS concerning its system (such as information submitted through the SRT) (see FSIS Notice 35-14,
NACMPI did not recommend that the Agency conduct annual on-site audits to verify ongoing equivalence. In 2008, NACMPI recommended that the “length of time between audits can be based more on risk and compliance history in the foreign country,”
FSIS acknowledges that it has not audited all countries eligible to export at least once every three years. Some time was necessary to work through the mechanics of the transition from an annual on-site audit to less frequent on-site audits based on performance (78 FR 5409, January 25, 2013). Going forward, FSIS will conduct on-site audits of countries eligible to export product to the U.S. at least once every three years.
Approximately the same number of recalls involving imported products occurred when FSIS conducted annual on-site audits as have occurred since FSIS changed the frequency of on-site audits in certain countries.
Finally, regarding concerns about products from China, FSIS does not inspect baby formula or jerky dog treats. These products are under the jurisdiction of the U.S. Food and Drug Administration (FDA). Currently, China is only authorized to export to the United States processed poultry products that originated in the U.S. or another equivalent country. FSIS will reinspect at POE any processed (fully cooked) poultry products exported from China. China has not yet exported such product to the United States. FSIS will conduct annual on-site audits of China's regulatory system for at least the next three years, as the Agency would do for any country that has just been found to be equivalent.
FSIS measures the effectiveness of its methodology by routinely analyzing information from document reviews, on-site audits, and data from POE reinspections and recalls related to imported products. Since the PHIS import module was implemented on May 29, 2012, FSIS has used PHIS to generate detailed reports, including reports on the amount of product presented for reinspection; the types of activities performed at reinspection; the amount of product refused entry; and whether the product was refused because it failed a Public Health Critical exam (
Two commenters stated that it was not clear how frequently FSIS will audit each country. The commenters requested that FSIS identify which countries it will audit on an annual basis.
A few commenters asserted that the LOAs are not well defined and requested that FSIS clarify how it will assign LOAs when determining a country's performance score. One commenter stated that assigning an LOA to each country or to each equivalence component would complicate the process, and that FSIS should assign one LOA to a group of factors.
As explained above, the SRT includes LOA questions that FSIS encourages countries to answer to demonstrate what they are doing that is above and beyond what is required to be equivalent to FSIS's system. FSIS then scores the responses.
The LOA responses are just one of the factors that FSIS considers as part of an annual analysis of country performance to determine the frequency and scope of on-site audits (78 FR 5409, January 25, 2013). Previous on-site audits and POE results also contribute to FSIS's assessment of a country's performance and to FSIS's determination of the appropriate audit frequency for that country.
Another commenter stated that FSIS should offer more incentives to high performing countries in addition to reduced audit frequency. The commenter argued that FSIS should not reinspect every product from high performing countries. A few other commenters stated that FSIS should streamline the reinspection process by allowing the exporting countries to conduct inspections and sampling prior to shipment. The commenters asserted that this process would provide for the earliest possible detection of potential problems, prevent recalls, and reduce considerable transport and subsequent storage costs associated with such shipments. Another commenter suggested that FSIS collaborate with the FDA and U.S. Customs and Border Protection (CBP) to develop a consistent standard in the U.S. for determining which products are low or high risk.
FSIS does not intend to change its POE reinspection procedures at this time. In compliance with statutory and regulatory requirements (21 U.S.C. 620, 466, and 1046; 9 CFR 327.6, 381.199, and 590.925), FSIS reinspects all shipments presented at ports of entry to ensure proper certification by the foreign country and examines each shipment for general condition and labeling compliance. Additionally, PHIS randomly assigns more targeted reinspections of the meat and poultry presented to include laboratory sampling and testing to identify microbiological pathogens, drug and chemical residues, and species. PHIS assigns the type of reinspection based on compliance history of the foreign establishment and country and product volume.
Because FSIS reinspection is necessary to ensure that all imported meat, poultry, and egg products are properly labeled and not adulterated, FSIS will not rely on other country results in determining whether to allow the product to enter domestic commerce. However, FSIS is committed to collaborating with other U.S. agencies to enhance and streamline inspection efforts. For example, in April 2014, FSIS began a pilot program with CBP's Participating Government Agency (PGA) Message Set, which allows FSIS to electronically collect the information required by FSIS form 9540-1,
In addition, the PGA Message Set pilot supports more efficient protection of public health by transferring all data from the industry for products under FSIS jurisdiction, thus providing the Agency with specific information on FSIS regulated products that could be potentially entering the country from ineligible sources.
Finally, the pilot will facilitate compliance through early filing. Through ACE, importers file their FSIS application with their Customs entry, in advance of the shipment arriving at the official import inspection establishment. This early filing will enable FSIS inspection personnel to better monitor shipments and will facilitate faster recalls if amenable products produced by foreign establishments are delivered into commerce without the benefit of FSIS POE reinspection.
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).
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,
Rural Business-Cooperative Service, USDA.
Notice.
This Notice announces that the Rural Business-Cooperative Service (Agency) is accepting fiscal year (FY) 2015 applications for the Value-Added Producer Grant (VAPG) program. Approximately $30 million in funding is available to help agricultural producers enter into value-added activities for FY 2015. Approximately $10.2 million has been appropriated through the Consolidated and Further Continuing Appropriations Act of 2015 and the remaining funds have been made available through either carry over funding from FY 2014 or through the Agricultural Act of 2014 (2014 Farm Bill). The Agency is concurrently publishing a final rule that will revise the current VAPG regulation at 7 CFR part 4284, subpart J in response to: The 2014 Farm Bill; comments received on the interim rule, which was published on February 23, 2011 (76 FR 10122); a listening session, held on April 25, 2014, on the VAPG provisions in the 2014 Farm Bill; and to provide program clarifications. The Agency is encouraging applications that directs grants to projects based in or serving census tracts with poverty rates greater than or equal to 20 percent. This emphasis will support Rural Development's (RD) mission of improving the quality of life for rural Americans and commitment to directing resources to those who most need them.
You must submit your application by July 7, 2015 or it will not be considered for funding. Paper applications must be postmarked and mailed, shipped or sent overnight by this date. You may also hand carry your application to one of our field offices, but it must be received by close of business on the deadline date. Electronic applications are permitted via
You should contact your USDA Rural Development State Office if you have questions about eligibility or submission requirements. You are encouraged to contact your State Office well in advance of the application deadline to discuss your project and to ask any questions about the application process. Application materials are available at
If you want to submit an electronic application, follow the instructions for the VAPG funding announcement on
Web site at
Grants Division, Cooperative Programs, Rural Business-Cooperative Service, United States Department of Agriculture, 1400 Independence Avenue SW., MS 3253, Room 4008-South, Washington, DC 20250-3253, or call 202-690-1374.
In accordance with the Paperwork Reduction Act, the paperwork burden associated with this Notice has been approved by the Office of Management and Budget (OMB) under OMB Control Number 0570-0039.
The VAPG program is authorized under section 231 of the Agriculture Risk Protection Act of 2000 (Pub. L. 106-224), as amended by section 6203 of the Agricultural Act of 2014 (Pub. L. 113-79) (see 7 U.S.C. 1632a). Applicants must adhere to the requirements contained in the program regulation, 7 CFR 4284, subpart J, which is incorporated by reference in this Notice.
The primary objective of this grant program is to assist Independent Producers, Agricultural Producer Groups, Farmer and Rancher Cooperatives, and Majority-Controlled Producer-Based Businesses in starting or expanding value-added activities related to the processing and/or marketing of Value-Added Agricultural Products. Grants will be awarded competitively for either planning or working capital projects directly related to the processing and/or marketing of value-added products. Generating new products, creating and expanding marketing opportunities, and increasing producer income are the end goals of the program. All proposals must demonstrate economic viability and sustainability in order to compete for funding.
Funding priority will be made available to Beginning Farmers and Ranchers, Veteran Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, Operators of Small and Medium-Sized Farms and Ranches structured as Family Farms or Ranches, Farmer or Rancher Cooperatives, and projects proposing to develop a Mid-Tier Value Chain. See 7 CFR 4284.923 for Reserved Funds eligibility and 7 CFR 4284.924 for Priority Scoring eligibility.
The terms you need to understand are defined in 7 CFR 4284.902.
Applicants must meet all of the following eligibility requirements. Applications which fail to meet any of these requirements by the application deadline will be deemed ineligible and will not be evaluated further.
You must demonstrate that you meet all the applicant eligibility requirements of 7 CFR 4284.920 and 4284.921 (Ineligible applicants). This includes meeting the definition requirements at 7 CFR 4284.902 for one of the following applicant types: Independent Producer, Agricultural Producer Group, Farmer or Rancher Cooperative or Majority-Controlled Producer-Based Business and also meeting the Emerging Market, Citizenship, Legal Authority and Responsibility, Multiple Grants and Active Grants requirements of the section. Required documentation to support eligibility is contained at 7 CFR 4284.931.
Federally-recognized Tribes and tribal entities must demonstrate that they meet all definition requirements for one of the four eligible applicant types. Rural Development State Offices and posted application toolkits will provide additional information on Tribal eligibility.
Per 4284.921, an applicant is ineligible if they have been debarred or suspended or otherwise excluded from or ineligible for participation in Federal assistance programs under Executive Order 12549, “Debarment and Suspension.” In addition, an applicant will be considered ineligible for a grant due to an outstanding judgment obtained by the U.S. in a Federal Court (other than U.S. Tax Court), is delinquent on the payment of Federal income taxes, or is delinquent on Federal debt.
There is a matching funds requirement of at least $1 for every $1 in grant funds provided by the Agency (matching funds plus grant funds must equal proposed Total Project Costs). Matching funds may be in the form of cash or eligible in-kind contributions and may be used only for eligible project purposes. Matching funds must be available at time of application and must be certified and verified as described in 7 CFR 4284.931(b)(3) and (4). Note that matching funds must also be discussed as part of the scoring criterion Commitments and Support as described in section E.1. (c).
You must demonstrate that you meet all the project eligibility requirements of 7 CFR 4284.922.
(a)
(b)
(i) Planning Grants. A planning grant is used to fund development of a defined program of economic planning activities to determine the viability of a potential value-added venture, and specifically for the purpose of paying for a qualified consultant to conduct and develop a feasibility study, business plan, and/or marketing plan associated with the processing and/or marketing of a value-added agricultural product. Planning grant funds may not be used to fund working capital activities.
(ii) Working Capital Grants. This type of grant provides funds to operate a value-added project, specifically to pay the eligible project expenses related to the processing and/or marketing of the value-added product that are eligible uses of grant funds. Working capital funds may not be used for planning purposes.
(c)
(d)
Eligible uses of grant and matching funds are discussed, along with examples, in 7 CFR 4284.923. In general, grant and cost-share matching funds have the same use restrictions and must be used to fund only the costs for eligible purposes as defined at 7 CFR 4284.923(a) and (b).
A list (not all inclusive) of ineligible uses of grant and matching fund is found in 7 CFR 4284.926. An Applicant may submit only one application in response to a solicitation, and must explicitly direct that it compete in either the general funds competition or in one of the named reserved funds competitions. Multiple applications from separate entities with identical or greater than 75 percent common ownership, or from a parent, subsidiary or affiliated organization (with “affiliation” defined by Small Business Administration regulation 13 CFR 121.103, or successor regulation) are not permitted. Further, Applicants who have already received a Planning Grant for the proposed project cannot receive another Planning Grant for the same project. Applicants who have already received a Working Capital Grant for the proposed project cannot receive any additional grants for that project.
The application toolkit, regulation, and official program notification for this funding opportunity can be obtained online at
You may submit your application in paper form or electronically through Grants.gov. Your application must contain all required information.
To submit an application electronically, you must follow the instructions for this funding announcement at
You can locate the Grants.gov downloadable application package for this program by using a keyword, the program name, or the Catalog of Federal Domestic Assistance Number for this program.
When you enter the Grants.gov Web site, you will find information about submitting an application electronically through the site, as well as the hours of operation.
To use Grants.gov, you must already have a DUNS number and you must also be registered and maintain registration in SAM. We strongly recommend that you do not wait until the application deadline date to begin the application process through Grants.gov.
You must submit all of your application documents electronically through Grants.gov.
After electronically submitting an application through Grants.gov, you will receive an automatic acknowledgement from Grants.gov that contains a Grants.gov tracking number.
If you want to submit a paper application, send it to the State Office located in the State where your project will primarily take place. You can find State Office Contact information at:
Your application must contain all of the required forms and proposal elements described in 7 CFR 4284.931, unless otherwise clarified in this Notice. You are encouraged, but not required to utilize the Application Toolkits found at
• Standard Form (SF)-424, “Application for Federal Assistance,” to include your DUNS number and SAM (CAGE) code and expiration date. Because there are no specific fields for a CAGE code and expiration date, you may identify them anywhere you want to on the form. If you do not include the CAGE code and expiration date and the DUNS number in your application, it will not be considered for funding.
• SF-424A, “Budget Information-Non-Construction Programs.” This form must be completed and submitted as part of the application package.
• SF-424B, “Assurances—Non-Construction Programs.” This form must be completed, signed, and submitted as part of the application package.
• Form AD-3030, “Representations Regarding Felony Conviction and Tax Delinquent Status for Corporate Applicants,” if you are a corporation. A corporation is any entity that has filed articles of incorporation in one of the 50 States, the District of Columbia, the Federated States of Micronesia, the Republic of Palau, and the Republic of the Marshall Islands, or the various territories of the United States including American Samoa, Guam, Midway Islands, the Commonwealth of the Northern Mariana Islands, Puerto Rico, or the U.S. Virgin Islands. Corporations include both for profit and non-profit entities.
• You must certify that there are no current outstanding Federal judgments against your property and that you will not use grant funds to pay for any judgment obtained by the United States. To satisfy the Certification requirement, you should include this statement in your application: “[INSERT NAME OF APPLICANT] certifies that the United States has not obtained an unsatisfied judgment against its property and will not use grant funds to pay any judgments obtained by the United States.” A separate signature is not required.
• Executive Summary and Abstract. A one-page Executive Summary containing the following information: Legal name of applicant entity, application type (planning or working capital), applicant type, amount of grant request, a summary of your project, and whether you are submitting a simplified application, and whether you are requesting Reserved Funds. Also include a separate abstract of up to 100 words briefly describing your project.
• Eligibility discussion.
• Work plan and budget.
• Performance evaluation criteria.
• Proposal evaluation criteria.
• Certification and verification of matching funds.
• Reserved Funds and Priority Point documentation (as applicable).
• Appendices containing required supporting documentation.
In order to be eligible (unless you are excepted under 2 CFR 25.110(b), (c) or (d), you are required to:
(a) Provide a valid DUNS number in your application, which can be obtained at no cost via a toll-free request line at (866) 705-5711;
(b) Register in SAM before submitting your application. You may register in SAM at no cost at
(c) Continue to maintain an active SAM registration with current information at all times during which you have an active Federal award or an application or plan under consideration by a Federal awarding agency.
The Agency may not make a Federal award to you until you have complied with all applicable DUNS and SAM requirements. If you have not fully complied with the requirements, the Agency may determine that the applicant is not qualified to receive a Federal award and the Agency may use that determination as a basis for making an award to another applicant. Please refer to Section F. 2. for additional submission requirements that apply to grantees selected for this program.
Electronic applications must be received at
Executive Order (EO) 12372, Intergovernmental Review of Federal Programs, applies to this program. This EO requires that Federal agencies provide opportunities for consultation on proposed assistance with State and local governments. Many States have established a Single Point of Contact (SPOC) to facilitate this consultation. A list of States that maintain a SPOC may be obtained at
Funding limitations and reservations found in the program regulation at 7 CFR 4284.927 will apply, including:
(a) Use of Funds. Grant funds may be used to pay up to 50 percent of the total eligible project costs, subject to the limitations established for maximum total grant amount. Grant funds may not be used to pay any costs of the project incurred prior to the date of grant approval. Grant and matching funds may only be used for eligible purposes. (see examples of eligible and ineligible uses in 7 CFR 4284.923 and 4284.924, respectively).
(b) Grant Term (project period). Your project timeframe or grant period can be a maximum of 36 months in length from the date of award. Your proposed grant period should begin no earlier than the anticipated award announcement date in this notice, September 30, 2015, and should end no later than 36 months following that date. If you receive an award, your grant period will be revised to begin on the actual date of award—the date the grant agreement is executed by the Agency—and your grant period end date will be adjusted accordingly. Your project activities must begin within 90 days of that date of award. The length of your grant period should be based on your project's complexity, as indicated in your application work plan. For example, it is expected that most planning grants can be completed within 12 months.
(c) Program Income. If Program Income is earned during the grant period as a result of the project activities, it is subject to the requirements in 2 CFR 200.80, and must be managed and reported accordingly.
(d) Majority Controlled Producer-Based Business. The aggregate amount of awards to Majority Controlled Producer-Based Businesses in response to this announcement shall not exceed 10 percent of the total funds obligated for the program during the fiscal year.
(e) Reserved Funds. Ten percent of all funds available for FY 2015 will be reserved to fund projects that benefit Beginning Farmers or Ranchers, or Socially-Disadvantaged Farmers or Ranchers. In addition, 10 percent of total funding available will be used to fund projects that propose development of Mid-Tier Value Chains as part of a Local or Regional Supply Chain Network. See related definitions in 7 CFR 4284.902.
(f) Disposition of Reserved Funds Not Obligated. For this announcement, any reserved FY 2015 funds that have not been obligated by June 30, 2015, will be available to the Secretary to make VAPG grants in accordance with 7 CFR 4284.927(d).
This notice has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” We have determined that an Environmental Impact Statement is not required because the issuance of regulations and instructions, as well as amendments to them, describing administrative and financial procedures for processing, approving, and implementing the Agency's financial programs is categorically excluded in the Agency's National Environmental Policy Act (NEPA) regulation found at 7 CFR 1940.310(e)(3) of subpart G, “Environmental Program.” We have determined that this Notice does not constitute a major Federal action significantly affecting the quality of the human environment. Individual awards under this Notice are hereby classified as Categorical Exclusions according to 7 CFR 1940.310(e), which do not require any additional documentation.
All grants made under this Notice are subject to Title VI of the Civil Rights Act of 1964 as required by the USDA (7 CFR part 15, subpart A) and Section 504 of the Rehabilitation Act of 1973.
Applications will be reviewed and processed as described at 7 CFR 4284.940. The Agency will review your application to determine if it is complete and eligible. If at any time, the Agency determines that your application is ineligible, you will be notified in writing as to the reasons it was determined ineligible and you will be informed of your review and appeal rights. Funding of successfully appealed applications will be limited to available FY 2015 funds.
The Agency will only score applications in which the applicant and project are eligible, which are complete and sufficiently responsive to program requirements, and in which the Agency agrees on the likelihood of financial feasibility for working capital requests. We will score your application according to the procedures and criteria specified in 7 CFR 4284.942, and with tiered scoring thresholds as specified below.
For each criterion, you must show how the project has merit and why it is likely to be successful. If you do not address all parts of the criterion, or do not sufficiently communicate relevant project information, you will receive lower scores. VAPG is a competitive program, so you will receive scores based on the quality of your responses. Simply addressing the criteria will not guarantee higher scores. The maximum number of points that can be awarded to your application is 100. For this announcement, the minimum score requirement for funding is 50 points.
The Agency application toolkit provides additional instruction to help you to respond to the criteria below.
(a)
For both planning and working capital grants, you should discuss the technological feasibility of the project, as well as operational efficiency, profitability, and overall economic sustainability resulting from the project. In addition, demonstrate the potential for expanding the customer base for the agricultural commodity or value-added product, and the expected increase in revenue returns to the producer-owners providing the majority of the raw agricultural commodity to the project. You should reference third-party data and other information that specifically supports your value-added project; discuss the value-added process you are proposing; potential markets and distribution channels; the value to be added to the raw commodity through
Points will be awarded as follows:
(i) 0 points will be awarded if you do not substantively address the criterion.
(ii) 1-5 points will be awarded if you do not address each of the following: Technological feasibility, operational efficiency, profitability, and overall economic sustainability.
(iii) 6-13 points will be awarded if you address technological feasibility, operational efficiency, profitability, and overall economic sustainability, but do not reference third-party information that supports the success of your project.
(iv) 14-22 points will be awarded if you address technological feasibility, operational efficiency, profitability, and overall economic sustainability, supported by third-party information demonstrating a reasonable likelihood of success.
(v) 23-30 points will be awarded if all criterion components are well addressed, supported by third-party information, and demonstrate a high likelihood of success.
(b)
You must identify all individuals who will be responsible for completing the proposed tasks in the work plan, including the roles and activities that owners, staff, contractors, consultants or new hires may perform; and show that these individuals have the necessary qualifications and expertise, including those hired to do market or feasibility analyses, or to develop a business operations plan for the value-added venture. You must include the qualifications of those individuals responsible for leading or managing the total project (applicant owners or project managers), as well as those individuals responsible for actually conducting the various individual tasks in the work plan (such as consultants, contractors, staff or new hires). You must discuss the commitment and the availability of any consultants or other professionals to be hired for the project. If staff or consultants have not been selected at the time of application, you must provide specific descriptions of the qualifications required for the positions to be filled. Applications that demonstrate the strong credentials, education, capabilities, experience and availability of project personnel that will contribute to a high likelihood of project success will receive more points than those that demonstrate less potential for success in these areas.
Points will be awarded as follows:
(i) 0 points will be awarded if you do not substantively address the criterion.
(ii) 1-4 points will be awarded if qualifications and experience of all staff is not addressed and/or if necessary qualifications of unfilled positions are not provided.
(iii) 5-9 points will be awarded if all project personnel are identified but do not demonstrate qualifications or experience relevant to the project.
(iv) 10-14 will be awarded if most key personnel demonstrate strong credentials and/or experience, and availability indicating a reasonable likelihood of success.
(v) 15-20 points will be awarded if all personnel demonstrate strong, relevant credentials or experience, and availability indicating a high likelihood of project success.
(c)
Producer commitments to the project will be evaluated based on the number of independent producers currently involved in the project; and the nature, level and quality of their contributions. End-user commitments will be evaluated on the basis of potential or identified markets and the potential amount of output to be purchased, as indicated by letters of intent or contracts from potential buyers referenced within the application. Other third-party commitments to the project will be evaluated based on the critical and tangible nature of their contribution to the project, such as technical assistance, storage, processing, marketing, or distribution arrangements that are necessary for the project to proceed; and the level and quality of these contributions. All cash or in-kind contributions from producers, end users, or other contributors should be discussed. End-user commitments may include contracts or letters of intent or interest in purchasing the value-added product. Letters of commitment by producers, end-users, and third-parties should be summarized as part of your response to this criterion, and the letters should be included in Appendix B. Applications that demonstrate the project has strong direct financial, technical and logistical support to successfully complete the project will receive more points than those that demonstrate less potential for success in these areas.
Points will be awarded as follows:
(i) 0 points will be awarded if you do not substantively address the criterion.
(ii) 1-3 points will be awarded if you show real, direct support from at least one end-user or third-party contributor.
(iii) 4-6 points will be awarded if you, as the applicant, show strong financial commitment to the project AND measurable commitment or interest in purchasing the value-added product from at least one end-user; AND commitment or tangible support from at least one other third-party contributor.
(iv) 7-10 points will be awarded if you, as the applicant, show strong financial commitment to the project, AND participation from additional producers, AND measurable commitment or interest from multiple end-users, AND commitment or tangible support from multiple third-party contributors.
(d)
You must submit a comprehensive work plan and budget (for full details, see 7 CFR 4284.922(b)(5)). Your work plan must provide specific and detailed descriptions of the tasks and the key project personnel that will accomplish the project's goals. The budget must present a detailed breakdown of all estimated costs of project activities and allocate those costs among the listed tasks. You must show the source and use of both grant and matching funds for all tasks. Matching funds must be spent at a rate equal to, or in advance of, grant funds. An eligible start and end date for the project and for individual project tasks must be clearly shown and may not exceed Agency specified timeframes for the grant period. Working capital applications must include an estimate of program income expected to be earned during the grant period (see 2 CFR 200.307).
Points will be awarded as follows:
(i) 0 points will be awarded if you do not substantively address the criterion.
(ii) 1-7 points will be awarded if the work plan and budget do not account for all project goals, tasks, costs, timelines, and responsible personnel.
(iii) 8-14 points will be awarded if you provide a clear, comprehensive work plan detailing all project goals, tasks, timelines, costs, and responsible personnel in a logical and realistic manner that demonstrates a reasonable likelihood of success.
(iv) 15-20 points will be awarded if you provide a clear, comprehensive work plan detailing all project goals, tasks, timelines, costs, and responsible personnel in a logical and realistic manner that demonstrates a high likelihood of success.
(e)
It is recommended that you use the Agency application package when applying for priority points and refer to the requirements specified in 7 CFR 4284.924. Priority points may be awarded in both the general funds and Reserved Funds competitions.
(i) 5 points will be awarded if you meet the requirements for one of the following categories and provide the documentation described in 7 CFR 4284.923 and 4284.924 as applicable: Beginning Farmer or Rancher, Socially-Disadvantaged Farmer or Rancher, Veteran Farmer or Rancher, Operator of a Small or Medium-sized Farm or Ranch that is structured as a Family Farm, Farmer or Rancher Cooperative, or a Mid-Tier Value Chain project.
(ii) Up to 5 additional priority points will be awarded if you are an Agricultural Producer Group, Farmer or Rancher Cooperative, or Majority-Controlled Producer-Based Business Venture (referred to below as “applicant group”) whose project “best contributes to creating or increasing marketing opportunities” for Operators of Small- and Medium-sized Farms and Ranches that are structured as Family Farms, Beginning Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, and Veteran Farmers and Ranchers (referred to below as “priority groups”).
(A) 2 priority points will be awarded if the existing membership of the applicant group is comprised of either more than 75 percent of any one of the four priority groups or more than 75 percent of any combination of the four priority groups.
(B) 1 priority point will be awarded if the existing membership of the applicant group is comprised of two or more of the priority groups. One point is awarded regardless of whether a group's membership is comprised of two, three, or all four of the priority groups.
(C) 2 priority points will be awarded if the applicant's proposed project will increase the number of priority groups that comprise the applicant membership by one or more priority groups. However, if an applicant group's membership is already comprised of all four priority groups, such an applicant would not be eligible for points under this criterion because there is no opportunity to increase the number of priority groups. Note also that this criterion does not consider either the percentage of the existing membership that is comprised of the four priority groups or the number of priority groups currently comprising the applicant group's membership.
(f)
The Administrator of the Agency may choose to award up to 10 points to an application to improve the geographic diversity of awardees in a fiscal year.
The Agency will select applications for award under this Notice in accordance with the provisions specified in 7 CFR 4284.950(a).
If your application is eligible and complete, it will be qualitatively scored by at least two reviewers based on criteria specified in section E.1. of this Notice. One of these reviewers will be an experienced RD employee from your servicing State Office and at least one additional reviewer will be a non-Federal, independent reviewer, who must meet the following qualifications. Independent reviewers must have at least bachelor's degree in one or more of the following fields: Agri-business, agricultural economics, agriculture, animal science, business, marketing, economics or finance; and a minimum of 8 years of experience in an agriculture-related field (
The Administrator of the Agency may choose to award up to 10 Administrator priority points based on criterion (f) in section E.1. of this Notice. These points will be added to the cumulative score for a total possible score of 100.
A final ranking will be obtained based solely on the scores received for criteria (a) through (e). A minimum score of 50 points is required. Applications for Reserved Funds will be funded in rank order until funds are depleted. Unfunded reserve applications will be returned to the general funds where applications will be funded in rank order until the funds are expended. Funding for Majority Controlled Producer-Based Business Ventures is limited to 10 percent of total grant funds expected to be obligated as a result of this Notice. These applications will be funded in rank order until the funding limitation has been reached. Grants to these applicants from Reserved Funds will count against this funding limitation. In the event of tied scores, the Administrator shall have discretion in breaking ties.
If your application is ranked, but not funded, it will not be carried forward into the next competition.
If you are selected for funding, you will receive a signed notice of Federal award by postal mail, containing instructions on requirements necessary to proceed with execution and performance of the award.
If you are not selected for funding, you will be notified in writing via postal mail and informed of any review and appeal rights. Funding of successfully appealed applications will be limited to available FY 2015 funding.
Additional requirements that apply to grantees selected for this program can be found in 7 CFR part 4284, subpart J; the Grants and Agreements regulations of the Department of Agriculture codified in 2 CFR parts 180, 400, 415, 417, 418, 421; 2 CFR parts 25 and 170; and 48 CFR 31.2, and successor regulations to these parts.
In addition, all recipients of Federal financial assistance are required to report information about first-tier sub-awards and executive compensation (see 2 CFR part 170). You will be required to have the necessary processes and systems in place to comply with the Federal Funding Accountability and Transparency Act of 2006 (Pub. L. 109-282) reporting requirements (see 2 CFR 170.200(b), unless you are exempt under 2 CFR 170.110(b)). More information on these requirements can be found at
The following additional requirements apply to grantees selected for this program:
(a) Agency approved Grant Agreement.
(b) Letter of Conditions.
(c) Form RD 1940-1, “Request for Obligation of Funds.”
(d) Form RD 1942-46, “Letter of Intent to Meet Conditions.”
(e) Form AD-1047, “Certification Regarding Debarment, Suspension, and Other Responsibility Matters-Primary Covered Transactions.”
(f) Form AD-1048, “Certification Regarding Debarment, Suspension,
(g) Form AD-1049, “Certification Regarding a Drug-Free Workplace Requirement (Grants).”
(h) Form AD-3031, “Assurance Regarding Felony Conviction or Tax Delinquent Status for Corporate Applicants.” Must be signed by corporate applicants who receive an award under this Notice.
(i) Form RD 400-4, “Assurance Agreement.”
(j) SF LLL, “Disclosure of Lobbying Activities,” if applicable.
(k) Use Form SF 270, “Request for Advance or Reimbursement.”
After grant approval and through grant completion, you will be required to provide the following, as indicated in the Grant Agreement:
(a) A SF-425, “Federal Financial Report,” and a project performance report will be required on a semiannual basis (due 45 working days after end of the semiannual period). For the purposes of this grant, semiannual periods end on March 31st and September 30th. The project performance reports shall include the elements prescribed in the grant agreement.
(b) A final project and financial status report within 90 days after the expiration or termination of the grant.
(c) Provide outcome project performance reports and final deliverables.
If you have questions about this Notice, please contact the State Office as identified in the
The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital status, familial or parental status, sexual orientation, or all or part of an individual's income is derived from any public assistance program, or protected genetic information in employment or in any program or activity conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or employment activities.)
If you wish to file an employment complaint, you must contact your agency's EEO Counselor (PDF) within 45 days of the date of the alleged discriminatory act, event, or in the case of a personnel action. Additional information can be found online at
If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found online at
Individuals who are deaf, hard of hearing or have speech disabilities and you wish to file either an EEO or program complaint please contact USDA through the Federal Relay Service at (800) 877-8339 or (800) 845-6136 (in Spanish).
Persons with disabilities, who wish to file a program complaint, please see information above on how to contact us by mail directly or by email. If you require alternative means of communication for program information (
Office of the Secretary, U.S. Department of Commerce.
Notice of a New Privacy Act System of Records; “COMMERCE/DEPARTMENT-25, Access Control and Identity Management System.”
In accordance with the Privacy Act of 1974, as amended, Title 5 United States Code (U.S.C.) 552(e)(4) and (11); and Office of Management and Budget (OMB) Circular A-130, Appendix I, Federal Agency Responsibilities for Maintaining Records About Individuals, the Department of Commerce is issuing this notice of its intent to establish a new system of records entitled “COMMERCE/DEPARTMENT-25, Access Control and Identity Management System.” This action is being taken to update the Privacy Act notice and Department of Commerce, Notice to Amend All Privacy Act System of Records. We invite the public to comment on the items noted in this publication. The purpose of this system of records is to establish identity, accountability, and audit control of electronic or other digital certificates of assigned personnel who require access to Department of Commerce electronic and physical assets. The records are created and maintained to provide assurance that the digital certificates/electronic access is granted to the correct individual, who typically has been issued an identification card by the Department of Commerce.
To be considered, written comments must be submitted on or before June 8, 2015.
Unless comments are received, the amended system of records will become effective as proposed on the date of publication of a subsequent notice in the
You may submit written comments by any of the following methods:
Mr. Nicholas Schnare, Office of Security, U.S. Department of Commerce, 1401 Constitution Ave. NW., Room 1511, Washington, DC 20230. (202) 482-8333.
This notice announces the Department of Commerce's proposal for a new system of records being established under the
In a notice of proposed rulemaking, which is published separately in today's
The system will be effective as proposed, on the date of publication of a subsequent notice in the
COMMERCE/DEPT-25 Access Control and Identity Management System.
None.
a. For Office of Security, Office of the Secretary, U.S. Department of Commerce, Room 1033, 1401 Constitution Avenue NW., Washington, DC 20230.
b. For Office of Security, U.S. Census Bureau, Room 2J438, 4600 Silver Hill Road, Washington, DC 20233-3700.
c. For Office of Security, U.S. Census Bureau Indiana, Room 104, Building 66, 1201 E. 10th Street, Jeffersonville, IN 47132.
d. For Office of Security, National Institute of Standards and Technology, Room A-105, Building 318, 100 Bureau Drive, Gaithersburg, MD 20899.
e. For Office of Security, National Oceanic and Atmospheric Administration, Room G-101, SSMC-OFA543, 1335 East-West Highway, Silver Spring, MD 20910.
f. For Office of Security, National Oceanic and Atmospheric Administration, Western Region, Building 1, 7600 Sand Point Way NE., Seattle, WA 38115.
g. For Office of Security, FirstNet, John W. Powell Federal Building, 12201 Sunrise Valley, Drive, Reston, VA 22091.
h. For Office of Security, U.S. Patent and Trademark Office, 600 Dulany Street, Madison Building, West, Alexandria, Virginia 22313.
i. For Office of the Secretary, Minority Business Development Agency, Economic and Statistics Administration, and Economic Development Administration: Office of the Secretary, Chief Information Officer, 1401 Constitution Avenue NW., Washington, DC 20230.
j. For U.S. Census Bureau, Chief Information Officer, 4600 Silver Hill Road, Suitland, MD 20746.
k. For Bureau of Industry and Security, Chief Information Officer, 1401 Constitution Avenue NW., Washington, DC 20230.
l. For International Trade Administration, Chief Information Officer, 1401 Constitution Avenue NW., Washington, DC 20230.
m. For National Institute of Standards and Technology, Chief Information Officer, 100 Bureau Drive, Gaithersburg, MD 20899.
n. For National Telecommunications and Information Administration, Chief Information Officer, 1401 Constitution Avenue NW., Washington, DC 20230.
o. For National Oceanic and Atmospheric Administration, Chief Information Officer, 1305 East-West Highway, SSMC3, Silver Spring, MD 20910.
p. For U.S. Patent and Trademark Office, Chief Information Officer, 600 Dulany Street, Madison Building, Alexandria, VA 22314.
q. For Office of Inspector General, Chief Information Officer, Chief Information Officer, 1401 Constitution Avenue NW., Washington, DC 20230.
Employees, contractors, and other affiliates requiring access to Department of Commerce electronic (including PKI-authenticated) and physical assets.
Records may include the individual's name; organization; work telephone number; cellular telephone number; home telephone number, work email; Federal agency Smart Card Number (FASC-N); social security number; employee number; status as an employee, contractor or other affiliation with the Department of Commerce; PIN number (encrypted); sign-in/out, badge-in/out, time-in/out, log-in/out data; computer transaction data to include, but not limited to, key stroke monitoring; IP address of access; logs of internet activity and records on the authentication of the access request; key fob identifier; token identifier; Personal Identity Verification (PIV) Card identifier; computer access login name; and any computer generated identifier assigned to a user.
5 U.S.C. 301; 35 U.S.C. 2; the Electronic Signatures in Global and National Commerce Act, Public Law 106-229; 28 U.S.C. 533-535; 44 U.S.C. 1301; Homeland Security Presidential Directive 12 and IRS Publication-1075.
Records in this system are used by authorized personnel to improve security for Department of Commerce physical facilities for purposes including: Ensuring process integrity; enabling employees to carry out their lawful and authorized responsibilities; verifying individuals' authorization to access buildings and facilities; creating a record of individuals' access to buildings and facilities; facilitating the issuance and retrieval of visitor and temporary badges; and providing statistical data on building and facility access patterns including electronic and physical sign/badge-in and sign/badge-out data for resource planning and emergency management purposes.
Records may also be used to secure electronic assets; to maintain accountability for issuance and disposition of security access; to maintain an electronic system to facilitate secure on-line communication between Federal automated systems, between Federal employees or contractors, and with the public, using digital signature technologies to authenticate and verify identity; to provide a means of access to electronic assets, desktops, and laptops; and to provide mechanisms for non-repudiation of personal identification and access to electronic systems, including but not limited to human resource, financial, procurement, travel and property systems, as well as systems containing information on intellectual property and other mission critical systems. The system also maintains records relating to the issuance of digital certificates utilizing public key cryptography to employees and contractors for the transmission of sensitive electronic material that requires protection.
1. Records in this system are accessed on a daily basis by authorized personnel to verify individuals' authorized access to buildings and facilities; electronic systems and computers; facilitate the issuance and retrieval of visitor and temporary badges; determine whether administrative action (including disciplinary action) should be taken regarding any employee, contractor, or
2. In the event that a system of records maintained by the Department to carry out its functions indicates or relates to a violation or potential violation of law or contract, whether civil, criminal or regulatory in nature, and whether arising by general statute or particular program statute or contract, or rule, regulation, or order issued pursuant thereto, or where necessary to protect an interest of the Department, the relevant records in the system of records may be referred, as a routine use, to the appropriate agency, whether Federal, state, local or foreign, charged with the responsibility of investigating or prosecuting such violation or charged with enforcing or implementing the statute or contract, or rule, regulation or order issued pursuant thereto, or protecting the interest of the Department.
3. A record from this system of records may be disclosed to a Federal, state or local agency maintaining civil, criminal or other relevant enforcement information or other pertinent information, such as current licenses, if necessary to obtain information relevant to a Department decision concerning the assignment, hiring or retention of an individual, the issuance of a security clearance, the letting of a contract, or the issuance of a license, grant or other benefit.
4. A record from this system of records may be disclosed to a Federal, state, local, or international agency, in response to its request, in connection with the assignment, hiring or retention of an individual, the issuance of a security clearance, the reporting of an investigation of an individual, the letting of a contract, or the issuance of a license, grant, or other benefit by the requesting agency, to the extent that the information is relevant and necessary to the requesting agency's decision on the matter.
5. A record from this system of records may be disclosed in the course of presenting evidence to a court, magistrate or administrative tribunal, including disclosures to opposing counsel in the course of settlement negotiations.
6. A record in this system of records may be disclosed to a Member of Congress submitting a request involving an individual when the individual has requested assistance from the Member with respect to the subject matter of the record.
7. A record in this system of records may be disclosed to the Office of Management and Budget in connection with the review of private relief legislation as set forth in OMB Circular No. A-19 at any stage of the legislative coordination and clearance process as set forth in that Circular.
8. A record in this system of records may be disclosed to the Department of Justice in connection with determining whether disclosure thereof is required by the Freedom of Information Act (5 U.S.C. 552).
9. A record in this system of records may be disclosed to a contractor of the Department having need for the information in the performance of the contract, but not operating a system of records within the meaning of 5 U.S.C. 552a(m).
10. A record in this system may be transferred to the Office of Personnel Management for personnel research purposes; as a data source for management information; for the production of summary descriptive statistics and analytical studies in support of the function for which the records are collected and maintained; or for related manpower studies.
11. A record from this system of records may be disclosed to the Administrator, General Services, or his designee, during an inspection of records conducted by the General Services Administration as part of that agency's responsibility to recommend improvements in records management practices and programs, under authority of 44 U.S.C. 2904 and 2906. Such disclosure shall be made in accordance with the GSA regulations governing inspection of records for this purpose, and any other relevant (
12. A record in this system of records may be disclosed to appropriate agencies, entities and persons when (1) it is suspected or determined that the security or confidentiality of information in the system of records has been compromised; (2) the DOC 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 this system or whether systems or programs (whether maintained by the DOC or another agency or entity) that rely upon the compromised information; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the DOC's efforts to respond to the suspected or confirmed compromise and to prevent, minimize, or remedy such harm.
13. A record in this system of records may be disclosed to appropriate agencies, entities and persons for the purpose of performing audit or oversight operations as authorized by law, but only such information as is necessary and relevant to such audit or oversight function.
Not applicable.
Records in this system are on paper and/or in digital or other electronic form. Paper records are stored in secure rooms and storage cabinets and electronic records are stored as electronic/digital media and stored in secure file-servers within controlled environment. Both paper and electronic/digital records are accessed only by authorized personnel.
Records are retrieved by individual's name, employment status, organization and/or security access badge number, or other Department of Commerce identifier. Information may be retrieved from this system of records by automated search based on extant indices and automated capabilities utilized in the normal course of business.
Entrance to data centers and support organization offices is restricted to those employees whose work requires them to be there for the system to operate. Identification cards are verified to ensure that records are in areas accessible only to authorized personnel who are properly screened, cleared, and trained. Disclosure of electronic information through remote terminals is restricted through the use of passwords and sign-on protocols that are periodically changed. Reports produced from the remote printers are subject to the same privacy controls as other documents of like sensitivity.
Electronic and digital certificates ensure secure local and remote access and allow only authorized employees, contractor employees, or other affiliated individuals to gain access to federal information assets available through secured systems access.
Access to sensitive records is available only to authorized employees and contractor employees responsible for the management of the system and/or employees of program offices who have a need for such information. Electronic records are password-protected or PKI-protected, consistent with the requirements of the Federal Information Security Management Act (Pub. L. 107-296), and associated OMB policies, standards and guidance from the National Institute of Standards and Technology, and the General Services Administration, all records are protected from unauthorized access through appropriate administrative, physical, and technical safeguards. Access is restricted on a “need to know” basis, utilization of PIV Card access, secure VPN for Web access, and locks on doors and approved storage containers. Buildings have security guards and secured doors. Entrances are monitored through electronic surveillance equipment.
Records are disposed of in accordance with the appropriate records disposition schedule approved by the Archivist of the United States.
System managers are the same as stated in the System Location section above.
An individual requesting notification of existence of records on himself or herself should send a signed, written inquiry to the locations listed below. The request letter should be clearly marked, “PRIVACY ACT REQUEST.” The written inquiry must be signed and notarized or submitted with certification of identity under penalty of perjury. Requesters should reasonably specify the record contents being sought.
For records at locations a., g., and i.: Departmental Freedom of Information and Privacy Act Officer, Room A300, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230.
For records at locations b., c., and j.: U.S. Census Bureau, Freedom of Information and Privacy Act Officer, Room 8H027, 4600 Silver Hill Road, Washington, DC 20233-3700.
For records at locations d. and m.: National Institute of Standards and Technology, Freedom of Information and Privacy Act Officer, Room 1710, 100 Bureau Drive, Gaithersburg, MD 20899.
For records at locations e., f., and o.: National Oceanic and Atmospheric Administration, Freedom of Information and Privacy Act Officer, Room 9719, SSMC3, 1315 East-West Highway, Silver Spring, MD 20910.
For records at locations h.and p.: U.S. Patent and Trademark Office, Freedom of Information and Privacy Act Officer, 600 Dulany Street, Madison Building, East, Room 10B20, Alexandria, Virginia 22313.
For records at location k.: Bureau of Industry and Security, Freedom of Information and Privacy Act Officer, Room 6622, 1401 Constitution Avenue NW., Washington, DC 20230.
For records at location l.: International Trade Administration, Freedom of Information and Privacy Act Officer, Room 40003, 1401 Constitution Avenue NW., Washington, DC 20230.
For records at location n.: National Telecommunications and Information Administration, Freedom of Information and Privacy Act Officer, Room 4713, 1401 Constitution Avenue NW., Washington, DC 20230.
For records at location q.: Office of Inspector General, Freedom of Information and Privacy Act Officer, Room 7892, 1401 Constitution Avenue NW., Washington, DC 20230.
An individual requesting access to records on himself or herself should send a signed, written inquiry to the same address as stated in the Notification Procedure section above. The request letter should be clearly marked, “PRIVACY ACT REQUEST.” The written inquiry must be signed and notarized or submitted with certification of identity under penalty of perjury. Requesters should specify the record contents being sought.
An individual requesting corrections or contesting information contained in his or her records must send a signed, written request inquiry to the same address as stated in the Notification Procedure section above. Requesters should reasonable identify the records, specify the information they are contesting and state the corrective action sought and the reasons for the correction with supporting justification showing how the record is incomplete, untimely, inaccurate, or irrelevant.
The Department's rules for access, for contesting contents, and for appealing initial determination by the individual concerned appear in 15 CFR part 4, Appendix B.
The information contained in these records is provided by or verified by: The subject individual of the record, supervisors, other personnel documents, other Department systems, access log records and sensors and non-Federal sources such as private employers and their agents, along with those authorized by the individuals to furnish information.
Pursuant to 5 U.S.C. 552a(j)(2), (k)(1), (k)(2), and (k)(5), all information and material in the record which meets the criteria of these subsections are exempted from the notice, access, and contest requirements under 5 U.S.C. 552a(c)3, (d), (e)(1), (e)(4) (G), (H), and (I), and (f) of the agency regulations because of the necessity to exempt this information and material in order to accomplish the law enforcement function of the agency, to prevent disclosure of classified information as required by Executive Order 12958, as amended by Executive Order 13292, to assure the protection of the President, to prevent subjects of investigation from frustrating the investigatory process, to prevent the disclosure of investigative techniques, to fulfill commitments made to protect the confidentiality of information, and to avoid endangering these sources and law enforcement personnel. In a notice of proposed rulemaking, which is published separately in today's
The City of Mobile, grantee of FTZ 82, submitted a notification of proposed production activity to the FTZ Board on behalf of Outokumpu Stainless USA, LLC (Outokumpu), located in Calvert, Alabama. The notification conforming to the requirements of the regulations of
The Outokumpu facility is located within Subzone 82I. The facility is used for the production of stainless steel mill products. Pursuant to 15 CFR 400.14(b), FTZ activity would be limited to the specific foreign-status materials/components and specific finished products described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.
Production under FTZ procedures could exempt Outokumpu from customs duty payments on the foreign status materials/components used in export production. On its domestic sales, Outokumpu would be able to choose the duty rates during customs entry procedures that apply to: Granulated slag (slag sand); slag, dross and scalings; stainless steel in ingots and other primary forms; hot-rolled stainless steel coils; hot-rolled stainless steel not in coils; cold-rolled stainless steel not in coils; and, stainless steel sheets and plates (duty-free) for the foreign status materials/components noted below. Customs duties also could possibly be deferred or reduced on foreign status production equipment.
The materials/components sourced from abroad include: Fluorspar containing by weight 97% or less of calcium fluoride; ferromanganese containing by weight more than 1% but less than 2% of carbon; ferromanganese containing by weight not more than 1% of carbon; ferrosilicon containing by weight more than 80% but not more than 90% silicon; ferrosilicon containing by weight more than 90% silicon; ferrochromium; ferronickel; ferro-niobium; ferro-boron; copper waste and scrap; unwrought nickel; unwrought nickel alloys; unwrought aluminum (other than alloy); unwrought molybdenum, including bars and rods obtained by simple sintering; unwrought titanium in rock or powder form; titanium castings; and, titanium in bars, rods, profiles and wires (duty rate ranges from duty-free to 15%). The request indicates that ferrosilicon may be subject to an antidumping/countervailing duty (AD/CVD) order. The FTZ Board's regulations (15 CFR 400.14(e)) require that merchandise subject to AD/CVD actions be admitted to the zone in privileged foreign status (19 CFR 146.41). In addition, the request indicates that all foreign status ferrosilicon, molybdenum and titanium classified under HTSUS Subheadings 7202.21, 8102.94, 8108.20 and 8108.90 will be admitted to the subzone in privileged foreign status (19 CFR 146.41), thereby precluding inverted tariff benefits on such items.
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is June 17, 2015.
A copy of the notification will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230-0002, and in the “Reading Room” section of the Board's Web site, which is accessible via
For further information, contact Elizabeth Whiteman at
An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the City of Mobile, grantee of FTZ 82, requesting authority to reorganize and expand the zone under the alternative site framework (ASF) adopted by the FTZ Board (15 CFR Sec. 400.2(c)). The ASF is an option for grantees for the establishment or reorganization of zones and can permit significantly greater flexibility in the designation of new subzones or “usage-driven” FTZ sites for operators/users located within a grantee's “service area” in the context of the FTZ Board's standard 2,000-acre activation limit for a zone. The application was submitted pursuant to the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally docketed on May 1, 2015.
FTZ 82 was approved by the FTZ Board on February 24, 1982 (Board Order 208, 48 FR 9052, 3/3/1983) and expanded on February 27, 1990 (Board Order 464, 55 FR 8159, 3/7/1990) and on December 19, 2003 (Board Order 1312, 69 FR 48, 1/2/2004).
The current zone includes the following sites:
The grantee's proposed service area under the ASF would be the Counties of Mobile, Baldwin, Butler, Choctaw, Clarke, Conecuh, Escambia, Monroe, Washington and Wilcox, as described in the application. If approved, the grantee would be able to serve sites throughout the service area based on companies' needs for FTZ designation. The proposed service area is within and adjacent to the Mobile Customs and Border Protection port of entry.
The applicant is requesting authority to reorganize and expand its existing zone as follows: Restore 80 acres at Site 1 (new acreage—1,943 acres); Sites 1 (as modified), 2, 3, 4, 7, 9, 13 and 18 would become “magnet” sites; and, Sites 14, 15, 16, 17 and 19 would become “usage-driven” sites. The ASF allows for the possible exemption of one magnet site from the “sunset” time limits that generally apply to sites under the ASF, and the applicant proposes that modified Site 1 be so exempted. The application would have no impact on FTZ 82's previously authorized subzones.
In accordance with the FTZ Board's regulations, Camille Evans of the FTZ Staff is designated examiner to evaluate and analyze the facts and information presented in the application and case record and to report findings and recommendations to the FTZ Board.
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is July 7, 2015. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to July 22, 2015.
A copy of the application will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230-0002, and in the “Reading Room” section of the FTZ Board's Web site, which is accessible via
The Industrial Development Board of Blount County and the Cities of Alcoa and Maryville, Tennessee, grantee of FTZ 148, submitted a notification of proposed production activity to the FTZ Board on behalf of CoLinx, LLC (CoLinx), located in Crossville, Tennessee. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on April 29, 2015.
The CoLinx facilities are located within Sites 2, 6 and 7 of FTZ 148. The facilities are used for the distribution and assembly of kits of bearing products. Pursuant to 15 CFR 400.14(b), FTZ activity would be limited to the specific foreign-status materials and components and specific finished products described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.
Production under FTZ procedures could exempt CoLinx from customs duty payments on the foreign status components used in export production. On its domestic sales, CoLinx would be able to choose the duty rates during customs entry procedures that apply to: Mounted unit roller assemblies (housed, spherical roller bearing units); and, mounted unit ball assemblies (housed ball bearing units) (duty rate 4.5%) for the foreign status inputs noted below. Customs duties also could possibly be deferred or reduced on foreign status production equipment.
The components and materials sourced from abroad include: Mineral oil based, lithium soap thickened bearing grease; double row insert bearings (spherical rollers), nitrile rubber contact lip seals with spring-loaded lips; and, plastic end caps for bearing housings (duty rate ranges from 2.5% to 1.3¢/kg + 5.7%).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is June 17, 2015.
A copy of the notification will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230-0002, and in the “Reading Room” section of the Board's Web site, which is accessible via
For further information, contact Elizabeth Whiteman at
International Trade Administration, Department of Commerce.
Notice.
The United States Department of Commerce, International Trade Administration, is organizing an education mission to South Africa and Ghana with an optional stop in the Côte d'Ivoire. Department of Commerce is partnering with the Department of State's EducationUSA Advising Centers in each location. This trade mission will be led by a senior Department of Commerce official and the emphasis will be on higher education programs, community college programs and summer, undergraduate and graduate programs.
This mission will seek to connect U.S. higher education institutions to potential students and university/institution partners in these three African countries. The mission will include student fairs organized by Education USA, embassy briefings, site visits, and networking events in our target cities of Johannesburg, Accra, and Abidjan. Participation in the Education Mission to these nations, rather than traveling independently to each market, will enhance the ability of participants to secure appropriate meetings with productive contacts in the target markets.
Summer programs seeking to participate should be appropriately accredited by an accreditation body recognized by the U.S. Department of Education. Community colleges, undergraduate and graduate programs seeking to participate should be accredited by a recognized accreditation body listed in Council for Higher Education Accreditation (CHEA) or Accrediting Council for Education and Training (ACCET), in the Association of Specialized and Professional Accreditors (ASPA), or any accrediting body recognized by the U.S. Department of Education.
The delegation will include representatives from approximately 25 different educational institutions.
The goals of the United States Education Mission to Africa are: (1) To help participants gain market exposure and to introduce participants to the vibrant African market in the countries of South Africa, Ghana, and Côte d'Ivoire (2) to help participants assess current and future business prospects by establishing valuable contacts with prospective students and educational institutions/partners; and (3) to help participants develop market knowledge and relationships leading to student recruitment and potential partnerships.
• Arrive in Johannesburg.
• Check into hotel.
• Welcome and Briefing from the U.S. and Foreign Commercial Service.
• Visit to Oprah Winfrey's Leadership Academy.
• Visit to schools.
• Networking reception.
• Additional visits to schools.
• Education Fair.
• Travel to Accra, Ghana.
• Travel recovery.
• Welcome and briefing from the U.S. and Foreign Commercial Service.
• Visits to schools.
• Reception at the U.S. Ambassador's residence.
• Education Fair.
• Depart to Abidjan, Côte d'Ivoire for optional stop or return to the United States on own itinerary.
Welcome and briefing from the U.S. Department of State (EducationUSA)
• Visits to schools.
• Education Fair.
• Reception.
• Departure to the USA.
All parties interested in participating in the Education Trade Mission to Africa must complete and submit an application package for consideration by the Department of Commerce. All applicants will be evaluated on their ability to meet certain conditions and best satisfy the selection criteria as outlined below. The mission will open on a rolling basis to a minimum of 20 and a maximum of 25 appropriately accredited U.S. educational institutions. U.S. educational institutions already recruiting in Africa, as well as U.S. education institutions seeking to enter the African market for the first time, may apply.
After an institution has been selected to participate on the mission, a payment to the Department of Commerce in the form of a participation fee is required. The participation fee is $2,800 for one principal representative from each non-profit educational institution or educational institution with less than 500 employees and $3,300 for for-profit universities with over 500 employees.
An applicant must submit a timely, completed and signed mission application and supplemental application materials, including adequate information on course offerings, primary market objectives, and goals for participation. The institution must have appropriate accreditation as specified per paragraph one above. The institution must be represented at the student fair by an employee. No agents will be allowed to represent a school on the mission or participate at the student fair. Agents will also not be allowed into the fairs to solicit new partnerships. If the Department of Commerce receives an incomplete application, the Department may reject the application, request additional information, or take the lack of information into account when evaluating the applications.
Participants must travel to both stops in South Africa and Ghana on the mission. Côte d'Ivoire is the only optional stop.
Each applicant must certify that the services it seeks to export through the mission are either produced in the United States, or, if not, marketed under the name of a U.S. firm and have at least 51 percent U.S. content of the value of the service.
• Consistency of the applicant's goals and objectives with the stated scope of the mission.
• Applicant's potential for doing business in Africa, including the likelihood of service exports (education)/knowledge transfer resulting from the mission.
Referrals from political organizations and any documents containing references to partisan political activities (including political contributions) will be removed from an applicant's submission and will not be considered during the selection process.
Mission recruitment will be conducted in an open and public manner, including publication in the
Enforcement and Compliance, International Trade Administration, Department of Commerce.
On January 30, 2015, the Department of Commerce (“the Department”) published in the
Brendan Quinn or Erin Begnal, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-5848 or (202) 482-1442, respectively.
On January 30, 2015, the Department published the
The Department conducted this review in accordance with section 751(a)(1)(B) of the Tariff Act of 1930, as amended (“the Act”).
Merchandise covered by the order is pure magnesium regardless of chemistry, form or size, unless expressly excluded from the scope of the order. Pure magnesium is a metal or alloy containing by weight primarily the element magnesium and produced by decomposing raw materials into magnesium metal. Pure primary magnesium is used primarily as a chemical in the aluminum alloying, desulfurization, and chemical reduction industries. In addition, pure magnesium is used as an input in producing magnesium alloy. Pure magnesium encompasses products (including, but not limited to, butt ends, stubs, crowns and crystals) with the following primary magnesium contents:
(1) Products that contain at least 99.95% primary magnesium, by weight (generally referred to as “ultra pure” magnesium);
(2) Products that contain less than 99.95% but not less than 99.8% primary magnesium, by weight (generally referred to as “pure” magnesium); and
(3) Products that contain 50% or greater, but less than 99.8% primary magnesium, by weight, and that do not conform to ASTM specifications for alloy magnesium (generally referred to as “off-specification pure” magnesium).
“Off-specification pure” magnesium is pure primary magnesium containing magnesium scrap, secondary magnesium, oxidized magnesium or impurities (whether or not intentionally added) that cause the primary magnesium content to fall below 99.8% by weight. It generally does not contain, individually or in combination, 1.5% or more, by weight, of the following alloying elements: Aluminum, manganese, zinc, silicon, thorium, zirconium and rare earths.
Excluded from the scope of the order are alloy primary magnesium (that meets specifications for alloy magnesium), primary magnesium anodes, granular primary magnesium (including turnings, chips and powder) having a maximum physical dimension (
Pure magnesium products covered by the order are currently classifiable under Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings 8104.11.00, 8104.19.00, 8104.20.00, 8104.30.00, 8104.90.00, 3824.90.11, 3824.90.19 and 9817.00.90. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope is dispositive.
As explained above, in the
After issuing the
The Department determined, and CBP shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review.
Additionally, consistent with the Department's refinement to its assessment practice in NME cases, because the Department determined that TMI/TMM had no shipments of subject merchandise during the POR, any suspended entries that entered under TMI/TMM's antidumping duty case number (
The following cash deposit requirements will be effective for all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of this notice of final results of the administrative review, as provided by section 751(a)(2)(C) of the Act: (1) For TMI/TMM, which claimed no shipments, the cash deposit rate will remain unchanged from the rate assigned to TMI/TMM in the most recently completed review of the company; (2) for previously investigated or reviewed PRC and non-PRC exporters who are not under review in this segment of the proceeding but who have separate rates, the cash deposit rate will continue to be the exporter-specific rate published for the most recent period; (3) for all PRC exporters of subject merchandise that have not been found to be entitled to a separate rate, the cash deposit rate will be the PRC-wide rate of 111.73 percent;
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
We are issuing and publishing these final results and this notice in accordance with sections 751(a)(1) and 777(i) of the Act.
International Trade Administration, Department of Commerce.
Notice and Call for Applications.
The U.S. Department of Commerce (DOC) announces that it will begin accepting applications for the International Buyer Program (IBP) Select service for calendar year 2016 (January 1, 2016 through December 31, 2016). This announcement sets out the objectives, procedures and application review criteria for IBP Select. Under IBP Select, the International Trade Administration (ITA) recruits international buyers to U.S. trade shows to meet with U.S. suppliers exhibiting at those shows. The main difference between IBP and IBP Select is that IBP offers worldwide promotion, whereas IBP Select focuses on promotion and recruitment in up to five international markets. Specifically, through the IBP Select, the DOC selects domestic trade shows that will receive DOC assistance in the form of targeted promotion and recruitment in up to five foreign markets, export counseling to exhibitors, and export counseling and matchmaking services at the trade show. This notice covers selection for IBP Select participation during calendar year 2016.
Applications for IBP Select must be received by June 22, 2015.
Applications may be submitted by any of the following methods: (1) Mail/Hand Delivery Service: International Buyer Program, Trade Promotion Programs, International Trade Administration, U.S. Department of Commerce, Ronald Reagan Building, 1300 Pennsylvania Ave. NW., Suite 800—Mezzanine Level—Atrium North, Washington, DC 20004; (2) Facsimile: (202) 482-7800; or (3) email:
Vidya Desai, Acting Director, International Buyer Program, Trade Promotion Programs, International Trade Administration, U.S. Department of Commerce, 1300 Pennsylvania Ave. NW., Ronald Reagan Building, Suite 800M—Mezzanine Level—Atrium North, Washington, DC 20004; Telephone (202) 482-2311; Facsimile: (202) 482-7800; Email:
The IBP was established in the Omnibus Trade and Competitiveness Act of 1988 (Pub. L. 100-418, title II, § 2304, codified at 15 U.S.C. 4724) to bring international buyers together with U.S. firms by promoting leading U.S. trade shows in industries with high export potential. The IBP emphasizes cooperation between the DOC and trade show organizers to benefit U.S. firms exhibiting at selected events and provides practical, hands-on assistance such as export counseling and market analysis to U.S. companies interested in exporting. Shows selected for the IBP Select will provide a venue for U.S. companies interested in expanding their sales into international markets.
Through the IBP, the DOC selects trade shows that DOC determines to be leading trade shows with participation by U.S. firms interested in exporting. DOC provides successful applicants with assistance in the form of targeted overseas promotion of the show by U.S. Embassies and Consulates; outreach to show participants about exporting;
ITA is accepting applications for IBP Select from trade show organizers of trade events taking place between January 1, 2016 and December 31, 2016. Selection of a trade show for IBP Select is valid for one event. A trade show organizer seeking selection for a recurring event must submit a new application for selection for each occurrence of the event. For events that occur more than once in a calendar year, the trade show organizer must submit a separate application for each event.
There is no fee required to submit an application. For IBP Select in calendar year 2016, ITA expects to select approximately 6 events from among the applicants. ITA will select those events that are determined to most clearly support the statutory mandate in 15 U.S.C. 4721 to promote U.S. exports, especially those of small- and medium-sized enterprises, and that best meet the selection criteria articulated below. Once selected, applicants will be required to enter into a Memorandum of Agreement (MOA) with the DOC, and submit payment of the $6,000 2016 participation fee within 30 days of written notification of acceptance into IBP Select. The MOA constitutes an agreement between the DOC and the show organizer specifying which responsibilities for international promotion and export assistance services at the trade shows are to be undertaken by the DOC as part of the IBP Select and, in turn, which responsibilities are to be undertaken by the show organizer. Anyone requesting application information will be sent a sample copy of the MOA along with the application form and a copy of this
Selection as an IBP Select show does not constitute a guarantee by DOC of the show's success. IBP Select participation status is not an endorsement of the show except as to its international buyer activities. Non-selection of an applicant for IBP Select status should be viewed as a determination that the event will not be successful in promoting U.S. exports.
(a) Export Potential: The trade show promotes products and services from U.S. industries that have high export potential, as determined by DOC sources, including industry analysts' assessment of export potential, ITA best prospects lists, and U.S. export analysis.
(b) Level of International Interest: The trade show meets the needs of a significant number of overseas markets and corresponds to marketing opportunities as identified by ITA. Previous international attendance at the show may be used as an indicator.
(c) Scope of the Show: The event must offer a broad spectrum of U.S. made products and services for the subject industry. Trade shows with a majority of U.S. firms as exhibitors are given priority.
(d) U.S. Content of Show Exhibitors: Trade shows with exhibitors featuring a high percentage of products produced in the United States or products with a high degree of U.S. content will be preferred.
(e) Stature of the Show: The trade show is clearly recognized by the industry it covers as a leading event for the promotion of that industry's products and services both domestically and internationally, and as a showplace for the latest technology or services in that industry.
(f) Level of Exhibitor Interest: There is significant interest on the part of U.S. exhibitors in receiving international business visitors during the trade show. A significant number of U.S. exhibitors should be new-to-export or seeking to expand their sales into additional export markets.
(g) Level of Overseas Marketing: There has been a demonstrated effort by the applicant to market prior shows overseas. In addition, the applicant should describe in detail the international marketing program to be conducted for the event, and explain how efforts should increase individual and group international attendance.
(h) Level of Cooperation: The applicant demonstrates a willingness to cooperate with ITA to fulfill the program's goals and adhere to the target dates set out in the MOA and in the event timetables, both of which are available from the program office (see the
(i) Delegation Incentives: Waived or reduced (by at least 50%) admission fees are required for international attendees who are participating in IBP Select. Delegation leaders also must be provided complimentary admission to the event. In addition, show organizers should offer a range of incentives to delegations and/or delegation leaders recruited by the DOC overseas posts. Examples of incentives to international visitors and to organized delegations include: Special organized events, such as receptions, meetings with association executives, briefings, and site tours; or complimentary accommodations for delegation leaders.
The Office of Management and Budget (OMB) has approved the information collection requirements of the application to this program (0625-0151) under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
For further information please contact: Vidya Desai, Acting Director, International Buyer Program (
National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. The draft revised information collection form and guidance not yet approved by OMB can be reviewed at
Written comments must be submitted on or before July 7, 2015.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Julia Royster, Office of Habitat Conservation, Restoration Center, 1315 East-West Highway, Silver Spring, 20910, (301) 427-8686, or
This request is for revision and extension of a currently approved information collection.
The NOAA Restoration Center (NOAA RC) provides technical and financial assistance to identify, develop, implement, and evaluate community-driven habitat restoration projects. Awards are made as grants or cooperative agreements under the authority of the Magnuson-Stevens Fishery Conservation and Management Act of 2006, 16 U.S.C. 1891a and the Fish and Wildlife Coordination Act, 16 U.S.C. 661, as amended by the Reorganization Plan No. 4 of 1970.
The NOAA RC requires specific information on habitat restoration projects that we fund, as part of routine progress reporting. Recipients of NOAA RC funds submit information such as project location, restoration techniques used, species benefited, acres restored, stream miles opened to access for diadromous fish, volunteer participation, and other parameters.
The required information enables NOAA to track, evaluate and report on coastal and marine habitat restoration and demonstrate accountability for federal funds. This information is used to populate a database of NOAA RC-funded habitat restoration. The database, with its robust querying capabilities, is instrumental to provide accurate and timely responses to NOAA, Department of Commerce, Congressional and constituent inquiries. It also facilitates reporting by NOAA on the Government Performance and Results Act “acres restored” performance measure. Grant recipients are required by the NOAA Grants Management Division to submit periodic performance reports and a final report for each award; this collection stipulates the information to be provided in these reports.
Since the last extension of this collection approved by OMB, the database used to track and report on restoration projects has been updated and redesigned. The NOAA RC is revising and streamlining the progress report form to ensure it aligns with the updated database and collects only the information we need to effectively track, evaluate, and report on restoration projects completed with federal funds. The NOAA RC has also divided the information collected into two forms for simplicity. The Performance Report Form focuses on tracking project implementation, milestones, performance measures, monitoring, and expenditures. The Administrative Form only applies to recipients with an award that will implement multiple projects. It collects information on the administration of the award, the number of projects supported by the award, and award expenditures.
NOAA's preferred method of collection is submission of electronic fillable forms attached to an award file in Grants Online, NOAA's award management system. If the recipient does not have electronic access to submit the form, mailed paper forms will be accepted.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a joint public meeting of its Monkfish Committee and Advisory Panel to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Tuesday, May 26, 2015 at 9 a.m.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The Monkfish Committee and Advisory Panel will meet to review Plan Development Team work on alternatives under consideration and impacts of these alternatives in Framework Adjustment 9 and select preferred alternatives. The Committee and Advisory Panel will also address other business as necessary.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Western Pacific Fishery Management Council (Council) will hold the Second Meeting of its Protected Species Advisory Committee (PSAC) in Honolulu, HI. The PSAC will receive updates on fishery management actions and protected species activities, review protected species interactions in the Hawaii longline fishery, discuss monitoring of Fishery Ecosystem Plans (FEP) through annual reports, and review the Council's research priorities related to protected species. The PSAC may make recommendations on these topics.
The PSAC meeting will be held between 9 a.m. and 5 p.m. on May 27-28, 2015.
The meeting will be held at the Council Office Conference Room, 1164 Bishop Street, Suite 1400, Honolulu, HI; telephone: (808) 522-8220.
Kitty M. Simonds, Executive Director; telephone: (808) 522-8220.
Public comment opportunity will be provided. The order in which agenda items are addressed may change. The meetings will run as late as necessary to complete scheduled business.
Agenda:
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kitty M. Simonds, (808) 522-8220 (voice) or (808) 522-8226 (fax), at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Gulf of Mexico Fishery Management Council (Council) will hold a joint meeting of its Special Coral Scientific and Statistical Committee (SSC) and Coral Advisory Panel (AP).
The meeting will convene on Wednesday, May 27, 2015, from 8:30 a.m. until 4:30 p.m.
The meeting will be held at the Gulf of Mexico Fishery Management Council's office, 2203 North Lois Avenue, Suite 1100, Tampa, FL 33607.
Dr. Morgan Kilgour, Ph.D., Fishery Biologist, Gulf of Mexico Fishery Management Council; telephone: (813) 348-1630; fax: (813) 348-1711; email:
The items of discussion on the agenda are as follows:
This agenda may be modified as necessary to facilitate the discussion of pertinent materials up to and during the scheduled meeting.
For meeting materials see folder “Joint Special Coral SSC and Coral AP Meeting—2015-05” on Gulf Council file server. To access the file server, the URL is
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kathy Pereira at the Council Office (see
The times and sequence specified in this agenda are subject to change.
16 U.S.C. 1801
National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Written comments must be submitted on or before July 7, 2015.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Peter Edwards, (301) 563-1145 Ext 145 or at
This request is for a new information collection. The purpose of this
Manell-Geus is one of ten sites in the nation selected as a focus area for NOAA's Habitat Blueprint initiative. Community support and engagement are key elements towards successfully building resilience. We intend to use the information collected through this instrument for research purposes as well as measuring and improving the results of our coral reef protection programs. Because many of our efforts to protect reefs rely on education and changing attitudes toward reef protection, the information collected will allow NOAA staff to ensure programs are designed appropriately at the start, future program evaluation efforts are as successful as possible, and outreach efforts are targeting the intended recipients with useful information.
Information will be collected using a combination of approaches namely household surveys, focus groups, and key informant interviews. The combination of these approaches is the most efficient and effective way to collect this kind of information at the village level for this U.S. jurisdiction.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
United States Patent and Trademark Office, Commerce.
Notice of closed meeting.
The National Medal of Technology and Innovation (NMTI) Nomination Evaluation Committee will meet in closed session on Tuesday, May 19, 2015. The primary purpose of the meeting is to discuss the relative merits of persons, teams, and companies nominated for the 2013 and 2014 NMTI. The Committee will consider nominations from both years in order to expedite the awards process.
The meeting will convene Tuesday, May 19, 2015, at approximately 9 a.m., and adjourn at approximately 5 p.m.
The meeting will be held at the United States Patent and Trademark Office, 600 Dulany Street, Alexandria, VA 22314.
John Palafoutas, Program Manager, National Medal of Technology and Innovation Program, United States Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313; telephone (571) 272-9821; or by electronic mail:
Pursuant to the Federal Advisory Committee Act (FACA), 5 U.S.C. app. 2, notice is hereby given that the NMTI Nomination Evaluation Committee, chartered to the United States Department of Commerce, will meet at the United States Patent and Trademark Office campus in Alexandria, Virginia.
The Secretary of Commerce is responsible for recommending to the President prospective NMTI recipients. The NMTI Nomination Evaluation Committee evaluates the nominations received pursuant to public solicitation and makes its recommendations for the Medal to the Secretary. Committee members are distinguished experts in the fields of science, technology, business, and patent law drawn from both the public and private sectors and are appointed by the Secretary for three-year terms.
The NMTI Nomination Evaluation Committee was established in accordance with the FACA. The Committee meeting will be closed to the public in accordance with the FACA and 5 U.S.C. 552b(c)(6) and (9)(B), because the discussion of the relative merit of the Medal nominations is likely to disclose information of a personal nature..
The Chief Financial Officer and Assistant Secretary for Administration, United States Department of Commerce, formally determined on April 16, 2015 pursuant to Section 10(d) of the FACA, that the meeting may be closed because Committee members are concerned with matters that are within the purview of 5 U.S.C. 552b(c)(6) and (9)(B). Due to closure of this meeting, copies of any minutes of the meeting will not be available. A copy of the determination is available for public inspection at the United States Patent and Trademark Office.
Committee for Purchase From People Who Are Blind or Severely Disabled.
Additions to the Procurement List.
This action adds products to the Procurement List that will be
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 1/30/2015 (80 FR 5092-5093), the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed additions to the Procurement List.
After consideration of the material presented to it concerning capability of qualified nonprofit agencies to provide the products and impact of the additions on the current or most recent contractors, the Committee has determined that the products listed below are 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 organizations that will furnish the products to the Government.
2. The action will result in authorizing small entities to furnish the products 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 products proposed for addition to the Procurement List.
Accordingly, the following products are added to the Procurement List:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed additions to and deletions from the Procurement List.
The Committee is proposing to add product and service to the Procurement List that will be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities, and deleted products and services previously furnished by such agencies.
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.
If the Committee approves the proposed additions, the entities of the Federal Government identified in this notice will be required to procure the product and service listed below from nonprofit agencies employing persons who are blind or have other severe disabilities.
The following product and service are proposed for addition to the Procurement List for production by the nonprofit agencies listed:
The following products and services are proposed for deletion from the Procurement List:
U.S. Army Corps of Engineers, Civil Works Directorate, Department of Army.
Notice.
In compliance with the
Consideration will be given to all comments received by July 7, 2015.
You may submit comments, identified by docket number and title, by any of the following methods:
• Federal eRulemaking Portal:
• 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.
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 the U.S. Army Corps of Engineers, Directorate of Civil Works, Office of Planning and Policy, ATTN: Douglas Gorecki, 441 G Street, Washington, DC 20314, or call 202-761-5450.
Respondents are residents living in coastal areas where public officials may call for an evacuation when a hurricane threatens. The sample population queried in this generic collection is typically identified using available hurricane risk data, including data on areas at risk from hurricane storm surge flooding, previous hurricane evacuation studies or hurricane response plans, established hurricane evacuation zones, and in coordination with State and Local governments within the study area who are responsible for hurricane emergency management and evacuation decision making.
U.S. Army Corps of Engineers, Department of Army, Department of Defense.
Notice.
In compliance with the
Consideration will be given to all comments received by July 7, 2015.
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 the U.S. Army Corps of Engineers, Institute for Water Resources, Casey Building, 8801 Telegraph Road, Alexandria, VA 22315 ATTN: Meredith Bridgers or call 703-428-8458.
Respondents to this generic collection of information via comment cards are public visitors to U.S. Army Corps of Engineers Recreation Areas. Participation is voluntary. Comment cards are distributed via two methods. In a rack, for example at a visitor center or kiosk, resulting in visitor initiated response. Or scheduled surveys where visitors are intercepted by a survey clerk. The respondent is selected from exiting visitors where one member of the party is asked to complete the card and return to the survey clerk. Recreation areas where comment cards are used meet visitation and funding thresholds or a local administrative need. Survey Clerks are staff or USACE trained volunteers. Visitors are asked questions in the following categories; previous visits, area information sources, fees charged, facilities used, facility rating, and demographics.
Department of the Army, DOD.
Notice of availability.
The U.S. Army (Army) has prepared a Record of Decision (ROD) for the Modernization and Repair of Piers 2 and 3 at Military Ocean Terminal Concord, California (MOTCO) to document the Army's selection of Alternative 1 of the Final Environmental Impact Statement (EIS) for the action. Alternative 1 was selected because it meets the purpose and need of the proposed action, and balances environmental impacts with operational flexibility by providing MOTCO with safe, functional, and efficient facilities. Alternative 1 will fully implement repairs to Pier 3 and will re-orient and modernize Pier 2 to provide more efficient access for the types of vessels that use the pier. Implementation of Alternative 1 will include extensive demolition of existing Pier 2 and reconstruction of structural elements, replacement of pier-side infrastructure and supporting facilities at Pier 2, upgrades to shore-side roads and electrical infrastructure in the immediate vicinity of Piers 2 and 3, repair piles at Pier 3, and maintenance dredging waterward of Pier 2. The ROD adopts mitigation and management measures.
The ROD can be obtained electronically at
Ms. Sarah Garner, Public Affairs Office, Surface Deployment and Distribution Command; telephone: (618) 220-6284; email:
The Army assessed the potential environmental and socioeconomic impacts associated with those actions necessary to modernize and repair Pier 2 and repair Pier 3 so the Army can maintain its ability to meet Department of Defense (DOD) mission requirements. The selected alternative implements repairs to Pier 3 and re-orients Pier 2 to provide more efficient access for the types of vessels that use the pier. The ROD incorporates the analysis contained in the Final EIS, including comments provided during the public review periods.
Potential impacts were evaluated for noise; air quality; geology, topography, and soils; water resources; biological resources; land use and coastal zone management; transportation; infrastructure; visual resources; recreational resources; socioeconomics; environmental justice and protection of children; cultural resources; and hazardous materials, hazardous waste, toxic substances, and contaminated sites. Based on the analysis described in the Final EIS, all impacts are anticipated to be less than significant.
The Army concluded that the proposed action is consistent, to the maximum extent practicable, with the enforceable policies of the San Francisco Bay Conservation and Development Commission's (BCDC's) Coastal Management Program. BCDC issued conditional concurrences to the Army's Coastal Zone Management Act Consistency Determinations for Piers 3 and 2 on January 21, 2015 and April 9, 2015, respectively. The Army will adhere to the conditions detailed in the respective amended Consistency Determinations.
The ROD adopts mitigation and management measures. The measures include (1) commitments for cultural and biological resources resulting from agency consultations and (2) existing best management practices and standard operating procedures that the Army will continue with implementation of the Alternative 1. Commitments include general and specific measures for the protection of cultural resources and the protection of federally listed species and their habitat. The best management practices and standard operating procedures address erosion control, stormwater management, energy reduction, water efficiency/conservation, hazardous materials management, spill prevention and response, munitions and explosives of concern, natural resources management,
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 Tuesday, May 19, 2015. The Public Session will begin at 8:30 a.m. and end at 5:00 p.m.
U.S. District Court for the District of Columbia, 333 Constitution Avenue NW., Courtroom #20, 6th Floor, Washington, DC 20001.
Ms. Julie Carson, Judicial Proceedings Panel, One Liberty Center, 875 N. Randolph Street, Suite 150, Arlington, VA 22203. Email:
Due to circumstances beyond the control of the Designated Federal Officer and the Department of Defense, the Judicial Proceedings since Fiscal Year 2012 Amendments Panel (“the Judicial Proceedings Panel”) was unable to provide public notification of its meeting of May 19, 2015, as required by 41 CFR 102-3.150(a). Accordingly, the Advisory Committee Management Officer for the Department of Defense, pursuant to 41 CFR 102-3.150(b), waives the 15-calendar day notification requirement.
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 to delete a system of records.
The Office of the Secretary of Defense is deleting a system of records notice from its existing inventory of record systems subject to the Privacy Act of 1974, as amended. The system of records notice is WUSU 12, USUHS Vehicle Administration Records (February 22, 1993, 58 FR 10920).
Comments will be accepted on or before June 8, 2015. This proposed action will be effective on the day following the end of the comment period unless comments are received which result in a contrary determination.
You may submit comments, identified by docket number and title, by any of the following methods:
*
*
Mrs. Cindy Allard at (571) 372-0461.
The Office of the Secretary of Defense systems of records notices subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended, have been published in the
USUHS Vehicle Administration Records (February 22, 1993, 58 FR 10920).
Reason: Based on a recent review of WUSU 12, USUHS Vehicle Administration Records, it has been determined that this function is now performed by the Department of the Navy. This system of records is covered by system of records notices NM05512-1, Vehicle Parking Permit and License Control System (October 1, 2008, 73 FR 57086) and NM05512-2, Badge and Access Control System Records (April 9, 2014, 79 FR 19593); therefore, this notice can now be deleted.
Deputy Chief Management Officer, Department of Defense (DoD).
Notice of Federal Advisory Committee Meeting.
The DoD is publishing this notice to announce the meeting of the National Commission on the Future of the Army (“the Commission”). The meeting will be partially closed to the public.
Date of the Closed Meeting, including Hearing: Tuesday, May 19, 2015, from 7:30 a.m. to 5:30 p.m.
Date of the Open Meeting, including Hearing and Commission Discussion: Wednesday, May 20, 2015, from 8:30 a.m. to 5:00 p.m.
Address of Closed Meeting, May 19: Room 3D684, Pentagon, Washington, DC 20310. Address of Open Meeting, May 20: 12th Floor, Room 12158, James Polk Building, 2521 S. Clark St., Arlington, VA 22202.
Mr. Don Tison, Designated Federal Officer, National Commission on the Future of the Army, 700 Army Pentagon, Room 3E406, Washington, DC 20310-0700, Email:
Due to circumstances beyond the control of the Designated Federal Officer and the Department of Defense, the National Commission on the Future of the Army was unable to provide public notification of its meeting of May 19-20, 2015, as required by 41 CFR 102-3.150(a). Accordingly, the Advisory Committee Management Officer for the Department of Defense, pursuant to 41 CFR 102-3.150(b), waives the 15-calendar day notification requirement. This meeting will be held under the provisions of the Federal Advisory Committee Act (FACA) 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.
May 20, 2015—Public Hearing: Congressional representatives, DoD leaders, and professional military associations are invited to speak at the public hearing on May 20, 2015 and are asked to address matters pertaining to the Army, Army National Guard, and Army Reserve, such as their common and unique interests, roles, history, organizational structure, and operational factors influencing decision-making, as well as the transfer of certain aircraft between the Army components. These witnesses are also asked to address the criteria the Commission must consider pursuant to section 1703 of the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015 (Public Law 113-291)—(a) meet current and anticipated requirements of the combatant commands; (b) achieve cost-efficiency between the regular and reserve components of the Army, manages military risk, takes advantage of the strengths and capabilities of each, and considers fully burdened lifecycle costs; (c) ensure that the regular and reserve components of the Army have the capacity needed to support current and anticipated homeland defense and disaster assistance missions in the United States; (d) provide for sufficient numbers of regular members of the Army to provide a base of trained personnel from which the personnel of the reserve components of the Army could be recruited; (e) maintain a peacetime rotation force to avoid exceeding operational tempo goals of 1:2 for active members of the Army and 1:5 for members of the reserve components of the Army; and (f) manage strategic and operational risk by making tradeoffs among readiness, efficiency, effectiveness, capability, and affordability. The Commission Chairman will provide an update on Commission activities, and individual Commissioners will, if applicable, report their activities, information collection, and analyses to the full Commission.
Office of Postsecondary Education (OPE), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501
Interested persons are invited to submit comments on or before June 8, 2015.
Comments submitted in response to this notice should be submitted electronically through the Federal eRulemaking Portal at
For specific questions related to collection activities, please contact Maria Chang, 202-219-7001.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Environmental Protection Agency (EPA).
Notice.
In compliance with the Paperwork Reduction Act (PRA), this document announces that EPA is planning to submit an Information Collection Request (ICR) to the Office of Management and Budget (OMB). The ICR, entitled: “Foreign Purchaser Acknowledgement Statement of Unregistered Pesticides” and identified by EPA ICR No. 0161.13 and OMB Control No. 2070-0027, represents the renewal of an existing ICR that is scheduled to expire on January 31, 2016. Before submitting the ICR to OMB for review and approval, EPA is soliciting comments on specific aspects of the proposed information collection that is summarized in this document. The ICR and accompanying material are available in the docket for public review and comment.
Comments must be received on or before July 7, 2015.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2015-0231, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about
Scott Drewes, Field and External Affairs Division (7506P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number: (703) 347-0107; email address:
Pursuant to PRA section 3506(c)(2)(A) (44 U.S.C. 3506(c)(2)(A)), EPA specifically solicits comments and information to enable it to:
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 estimates 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.
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,
The ICR, which is available in the docket along with other related materials, provides a detailed explanation of the collection activities and the burden estimate that is only briefly summarized here:
There is a decrease of 6,477 hours in the total estimated respondent burden compared with that identified in the ICR currently approved by OMB. This decrease reflects EPA's updating of burden estimates for this collection based upon historical information on the number of responses per year. Based upon revised estimates, the number of exported products has decreased from 900 to 611, with a corresponding decrease in the associated burden. This change is an adjustment.
EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. EPA will issue another
44 U.S.C. 3501
Environmental Protection Agency (EPA).
Notice.
EPA has granted emergency exemptions under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) for use of pesticides as listed in this notice. The exemptions were granted during the period October 1, 2014 to March 31, 2015 to control unforeseen pest outbreaks.
Susan Lewis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2015-0301, is available at
EPA has granted emergency exemptions to the following State and Federal agencies. The emergency exemptions may take the following form: Crisis, public health, quarantine, or specific.
Under FIFRA section 18 (7 U.S.C. 136p), EPA can authorize the use of a pesticide when emergency conditions exist. Authorizations (commonly called emergency exemptions) are granted to State and Federal agencies and are of four types:
1. A “specific exemption” authorizes use of a pesticide against specific pests on a limited acreage in a particular State. Most emergency exemptions are specific exemptions.
2. “Quarantine” and “public health” exemptions are emergency exemptions issued for quarantine or public health purposes. These are rarely requested.
3. A “crisis exemption” is initiated by a State or Federal agency (and is confirmed by EPA) when there is insufficient time to request and obtain EPA permission for use of a pesticide in an emergency.
EPA may deny an emergency exemption: If the State or Federal agency cannot demonstrate that an emergency exists, if the use poses unacceptable risks to the environment, or if EPA cannot reach a conclusion that the proposed pesticide use is likely to result in “a reasonable certainty of no harm” to human health, including exposure of residues of the pesticide to infants and children.
If the emergency use of the pesticide on a food or feed commodity would result in pesticide chemical residues, EPA establishes a time-limited tolerance meeting the “reasonable certainty of no harm standard” of the Federal Food, Drug, and Cosmetic Act (FFDCA).
In this document: EPA identifies the State or Federal agency granted the exemption, the type of exemption, the pesticide authorized and the pests, the crop or use for which authorized, and the duration of the exemption.
7 U.S.C. 136
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) is planning to submit an information collection request (ICR), “Part 70 State Operating Permit Program (Renewal)” (EPA ICR No. 1587.12, OMB Control No. 2060.0243) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Comments must be submitted on or before July 7, 2015.
Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2004-0015, to the
For additional submission methods, the full EPA public comment policy and general guidance on making effective comments, please visit
Dylan C. Mataway-Novak, Air Quality Policy Division, Office of Air Quality Planning and Standards, C504-05, U.S. Environmental Protection Agency, Research Triangle Park, NC; telephone number: (919) 541-5795; fax number: (919) 541-5509; email address:
Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at
Pursuant to section 3506(c)(2)(A) of the PRA, the EPA is soliciting comments and information to enable it to: (i) 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; (ii) 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; (iii) enhance the quality, utility and clarity of the information to be collected; and (iv) 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,
In order to receive an operating permit for a major or other source subject to the permitting program, the applicant must conduct the necessary research, perform the appropriate analyses and prepare the permit application with documentation to demonstrate that its facility meets all applicable statutory and regulatory requirements. Specific activities and requirements are listed and described in the Supporting Statement for the 40 CFR part 70 ICR.
Under 40 CFR part 70, state, local and tribal permitting authorities review permit applications, provide for public review of proposed permits, issue permits based on consideration of all technical factors and public input and review information submittals required of sources during the term of the permit. Also, under 40 CFR part 70, the EPA reviews certain actions of the permitting authorities and provides oversight of the programs to ensure that they are being adequately implemented and enforced. Consequently, information prepared and submitted by sources is essential for sources to receive permits, and for federal, state, local and tribal permitting authorities to adequately review the permit applications and thereby properly administer and manage the program.
Information that is collected is handled according to EPA's policies set forth in title 40, chapter 1, part 2, subpart B—Confidentiality of Business Information (
Responsible Agency: Office of Federal Activities, General Information (202) 564-7146 or
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 Advisory Committee was established by Public Law 98-181, November 30, 1983, to advise the Export-Import Bank on its programs and to provide comments for inclusion in the report on competitiveness of the Export-Import Bank of the United States to Congress.
Farm Credit Administration.
Notice is hereby given, pursuant to the Government in the Sunshine Act, of the regular meeting of the Farm Credit Administration Board (Board).
The regular meeting of the Board will be held at the offices of the Farm Credit Administration in McLean, Virginia, on May 14, 2015, from 9:00 a.m. until such time as the Board concludes its business.
Dale L. Aultman, Secretary to the Farm Credit Administration Board, (703) 883-4009, TTY (703) 883-4056.
Farm Credit Administration, 1501 Farm Credit Drive, McLean, Virginia 22102-5090. Submit attendance requests via email to
Parts of this meeting of the Board will be open to the public (limited space available), and parts will be closed to the public. Please send an email to
* Session Closed-Exempt pursuant to 5 U.S.C. Section 552b(c)(8)and (9).
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before July 7, 2015. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele at (202) 418-2991.
This information collection addresses requirements to carry out the rural broadband experiments the Commission adopted in the
Federal Communications Commission.
Notice.
In this document, the Office of Engineering and Technology (OET) and Wireless Telecommunications Bureau (WTB) seek information on technologies and techniques they will implement to share spectrum with existing unlicensed operations and technologies such as Wi-Fi that are widely used by the public. Parties within the wireless industry are developing a version of commercial wireless LTE technology called LTE-Unlicensed (LTE-U) that is intended for operations in certain unlicensed frequency bands. LTE-U could operate in conjunction with licensed commercial wireless services using a technique called Licensed Assisted Access (LAA) whereby a channel in an operator's licensed spectrum is used as the primary channel for devices operating on an unlicensed basis.
Comments must be filed on or before June 11, 2015 and reply comments must be filed on or before June 26, 2015.
You may submit comments, identified by ET Docket No. 15-105, by any of the following methods:
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•
•
For detailed instructions for submitting comments and additional information on the process, see the
Ira Keltz, Office of Engineering and Technology, (202) 418-0616, email
This is a summary of the Commission's document, ET Docket No. 15-105, DA 15-516, released May 5, 2015. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street SW., Washington, DC 20554. The complete text of this document also may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc., 445 12th Street SW., Room, CY-B402, Washington, DC 20554. The full text may also be downloaded at:
Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments on or before the date indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS).
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• Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.
• All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.
• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington, DC 20554.
People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to
Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW., CY-A257, Washington, DC 20554. These documents will also be available via ECFS.
1. Parties within the wireless industry are developing a version of commercial wireless LTE technology called LTE-Unlicensed (LTE-U) that is intended for operations in certain unlicensed frequency bands. LTE-U could operate in conjunction with licensed commercial wireless services using a technique called Licensed Assisted Access (LAA) whereby a channel in an operator's licensed spectrum is used as the primary channel for devices operating on an unlicensed basis. By this public notice, the Office of Engineering and Technology and the Wireless Telecommunications Bureau seek information on these technologies and the techniques they will implement to share spectrum with existing unlicensed operations and technologies such as Wi-Fi that are widely used by the public.
2. A number of organizations have approached the Commission about the development of LTE-U and LAA in the context of the 3.5 GHz and 5 GHz proceedings, which would make spectrum available for general access and unlicensed use, respectively.
3. The 3rd Generation Partnership Project (3GPP), which develops standards for commercial wireless technologies, is developing the LTE-U and LAA standards. The Institute of Electrical and Electronics Engineers Working Group 802.11 (IEEE 802.11) develops standards for wireless local area networks such as Wi-Fi and other unlicensed technologies. Although many parties participate in both standards bodies, the organizations have a limited historical working relationship given their different backgrounds and scopes. We are aware that some companies have formed the LTE-U Forum,
4. The Commission has historically adopted rules that are technologically neutral and remains committed to this policy. With this principle in mind, we are opening this docket to provide an opportunity for interested parties to enable a fully participatory and transparent discussion about LTE-U and LAA technologies and how they will coexist with other technologies, including Wi-Fi. We specifically seek information on the following topics:
• What different variations of LTE in unlicensed spectrum (
• What is the current state of development of the LTE-U and LAA standards and what is the anticipated schedule for completion of the LTE-U and LAA standards?
• What is the status of coordination between 3GPP and the IEEE 802.11 on LTE-U and LAA, and what is the process for coming to agreement on appropriate sharing characteristics to ensure co-existence with the IEEE 802.11 family of standards?
• What are the anticipated technical characteristics (
• What tests or analyses have been performed to understand the impact of LTE-U and LAA on the existing commercial wireless and unlicensed ecosystems?
• Precisely how will LAA integrate licensed and unlicensed carriers, particularly with regard to controlling access to spectrum?
• To what extent is a standalone form of LTE-U being developed, that is, a form that can operate without a licensed primary channel?
• Are existing devices capable of software upgrades to implement LTE-U and LAA?
• What frequency bands are envisioned for deployment of LTE-U and LAA?
• What plans do carriers and manufacturers have for pre-standard deployment of LTE-U and LAA equipment including possible upgrades to 3GPP-based LTE-U or LAA and how would the above questions (particularly with respect to coexistence issues) be addressed relative to pre-standard versions of LTE-U and LAA?
5. In addition to information in response to these questions, we encourage parties to submit whatever additional information they feel is relevant to this matter.
6. This public notice is being issued pursuant to §§ 0.31 and 0.131 of the Commission's rules by the Office of Engineering and Technology and the Wireless Telecommunications Bureau.
7. For further information contact Ira Keltz in the Office of Engineering and Technology,
8. For more news and information about the Federal Communications Commission, please visit:
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments should be submitted on or before June 8, 2015. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts below as soon as possible.
Direct all PRA comments to Nicholas A. Fraser, OMB, via email
For additional information or copies of the information collection, contact Cathy Williams at (202) 418-2918. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the Web page <
47 CFR 73.1212 requires a broadcast station to identify at the time of broadcast the sponsor of any matter for which consideration is provided. For advertising commercial products or services, generally the mention of the name of the product or service constitutes sponsorship identification. In the case of television political advertisements concerning candidates for public office, the sponsor shall be identified with letters equal to or greater than four (4) percent of the vertical height of the television screen that airs for no less than four (4) seconds. In addition, when an entity rather than an individual sponsors the broadcast of matter that is of a political or controversial nature, licensee is required to retain a list of the executive officers, or board of directors, or executive committee, etc., of the organization paying for such matter. Sponsorship announcements are waived with respect to the broadcast of “want ads” sponsored by an individual but the licensee shall maintain a list showing the name, address and telephone number of each such advertiser. These lists shall be made available for public inspection.
47 CFR 73.1212(e) states that, when an entity rather than an individual sponsors the broadcast of matter that is of a political or controversial nature, the licensee is required to retain a list of the executive officers, or board of directors, or executive committee, etc., of the organization paying for such matter in its public file. Pursuant to the changes contained in 47 CFR 73.1212(e) and 47 CFR 73.3526(e)(19), this list, which could contain personally identifiable information, would be located in a public inspection file to be located on the Commission's Web site instead of being maintained in the public file at the station. Burden estimates for this change are included in OMB Control Number 3060-0214.
47 CFR 76.1615 states that, when a cable operator engaged in origination cablecasting presents any matter for which money, service or other valuable consideration is provided to such cable television system operator, the cable television system operator, at the time of the telecast, shall identify the sponsor. Under this rule section, when advertising commercial products or services, an announcement stating the
47 CFR 76.1715 state that, with respect to sponsorship announcements that are waived when the broadcast/origination cablecast of “want ads” sponsored by an individual, the licensee/operator shall maintain a list showing the name, address and telephone number of each such advertiser. These lists shall be made available for public inspection.
A final rulemaking has not been adopted by the Commission to date. The Commission would like to keep this collection in OMB's inventory. We will receive OMB final approval once the final rulemaking is adopted by the Commission.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning:
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before June 8, 2015. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Submit your PRA comments to Nicholas A. Fraser, Office of Management and Budget, via fax at 202-395-5167 or via Internet at
Benish Shah, Office of Managing Director, (202) 418-7866.
The Commission's Public Safety and Homeland Security Bureau (PSHSB) developed the Disaster Information Reporting System (DIRS) that uses electronic forms to collect Emergency Contact Information forms and through which participants may inform the Commission of damage to communications infrastructure and facilities due to major emergencies and may request resources for restoration. The Commission updated the process by increasing the number of reporting entities to ensure inclusion of wireless, wireline, broadcast, cable, VoIP, and broadband Internet access communications providers. The Commission is requesting a renewal of the currently approved collection. It is imperative that the Disaster Information Reporting System be in place so that the Commission has an accurate picture of the communications landscape during disasters.
Legal authority for this collection of information is contained in 47 U.S.C. 154(i), 218, 303(r) and 47 CFR 0.181(h).
Notice is given that a complaint has been filed with the Federal Maritime Commission (Commission) by Combustion Store Limited, hereinafter “Complainant,” against UniGroup Worldwide-UTS, hereinafter “Respondent.” Complainant states it is a “firm engaged in the business of supplying airplane parts” with a principal place of business in England. Complainant alleges that Respondent is an ocean transportation intermediary (OTI) with its primary place of business in North Carolina.
Complainant alleges that Respondent has violated the Shipping Act, 46 U.S.C. 41102(c), which provides that an OTI “may not fail to establish, observe and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property,” in connection with a shipment of two used aircraft engines. Complainant alleges that Respondent “failed to exercise due diligence in supervising the activities of its subcontracted service providers” to ensure shipment of the log books associated with the engines. Complainant alleges that “the engines are for all intents and purposes worthless without the log books.”
Complainant seeks reparations in the amount of $397,517, plus interest and attorneys fees “or such other sum as the Commission may determine to be proper as an award of reparations.”
The full text of the complaint can be found in the Commission's Electronic Reading Room at
This proceeding has been assigned to the Office of Administrative Law Judges. The initial decision of the presiding officer in this proceeding shall be issued by May 4, 2016, and the final decision of the Commission shall be issued by November 4, 2016.
Centers for Medicare & Medicaid Services (CMS), HHS.
Proposed notice.
The Social Security Act prohibits a physician-owned hospital from expanding its facility capacity, unless the Secretary of the Department of Health and Human Services (the Secretary) grants the hospital's request for an exception to that prohibition after considering input on the hospital's request from individuals and entities in the community where the hospital is located. The Centers for Medicare & Medicaid Services (CMS) has received a request from a physician-owned hospital for an exception to the prohibition against expansion of facility capacity. This notice solicits comments on the request from individuals and entities in the community in which the physician-owned hospital is located. Community input may inform our determination regarding whether the requesting hospital qualifies for an exception to the prohibition against expansion of facility capacity.
In commenting, please refer to file code CMS-1640-NC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of three 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.
For information on viewing public comments, see the beginning of the
Patricia Taft, (410) 786-4561 or Teresa Walden, (410) 786-3755.
All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received:
We will allow stakeholders 30 days from the date of this notice to submit written comments. Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of this notice, 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, please phone 1-800-743-3951.
Section 1877 of the Social Security Act (the Act), also known as the physician self-referral law—(1) prohibits a physician from making referrals for certain “designated health services” (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership or compensation), unless the requirements of an applicable exception are satisfied; and (2) prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third party payer) for those DHS furnished as a result of a prohibited referral.
Section 1877(d)(3) of the Act provides an exception, known as the “whole hospital exception,” for physician ownership or investment interests held in a hospital located outside of Puerto Rico, provided that the referring physician is authorized to perform services at the hospital and the ownership or investment interest is in the hospital itself (and not merely in a subdivision of the hospital).
Section 1877(d)(2) of the Act provides an exception for physician ownership or investment interests in rural providers (the “rural provider exception”). In order for an entity to qualify for the rural provider exception, the DHS must be furnished in a rural area (as defined in section 1886(d)(2) of the Act) and substantially all the DHS furnished by the entity must be furnished to individuals residing in a rural area.
Section 6001(a)(3) of the Patient Protection and Affordable Care Act (Pub. L. 111-148) as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) (hereafter referred to together as “the Affordable Care Act”) amended the whole hospital and rural provider exceptions to the physician self-referral prohibition to impose additional restrictions on physician ownership and investment in hospitals and rural providers. Since March 23, 2010, a physician-owned hospital that seeks to avail itself of either exception is prohibited from expanding facility capacity unless it qualifies as an “applicable hospital” or “high Medicaid facility” (as defined in sections 1877(i)(3)(E), (F) of the Act and 42 CFR 411.362(c)(2), (3) of our regulations) and has been granted an exception to the prohibition by the Secretary of the Department of Health and Human Services (the Secretary). Section 1877(i)(3)(A)(ii) of the Act provides that individuals and entities in the community in which the provider requesting the exception is located must have an opportunity to provide input with respect to the provider's application for the exception. For further information, we refer readers to the CMS Web site at:
On November 30, 2011, we published a final rule in the
As stated in regulations at § 411.362(c)(5), we will solicit community input on the request for an exception by publishing a notice of the request in the
A request for an exception to the facility expansion prohibition is considered complete as follows:
• If the request, any written comments, and any rebuttal statement include only HCRIS data: (1) The end of the 30-day comment period if CMS receives no written comments from the community; or (2) the end of the 30-day rebuttal period if CMS receives written comments from the community, regardless of whether the physician-owned hospital submitting the request submits a rebuttal statement (§ 411.362(c)(5)(i)).
• If the request, any written comments, or any rebuttal statement include data from an external data source, no later than: (1) 180 days after the end of the 30-day comment period if CMS receives no written comments from the community; and (2) 180 days after the end of the 30-day rebuttal period if CMS receives written comments from the community, regardless of whether the physician-owned hospital submitting the request submits a rebuttal statement (§ 411.362(c)(5)(ii)).
If we grant the request for an exception to the prohibition on expansion of facility capacity, the expansion may occur only in facilities on the hospital's main campus and may not result in the number of operating rooms, procedure rooms, and beds for which the hospital is licensed exceeding 200 percent of the hospital's baseline number of operating rooms, procedure rooms, and beds (§ 411.362(c)(6)). The CMS decision to grant or deny a hospital's request for an exception to the prohibition on expansion of facility capacity must be published in the
As permitted by section 1877(i)(3) of the Act and our regulations at § 411.362(c), the following physician-owned hospital has requested an exception to the prohibition on expansion of facility capacity:
Name of Facility: Doctors Hospital at Renaissance.
Location: 5501 South McColl Road, Edinburg, Texas 78539.
Basis for Exception Request: Applicable Hospital.
We seek comments on this request from individuals and entities in the community in which the hospital is located. We encourage interested parties to review the hospital's request, which is posted on the CMS Web site at:
• The hospital is located in a county that has a percentage increase in population that is at least 150 percent of the percentage increase in population of the State in which the hospital is located during the most recent 5-year period for which data are available as of the date that the hospital submits its request.
• The hospital has an annual percent of total inpatient admissions under Medicaid that is equal to or greater than the average percent with respect to such admissions for all hospitals located in the county in which the hospital is located during the most recent 12-month period for which data are available as of the date that the hospital submits its request. The most recent 12-month period for which data are available means the most recent 12-month period for which the data source used contains all data from the requesting hospital and each hospital located in the same county as the requesting hospital.
• The hospital does not discriminate against beneficiaries of Federal health care programs and does not permit physicians practicing at the hospital to discriminate against such beneficiaries.
• The hospital is located in a State in which the average bed capacity in the State is less than the national average bed capacity during the most recent fiscal year for which HCRIS, as of the date that the hospital submits its request, contains data from a sufficient number of hospitals to determine a State's average bed capacity and the national average bed capacity.
• The hospital has an average bed occupancy rate that is greater than the average bed occupancy rate in the State in which the hospital is located during the most recent fiscal year for which HCRIS, as of the date that the hospital submits its request, contains data from a sufficient number of hospitals to determine the requesting hospital's average bed occupancy rate and the relevant State's average bed occupancy rate.
Individuals and entities wishing to submit comments on the hospital's request should review the
This document does not impose information collection, recordkeeping, or third-party disclosure requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).
We will consider all comments we receive by the date and time specified in the
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 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by June 8, 2015:
When commenting on the proposed information collections, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be received by the OMB desk officer via one of the following transmissions: OMB, Office of Information and Regulatory Affairs, Attention: CMS Desk Officer, Fax Number: (202) 395-5806
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.
Under the Paperwork Reduction Act of 1995 (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 records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
1.
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), notice is hereby given of the following meeting:
The ACCV will meet on Thursday, June 4, 2015, from 10:00 a.m. to 4:30 p.m. (EDT). The public can join the meeting by:
1. (Audio Portion) Calling the conference Phone Number 877-917-4913 and providing the following information:
Leaders Name: Dr. A. Melissa Houston.
Password: ACCV.
2. (Visual Portion) Connecting to the ACCV Adobe Connect Pro Meeting using the following URL:
Call (301) 443-6634 or send an email to
Health Resources and Services Administration, HHS.
General notice.
The Health Resources and Services Administration (HRSA) announces that the listing of entities and associated Health Professional Shortage Area (HPSA) scores, which will receive priority for the assignment of National Health Service Corps (NHSC) scholarship recipients available for service during the period October 1, 2015, through September 30, 2016, is posted on the NHSC Jobs Center Web site at
To be eligible to receive assignment of Corps members, entities must: (1) Have a current HPSA status of “designated” by the Division of Policy and Shortage Designation, Bureau of Health Workforce, HRSA as of January 1, 2015, for placements October 1, 2015, through December 31, 2015, or as of January 1, 2016, for placements January 1, 2016, through September 30, 2016; (2) not deny requested health care services or discriminate in the provision of services to an individual because the individual is unable to pay for the services or because payment for the services would be made under Medicare, Medicaid, or the Children's Health Insurance Program (CHIP); (3) enter into an agreement with the state agency that administers Medicaid and CHIP, accept assignment under Medicare, see all patients regardless of their ability to pay and post such policy, and use and post a discounted fee plan; and (4) be determined by the Secretary to have (a) a need and demand for health manpower in the area; (b) appropriately and efficiently used Corps members assigned to the entity in the past; (c) general community support for the assignment of Corps members; (d) made unsuccessful efforts to recruit health professionals; (e) a reasonable prospect for sound fiscal management by the entity with respect to Corps members assigned there; and (f) demonstrated a willingness to support and facilitate mentorship, professional development, and training opportunities for Corps members.
Priority in approving applications for assignment of Corps members goes to sites that (1) provide primary medical care, mental health, and/or oral health services that matches the discipline to a primary medical care, mental health, or dental HPSA of greatest shortage, respectively; (2) are part of a system of care that provides a continuum of services, including comprehensive primary health care and appropriate referrals (
Entities at which NHSC scholars are performing their service obligations must assure that (1) the position will permit the full scope of practice and that the clinician meets the credentialing requirements of the state and site; and (2) the NHSC scholar assigned to the entity is engaged in the requisite amount of clinical practice, as defined below, to meet his or her service obligation:
“Full-time clinical practice” is defined as a minimum of 40 hours per week for at least 45 weeks per service year. The 40 hours per week may be compressed into no less than 4 work days per week, with no more than 12 hours of work to be performed in any 24-hour period. Time spent on-call does not count toward the full-time service obligation, except to the extent the provider is directly treating patients during that period.
For all health professionals, except as noted below, at least 32 of the minimum 40 hours per week must be spent providing direct patient care in the outpatient ambulatory care setting(s) at the NHSC-approved service site(s) during normally scheduled office hours. The remaining 8 hours per week must be spent providing direct patient care for patients at the approved practice site(s), providing direct patient care in alternative settings as directed by the approved practice site(s), or performing practice-related administrative activities.
Teaching activities at the approved service site shall not exceed 8 hours of the minimum 40 hours per week, unless the teaching takes place in a HRSA-funded Teaching Health Center (see Section 340H of the Public Health Service Act, 42 U.S.C. Section 256h). Teaching activities in a HRSA-funded Teaching Health Center shall not exceed 20 hours of the minimum 40 hours per week.
For obstetrician/gynecologists, certified nurse midwives, family medicine physicians who practice obstetrics on a regular basis, providers of geriatric services, pediatric dentists, and behavioral/mental health providers, at least 21 of the minimum 40 hours per week must be spent providing direct patient care in the outpatient ambulatory care setting(s) at the NHSC-approved service site(s) during normally scheduled office hours. The remaining 19 hours per week must be spent providing direct patient care for patients at the approved practice site(s), providing direct patient care in alternative settings as directed by the approved practice site(s), or performing practice-related administrative activities. Of the remaining 19 hours per week, no more than 8 hours can be spent performing practice-related administrative activities. Teaching activities at the approved service site shall not exceed 8 hours of the minimum 21 hours per week providing direct patient care, unless the teaching takes place in a HRSA-funded Teaching Health Center, as noted above.
For physicians (including psychiatrists), physician assistants, nurse practitioners (including those specializing in psychiatry or mental health), and certified nurse midwives serving in a Critical Access Hospital (CAH) that is certified by the Centers for Medicare & Medicaid Services (CMS) as a CAH under section 1820 of the Social Security Act, the full-time service requirements are as follows: At least 16 of the minimum 40 hours per week must be spent providing direct patient care in the CAH-affiliated outpatient ambulatory care setting(s) specified in the NHSC's Customer Service Portal, during normally scheduled office hours. The remaining 24 hours of the minimum 40 hours per week must be spent providing direct patient care for patients at the CAH(s) or the CAH-affiliated outpatient ambulatory care setting specified in the Customer Service Portal, providing direct patient care in the CAH's skilled nursing facility or swing bed unit, or performing practice-related administrative activities. Of the remaining 24 hours per week, no more than 8 hours can be spent on practice-related administrative activities and teaching activities at the approved service site(s) shall not exceed 8 of the minimum 16 hours per week providing direct patient care, unless the teaching takes place in a HRSA-funded Teaching Health Center (see Section 340H of the Public Health Service Act, 42 U.S.C. Section 256h). Teaching activities in a HRSA-funded Teaching Health Center shall not exceed 20 hours of the minimum 40 hours per week.
“Half-time clinical practice” is defined as a minimum of 20 hours per week (not to exceed 39 hours per week), for at least 45 weeks per service year. The 20 hours per week may be compressed into no less than 2 work days per week, with no more than 12 hours of work to be performed in any 24-hour period. Time spent on-call does not count toward the half-time service obligation, except to the extent the provider is directly treating patients during that period.
For all health professionals, except as noted below, at least 16 of the minimum 20 hours per week must be spent providing direct patient care in the outpatient ambulatory care setting(s) at the NHSC-approved service site(s), during normally scheduled office hours. The remaining 4 hours per week must be spent providing direct patient care for patients at the approved practice site(s), providing direct patient care in alternative settings as directed by the approved practice site(s), or performing practice-related administrative activities. Teaching and practice-related administrative activities shall not exceed a total of 4 hours of the minimum 20 hours per week.
For obstetrician/gynecologists, certified nurse midwives, family medicine physicians who practice obstetrics on a regular basis, providers of geriatric services, pediatric dentists, and behavioral/mental health providers, at least 11 of the minimum 20 hours per week must be spent providing direct patient care in the outpatient ambulatory care setting(s) at the NHSC-approved service site(s) during normally scheduled office hours. The remaining 9 hours per week must be spent providing direct patient care for patients at the approved practice site(s), providing direct patient care in alternative settings as directed by the approved practice site(s), or performing practice-related administrative activities. Teaching and practice-related administrative activities shall not exceed 4 hours of the minimum 20 hours per week.
For physicians (including psychiatrists), physician assistants, nurse practitioners (including those specializing in psychiatry or mental health), and certified nurse midwives serving in a CAH, the half-time service requirements are as follows: At least 8 of the minimum 20 hours per week must be spent providing direct patient care in the CAH-affiliated outpatient ambulatory care setting(s) specified in the Customer Service Portal, during normally scheduled office hours. The remaining 12 hours of the minimum 20 hours per week must be spent providing direct patient care for patients at the CAH(s) or the CAH-affiliated outpatient ambulatory care setting specified in the Practice Agreement, providing direct patient care in the CAH's skilled nursing facility or swing bed unit, or performing practice-related administrative activities. Teaching and practice-related administrative activities shall not exceed 4 hours of the minimum 20 hours per week.
Half-time clinical practice is not an option for scholars serving their obligation through the Private Practice Option.
In addition to utilizing NHSC scholars in accordance with their full-time or half-time service obligation (as defined above), NHSC service sites are expected to: (1) Report to the NHSC all absences through clinician in-service verifications every 6 months, including those in excess of the authorized number of days (up to 35 full-time days per service year in the case of full-time service and up to 35 half-time days per service year in the case of half-time service); (2) report to the NHSC any change in the status of an NHSC clinician at the site; (3) provide the time and leave records, schedules, and any related personnel documents for NHSC scholars (including documentation, if applicable, of the reason(s) for the termination of an NHSC clinician's employment at the site prior to his or her obligated service end date); and (4) submit a Uniform Data System (UDS) report in the case of entities receiving HRSA grant support under Section 330 of the Public Health Service Act. The UDS report, as applicable, requires the site to assess the age, sex, race/ethnicity of, and provider encounter records for its user population and are aggregated at the organization level. Providers fulfilling NHSC commitments are approved to serve at a specific site or, in some cases, more than one site.
For a site to be eligible for placement of NHSC scholars, it must be approved by the NHSC following the site's submission of a site application. Processing of site applications from solo or group practices will involve additional screening, including a site visit by NHSC representatives. The site application approval is good for a period of 3 years from the date of approval.
In approving applications for the assignment of Corps members, the Secretary shall give priority to any such application that is made regarding the
The number of new NHSC placements through the Scholarship Program allowed at any one site is limited to one of the following provider types: Physician (MD/DO), nurse practitioner, physician assistant, certified nurse midwife, or dentist. The NHSC will consider requests for up to two scholar placements at any one site on a case-by-case basis. Factors that are taken into consideration include community need, as measured by demand for services, patient outcomes, and other similar factors. Sites wishing to request an additional scholar must complete an Additional Scholar Request form available at
NHSC-approved sites that do not meet the authorized threshold HPSA score of 16 may post job openings on the NHSC Jobs Center; however, scholars seeking placement between October 1, 2015, and September 30, 2016, will be advised that they can only compete for open positions at sites that meet the threshold placement HPSA score of 16. While not eligible for scholar placements in 2015-2016, vacancies in HPSAs scoring less than 16 will be used by the NHSC in evaluating the HPSA threshold score for the next scholarship placement cycle.
The list of HPSAs and entities that are eligible to receive priority for the placement of NHSC scholars may be updated periodically. New entities may be added to the NHSC Jobs Center during a site application competition. Likewise, entities that no longer meet eligibility criteria, including those sites whose 3-year approval as an NHSC service site has lapsed or whose HPSA designation has been withdrawn or proposed for withdrawal, will be removed from the priority listing.
Entities wishing to provide additional data and information in support of their inclusion on the proposed list of entities that would receive priority in assignment of NHSC Scholars, or in support of a higher priority determination, must do so in writing no later than
The program is not subject to the provisions of Executive Order 12372, Intergovernmental Review of Federal Programs (as implemented through 45 CFR part 100).
Office of the Secretary, HHS.
Notice.
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, announces plans to submit a new Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting the ICR to OMB, OS seeks comments from the public regarding the burden estimate, below, or any other aspect of the ICR.
Comments on the ICR must be received on or before July 7, 2015.
Submit your comments to
Information Collection Clearance staff,
When submitting comments or requesting information, please include the document identifier HHS-OS-0990-New-60D for reference. Information Collection Request Title: State and Territorial Health Disparities Survey Abstract: The Office of Minority Health (OMH), Office of the Secretary (OS) is requesting approval from the Office of Management and Budget (OMB) for a new data collection activity for the State and Territorial Health Disparities Survey (STHD Survey).
OMH has a long history of collaborating with states to improve minority health outcomes and reduce health and health care disparities. A strong partnership with state and territorial offices is a key to continue progress toward eliminating health disparities. To best facilitate continued partnerships, OMH needs information about the current activities, challenges, and resources within state and territorial offices of minority health. The State and Territorial Health Disparities Survey is intended to support OMH informational needs by collecting, organizing, and presenting a variety of information about states and U.S. territories, including the current status of minority health and health disparities, the organization and operation of state and territorial offices of minority health, and state/territorial implementation of federal standards and evidence-based practices designed to address disparities and improve minority health. The STHD Survey, which will focus on the activities, staffing, and funding of State Minority Health Entities, is part of a larger project to catalog the extent of health disparities and the activities underway to reduce them in each state and U.S. territory. The STHD Survey supports OMH's goals of working with states and territories to improve the health of racial and ethnic minority populations and eliminate health disparities. While existing, state/territorial-specific information sources (
Likely Respondents—Data will be collected using semi-structured telephone interviews with state/territorial minority health entity directors (or their designees) in approximately 54 states and territories (50 states plus the District of Columbia and the U.S. territories of Guam, Puerto Rico, and the U.S. Virgin Islands). The purpose of this interview is to collect qualitative information about state/territory program goals and activities, partnerships, and organizational structure, as well as quantitative data elements on staffing and funding.
OS specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions, (2) the accuracy of the estimated burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Office of the Secretary, HHS.
Notice.
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, announces plans to submit an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). The ICR is for extending the use of the approved information collection assigned OMB control number 0990-0331 (which expires on August 21, 2015) through December 31, 2015. Prior to submitting that ICR to OMB, OS seeks comments from the public regarding the burden estimate, below, or any other aspect of the ICR.
Comments on the ICR must be received on or before July 7, 2015.
Submit your comments to
Information Collection Clearance staff,
When submitting comments or requesting information, please include the document identifier HHS-OS-0990-0331-60D for reference.
Data collection for the entire evaluation is expected to last 7 years, from the time the first participant was enrolled in late 2008 until the last qualitative follow-back interview is administered. The burden table below includes completion of a set of follow-back qualitative interviews with a small group of respondents (previously approved under OMB No. 0990-0331). The current approval expires on August 21, 2015, and we are requesting an extension until December 31, 2015, to enable us to complete all of the interviews that have been previously approved by OMB under this information collection.
OS specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions, (2) the accuracy of the estimated burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Pursuant to the Federal Advisory Committee Act, the Department of Health and Human Services (HHS) announces the following advisory committee meeting.
The times shown above are for the full Committee meeting. Subcommittee issues will be included as part of the Full Committee schedule.
Should you require reasonable accommodation, please contact the CDC Office of Equal Employment Opportunity on (301) 458-4EEO (4336) as soon as possible.
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.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of meetings of the National Center for Advancing Translational Sciences.
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 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.
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 Minority Health and Health Disparities.
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.
Open: 8:30 a.m. to 03:00 p.m.
Closed: 03:00 p.m. to Adjournment.
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.
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxis, hotel, and airport shuttles, will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
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.
SAMHSA, HHS.
Notice.
15 U.S.C. 3719.
In summarizing the challenge that will be issued by your agency, please answer the following four questions:
The Substance Abuse and Mental Health Services Administration (SAMHSA) has issued a challenge to help prevent opioid overdose and support recovery through innovative, software-based solutions that help people know the signs of opioid use, understand what to do if a family member or friend overdoses on heroin or opioid pain medications, and support treatment for opioid addiction and recovery.
There were 17,000 deaths from opioids in 2010, double the deaths in 2001. Use of prescription opioids has quadrupled. Death by opioid overdose is preventable. SAMHSA hopes to help prevent deaths from opioid overdose, and support treatment and recovery for individuals with an opioid substance use disorder.
To prevent deaths from opioid overdose, and support treatment and recovery for individuals with an opioid substance use disorder by providing resources and information on understanding the signs of overdose, how to respond to an overdose, information about opioid use, treatment, and recovery.
A reduction in the number of individuals dying from opioid overdose.
SAMHSA is seeking solutions to this problem through cost-effective, portable, technology-based products that effectively reach a diverse population of friends and family concerned about opioid use by someone they know. Technology-based products may include, but are not limited to, web applications, mobile apps, and Web sites.
The challenge starts on June 1, 2015 10:00 a.m. ET. The challenge ends on July 29, 2015 11:59 p.m. ET.
Dina Passman, Public Health Advisor, SAMHSA/CSAT/PMB, 1 Choke Cherry Road, Room 5-1070, Rockville, MD, Phone: (240) 276-2854, Email:
To satisfy the mandatory provisions of the Competes Act, use the following language:
“To be eligible to win a prize under this challenge, an individual or entity—
(1) Shall have registered to participate in the competition under the rules promulgated by [the issuing agency];
(2) Shall have complied with all the requirements under this section;
(3) In the case of a private entity, shall be incorporated in and maintain a primary place of business in the United States, and in the case of an individual,
(4) May not be a Federal entity or Federal employee acting within the scope of their employment.”
(5) Shall not be an HHS employee working on their applications or submissions during assigned duty hours.
(6) Shall not be an employee of SAMHSA.
(7) Federal grantees may not use Federal funds to develop COMPETES Act challenge applications unless consistent with the purpose of their grant award.
(8) Federal contractors may not use Federal funds from a contract to develop COMPETES Act challenge applications or to fund efforts in support of a COMPETES Act challenge submission.
Challenge Managers should include the following statement regarding consultation with Federal employees:
“An individual or entity shall not be deemed ineligible because the individual or entity used Federal facilities or consulted with Federal employees during a competition if the facilities and employees are made available to all individuals and entities participating in the competition on an equitable basis.”
(i) Beginning on June 1, 2015 at 10:00 a.m. Eastern Time, visit CHALLENGE URL (the “Competition Web site”) and click “Sign Up” to create a ChallengePost account, or click “Log In” and log in with an existing ChallengePost account. There is no charge for creating a ChallengePost account.
(ii) After a Contestant signs up on the Competition Web site a confirmation email will be sent to the email address provided by the Contestant. The Contestant should use the confirmation email to verify their email address.
(iii) Contestant should indicate their agreement in participating by clicking “Register” on the Competition Web site in order to receive important Competition updates.
(iv) In the event of a dispute pertaining to this Competition, the authorized account holder of the email address used to sign up for the ChallengePost account used to enter the Submission will be deemed to be the Contestant (in case of an individual) and the Contestant's Representative, in the case of a team or Organization. The “authorized account holder” is the natural person or legal entity assigned an email address by an Internet access provider, online service provider or other organization responsible for assigning email addresses for the domain associated with the submitted address. Contestants generally and potential winners may be required to show proof of being the authorized account holder.
A. All eligible Submissions will be judged by an expert panel of impartial judges (the “Judges”) selected by the Sponsor. The internal panel will judge these Submissions on the criteria identified in these Official Rules to select finalist Submissions. Finalist Submissions will then be judged by the expert judging panel determined by the Sponsor. The judging panel is not required to test the Application and may choose to judge based solely on the text description and video provided in the Submission. The Sponsor and the Administrator reserve the right to divide and assign the criteria identified below in these Official Rules among different members of the internal and expert judging panels. The Sponsor and the Administrator reserve the right to substitute or modify the judging panel at any time for any reason.
B. All Judges shall be and remain fair and impartial. Any Judge may recuse him or herself from judging a Submission if the Judge, the Sponsor or the Administrator considers that it is inappropriate, for any reason, for the Judge to evaluate a specific Submission or group of Submissions.
C. A Contestant's likelihood of winning will depend primarily on the number and quality of all of the Submissions, as determined by the Judges using the criteria in these Official Rules. The judging period is August 5, 2015 at 10:00 a.m. Eastern Time through August 14, 2015 at 11:59 p.m. Eastern Time (the “Judging Period”).
D. Criteria:
Judging Criteria:
(i) Quality of Performance (40 points) (includes how well the Application functions technically, and extent to which the Application responds to the Competition topic and target audience, and how thoroughly and clearly the solution utilizes the required assets);
(ii) Quality of User Experience (25 points) (includes visual aesthetic and ease of use);
(iii) Potential Impact (25 points) (includes the potential impact related to successfully informing target audiences about how to prevent opioid overdoses and provide a spectrum of additional support for the prevention, treatment and recovery of opioid misuse and abuse; and
(iv) Feasibility of Use (10 points) (includes how easily target audiences and members of the public can access and use the Application).
E. If deemed necessary by the judging panel, each of the top five finalists may be asked to participate in a virtual or in-person meeting with federal staff to discuss their Application and demonstrate its operation. The purpose of these meetings will be to further evaluate the Contestant's product, provide any additional information to SAMHSA, and clarify any concerns or questions raised by the review panel.
F. Tie Breakers. In the event of a tie between two or more Submissions, the tied Submission with the highest score in the first criterion listed above shall be deemed the higher scoring Submission. In the event any ties remain, this process will be repeated by comparing the tied Submissions' scores on the second, third, fourth, and fifth criterion listed above, respectively. If two or more Submissions are tied on all four criteria, the panel of Judges will vote on the tied submissions.
The COMPETES Act requires the basis on which a winner will be selected to be included in the
(i) Contestants must create a working software application which runs on a smartphone or tablet (iOS, Android, Blackberry, Windows Mobile, via a mobile browser or downloadable app), a Windows or Mac personal computer, or on a web browser (Chrome, Firefox, Internet Explorer, or Safari) (each an “Application”).
(ii) During the Competition Submission Period, Contestant must visit the Competition Web site and confirm that he or she has or, if Contestant is a Representative, all members of their team or Organization have, read and agree to the Official
a. The name of the Application;
b. a text description of the Application and how it functions;
c. a text description of testing instructions for the app;
d. at least one image (screenshot) of the working Application;
e. a link to a video uploaded to ChallengePost.com and YouTube.com that clearly demonstrates the Application's functionality and features (by walking through the Application);
f. the Application platform (iOS, Android, Mac Desktop, Windows Desktop, Web);
g. for web or mobile web Applications, a link to a Web site where the Application can be accessed free of charge;
h. for Mac or Windows desktop Applications, a zip file upload including appropriate installation files; and, if available, a link to a Web site or app store where the Application can be downloaded;
i. step-by-step testing instructions including the minimum operating system or web browser version required for testing and login instructions, if a login is required;
j. the submitter type (individual, team, or organization);
k. the Organization name, if the submitter is an Organization; and
l. the Contestant Representative's phone number.
(a-l above, are collectively a “Submission”)
(iii) For sake of clarity, all parts of the Submission must be entered at the same time on the Competition Web site. All Submissions must be received by no later than 11:59 p.m. Eastern Time on July 29, 2015.
(iv) Once a Submission has been submitted and the Competition Submission Period has ended, a Contestant may not make any changes or alterations to the Submission until the end of the Judging Period. Contestants may save draft versions of their Submission before entering it on the Competition Web site.
(v) The Sponsor and/or the Administrator, at their sole discretion, may permit a Contestant to modify part of the Submission after the Competition Submission Deadline for the purpose of removing material that potentially infringes a third party mark or right, discloses personally identifiable information, or is otherwise inappropriate. The modified Submission must remain substantively the same as the original Submission with the only modification being what is permitted by the Sponsor and/or Administrator. Any modifications beyond what is permitted may result in disqualification.
(vi) Applications cannot be changed after the Competition Submission Period and before the end of the Judging Period, unless the Contestant has provided an installation file and testing instructions on the Enter an Application form on the Competition Web site.
All Submission materials must be in English.
(i) The text description must describe the Application's key features and functionality.
(ii) The image(s) must be photographs or screenshots of your working Application.
(iii) The video portion of the Submission:
a. Should be no longer than five (5) minutes;
b. must clearly demonstrate the Application's features and functionality; and
c. must not include music or other copyrighted material or use third party trademarks unless the Contestant has written permission to use such material.
(iv) If the video is primarily promotional rather than a demonstration of the Application's functionality and features (by walking through the Application), the Submission may be disqualified at the Sponsor's and/or Administrator's sole discretion.
(i) The Submission must exclusively include information contained in the SAMHSA Opioid Overdose Toolkit section, Five Essential Steps for First Responders. The Submission content should encourage utilization of the five essential steps described in the SAMHSA Opioid Overdose Toolkit section, Five Essential Steps for First Responders. The submission must also present all of the assets provided in the DPT Asset File. Entries may not substantially alter the meaning, intent, or otherwise misrepresent the content from SAMHSA's Opioid Overdose Toolkit in whole or in part. The intention of this clause is to ensure that the integrity of the content is maintained.
(ii) The Submission must target friends, family, and caregivers of people using opioids, and/or people concerned about someone at risk for overdose.
(iii) Submission must not include an audio or visual performance, including but not limited to music, dance, or other performing art, third-party copyrighted material or trademarks, unless the Contestant has written permission to use such material.
(iv) The Submission must not use HHS's or SAMHSA's logos or official seals and must not claim endorsement.
15 U.S.C. 3719.
SAMHSA, HHS.
Notice.
(1) What action is being taken?
The Substance Abuse and Mental Health Services Administration (SAMHSA) has issued an Offender Reintegration Toolkit Challenge to help reduce recidivism and promote the public health and safety of communities.
(2) Why is this action necessary?
Studies show that people leaving the criminal justice system have a higher proportion of substance use and mental disorders than the general population. Treatment and recovery support, along with housing and employment are necessary to help newly released individuals address substance use and mental disorders and to keep them from reoffending. Easy to find information and resources can help them (and their family and friends) as they return to their communities.
(3) What is the objective of the challenge?
To reduce recidivism and provide resources and support for individuals leaving the criminal justice system and re-entering their communities.
(4) What is the intended effect of this action?
Family, friends, parole officers, and community service staff will help ex-offenders connect to resources for housing, employment, healthcare, and treatment and recovery for substance use and mental health disorders. By connecting them to necessary supports,
SAMHSA is seeking solutions to this problem through cost-effective, portable, technology-based products that effectively reach a diverse population of ex-offenders being released from jail or prison, and the friends, family, parole officers, case managers, and service center staff who help them. Technology-based products may include, but are not limited to, web applications, mobile apps, and Web sites.
The challenge starts on June 1, 2015 10:00 a.m. ET. The challenge ends on July 29, 2015 11:59 p.m. ET.
Dina Passman, Public Health Advisor, SAMHSA/CSAT/PMB, 1 Choke Cherry Road, Room 5-1070, Rockville, MD, Phone: (240) 276-2854, Email:
Eligibility Rules for Participating in the Competition:
“To be eligible to win a prize under this challenge, an individual or entity—
(1) Shall have registered to participate in the competition under the rules promulgated by [the issuing agency];
(2) Shall have complied with all the requirements under this section;
(3) In the case of a private entity, shall be incorporated in and maintain a primary place of business in the United States, and in the case of an individual, whether participating singly or in a group, shall be a citizen or permanent resident of the United States; and
(4) May not be a Federal entity or Federal employee acting within the scope of their employment.”
(5) Shall not be an HHS employee working on their applications or submissions during assigned duty hours.
(6) Shall not be an employee of SAMHSA.
(7) [Federal grantees may not use Federal funds to develop COMPETES Act challenge applications unless consistent with the purpose of their grant award and specifically requested to do so due to the competition design. Therefore, unless specifically requesting Federal grantees to compete, include the following text in your
(8) Federal contractors may not use Federal funds from a contract to develop COMPETES Act challenge applications or to fund efforts in support of a COMPETES Act challenge submission.
“An individual or entity shall not be deemed ineligible because the individual or entity used Federal facilities or consulted with Federal employees during a competition if the facilities and employees are made available to all individuals and entities participating in the competition on an equitable basis.”
(i) Beginning on June 1, 2015 at 10:00 a.m. Eastern Time, visit CHALLENGE URL (the “Competition Web site”) and click “Sign Up” to create a ChallengePost account, or click “Log In” and log in with an existing ChallengePost account. There is no charge for creating a ChallengePost account.
(ii) After a Contestant signs up on the Competition Web site a confirmation email will be sent to the email address provided by the Contestant. The Contestant should use the confirmation email to verify their email address.
(iii) Contestant should indicate their agreement in participating by clicking “Register” on the Competition Web site in order to receive important Competition updates.
(iv) In the event of a dispute pertaining to this Competition, the authorized account holder of the email address used to sign up for the ChallengePost account used to enter the Submission will be deemed to be the Contestant (in case of an individual) and the Contestant's Representative, in the case of a team or Organization. The “authorized account holder” is the natural person or legal entity assigned an email address by an Internet access provider, online service provider or other organization responsible for assigning email addresses for the domain associated with the submitted address. Contestants generally and potential winners may be required to show proof of being the authorized account holder.
A. All eligible Submissions will be judged by an expert panel of impartial judges (the “Judges”) selected by the Sponsor. The internal panel will judge these Submissions on the criteria identified in these Official Rules to select finalist Submissions. Finalist Submissions will then be judged by the expert judging panel determined by the Sponsor. The judging panel is not required to test the Application and may choose to judge based solely on the text description and video provided in the Submission. The Sponsor and the Administrator reserve the right to divide and assign the criteria identified below in these Official Rules among different members of the internal and expert judging panels. The Sponsor and the Administrator reserve the right to substitute or modify the judging panel at any time for any reason.
B. All Judges shall be and remain fair and impartial. Any Judge may recuse him or herself from judging a Submission if the Judge, the Sponsor or the Administrator considers that it is inappropriate, for any reason, for the Judge to evaluate a specific Submission or group of Submissions.
C. A Contestant's likelihood of winning will depend primarily on the number and quality of all of the Submissions, as determined by the Judges using the criteria in these Official Rules. The judging period is August 5, 2015 at 10:00 a.m. Eastern Time through August 14, 2015 at 11:59 p.m. Eastern Time (the “Judging Period ”).
D. Criteria:
Judging Criteria:
(i) Quality of Performance (40 points) (includes how well the Application functions technically, and extent to which the Application responds to the Competition topic and target audience, and how thoroughly and clearly the solution utilizes the required assets);
(ii) Quality of User Experience (25 points) (includes visual aesthetic and ease of use);
(iii) Potential Impact (25 points) (includes the potential impact related to successfully informing target audiences about the resources available to them for employment, housing, treatment and recovery;) and
(iv) Feasibility of Use (10 points) (includes how easily target audiences and members of the public can access and use the Application).
E. If deemed necessary by the judging panel, each of the top five finalists may be asked to participate in a virtual or in-person meeting with federal staff to discuss their Application and demonstrate its operation. The purpose of these meetings will be to further evaluate the Contestant's product, provide any additional information to SAMHSA, and clarify any concerns or questions raised by the review panel.
F. Tie Breakers. In the event of a tie between two or more Submissions, the
(i) Contestants must create a working software application which runs on a smartphone or tablet (iOS, Android, Blackberry, Windows Mobile, via a mobile browser or downloadable app), a Windows or Mac personal computer, or on a web browser (Chrome, Firefox, Internet Explorer, or Safari) (each an “Application”).
(ii) During the Competition Submission Period, Contestant must visit the Competition Web site and confirm that he or she has or, if Contestant is a Representative, all members of their team or Organization have, read and agree to the Official Rules. Then, Contestant must submit its Submission by providing:
a. The name of the Application;
b. a text description of the Application and how it functions;
c. a text description of testing instructions for the app;
d. at least one image (screenshot) of the working Application;
e. a link to a video uploaded to ChallengePost.com and YouTube.com that clearly demonstrates the Application's functionality and features (by walking through the Application);
f. the Application platform (iOS, Android, Mac Desktop, Windows Desktop, Web);
g. for web or mobile web Applications, a link to a Web site where the Application can be accessed free of charge;
h. for Mac or Windows desktop Applications, a zip file upload including appropriate installation files; and, if available, a link to a Web site or app store where the Application can be downloaded;
i. step-by-step testing instructions including the minimum operating system or web browser version required for testing and login instructions, if a login is required;
j. the submitter type (individual, team, or organization);
k. the Organization name, if the submitter is an Organization; and
l. the Contestant Representative's phone number.
(a-l above, are collectively a “Submission”)
(iii) For sake of clarity, all parts of the Submission must be entered at the same time on the Competition Web site. All Submissions must be received by no later than 11:59 p.m. Eastern Time on July 29, 2015.
(iv) Once a Submission has been submitted and the Competition Submission Period has ended, a Contestant may not make any changes or alterations to the Submission until the end of the Judging Period. Contestants may save draft versions of their Submission before entering it on the Competition Web site.
(v) The Sponsor and/or the Administrator, at their sole discretion, may permit a Contestant to modify part of the Submission after the Competition Submission Deadline for the purpose of removing material that potentially infringes a third party mark or right, discloses personally identifiable information, or is otherwise inappropriate. The modified Submission must remain substantively the same as the original Submission with the only modification being what is permitted by the Sponsor and/or Administrator. Any modifications beyond what is permitted may result in disqualification.
(vi) Applications cannot be changed after the Competition Submission Period and before the end of the Judging Period, unless the Contestant has provided an installation file and testing instructions on the Enter an Application form on the Competition Web site.
All Submission materials must be in English.
(i) The text description must describe the Application's key features and functionality.
(ii) The image(s) must be photographs or screenshots of your working Application.
(iii) The video portion of the Submission:
a. Should be no longer than five (5) minutes;
b. must clearly demonstrate the Application's features and functionality; and
c. must not include music or other copyrighted material or use third party trademarks unless the Contestant has written permission to use such material.
(iv) If the video is primarily promotional rather than a demonstration of the Application's functionality and features (by walking through the Application), the Submission may be disqualified at the Sponsor's and/or Administrator's sole discretion. Challenge managers should include any additional information in this section that would be relevant for participants. For example, it could include background information about the data sources or materials that should be accessed for purposes of this challenge, treatment of intellectual property rights if it is an area the agency plans to negotiate at a later point in the challenge competition, or background information about related initiatives or challenges.
(i) The Submission must exclusively include information specified in the asset file. This information must include, but not be limited to, the SAMHSA Opioid Overdose Toolkit. Entries may not substantially alter the meaning, intent, or otherwise misrepresent the content from SAMHSA's Opioid Overdose Toolkit or other assets in whole or in part. The intention of this clause is to ensure that the integrity of the content is maintained.
(ii) The Submission must target individuals, friends, family, and people who work in organizations assisting people leaving the criminal justice system and re-entering their community. The submission must be developed based on the use cases (included in the materials) as their target users.
(iii) Submission must not include an audio or visual performance, including but not limited to music, dance, or other performing art, third-party copyrighted material or trademarks, unless the Contestant has written permission to use such material.
(iv) The Submission must not use HHS's or SAMHSA's logos or official seals and must not claim endorsement.
Office of the Assistant Secretary for Community Planning and Development, HUD.
Notice.
This Notice identifies unutilized, underutilized, excess, and surplus Federal property reviewed by HUD for suitability for use to assist the homeless.
Juanita Perry, Department of Housing and Urban Development, 451 Seventh Street SW., Room 7266, Washington, DC 20410; telephone (202) 402-3970; TTY number for the hearing- and speech-impaired (202) 708-2565 (these telephone numbers are not toll-free), or call the toll-free Title V information line at 800-927-7588.
In accordance with 24 CFR part 581 and section 501 of the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11411), as amended, HUD is publishing this Notice to identify Federal buildings and other real property that HUD has reviewed for suitability for use to assist the homeless. The properties were reviewed using information provided to HUD by Federal landholding agencies regarding unutilized and underutilized buildings and real property controlled by such agencies or by GSA regarding its inventory of excess or surplus Federal property. This Notice is also published in order to comply with the December 12, 1988 Court Order in
Properties reviewed are listed in this Notice according to the following categories: Suitable/available, suitable/unavailable, and suitable/to be excess, and unsuitable. The properties listed in the three suitable categories have been reviewed by the landholding agencies, and each agency has transmitted to HUD: (1) Its intention to make the property available for use to assist the homeless, (2) its intention to declare the property excess to the agency's needs, or (3) a statement of the reasons that the property cannot be declared excess or made available for use as facilities to assist the homeless.
Properties listed as suitable/available will be available exclusively for homeless use for a period of 60 days from the date of this Notice. Where property is described as for “off-site use only” recipients of the property will be required to relocate the building to their own site at their own expense. Homeless assistance providers interested in any such property should send a written expression of interest to HHS, addressed to: Ms. Theresa M. Ritta, Chief Real Property Branch, the Department of Health and Human Services, Room 5B-17, Parklawn Building, 5600 Fishers Lane, Rockville, MD 20857, (301) 443-2265 (This is not a toll-free number.) HHS will mail to the interested provider an application packet, which will include instructions for completing the application. In order to maximize the opportunity to utilize a suitable property, providers should submit their written expressions of interest as soon as possible. For complete details concerning the processing of applications, the reader is encouraged to refer to the interim rule governing this program, 24 CFR part 581.
For properties listed as suitable/to be excess, that property may, if subsequently accepted as excess by GSA, be made available for use by the homeless in accordance with applicable law, subject to screening for other Federal use. At the appropriate time, HUD will publish the property in a Notice showing it as either suitable/available or suitable/unavailable.
For properties listed as suitable/unavailable, the landholding agency has decided that the property cannot be declared excess or made available for use to assist the homeless, and the property will not be available.
Properties listed as unsuitable will not be made available for any other purpose for 20 days from the date of this Notice. Homeless assistance providers interested in a review by HUD of the determination of unsuitability should call the toll free information line at 1-800-927-7588 for detailed instructions or write a letter to Ann Marie Oliva at the address listed at the beginning of this Notice. Included in the request for review should be the property address (including zip code), the date of publication in the
For more information regarding particular properties identified in this Notice (
U.S. Geological Survey, Interior.
Notice of meeting.
The National Geospatial Advisory Committee (NGAC) will meet on June 9-10, 2015 at the South Interior Building Auditorium, 1951 Constitution Avenue NW., Washington, DC 20240. The meeting will be held in the first floor Auditorium. The NGAC, which is composed of representatives from governmental, private sector, non-profit, and academic organizations, was established to advise the Federal Geographic Data Committee (FGDC) on management of Federal geospatial programs, the development of the National Spatial Data Infrastructure (NSDI), and the implementation of Office of Management and Budget (OMB) Circular A-16. Topics to be addressed at the meeting include:
The meeting will include an opportunity for public comment on June 10. Comments may also be submitted to the NGAC in writing. Members of the public who wish to attend the meeting must register in advance. Please register by contacting Lucia Foulkes at the U.S. Geological Survey (703-648-4142,
The meeting will be held from 8:30 a.m. to 5:30 p.m. on June 9 and from 8:30 a.m. to 4:00 p.m. on June 10.
John Mahoney, U.S. Geological Survey (206-220-4621).
Meetings of the National Geospatial Advisory Committee are open to the public. Additional information about the NGAC and the meeting is available at
Office of Natural Resources Revenue Management, Interior.
Notice.
The Department of the Interior (Interior) is seeking nominations for individuals to be Committee members or alternates on the U.S. Extractive Industries Transparency Initiative Advisory Committee (Committee). We seek nominees who can represent stakeholder constituencies from government, civil society, and industry so that we can fill current vacancies and create a roster of candidates in case future vacancies occur.
Submit nominations by June 30, 2015.
You may submit nominations by any of the following methods:
• Mail or hand-carry nominations to Ms. Rosita Compton Christian; Department of the Interior; 1849 C Street NW., MS 4211, Washington, DC 20240.
• Email nominations to
Rosita Compton Christian at (202) 208-0272 or (202) 513-0597; fax (202) 513-0682; email
Interior established the Committee on July 26, 2012, in accordance with the provisions of the Federal Advisory Committee Act (FACA), as amended (5 U.S.C. App. 2), and with the concurrence of the General Services Administration. The Committee serves as the U.S. Extractive Industries Transparency Initiative Multi-Stakeholder Group and advises the Secretary of the Interior on design and implementation of the initiative.
The Committee does the following:
• Oversees the U.S. implementation of the Extractive Industries Transparency Initiative (EITI), a global standard for governments to publicly disclose revenues received from oil, gas, and mining assets belonging to the government, with parallel public disclosure by companies of payments to the government (such as royalties, rents, bonuses, taxes, or other payments)
• Develops and recommends to the Secretary a fully-costed work plan, containing measurable targets and a timetable for implementation and incorporating an assessment of capacity constraints; this plan will be developed in consultation with key EITI stakeholders and published upon completion
• Provides opportunities for collaboration and consultation among stakeholders
• Advises the Secretary and posts for consideration by other stakeholders proposals for conducting long-term oversight and other activities necessary to achieve and maintain EITI-compliant status
The Committee consists of representatives from three stakeholder sectors. The sectors are as follows:
• Industry—including non-Federal representatives from the extractive industry—including oil, gas, and mining companies and industry-related trade associations.
• Civil society, including organizations with an interest in extractive industries, transparency, and government oversight; members of the public; and public and/or private investors.
• Government, including Federal, State, local, and Tribal governments and individual Indian mineral owners.
In addition to honoring the EITI principle of self-selection within the stakeholder sector, we will consider the following criteria when making final selections:
• Understanding of and commitment to the EITI process
• Ability to collaborate and operate in a multi-stakeholder setting
• Access to and support from a relevant stakeholder constituency
• Basic understanding of the extractive industry and/or revenue collection or willingness to be educated on such matters
Nominations should include a resume providing relevant contact information and an adequate description of the
Parties are strongly encouraged to work with and within stakeholder sectors (including industry, civil society, and government sectors, as the EITI process defines) to jointly consider and submit nominations that, overall, reflect the diversity and breadth of their sector. Nominees are strongly encouraged to include supporting letters from constituents, trade associations, alliances, and/or other organizations that indicate the support by a meaningful constituency for the nominee.
Individuals who are Federally registered lobbyists are ineligible to serve on FACA and non-FACA boards, committees, or councils in an individual capacity. The term “individual capacity” refers to individuals who are appointed to exercise their own individual best judgment on behalf of the government, such as when they are designated Special Government Employees, rather than being appointed to represent a particular interest.
The Committee will meet quarterly or at the request of the Designated Federal Officer. Non-Federal members of the Committee will serve without compensation. However, we may pay the travel and per diem expenses of Committee members, if appropriate, under the Federal Travel Regulations.
To learn more about USEITI please visit the official Web site at
Nominations for the following properties being considered for listing or related actions in the National Register were received by the National Park Service before April 18, 2015. Pursuant to section 60.13 of 36 CFR part 60, written comments are being accepted concerning the significance of the nominated properties under the National Register criteria for evaluation. Comments may be forwarded by United States Postal Service, to the National Register of Historic Places, National Park Service, 1849 C St. NW., MS 2280, Washington, DC 20240; by all other carriers, National Register of Historic Places, National Park Service, 1201 Eye St. NW., 8th floor, Washington, DC 20005; or by fax, 202-371-6447. Written or faxed comments should be submitted by May 26, 2015. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Arvine Heights Historic District, 15-120 Arvine Heights, Rochester, 15000310
Bureau of Reclamation, Interior.
Notice; correction.
The Bureau of Reclamation published a notice in the
Glen Knowles, Bureau of Reclamation, telephone (801) 524-3781; facsimile (801) 524-3807; email at
Bureau of Reclamation, Interior.
Notice.
The Bureau of Reclamation and Washington State Department of Ecology, as joint lead agencies, have made available the Cle Elum Pool Raise Project Final Environmental Impact Statement (EIS). The Final EIS describes the potential environmental effects of the No Action Alternative and four action alternatives to modify the existing radial gates in the Cle Elum Dam spillway to provide an additional 14,600 acre-feet of storage capacity in Cle Elum Reservoir, put the additional stored water to beneficial use, provide for shoreline protection of the reservoir, and implement necessary environmental mitigation. The Final EIS also includes responses to all public comments on the Draft EIS.
Reclamation will not make a decision on the proposed action until at least 30 days after the Environmental Protection Agency publishes the notice of availability of the Final EIS in the
Send requests for copies of the Final EIS to Ms. Candace McKinley, Bureau of Reclamation, 1917 Marsh Road, Yakima, WA 98901, 509-575-5848, ext. 613, or via email to
Ms. Candace McKinley, 509-575-5848, ext. 613; or by email at
The Final EIS documents the potential direct, indirect, and cumulative physical, biological, and socioeconomic environmental effects that may result from increasing the reservoir storage capacity.
The Final EIS evaluates the construction and operation of modified radial gates at Cle Elum Dam to enable a 3-foot raise in the reservoir pool (14,600 acre-feet additional storage capacity), use of the additional stored water to improve instream flows or to supplement the Yakima Project Total Water Supply Available, raising the height of three existing dikes, raising the height of access roads and facilities at the U.S. Forest Service Cle Elum River Campground and Wish-Poosh boat ramp, implementing shoreline protection to reduce erosion, and acquiring private property and easements to accommodate shoreline protection. The primary project objectives are to: (1) Fulfill the intent of the congressional authorization given in sections 1205 and 1206, Title XII, Yakima River Basin Water Enhancement Project (YRBWEP), of Public Law 103-434, Yavapai-Prescott Indian Tribe Water Rights Settlement Act of 1994; (2) improve aquatic resources for fish habitat, rearing, and migration in the Cle Elum and upper Yakima Rivers; and (3) (if authorized by Congress) help meet demands for agricultural water supply.
The primary study area encompasses the Cle Elum Reservoir, the adjacent area that would be inundated by the proposed 3-foot raise in the full-pool reservoir level, and areas that could be directly affected by construction or operations-related activities, including the spillway, dikes, adjacent lands, and public recreation resources. The extended study area includes the Cle Elum and Yakima rivers downstream from Cle Elum Dam; lands, municipalities, and instream uses served by Cle Elum and Yakima rivers water rights; and the larger Yakima Project area.
A ROD will identify all the alternatives considered, including the environmentally preferable alternative and the action selected for implementation, if they are not the same. A ROD will also discuss the factors and rationale used in making the decision; provide information on the adopted means to avoid, minimize and compensate for environmental impacts; describe any monitoring and enforcement program to ensure that adopted mitigation is accomplished; and address any significant comments received on the Final EIS.
The Cle Elum Pool Raise Project is authorized in sections 1205 and 1206 of Title XII of the Yavapai-Prescott Indian Tribe Water Rights Settlement Act of 1994.
The Final EIS is available for public inspection at the following locations:
1. Bureau of Reclamation, Pacific Northwest Regional Office, 1150 N Curtis Road, Boise, Idaho 83706.
2. Bureau of Reclamation, Columbia-Cascades Area Office, 1917 Marsh Road, Yakima, Washington 98901.
3. Washington State Department of Ecology, 15 W. Yakima Avenue, Suite 200, Yakima, Washington 98902.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment-including your personal identifying information-may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at EDIS,
General information concerning the Commission may also be obtained by accessing its Internet server at United States International Trade Commission (USITC) at USITC.
The Commission has received a complaint and a submission pursuant to section 210.8(b) of the Commission's Rules of Practice and Procedure filed on behalf of Global Cash Access, Inc. on May 4, 2015. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain automated teller machines and point of sale devices and associated software thereof. The complaint names as respondents NRT Technology Corp. of Canada and NRT Technologies, Inc. of Las Vegas, NV. The complainant requests that the Commission issue a permanent limited exclusion order, cease and desist orders, and a bond upon respondents' alleged infringing articles during the 60-day Presidential review period pursuant to 19 U.S.C. § 1337(j).
Proposed respondents, other interested parties, and members of the public are invited to file comments, not to exceed five (5) pages in length, inclusive of attachments, on any public interest issues raised by the complaint or section 210.8(b) filing. Comments should address whether issuance of the relief specifically requested by the complainant in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions must be filed no later than by close of business, eight calendar days after the date of publication of this notice in the
Persons filing written submissions must file the original document electronically on or before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by noon the next day pursuant to section 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the docket number (“Docket No. 3068”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of sections 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the presiding administrative law judge has issued a Final Initial Determination and Recommended Determination on Remedy and Bonding in the above-captioned investigation. The Commission is soliciting comments on public interest issues raised by the recommended relief. This notice is soliciting public interest comments from the public only. Parties are to file public interest submissions pursuant to 19 CFR 210.50(a)(4).
Amanda P. Fisherow, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-2737. The public version of the complaint can be accessed on the Commission's electronic docket (EDIS) at
General information concerning the Commission may also be obtained by accessing its Internet server (
Section 337 of the Tariff Act of 1930 provides that if the Commission finds a violation it shall exclude the articles concerned from the United States:
The Commission is interested in further development of the record on the public interest in these investigations. Accordingly, members of the public are invited to file submissions of no more than five (5) pages, inclusive of attachments, concerning the public interest in light of the administrative law judge's Recommended Determination on Remedy and Bond issued in this investigation on April 27, 2015. Comments should address whether the recommended relief in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to any recommended order are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to any recommended order;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to any recommended order within a commercially reasonable time; and
(v) explain how any recommended order would impact consumers in the United States.
Written submissions must be filed no later than by close of business on June 3, 2015.
Persons filing written submissions must file the original document electronically on or before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by noon the next day pursuant to section 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the investigation number (“Inv. No. 907”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of sections 201.10 and 210.50 of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.50).
By order of the Commission.
Office on Violence Against Women, Department of Justice.
30-day notice.
The Department of Justice (DOJ), Office on Violence Against Women, will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for an additional 30 days until June 8, 2015.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
(1)
(2)
(3)
(4)
(5)
(6)
If additional information is required contact: Jerri Murray, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., Room 3E.405B, Washington, DC 20530.
National Aeronautics and Space Administration (NASA).
Notice of information collection.
The National Aeronautics and Space Administration, as part of its continuing effort to guide the development of space technologies, has released a draft version of the 2015 NASA Technology Roadmaps to the public. These Roadmaps, which expand and update the Technology Roadmaps released in 2012, consist of an introductory section and fifteen (15) distinct Technology Area roadmaps, which contain over 1,250 technology candidate snapshots. NASA is using specific questions to enable comment on the draft 2015 NASA Technology Roadmaps in a broad spectrum of areas.
Consideration will be given to all comments received within 30 days from the date of this publication. The Web site,
Requests for additional information or instructions should be directed to Faith Chandler, Director Strategic Integration, Office of the Chief Technologist, NASA Headquarters, 300 E Street SW., Washington, DC 20546, at
The draft 2015 NASA Technology Roadmaps expand and update the original 2012 roadmaps, providing extensive details about anticipated NASA mission capability and associated technology development needs. NASA believes sharing these documents with the broader community will increase awareness, generate innovative solutions to provide the capabilities for space exploration and scientific discovery, and inspire others to get involved in America's space program.
The five questions on the Web site enable comment on the draft 2015
Question 1: Confirm validity or propose a change to the description of state of the art.
Question 2: Identify interest in the use of a technology candidate for a space application.
Question 3: Identify interest in the use of a technology candidate for a non-space application.
Question 4: Describe interest in potential partnership (co-funding development) of a technology candidate.
Question 5: Suggest other changes to the draft 2015 NASA Technology Roadmaps.
When arriving on the home page of the Web site titled: “
• Full name (maximum 200 characters),
• Organization (maximum 500 characters),
• Country in which organization is based (maximum 200 characters),
• Organization type (selection button),
• Email Address (maximum 200 characters),
• Brief description of the expertise (maximum 5,000 characters).
The reviewer should
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning an amendment to Priority Mail Express, Priority Mail & First-Class Package Service Contract 3. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
On May 1, 2015, the Postal Service filed notice of an Amendment to the existing Priority Mail Express, Priority Mail & First-Class Package Service Contract 3 negotiated service agreement approved in this docket.
The Postal Service also filed the unredacted Amendment and supporting financial information under seal. The Postal Service seeks to incorporate by reference the Application for Non-Public Treatment originally filed in this docket for the protection of information that it has filed under seal. Notice at 1.
The Amendment changes prices, as contemplated by the contract's terms.
The Postal Service intends for the Amendment to become effective one business day after the date that the Commission completes its review of the Notice.
The Commission invites comments on whether the changes presented in the Postal Service's Notice are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR 3015.5, and 39 CFR part 3020, subpart B. Comments are due no later than May 11, 2015. The public portions of this filing can be accessed via the Commission's Web site (
The Commission appoints Curtis Kidd to represent the interests of the general public (Public Representative) in this docket.
1. The Commission reopens Docket No. CP2014-53 for consideration of matters raised by the Postal Service's Notice.
2. Pursuant to 39 U.S.C. 505, the Commission appoints Curtis Kidd to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding.
3. Comments are due no later than May 11, 2015.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing concerning an addition to Priority Mail Express & Priority Mail Contract 18. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
In accordance with 39 U.S.C. 3642 and 39 CFR 3020.30
The Postal Service contemporaneously filed a redacted contract related to the proposed new product under 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5.
To support its Request, the Postal Service filed a copy of the contract, a copy of the Governors' Decision authorizing the product, proposed changes to the Mail Classification Schedule, a Statement of Supporting Justification, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket Nos. MC2015-49 and CP2015-61 to consider the Request pertaining to the proposed Priority Mail Express & Priority Mail Contract 18 product and the related contract, respectively.
The Commission invites comments on whether the Postal Service's filings in the captioned dockets are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 11, 2015. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Kenneth R. Moeller to serve as Public Representative in these dockets.
1. The Commission establishes Docket Nos. MC2015-49 and CP2015-61 to consider the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Kenneth R. Moeller is appointed to serve as an officer of the Commission to represent the interests of the general public in these proceedings (Public Representative).
3. Comments are due no later than May 11, 2015.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Elizabeth A. Reed, 202-268-3179.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on May 1, 2015, it filed with the Postal Regulatory Commission a
Request for nominations to the Scientific Advisory Committee for the Foundation's Innovation in Medical Evidence Development and Surveillance (IMEDS) program.
The Reagan-Udall Foundation for the Food and Drug Administration (FDA), which was created by Title VI of the Food and Drug Amendments of 2007, is requesting nominations for its Innovation in Medical Evidence Development and Surveillance (IMEDS) Scientific Advisory Committee. The IMEDS Scientific Advisory Committee will provide scientific oversight and guidance of the IMEDS Program, and will report to the Reagan-Udall Foundation for the FDA's Board of Directors. Instructions on submitting nominations are listed in the “Background” section.
All nominations must be submitted to the Reagan-Udall Foundation for the FDA by May 24, 2015. IMEDS Scientific Advisory Committee members will be selected by the IMEDS Steering Committee before July 15, 2015; those selected will be notified by July 30, 2015 regarding the Steering Committee's decision.
Nicole Spear, Reagan-Udall Foundation for the FDA, 202-828-1210. Nominations should be sent to
The Reagan-Udall Foundation for the FDA (the Foundation) is an independent 501(c)(3) not-for-profit, organization created by Congress to advance the mission of FDA to modernize medical, veterinary, food, food ingredient, and cosmetic product development; accelerate innovation, and enhance product safety. With the ultimate goal of improving public health, the Foundation provides a unique opportunity for different sectors (FDA, patient groups, academia, other government entities, and industry) to work together in a transparent way to create exciting new research projects to advance regulatory science.
The Foundation acts as a neutral third party to establish novel, scientific collaborations. Much like any other independently developed information, FDA evaluates the scientific information from these collaborations to determine how Reagan-Udall Foundation projects can help the agency to fulfill its mission.
The Innovation in Medical Evidence Development and Surveillance (IMEDS) program is offered by the Foundation. IMEDS is a public-private partnership created to build upon the significant progress made on research methodology by the Sentinel Initiative and the Observational Medical Outcomes Partnership (OMOP).
IMEDS's primary objective is to advance the science and tools necessary to support post-market evidence generation on regulated products, including safety surveillance and
1. IMEDS-Methods: Supports the development of a methods research agenda and coordination of methods research in support of using electronic health data for safety surveillance conducted by FDA as well as the broader community of researchers.
2. IMEDS-Education: Offers educational opportunities in areas related to medical product safety surveillance, and methods research and application for scientific professionals.
3. IMEDS-Evaluation: Applies Methods and Education lessons learned for medical product assessments to facilitate leveraging Sentinel tools and capabilities toward a national resource for evidence generation.
The IMEDS Scientific Advisory Committee has oversight of all IMEDS projects.
RUF is seeking nominations for four (4) voting members of the IMEDS Scientific Advisory Committee listed below.
1. At Large (excluding Pharmaceutical representative): 2 members.
2. Regulated Industry Representative: 2 members.
The following criteria will be used to evaluate nominees for the IMEDS Scientific Advisory Committee.
1. Required Criteria for Each of 4 Positions.
a. Currently employed by/volunteering for stakeholder field (
b. Leading expert in their relevant field (based on position/title, publications, or other experience).
2. Criteria across Scientific Advisory Committee (
a. Ability to complete Scientific Advisory Committee responsibilities (which can be accessed via the IMEDS Web site:
b. Prior experience serving on a related or similar governance body.
c. Understanding of post-market surveillance landscape and impact upon stakeholder group represented by Scientific Advisory Committee seat, or understanding of issues around use of electronic health data for observational purposes.
d. Individuals both with and without past experience in Mini-Sentinel, OMOP, and similar research/regulatory science initiatives to ensure a diversity of perspectives.
e. Individuals from both U.S.- and international-based institutions.
• The IMEDS Scientific Advisory Committee meets in-person at least twice per year, with bimonthly teleconferences in between meetings (or monthly teleconferences as deemed necessary by the Chair).
• Members serve two-year terms, and a maximum of two terms (based on IMEDS fiscal calendar).
• Members do not receive compensation from RUF.
• Members can be reimbursed by RUF for actual and reasonable expenses incurred in support of IMEDS in accordance with applicable law and their specific institutional policies.
• Members are subject to the IMEDS Conflict of Interest policies.
• To apply, please submit the nominee's CV and the nomination form that can be found on the IMEDS Web site:
• Individuals may be nominated for one or more of the 4 voting positions, and those making nominations should specify for which of the 4 voting positions the nominee is being nominated.
• Individuals may nominate themselves.
Request for nominations to the Steering Committee for the Foundation's Innovation in Medical Evidence Development and Surveillance (IMEDS) program.
The Reagan-Udall Foundation for the Food and Drug Administration (FDA), which was created by Title VI of the Food and Drug Amendments of 2007, is requesting nominations for its Innovation in Medical Evidence Development and Surveillance (IMEDS) Steering Committee. The IMEDS Steering Committee will provide oversight and guidance of the IMEDS Program, and will report to the Reagan-Udall Foundation for the FDA's Board of Directors. Instructions on making nominations are listed in the “Background” section.
All nominations must be submitted to the Reagan-Udall Foundation for the FDA by May 24, 2015. IMEDS Steering Committee members will be selected by the Reagan-Udall Foundation for the FDA's Board of Directors by July 2015; those selected will be notified by July 30, 2015 regarding the Board's decision.
Nicole Spear, Reagan-Udall Foundation for the FDA, 202-828-1210. Nominations should be sent to
The Reagan-Udall Foundation for the FDA (the Foundation) is an independent 501(c)(3) not-for-profit, organization created by Congress to advance the mission of FDA to modernize medical, veterinary, food, food ingredient, and cosmetic product development; accelerate innovation, and enhance product safety. With the ultimate goal of improving public health, the Foundation provides a unique opportunity for different sectors (FDA, patient groups, academia, other government entities, and industry) to work together in a transparent way to create exciting new research projects to advance regulatory science.
The Foundation acts as a neutral third party to establish novel, scientific collaborations. Much like any other independently developed information, FDA evaluates the scientific information from these collaborations to determine how Reagan-Udall Foundation projects can help the agency to fulfill its mission.
The Innovation in Medical Evidence Development and Surveillance (IMEDS) program is offered by the Foundation. IMEDS is a public-private partnership created to build upon the significant progress made on research methodology by the Sentinel Initiative and the
IMEDS's primary objective is to advance the science and tools necessary to support post-market evidence generation on regulated products, including safety surveillance and evaluations, and to facilitate utilization of a robust electronic healthcare data platform for generating better evidence on regulated products in the post-market settings. To accomplish this objective, the IMEDS program includes three projects:
1. IMEDS-Methods: Supports the development of a methods research agenda and coordination of methods research in support of using electronic health data for safety surveillance conducted by FDA as well as the broader community of researchers.
2. IMEDS-Education: Offers educational opportunities in areas related to medical product safety surveillance, and methods research and application for scientific professionals.
3. IMEDS-Evaluation: Applies Methods and Education lessons learned for medical product assessments to facilitate leveraging Sentinel tools and capabilities toward a national resource for evidence generation.
The IMEDS Steering Committee will have oversight of all IMEDS projects.
RUF is seeking nominations for two (2) voting members of the IMEDS Steering Committee listed below.
1. At Large (excluding Pharmaceutical representative): 1 member.
2. Provider (
The following criteria will be used to evaluate nominees for the IMEDS Steering Committee.
1. Required Criteria for Each of 2 Positions
a. Currently employed by/volunteering for stakeholder field (
b. Leading expert in their relevant field (based on position/title, publications, or other experience).
2. Criteria across Steering Committee (
a. Ability to complete Steering Committee responsibilities (which can be accessed via the IMEDS Web site:
b. Prior experience serving on a related or similar governance body.
c. Understanding of post-market surveillance landscape and impact upon stakeholder group represented by Steering Committee seat, or understanding of issues around use of electronic health data for observational purposes.
d. Individuals both with and without past experience in Mini-Sentinel, OMOP, and similar research/regulatory science initiatives to ensure a diversity of perspectives.
e. Individuals from both U.S.- and international-based institutions.
• The IMEDS Steering Committee meets in-person at least twice per year, with bimonthly teleconferences in between meetings (or monthly teleconferences as deemed necessary by the Chair).
• Members serve two-year terms, and a maximum of two terms (based on IMEDS fiscal calendar).
• Members do not receive compensation from RUF.
• Members can be reimbursed by RUF for actual and reasonable expenses incurred in support of IMEDS in accordance with applicable law and their specific institutional policies.
• Members are subject to the IMEDS Conflict of Interest policies.
• To apply, please submit the nominee's CV and the nomination form that can be found on the IMEDS Web site:
• Individuals may be nominated for one or more of the 2 voting positions, and those making nominations should specify for which of the 2 voting positions the nominee is being nominated.
• Individuals may nominate themselves.
On January 16, 2015, NYSE Arca, Inc. (“Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
NYSE Arca Equities Rule 5.2(j)(3) permits the listing and trading of Investment Company Units (“Units”).
Commentary .02(a)(2) to NYSE Arca Equities Rule 5.2(j)(3) provides that, to be listed and traded pursuant to Rule 19b-4(e) under the Act, components of an index or portfolio underlying a series of Units, in the aggregate, that account for at least 75% of the weight of the index or portfolio each shall have a minimum original principal amount outstanding of $100 million or more. The Exchange proposes to amend this generic listing criterion to accommodate the listing of Units based on indexes or portfolios that include municipal bonds.
Specifically, the Exchange proposes to amend NYSE Arca Equities Rule 5.2(j)(3), Commentary .02(a)(2) to state that components that, in the aggregate, account for at least 75% of the weight of an index or portfolio shall: (A) Each shall have a minimum original principal amount outstanding of $100 million or more; or (B) if a municipal bond component, such component shall be issued in an offering with an aggregate size, as set forth in the offering's official statement, of $100 million or more. Accordingly, if an individual municipal bond component of an index or portfolio has an amount outstanding of less than $100 million, Units based on such an index or portfolio could still meet the generic listing standard if the municipal bond component were part of an overall municipal bond offering of $100 million or more.
The Exchange provides that it is appropriate to calculate components of a municipal bond index differently from other Fixed Income Securities. Principally, the Exchange states that municipal bonds are issued with either “serial” or “term” maturities or some combination thereof. The official statement issued in connection with a municipal bond offering describes the terms of the component bonds and the issuer and/or obligor on the related bonds. Such an offering is comprised of a number of specific maturity sizes, but the entire issue or offering receives the same credit rating. Further, the entire issue or offering is based on a specified project or group of related projects and funded by the same revenue or other funding sources.
According to the Exchange, because the individual municipal bond components of an index or portfolio may predominantly have maturities of less than $100 million outstanding (although part of a municipal bond offering of $100 million or greater), if only individual maturity sizes are considered, Units based on a municipal bond index may not qualify to be listed under the generic listing standards. Accordingly, the Exchange believes the proposed amendment to Commentary .02(a)(2) would facilitate the listing of Units based on municipal bond indexes by permitting the Exchange, in applying its generic listing criteria, to take into account the aggregate size of the municipal bond offering.
The Exchange states that consideration of the aggregate size of the municipal bond offering, rather than the individual bond component, does not raise concerns regarding pricing or liquidity of the applicable municipal bond index components or of the Units overlying the applicable index. The Exchange states that, within a single municipal bond issuer, there are often multiple contemporaneous or sequential issuances that have the same credit rating, structure, and maturity. According to the Exchange, although these separate issues have different CUSIPs, because individual maturities share a number of important features, including credit rating and the purpose and terms of the offering as set forth in the applicable official statement, for investment purposes, they can be expected to be relatively fungible to one another. Accordingly, the Exchange believes that the proposed rule change is reasonable and appropriate because the pricing and liquidity of such maturity sizes is predominately based on the common characteristics of the aggregate issue.
The Exchange also notes that major municipal bond indexes, while they include individual bond maturities as index components, include “deal size” as a factor in the criteria for index constituents and additions.
The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act
Pursuant to Section 19(b)(2)(B) of the Act,
The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.
Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by May 29, 2015. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by June 12, 2015.
The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, which are set forth in the Notice,
Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend the fees for NYSE Arca Integrated Feed to add a late fee in connection with failure to submit the non-display use declaration, operative on May 1, 2015. The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at
The Exchange proposes to amend the fees for NYSE Arca Integrated Feed, as set forth on the NYSE Arca Equities Proprietary Market Data Fee Schedule (“Fee Schedule”), to add a late fee in connection with failure to submit an updated non-display use declaration. The proposed change to the Fee Schedule would be operative on May 1, 2015.
The Exchange established the current fees for non-display services for NYSE Arca Integrated Feed in April 2013 and amended those fees in September 2014.
The Exchange notes that if a data recipient does not timely submit a Non-Display Use Declaration, the Exchange does not have up-to-date information about the data recipient's data use and therefore may not be charging the correct fees to the data recipient. In order to correctly assess fees for the non-display use of NYSE Arca Integrated Feed, the Exchange needs to have current and accurate information about the use of NYSE Arca Integrated Feed. The failure of data recipients to submit the Non-Display Use Declaration on time leads to potentially incorrect billing and administrative burdens, including tracking and obtaining late Non-Display Use Declarations and correcting customer records in connection with late Non-Display Use Declarations. The purpose of the proposed late fee is to incent data recipients to submit the Non-Display Use Declaration promptly to avoid the administrative burdens associated with the late submission of Non-Display Use Declarations.
The Exchange proposes to establish a Non-Display Declaration Late Fee of $1,000 per month. The proposed fee would be charged to any data recipient that pays an Access Fee for NYSE Arca Integrated Feed that has failed to timely complete and submit a Non-Display Use Declaration.
With respect to the Non-Display Use Declaration that was due by September 1, 2014, the Non-Display Declaration Late Fee would apply to NYSE Arca Integrated Feed data recipients that have not submitted the Non-Display Use Declaration by June 30, 2015, and would apply beginning July 1, 2015 and for each month thereafter until the data recipient has completed and submitted the Non-Display Use Declaration. With respect to the annual Non-Display Use Declaration due by January 31st of each year beginning in 2016, the Non-Display Declaration Late Fee would apply to data recipients that fail to complete and submit the annual Non-Display Use Declaration by the January 31st due date, and would apply beginning February 1st and for each month thereafter until the data recipient has completed and submitted the annual Non-Display Use Declaration.
In addition to adding the Non-Display Declaration Late Fee for NYSE Arca Integrated Feed to the Fee Schedule, the Exchange proposes to add an endnote to the Fee Schedule that would specify the effective dates for the Non-Display Declaration Late Fee as described above, and to change the numbering for the existing endnotes as needed.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange believes that it is reasonable to impose a late fee in connection with the submission of the Non-Display Use Declaration. In order to correctly assess fees for the non-display use of NYSE Arca Integrated Feed, the Exchange needs to have current and accurate information about the use of NYSE Arca Integrated Feed. The failure of data recipients to submit the Non-Display Use Declaration on time leads to potentially incorrect billing and administrative burdens, including tracking and obtaining late Non-Display Use Declarations and correcting and following up on payments owed in connection with late Non-Display Use Declarations. The purpose of the late fee is to incent data recipients to submit the Non-Display Use Declaration promptly to avoid the administrative burdens associated with the late submission of Non-Display Use Declarations. The Non-Display Declaration Late Fee is equitable and not unfairly discriminatory because it will apply to all data recipients that choose to subscribe to the NYSE Arca Integrated Feed.
The Non-Display Declaration Late Fee is also consistent with similar pricing adopted in 2013 by the Consolidated Tape Association (“CTA”).
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. An exchange's ability to price its proprietary market data feed products is constrained by actual competition for the sale of proprietary market data products, the joint product nature of exchange platforms, and the existence of alternatives to the Exchange's proprietary data. In addition to being able to choose which proprietary data products (if any) to use and how to use them, a user can avoid the late fees that are the subject of this filing entirely by simply complying with the requisite deadlines.
In setting the proposed fees, the Exchange considered the competitiveness of the market for proprietary data and all of the implications of that competition. The Exchange believes that it has considered all relevant factors and has not considered irrelevant factors in order to establish fair, reasonable, and not unreasonably discriminatory fees and an equitable allocation of fees among all users. The existence of fierce competition to sell proprietary data products and for order flow, as well as numerous alternatives to the Exchange's products, including proprietary data from other sources, ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect these alternatives or choose not to purchase a specific proprietary data product if the attendant fees are not justified by the returns that any particular vendor or data recipient would achieve through the purchase (the returns on use being a particularly important aspect of non-display uses of proprietary data).
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On March 12, 2015, NYSE Arca, Inc. (the “Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1)
NYSE Arca proposes to list and trade shares of the Fund under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares.
The Fund will seek to provide current income, and will invest in a manner designed to provide shareholders with regular cash flow from their investment in the Fund. With regard to each investment category, the Fund will carry out its investment strategy by investing in the securities listed in each investment category below and/or through the purchase of shares issued by U.S. exchange-traded funds (“ETFs”)
Under normal market circumstances, at least 20% but no more than 90% of the Fund's net assets will be invested in investment grade and non-investment grade fixed income securities
Under normal market circumstances, at least 20% but no more than 90% of the Fund's net assets will be invested in a diversified portfolio of equity securities issued by companies located in the U.S. and/or foreign countries, including emerging markets, which trade on a U.S. or foreign exchange. The Fund may carry out its investment in foreign securities by purchasing American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”) and Global Depositary Receipts (“GDRs”, together with EDRs and ADRs, “Depositary Receipts”).
The Fund may engage in short sales.
While the Fund, under normal market circumstances, will invest a majority of
The Fund may invest in the following money market instruments: commercial paper issued by U.S. and foreign corporations; bank obligations; certificates of deposit; time deposits and bankers' acceptances of U.S. commercial banks and overseas branches of U.S. commercial banks and foreign banks; and short-term corporate debt, all of which have, at the time of purchase, 397 days or less remaining to maturity issued by U.S. and foreign issuers.
A portion of the Fund's assets may be invested in cross currency positions of the currencies of developed and emerging markets through spot foreign exchange currency contracts, forward foreign exchange currency contracts, and foreign exchange currency options that trade on U.S. exchanges.
The Fund may invest in the following derivative instruments: Futures contracts (consisting of futures contracts based on equity or fixed income securities and/or equity or fixed income indices, commodities, interest rates and currencies); swap agreements on any of the following asset classes: equity, fixed income, currency and interest rates (such swaps may be based on the price return or total return of the referenced asset); credit default swaps (consisting of credit default swaps in which the referenced asset is a single fixed income security or a group of fixed income securities); options (consisting of long and short positions in call options and put options on indices based on equities, fixed income securities, interest rates, currencies or commodities, individual securities or currencies, swaptions and options on futures contracts); and forward contracts (consisting of forward contracts based on equity or fixed income securities and/or equity or fixed income indices, currencies, interest rates, swap forwards and non-deliverable forwards). Futures contracts and options on futures contracts in which the Fund may invest will be traded on U.S. exchanges regulated by the Commodity Futures Trading Commission (“CFTC”),
The Fund may use repurchase agreements, reverse repurchase agreements, and mortgage dollar rolls for temporary or emergency purposes or to earn additional income on portfolio securities, such as Treasury bills or notes.
With respect to its investments in fixed income securities, the Fund may invest in restricted securities (Rule 144A securities), which are subject to legal restrictions on their sale.
The Exchange represents that the Fund will limit its investment in non-government sponsored residential mortgage-backed securities, commercial mortgage-backed securities and asset-backed securities (including equipment trust certificates) as well as bank loans and illiquid restricted securities, in the aggregate, to 20% or less of the Fund's net assets.
The Exchange represents that the Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), including Rule 144A securities deemed illiquid by the Adviser, consistent with Commission guidance. The Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Fund's net assets are held in illiquid assets.
Not more than 10% of the net assets of the Fund in the aggregate invested in exchange-listed equity securities shall consist of equity securities whose principal market is not a member of the Intermarket Surveillance Group (“ISG”) or a party to a comprehensive surveillance sharing agreement (“CSSA”) with the Exchange.
The Fund's investments will be consistent with its investment objective and will not be used to enhance leverage.
While the Fund may invest in inverse ETFs, the Fund will not invest in leveraged (
After careful review, the Commission finds that the Exchange's proposal to list and trade the Shares is consistent with the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange.
The Commission finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Exchange Act,
The Commission also believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. On each business day, before commencement of trading in Shares in the Core Trading Session on the Exchange, the Adviser will disclose on the Fund's Web site the Disclosed Portfolio for the Fund as defined in NYSE Arca Equities Rule 8.600(c)(2) that will form the basis for the Fund's calculation of NAV at the end of the business day.
The Exchange represents that trading in the Shares will be halted if the circuit breaker parameters in NYSE Arca Equities Rule 7.12 have been reached or because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable.
The Exchange states that it has a general policy prohibiting the distribution of material, non-public information by its employees. The Exchange represents that the Adviser and Sub-Advisers are not registered as broker-dealers but are affiliated with three broker-dealers and have implemented and will maintain a “fire wall” with respect to each such broker-dealer affiliate regarding access to information concerning the composition and/or changes to the portfolios. Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit Holders in an Information Bulletin (“Bulletin”) of the special characteristics and risks associated with trading the Shares. The Exchange states that trading in the Shares will be subject to the existing trading surveillances, administered by the Financial Industry Regulatory Authority (“FINRA”) on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.
The Exchange represents that it deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. In support of this proposal, the Exchange has also made the following representations:
(1) The Shares of the Fund will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600.
(2) The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions.
(3) Trading in the Shares will be subject to the existing trading surveillances, administered by FINRA on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws, and these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and federal securities laws applicable to trading on the Exchange.
(4) Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit Holders in a Bulletin of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin will discuss the following: (a) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares; (c)
(5) For initial and/or continued listing, the Fund will be in compliance with Rule 10A-3
(6) The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), including Rule 144A securities deemed illiquid by the Adviser, consistent with Commission guidance. The Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Fund's net assets are held in illiquid assets.
(7) The Fund will limit its investment in non-government sponsored residential mortgage-backed securities, commercial mortgage-backed securities and asset-backed securities (including equipment trust certificates) as well as bank loans and illiquid restricted securities, in the aggregate, to 20% or less of the Fund's net assets.
(8) Not more than 10% of the net assets of the Fund will be invested in non-exchange-listed ADRs.
(9) Not more than 10% of the net assets of the Fund in the aggregate invested in exchange-traded equity securities shall consist of equity securities whose principal market is not a member of the ISG or party to a CSSA with the Exchange.
(10) A minimum of 100,000 Shares will be outstanding at the commencement of trading on the Exchange.
This approval order is based on all of the Exchange's representations, including those set forth above and in the Notice.
For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On March 6, 2015, Chicago Board Options Exchange, Incorporated (“Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission is extending the 45-day time period for Commission action on the proposed rule change. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider and take action on the Exchange's proposed rule change.
Accordingly, pursuant to Section 19(b)(2)(A)(ii)(I) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend the fees for NYSE BBO and NYSE Trades to add a late fee in connection with failure to submit the non-display use declaration, operative on May 1, 2015. The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the fees for NYSE BBO and NYSE Trades, as set forth on the NYSE Proprietary Market Data Fee Schedule (“Fee Schedule”), to add a late fee in connection with failure to submit an updated non-display use declaration. The proposed change to the Fee Schedule would be operative on May 1, 2015.
The Exchange established the current fees for non-display services for NYSE BBO and NYSE Trades in April 2013 and amended those fees in September 2014.
The Exchange notes that if a data recipient does not timely submit a Non-Display Use Declaration, the Exchange does not have up-to-date information about the data recipient's data use and therefore may not be charging the correct fees to the data recipient. In order to correctly assess fees for the non-display use of NYSE BBO and NYSE Trades, the Exchange needs to have current and accurate information about the use of NYSE BBO and NYSE Trades. The failure of data recipients to submit the Non-Display Use Declaration on time leads to potentially incorrect billing and administrative burdens, including tracking and obtaining late Non-Display Use Declarations and correcting customer records in connection with late Non-Display Use Declarations. The purpose of the proposed late fee is to incent data recipients to submit the Non-Display Use Declaration promptly to avoid the administrative burdens associated with the late submission of Non-Display Use Declarations.
The Exchange proposes to establish a Non-Display Declaration Late Fee of $1,000 per month. The proposed fee would be charged to any data recipient that pays an Access Fee for NYSE BBO and NYSE Trades that has failed to timely complete and submit a Non-Display Use Declaration.
With respect to the Non-Display Use Declaration that was due by September 1, 2014, the Non-Display Declaration Late Fee would apply to data recipients of NYSE BBO and NYSE Trades that have not submitted the Non-Display Use Declaration by June 30, 2015, and would apply beginning July 1, 2015 and for each month thereafter until the data recipient has completed and submitted the Non-Display Use Declaration. With respect to the annual Non-Display Use Declaration due by January 31st of each year beginning in 2016, the Non-Display Declaration Late Fee would apply to data recipients that fail to complete and submit the annual Non-Display Use Declaration by the January 31st due date, and would apply beginning February 1st and for each month thereafter until the data recipient has completed and submitted the annual Non-Display Use Declaration.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange believes that it is reasonable to impose a late fee in connection with the submission of the Non-Display Use Declaration. In order to correctly assess fees for the non-display use of NYSE BBO and NYSE Trades, the Exchange needs to have current and accurate information about the use of NYSE BBO and NYSE Trades. The failure of data recipients to submit the Non-Display Use Declaration on time leads to potentially incorrect billing and administrative burdens, including tracking and obtaining late Non-Display Use Declarations and correcting and following up on payments owed in connection with late Non-Display Use Declarations. The purpose of the late fee is to incent data recipients to submit the Non-Display Use Declaration promptly to avoid the administrative burdens associated with the late submission of Non-Display Use Declarations. The Non-Display Declaration Late Fee is equitable and not unfairly discriminatory because it
The Non-Display Declaration Late Fee is also consistent with similar pricing adopted in 2013 by the Consolidated Tape Association (“CTA”).
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. An exchange's ability to price its proprietary market data feed products is constrained by actual competition for the sale of proprietary market data products, the joint product nature of exchange platforms, and the existence of alternatives to the Exchange's proprietary data. In addition to being able to choose which proprietary data products (if any) to use and how to use them, a user can avoid the late fees that are the subject of this filing entirely by simply complying with the requisite deadlines.
In setting the proposed fees, the Exchange considered the competitiveness of the market for proprietary data and all of the implications of that competition. The Exchange believes that it has considered all relevant factors and has not considered irrelevant factors in order to establish fair, reasonable, and not unreasonably discriminatory fees and an equitable allocation of fees among all users. The existence of fierce competition to sell proprietary data products and for order flow, as well as numerous alternatives to the Exchange's products, including proprietary data from other sources, ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect these alternatives or choose not to purchase a specific proprietary data product if the attendant fees are not justified by the returns that any particular vendor or data recipient would achieve through the purchase (the returns on use being a particularly important aspect of non-display uses of proprietary data).
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend Rule 6.74A relating to its Automated Improvement Mechanism (“AIM”). The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its AIM auction Rule 6.74A to provide that in instances where an Initiating Trading Permit Holder electronically submits an order that it represents as agent (“Agency Order”) into an AIM Auction (“Auction”), which the Initiating Trading Permit Holder is willing to automatically match (“auto-match”) as principal, the price and size of all Auction responses up to an optional designated limit price and, at the final Auction price level, there is only one competing Market-Maker or Trading Permit Holder acting as agent for an order resting at the top of the Exchange's book opposite the Agency Order, the Initiating Trading Permit Holder may be allocated up to fifty percent (50%) of the size of the order. The Exchange also proposes to add language in Rule 6.74A to more fully describe the manner in which any remaining contracts will be allocated at the conclusion of an Auction and make other non-substantive changes to Rule 6.74A to update terminology in the Rule and make fix minor typographical errors in the text. This is a competitive filing that is substantially and materially based on the price improvement auction rules of BOX Options Exchange, LLC (“BOX”),
Pursuant to Rule 6.74A(b)(3), upon conclusion of an Auction, an Initiating Trading Permit Holder will retain certain priority and trade allocation privileges for both Agency Orders that the Initiation Trading Permit Holder seeks to cross at a single price (“single-price submissions”) and Agency Orders that the Initiating Trading Permit Holder is willing to automatically match as principal the price and size of all Auction responses (“auto-match submissions”). Under current Rule 6.74A(b)(3)(F), if the best competing Auction response price equals the Initiating Trading Permit Holder's single-price submission, the Initiating Trading Permit Holder's single-price submission shall be allocated the greater of one contract or a certain percentage of the order, which percentage will be determined by the Exchange and may not be larger than 40%. However, if only one Market-Maker matches the Initiating Trading Permit Holder's single price submission then the Initiating Trading Permit Holder may be allocated up to 50% of the order.
Similarly, current Rule 6.74A(b)(3)(G) provides that if the Initiating Trading Permit Holder selected the auto-match option of the Auction, the Initiating Trading Permit Holder shall be allocated its full size at each price point until a price point is reached where the balance of the order can be fully executed. At such price point, the Initiating Trading Permit Holder shall be allocated the greater of one contract or a certain percentage of the remainder of the order, which percentage will be determined by the Exchange and may not be larger than 40%. Notably, unlike the single-price submission rules in Rule 6.74A(b)(3)(F), current Rule 6.74A(b)(3)(G) provides that an Initiating Trading Permit Holder would only receive an allocation of up to 40% for orders that are matched at the final price level by only one competing Market-Maker with an appointment in the relevant option class or Trading Permit Holder acting as agent for an order resting at the top of the Exchange's book opposite the Agency Order when the auto-match option is selected for the Agency Order. The Exchange believes this result to be inconsistent within the Rules and believes that Initiating Trading Permit Holders that price orders more aggressively using the auto-match option and that the Rules should provide that such Initiating Trading Permit Holders receive allocations at least equal to those that select a single-price submission option for an Auction.
The Exchange proposes to amend Rule 6.74A(b)(3)(G) to provide that if only one competing Market-Maker with an appointment in the relevant option class or Trading Permit Holder acting as agent for an order resting at the top of the Exchange's book opposite the Agency Order is present at the final Auction price, then the Initiating Trading Permit Holder may be allocated up to 50% of the remainder of the Agency Order at the final Auction price level. As discussed above, current Rule 6.74A(b)(3)(G) provides that an Initiating Trading Permit Holder will receive an allocation of up to 40% for orders that are matched at the final price level by only one competing Market-Maker with an allocation in the relevant option class or Trading Permit Holder acting as agent for an order resting at the top of the Exchange's book opposite the Agency Order when the auto-match option is selected by the Initiating Trading Permit Holder for the Auction. The Exchange believes this result to be inconsistent within the Rules and believes that Initiating Trading Permit Holders that price orders more aggressively using the auto-match option should receive allocations at least equal to those that select a single-price submission option. The Exchange also believes proposed rule change will more closely align the language in Rule 6.74A(b)(3)(G) with the language in Rule 6.74A(b)(3)(F) and will thus, provide additional internal consistency within the Rules by harmonizing order allocations of single-price submissions and auto-match Auction orders in instances where there is only one competing order at the final Auction price level. Furthermore, the proposed rule change will bring the Exchange's AIM rules in line with the Rules of other competitor exchanges with which the Exchange competes for order flow.
The Exchange notes that the proposed rule change would not affect the priority of public customer orders under Rule 6.74A(b)(3)(B). Public customer orders
Similarly, a public customer order resting in the book at a final Auction price level worse than the best Auction response will also retain priority in the book. Accordingly, assume again that the national best bid (“NBB”) for a particular option is $1.00 and the national best offer (“NBO”) for the option is $1.20 and that the NBB is an order to buy 10 contracts at CBOE. The minimum increment in the option series is $0.01. An Initiating Trading Permit Holder at CBOE submits an auto-match Agency Order to sell 100 options contracts in the series. The Auction begins and during the Auction, one competing Market-Maker (“MM1”) submits an Auction response to buy 20 contracts at $1.02, a second Market-Maker (“MM2”) submits an Action response to buy 20 contracts at $1.01, and a third Market-Maker (“MM3”) submits an Auction response to buy 20 contracts at $1.00. The Auction then concludes. In this case, MM1 and the Initiating Trading Permit Holder would each be allocated 20 contracts at $1.02 and MM2 and the Initiating Trading Permit Holder would each be allocated 20 contracts at $1.01 since the Initiating Trading Permit Holder is willing to match the price and size at each improved price level. The remaining 20 contracts would be allocated 10 to the public customer order resting in the book at $1.00 because the public customer would retain priority at that price level with the remaining 10 contracts being allocated 50/50 to MM3 and the Initiating Trading Permit Holder, 5 contracts each.
The Exchange believes that increasing the Initiating Trading Permit Holder's allocation priority for auto-match submissions that only have one competing order at the final price level fairly distributes the order when there are only two counterparties to the Auction involved, and that doing so is reasonable because of the value that Initiating Trading Permit Holders provide to the market. Initiating Trading Permit Holders selecting the auto-match option for Agency Orders guarantee an execution at the NBBO or at a better price, and are subject to a greater market risk than single-price submissions while the order is exposed to other AIM participants. As such, the Exchange believes that the value added from Initiating Trading Permit Holders guaranteeing execution of Agency Orders at a price equal to or better than the NBBO in combination with the additional market risk of initiating auto-match submissions warrants an allocation priority of at least the same percentage as Trading Permit Holders who submit single-price orders into AIM. The Exchange also believes that the proposed rule change, like other price improvement allocation programs currently offered by competitor exchanges, will benefit investors by attracting more order flow as well as increasing the frequency that Trading Permit Holders initiate Auctions, which may result in greater opportunities for customer order price improvement. Moreover, as discussed above, the proposed rule change is consistent with the rules of other exchanges.
The Exchange also proposes to add text to Rules 6.74A(b)(3)(F) and (G) to describe the manner in which remaining contracts would be allocated at the conclusion of an Auction under the scenarios therein. Specifically, the Exchange proposes to amend paragraphs (F) and (G) to provide that (subject to public customer priority), after the Initiating Trading Permit Holder has received an allocation of up to 40% of the Agency Order (or 50% of the Agency Order if there is only one other RFR response), contracts shall be allocated among remaining quotes, orders, and auction responses (
For example, suppose that the NBBO for a particular option is $1.00-$1.20. The minimum increment for the series is $0.01 and the matching algorithm in effect for the option class is pro rata. An Initiating Trading Permit Holder submits a matched Agency Order to sell 5 contracts at $1.10. The Auction begins and, during the auction, one competing Market-Maker (“MM1”) submits an Auction response to buy 5 contracts at $1.10, followed by another Market-Maker (“MM2”) submitting an Auction response to buy 5 contracts at $1.10. The Auction concludes. In this case, under proposed Rule 6.74A(b)(3)(F), the Initiating Trading Permit Holder would receive an allocation up to 40%, or, in this case, 2 contracts at $1.10. MM1 and MM2 would then receive 1 contract each at $1.10 according to the pro rata allocation algorithm in place for the class with MM1, as the first responder, receiving the final 1 contract at the final auction price of $1.10.
Similarly, suppose that the NBBO for a particular option is $1.00-$1.20. The minimum increment for the series is $0.01 and the matching algorithm in effect for the option class is pro rata. An Initiating Trading Permit Holder
Remaining odd-lots for auto-match submissions would be similarly allocated under proposed Rule 6.74A(b)(3)(G), except that if all RFR Responses are filled (
The Exchange notes that these proposed amendments are based on, and consistent with, the rules of other competitor exchanges.
Additionally, the Exchange is proposing to add additional clarifying language to Rule 6.74A and correct minor typographical errors in the Rule. Specifically, the Exchange is seeking to amend Rule 6.74A(b)(1)(E) to replace the word “Members” with “Trading Permit Holders.” The Exchange no longer has “members,” but rather Trading Permit Holders. Since its demutualization, the Exchange has attempted (and continues to seek to) replace the word “members” with Trading Permit Holders throughout the Rules for consistency purposes.
The Exchange also proposes to amend Rule 6.74A(b)(3)(F) to make clear the parties that may be entitled to receive a 50% portion of the remainder of the Agency Order at the final price level of an Auction. Current Rule 6.74A(b)(3)(F) provides that if the best Auction response price equals the Initiating Trading Permit Holder's single-price submission and only one Market-Maker matches the Initiating Trading Permit Holder's single price submission, then the Initiating Trading Permit Holder may be allocated up to 50% of the order. The Exchange proposes to add the word “competing” before “Market-Maker” in the second sentence of Rule 6.74A(b)(3)(F) and add the language “with an appointment in the relevant option class or Trading Permit Holder acting as agent for an order resting at the top of the Exchange's book opposite the Agency Order” after “Market-Maker” to make clear that both Market-Makers with an appointment in the relevant option class and Trading Permit Holders acting as agent for an order resting at the top of the Exchange's book opposite the Agency Order may respond to Auctions and thus, may be present at the final Auction price. The Exchange notes that the proposed language is consistent with the current Rule and would also be consistent with the proposed changes to the auto-match rules in Rule 6.74A(b)(3)(G). The Exchange believes that these changes are non-controversial as they simply clarify the Exchange's already existing AIM rules. The Exchange strives for transparency in its Rules and believes these non-substantive changes will provide greater clarity for market participants. Finally, the Exchange proposes to add the word “of” to Rule 6.74A(b)(3)(G) to fix a minor typographical error in the rule text.
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes the proposed rule change protects investors and is in the public interest because it fairly distributes the allocation of the AIM order between the Initiating Trading Permit Holder and the Trading Permit Holder who responded when those Trading Permit Holders are the only two counterparties to the Auction and/or the number of contracts remaining at the final Auction price cannot be evenly distributed at the end of an Auction. The Exchange believes
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed changes are meant to more fairly distribute the order allocation when there are only two counterparties to an Auction auto-match order. The Exchange does not believe that this change will discourage any market participants from entering into the AIM, as the auto-match option of the AIM is more aggressive in terms of risk and therefore, increasing the allocation to up to 50% of the remainder for the Initiating Trading Permit Holder when there is only one competing order at the final price level is a more fair and reasonable allocation mechanism and would likely only increase the number of Trading Permit Holders that select the auto-match option to initiate Auctions.
Furthermore, the Exchange notes that the proposed rule change is a competitive response to similar provisions in the price improvement auction rules of BOX, PHLX and NYSE MKT.
The Exchange neither solicited nor received written comments on the proposed rule change.
Because the foregoing proposed rule change does not:
A. Significantly affect the protection of investors or the public interest;
B. impose any significant burden on competition; and
C. become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2015-043. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes one new information collection.
SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, email, or fax your comments and recommendations on the information collection(s) to the OMB Desk Officer and SSA Reports Clearance Officer at the following addresses or fax numbers.
(OMB) Office of Management and Budget, Attn: Desk Officer for SSA, Fax: 202-395-6974, Email address:
(SSA) Social Security Administration, OLCA, Attn: Reports Clearance Director, 3100 West High Rise, 6401 Security Blvd., Baltimore, MD 21235, Fax: 410-966-2830, Email address:
Or you may submit your comments online through
The information collection below is pending at SSA. SSA will submit it to OMB within 60 days from the date of this notice. To be sure we consider your comments, we must receive them no later than July 7, 2015. Individuals can obtain copies of the collection instruments by writing to the above email address.
Authorization for the Social Security Administration to Obtain Personal Information—20 CFR 404.704; 404.820-404.823; 404.1926; 416.203; and 418.3001-0960-NEW. SSA requests respondents fill out Form SSA-8510, allowing SSA to contact a public or private custodian of records on behalf of an applicant or recipient of an SSA program to request evidence information which may support a benefit application or payment continuation. We ask for evidence information such as the following:
• Age requirements (
• Insured status (
• Marriage or divorce information.
• Pension offsets.
• Wages verification.
• Annuities.
• Property information.
• Benefit verification from a State agency or third party.
• Immigration status (rare instances).
• Income verification from public agencies or private individuals.
• Unemployment benefits.
• Insurance policies.
If the custodian requires a signed authorization from the individual(s) whose information SSA requests, SSA may provide the custodian with a copy of the SSA-8510. Once the respondent completes the SSA-8510, either using the paper form, or using the Modernized Supplemental Security Income Claims System (MSSICS) version, SSA uses the form as the authorization to obtain personal information regarding the respondent from third parties until the authorizing person (respondent) revokes the permission of its usage. The collection is voluntary; however, failure to verify the individuals' eligibility can prevent SSA from making an accurate and timely decision for their benefits. The respondents are individuals who may file for, or currently receive, Social Security benefits, SSI payments, or Medicare Part D subsidies.
Type of Request: Information Collection in Use Without an OMB Number.
Susquehanna River Basin Commission.
Notice.
The Susquehanna River Basin Commission will hold its regular business meeting on June 4, 2015, in Baltimore, Maryland. Details concerning the matters to be addressed at the business meeting are contained in the Supplementary Information section of this notice.
June 4, 2015, at 9:00 a.m.
City Crescent Building, 4th Floor, EEOC Conference Room, 10 S. Howard Street, Baltimore, Md. 21201. (The recommended parking option is to park at the Arena Garage, 99 S. Howard Street, Baltimore, Md.—for all available parking options, see
Jason E. Oyler, Regulatory Counsel, telephone: (717) 238-0423, ext. 1312; fax: (717) 238-2436.
The business meeting will include actions or presentations on the following items: (1) Informational presentation of interest to the Lower Susquehanna Subbasin area; (2) election of officers for FY-2016; (3) the proposed Water Resources Program for fiscal years 2016 and 2017; (4) FY-2016 Regulatory Program Fee Schedule; (5) adoption of a FY-2017 budget; (6) regulatory compliance matter for Wyoming Valley Country Club; (7) Augusta Water, Inc. request for waiver of application required by 18 CFR 806.6(d)(1) and transfer of Docket No. 20021014; (8) Shrewsbury Borough Council (York County, Pa.) request for waiver of applications required by 18 CFR 806.4(a)(2)(ii); (9) notice for Four Seasons Golf Course project sponsor to appear and show cause before the Commission; and (10) Regulatory Program projects.
Projects, the fee schedule, and requests for waiver listed for Commission action are those that were the subject of a public hearing conducted by the Commission on April 30, 2015, and identified in the notice for such hearing, which was published in 80 FR 18276, April 3, 2015.
Interested parties are invited to attend the business meeting and encouraged to review the Commission's Public Meeting Rules of Conduct, which are posted on the Commission's Web site,
Pub. L. 91-575, 84 Stat. 1509
Office of the United States Trade Representative.
Request for comments.
On January 15, 2013, the United States Trade Representative notified Congress of the Administration's intention to enter into negotiations for a Trade in Services Agreement (TISA) with an initial group of 20 trading partners. The January 15 notification states that the group negotiating TISA “will expand as negotiations progress to include others who share our ambitious goals.” In April 2015, the TISA negotiating participants reached a consensus decision to accept Mauritius into the negotiations. The Office of the United States Trade Representative (USTR) seeks public comments regarding particular priorities with respect to the participation of Mauritius in the negotiations. Comments may be provided in writing.
Written comments are due by noon, June 8, 2015.
For questions concerning requirements for written comments, please contact Yvonne Jamison at (202) 395-3475. All other questions regarding this notice should be directed to Christopher Melly at (202) 395-9581.
On January 15, 2013, Ambassador Kirk notified Congress of the Administration's intention to enter into the TISA negotiations. The following 20 trading partners constituted the initial group of TISA participants: Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, European Union on behalf of its member states, Hong Kong China, Iceland, Israel, Japan, Korea, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, Switzerland, and Turkey. Paraguay and Liechtenstein joined the negotiations in September 2013. Uruguay followed in February 2015. USTR solicited public comments on the agreement through notifications published in the
The Chair of the interagency Trade Policy Staff Committee (TPSC) now invites interested persons to provide written comments that will assist USTR in assessing U.S. objectives with regard to the participation of Mauritius in the negotiations. The TPSC Chair invites comments on all relevant matters, and, in particular, with regard to the nature of any existing barriers to trade in services with these markets or issues affecting the supply of services to these markets through various modes of supply and technologies.
Persons submitting written comments must do so in English and must identify (on the first page of the submission) “Trade in Services Agreement: New Participant.” In order to be assured of consideration, comments should be submitted by noon, June 8, 2015. In order to ensure the timely receipt and consideration of comments, USTR strongly encourages commenters to make on-line submissions, using the
The
USTR strongly urges submitters to file comments through
Comments will be placed in the docket and open to public inspection, except business confidential information. Comments may be viewed on the
Federal Highway Administration (FHWA), DOT.
Notice of Limitation on Claims for Judicial Review of Actions by the California Department of Transportation (Caltrans), pursuant to 23 U.S.C. 327.
The FHWA, on behalf of Caltrans, is issuing this notice to announce actions taken by Caltrans, that are final within the meaning of 23 U.S.C. 139(
By this notice, the FHWA, on behalf of Caltrans, is advising the public of final agency actions subject to 23 U.S.C. 139(
For Caltrans: Cristin Hallissy, Branch Chief, Environmental Analysis Branch, California Department of Transportation, District 4, 111 Grand Avenue, Oakland, CA 94612; telephone 510-622-8717; email
Effective July 1, 2007, the Federal Highway Administration (FHWA) assigned, and the California Department of Transportation (Caltrans) assumed, environmental responsibilities for this project pursuant to 23 U.S.C. 327. Notice is hereby given that the Caltrans has taken final agency actions subject to 23 U.S.C. 139(
The express lanes would extend along the entire 24.1-mile length of SR 85 and 1.5 miles of US 101 from the southern end of SR 85 to Metcalf Road in San Jose. The project would also convert the SR 85/US 101 HOV direct connectors in San Jose to express lane connectors, add signs to 4.1 miles of US 101 north of SR 85 in Mountain View and Palo Alto and to 1.8 miles of US 101 between Metcalf Road and Bailey Avenue in San Jose, and add an auxiliary lane to a 1.1-mile segment of northbound SR 85 between South De Anza Boulevard and Stevens Creek Boulevard in Cupertino. The total project length is 33.7 miles.
The actions by the Federal agencies, and the laws under which such actions were taken, are described in the Final Environmental Assessment (EA)/Finding of No Significant Impact (FONSI) for the project, approved on April 20, 2015, and in other documents in the FHWA project records. The EA/FONSI and other project records are available by contacting Caltrans at the addresses provided above. The Caltrans EA/FONSI can be viewed and downloaded from the project Web site at
This notice applies to all Federal agency decisions as of the issuance date of this notice and all laws under which such actions were taken, including but not limited to:
1. General: National Environmental Policy Act (NEPA) [42 U.S.C. 4321-4351]; Federal-Aid Highway Act [23 U.S.C. 109 and 23 U.S.C. 128].
2. Air: Clean Air Act [42 U.S.C. 7401-7671(q)].
3. Wildlife: Endangered Species Act [16 U.S.C. 1531-1544 and Section 1536]; Fish and Wildlife Coordination Act [16 U.S.C. 661-667(d)]; Migratory Bird Treaty Act [16 U.S.C. 703-712].
4. Historic and Cultural Resources: Section 106 of the National Historic Preservation Act of 1966, as amended [16 U.S.C. 470(f)
5. Social and Economic: Civil Rights Act of 1964 [42 U.S.C. 2000(d)-2000(d)(1)].
6. Wetlands and Water Resources: Clean Water Act (Section 404, Section 401, Section 319) [33 U.S.C. 1251-1377].
7. Executive Orders: E.O. 11988, Floodplain Management; E.O. 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations; E.O. 13112, Invasive Species.
23 U.S.C. 139(
Federal Highway Administration, FHWA, DOT.
Notice of Limitation of Claims for Judicial Review of Actions by FHWA and Other Federal Agencies.
This notice announces actions taken by FHWA and other Federal Agencies since October 2, 2014, that are final within the meaning of 23 U.S.C. 139(
By this notice, FHWA is advising the public of final agency actions subject to 23 U.S.C. 139(
For FHWA: Ms. Cathy Kendall, AICP, Senior Environmental Specialist, FHWA Florida Division, 545 John Knox Road, Suite 200, Tallahassee, Florida 32303; telephone: (850) 553-2225; email:
Notice is hereby given that FHWA and other Federal Agencies have taken final agency action by issuing licenses, permits, and approvals for the projects listed below. The actions by the Federal agencies on a project, and the laws under which such actions were taken, are described in the documented environmental assessment (EA) or environmental impact statement (EIS) issued in connection with the project, and in other project records for the listed projects. The EA or FEIS and other documents from the FHWA and other Federal Agency project records for the listed projects are available by contacting the FHWA or by using the links provided below.
This notice applies to all Federal agency decisions as of the issuance date of this notice and all laws under which such actions were taken, including but not limited to:
1. General: National Environmental Policy Act (NEPA) [42 U.S.C. 4321-4351; Federal-Aid Highway Act [23 U.S.C. 109 and 23 U.S.C. 128].
2. Air: Clean Air Act (CAA), 42 U.S.C. 7401-7671(q).
3. Land: Section 4(f) of the Department of Transportation Act of 1966 [49 U.S.C. 303 and 23 U.S.C. 138].
4. Wildlife: Endangered Species Act [16 U.S.C. 1531-1544 and 1536]; Marine Mammal Protection Act [16 U.S.C. 1361], Fish and Wildlife Coordination Act [16 U.S.C. 661-667(d); Migratory Bird Treaty Act (MBTA) [16 U.S.C. 703-712]; Magnuson-Stevenson Fishery Conservation and Management Act of 1976, as amended [16 U.S.C. 1801
5. Historic and Cultural Resources: Section 106 of the National Historic Preservation Act of 1966, as amended [16 U.S.C. 470(f)
6. Social and Economic: Civil Rights Act of 1964 [42 U.S.C. 20009(d)-2000(d)(1)]; American Indian Religious Freedom Act [42 U.S.C. 1996]; Farmland Protection Policy Act (FPPA) [7 U.S.C. 4201-4209].
7. Wetlands and Water Resources: Clean Water Act (Section 404, Section 401, Section 319) [33 U.S.C. 1251-1377]; Coastal Barriers Resources Act (CBRA) [16 U.S.C. 3501
8. Executive Orders: E.O. 11990 Protection of Wetlands; E.O. 11988 Floodplain Management; E.O. 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations; E.O. 11593 Protection and Enhancement of Cultural Resources; E.O. 13287 Preserve America; E.O. 13175 Consultation and Coordination with Indian Tribal Governments; E.O. 11514 Protection and Enhancement of Environmental Quality; E.O. 13112 Invasive Species.
The projects subject to this notice are:
1. Project Location: Bay County, CR 388 Segment 2 (Westbay Parkway) from SR 79 to SR 77. Financial Project Number 424464-3-22-01. Project type: The project will widen CR 388 (West Bay Parkway, Segment 2) from a two-lane undivided roadway to a four-lane divided roadway, for approximately 12.8 miles. The actions by FHWA and the laws under which such actions were taken are described in the EA and in the Finding of No Significant Impact (FONSI) issued on October 2, 2014, and are available at
2. Project Location: St. Johns County, SR 9B Extension. Financial Project Number: 431418-2. Project type: The SR 9B Extension proposes a 2.3-mile extension of State Road (SR) 9B in St. Johns County from the Interstate 95 (I-95)/SR 9B interchange to County Road (CR) 2209, and also provides a connection to existing Race Track Road. Implementing Federal permits that have been issued include SJRWMD Permit #: 102025-6, 102025-7 and ACOE Permit #: SAJ-2014-01931(SP-AWP). The actions by FHWA and the laws under which such actions were taken are described in the EA and in the FONSI issued on November 3, 2014, and are available at
3. Project Location: Miami-Dade County, Krome Avenue South (SR 997). Financial Project Number: 249614-4-22-01. Project type: Improve SR 997/SW 177th Avenue/Krome Avenue South (located north of Homestead) to address safety, capacity and design deficiency needs. The project limits are SW 296th Street (Avocado Drive) to SW 136th Street (Howard Drive) in Miami-Dade County, Florida. The actions by FHWA and the laws under which such actions were taken are described in the EIS and Record of Decision (ROD) issued on December 22, 2014, and are available at
4. Project Location: Miami-Dade County, SR 90/Tamiami Trail (US Highway 41), Tamiami Trail Modifications: Next Steps. Project Type: The project will implement roadway modifications to restore more natural water flow to Everglades National Park and Florida Bay for the purpose of restoring habitat within the Park and ecological connectivity between the Park and Water Conservation Areas. The project limits are between milepost 13.87 and 24.62 (west of Krome Avenue). This project will not add through lanes. The project will remove approximately 5.5 miles of existing 2-lane roadway fill embankment and construct an equal length of 2-lane bridging to replace the removed embankment. Remaining roadway and fill embankment will be slightly raised in elevation. The actions by FHWA and the laws under which such actions were taken are described in the adopted National Park Service EIS, ROD issued by FHWA on February 9, 2015, and are
5. Project Location: Palm Beach County, SR 7 Extension. Federal Aid No: 4752(030)P. Project Type: The project will extend SR 7 for 8.5 miles from SR704 (Okeechobee Boulevard) to SR809A (Northlake Boulevard). The actions by FHWA and the laws under which such actions were taken are described in the EA and in the FONSI issued on February 19, 2015, and are available at
6. Project Location: Brevard County, Palm Bay Parkway Southern Interchange at I-95. Financial Project No: 426904-1-22-01 and 426904-1-22-02 Project Type: The project builds a new interchange that will directly connect the Palm Bay Parkway and Micco Road to I-95 just south of the City of Palm Bay in Brevard County. The actions by FHWA and the laws under which such actions were taken are described in the EA and in the FONSI issued on February 25, 2015, and are available at
7. Project Location: Alachua and Putnam Counties, SR 20. Financial Project No: 207818-1 and 210024-1. Project Type: The project will widen SR-20 from a two-lane rural roadway to a four-lane urban divided roadway with a raised median from US-301 to CR-315. The actions by FHWA and the laws under which such actions were taken are described in the EA and in the FONSI issued on March 17, 2015, and are available at
23 U.S.C. 139(
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of applications for exemptions; request for comments.
FMCSA announces that 12 individuals have applied for a medical exemption from the hearing requirement in the Federal Motor Carrier Safety Regulations (FMCSRs). In accordance with the statutory requirements concerning applications for exemptions, FMCSA requests public comments on these requests. The statute and implementing regulations concerning exemptions require that exemptions must provide an equivalent or greater level of safety than if they were not granted. If the Agency determines the exemptions would satisfy the statutory requirements and decides to grant these requests after reviewing the public comments submitted in response to this notice, the exemptions would enable 12 individuals to operate CMVs in interstate commerce.
Comments must be received on or before June 8, 2015.
You may submit comments bearing the Federal Docket Management System (FDMS) Docket No. FMCSA-2014-0384 using any of the following methods:
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Charles A. Horan, III, Director, Office of Carrier, Driver and Vehicle Safety, (202) 366-4001,
The Federal Motor Carrier Safety Administration has authority to grant exemptions from many of the Federal Motor Carrier Safety Regulations (FMCSRs) under 49 U.S.C. 31315 and 31136(e), as amended by Section 4007 of the Transportation Equity Act for the 21st Century (TEA-21) (Pub. L. 105-178, June 9, 1998, 112 Stat. 107, 401). FMCSA has published in 49 CFR part 381, subpart C final rules implementing the statutory changes in its exemption procedures made by section 4007, 69 FR 51589 (August 20, 2004).
The Agency reviews the safety analyses and the public comments and determines whether granting the exemption would likely achieve a level of safety equivalent to or greater than the level that would be achieved without the exemption. The decision of the Agency must be published in the
The current provisions of the FMCSRs concerning hearing state that a person is physically qualified to drive a CMV if that person
First perceives a forced whispered voice in the better ear at not less than 5 feet with or without the use of a hearing aid or, if tested by use of an audiometric device, does not have an average hearing loss in the better ear greater than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a hearing aid when the audiometric device is calibrated to American National Standard (formerly ASA Standard) Z24.5-1951.
FMCSA also issues instructions for completing the medical examination report and includes advisory criteria on the report itself to provide guidance for medical examiners in applying the hearing standard. See 49 CFR 391.43(f). The current advisory criteria for the hearing standard include a reference to a report entitled “Hearing Disorders and Commercial Motor Vehicle Drivers” prepared for the Federal Highway Administration, FMCSA's predecessor, in 1993.
FMCSA requests comments from all interested parties on whether a driver who cannot meet the hearing standard should be permitted to operate a CMV in interstate commerce. Further, the Agency asks for comments on whether a driver who cannot meet the hearing standard should be limited to operating only certain types of vehicles in interstate commerce, for example, vehicles without air brakes. The statute and implementing regulations concerning exemptions require that the Agency request public comments on all applications for exemptions. The Agency is also required to make a determination that an exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be
You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
We will consider all comments and material received during the comment period and may change this proposed rule based on your comments. FMCSA may issue a final rule at any time after the close of the comment period.
To view comments, as well as any documents mentioned in this preamble, To submit your comment online, go to
Mr. Carr, 50, holds a Class B commercial driver's license (CDL) in Pennsylvania.
Mr. Griffin, 50, holds an operator's license in California.
Mr. Hall, 35, holds an operator's license in Alabama.
Mr. Hayden, 29, holds an operator's license in Florida.
Mr. Knapp, 47, holds an operator's license in Wisconsin.
Mr. Miller, 37, holds an operator's license in Pennsylvania.
Mr. Sanchez, 34, holds an operator's license in Texas.
Mr. Sexton, 36, holds an operator's license in Oklahoma.
Ms. Sloat, 34, holds an operator's license in Texas.
Mr. Toler, 31, holds an operator's license in Missouri.
Mr. Webber, 53, holds an operator's license in Oklahoma.
Mr. Wilkes, 50, holds an operator's license in Massachusetts.
In accordance with 49 U.S.C. 31136(e) and 31315(b)(4), FMCSA requests public comment from all interested persons on the exemption petitions described in this notice. The Agency will consider all comments received before the close of business June 8, 2015. Comments will be available for examination in the docket at the location listed under the
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of applications for exemptions; request for comments.
FMCSA announces receipt of applications from 18 individuals for an exemption from the prohibition against persons with a clinical diagnosis of epilepsy or any other condition that is likely to cause a loss of consciousness or any loss of ability to operate a commercial motor vehicle (CMV) in interstate commerce. The regulation and the associated advisory criteria published in the Code of Federal Regulations as the “Instructions for Performing and Recording Physical Examinations” have resulted in numerous drivers being prohibited from operating CMVs in interstate commerce based on the fact that they have had one or more seizures and are taking anti-seizure medication, rather than an individual analysis of their circumstances by a qualified medical examiner. If granted, the exemptions would enable these individuals who have had one or more seizures and are taking anti-seizure medication to operate CMVs for up to 2 years in interstate commerce.
Comments must be received on or before June 8, 2015.
You may submit comments bearing the Federal Docket Management System (FDMS) Docket ID FMCSA-2015-0115 using any of the following methods:
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Each submission must include the Agency name and the docket ID for this Notice. Note that DOT posts all comments received without change to
Charles A. Horan, III, Director, Office of Carrier, Driver and Vehicle Safety, (202) 366-4001, or via email at
Under 49 U.S.C. 31315 and 31136(e), FMCSA may grant an exemption for up to a 2-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” The statutes allow the Agency to renew exemptions at the end of the 2-year period. The 18 individuals listed in this notice have requested an exemption from the epilepsy prohibition in 49 CFR 391.41(b)(8), which applies to drivers who operate CMVs as defined in 49 CFR 390.5, in interstate commerce. Section 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
FMCSA provides medical advisory criteria for use by medical examiners in determining whether drivers with certain medical conditions should be certified to operate CMVs in intrastate commerce. The advisory criteria indicate that if an individual has had a sudden episode of a non-epileptic seizure or loss of consciousness of unknown cause that did not require anti-seizure medication, the decision whether that person's condition is likely to cause the loss of consciousness or loss of ability to control a CMV should be made on an individual basis by the medical examiner in consultation with the treating physician. Before certification is considered, it is suggested that a 6-month waiting period elapse from the time of the episode. Following the waiting period, it is suggested that the individual have a complete neurological examination. If the results of the examination are negative and anti-seizure medication is not required, then the driver may be qualified.
In those individual cases where a driver had a seizure or an episode of loss of consciousness that resulted from a known medical condition (
Drivers who have a history of epilepsy/seizures, off anti-seizure medication and seizure-free for 10 years, may be qualified to operate a CMV in interstate commerce. Interstate drivers with a history of a single unprovoked seizure may be qualified to drive a CMV in interstate commerce if seizure-free and off anti-seizure medication for a 5-year period or more.
You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission. To submit your comment online, go to
We will consider all comments and material received during the comment period and may change this proposed rule based on your comments. FMCSA may issue a final rule at any time after the close of the comment period.
To view comments, as well as any documents mentioned in this preamble, To submit your comment online, go to
Mr. Correll-Zerbe is a 26 year-old driver in Pennsylvania. He has a history of epilepsy and has remained seizure free since 2004. He takes anti-seizure medication with the dosage and frequency remaining the same since January 2013. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Correll-Zerbe receiving an exemption.
Mr. Feurerhelm is a 68 year-old class A CDL holder in Iowa. He has a history of epilepsy and has remained seizure free since 1985. He takes anti-seizure medication with the dosage and frequency remaining the same since that time. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Feuerhelm receiving an exemption.
Mr. Forney is a 37 year-old class A CDL holder in Wisconsin. He has a history of a seizure disorder and has remained seizure free since 2005. He takes anti-seizure medication with the dosage and frequency remaining the same since 2011. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Forney receiving an exemption.
Mr. Freiburger is a 42 year-old class A CDL holder in Wisconsin. He has a history of epilepsy and has remained seizure free since 2002. He takes anti-seizure medication with the dosage and frequency remaining the same since July 2014. If granted the exemption, he would like to drive a CMV. His physician states that he is not supportive of Mr. Freiburger receiving an exemption.
Mr. Jameson is a 41 year-old class A CDL holder in Utah. He has a history of epilepsy and has remained seizure since 2010. He takes anti-seizure medication with the dosage and frequency remaining the same since that time. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Jameson receiving an exemption.
Mr. Jones is a 31 year-old class B CDL holder in Pennsylvania. He has a history of epilepsy and has remained seizure free since 2002. He takes anti-seizure medication with the dosage and frequency remaining the same since that time. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Jones receiving an exemption.
Ms. Kahle is a 49 year-old class A CDL holder in Pennsylvania. She has a history of a seizure disorder and has remained seizure free since 2004. She takes anti-seizure medication with the dosage and frequency remaining the same since that time. If granted the exemption, she would like to drive a CMV. Her physician states that he is supportive of Ms. Kahle receiving an exemption.
Mr. Martin is a 56 year-old driver in Pennsylvania. He has a history of a seizure disorder and has remained seizure since 1985. He takes anti-seizure medication with the dosage and frequency remaining the same since 2004. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Martin receiving an exemption.
Mr. Marvel is a 64 year-old driver in Virginia. He has a history of epilepsy and has remained seizure free since 1967. He takes anti-seizure medication with the dosage and frequency remaining the same since that time. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Marvel receiving an exemption.
Mr. McNeal is a 52 year-old class B CDL holder in Indiana. He has a history of a single seizure and resected brain tumor in 2007. He takes anti-seizure medication with the dosage and frequency remaining the same since that time. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. McNeal receiving an exemption.
Mr. Murphy is a 32 year-old class B CDL holder in Wisconsin. He has a history of a single isolated generalized tonic-clonic seizure in November 2013. He takes anti-seizure medication with the dosage and frequency remaining the same since June 2014. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Murphy receiving an exemption.
Mr. Nelson is a 79 year-old class A CDL holder in Minnesota. He has a history of a seizure disorder and has remains seizure free since 196. He takes anti-seizure medication with the dosage and frequency remaining the same since that time. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Nelson receiving an exemption.
Mr. Patterson is a 52 year-old class B CDL holder in Minnesota. He has a history of a craniotomy and clipping of an aneurysm in 1988. He has no history of seizure and has never taken anti-seizure medication. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Patterson receiving an exemption.
Mr. Sprenger is a 53 year-old class C CDL holder in Minnesota. He has a history of a single seizure in 2008 which was believed to be related to a meningioma which was surgically removed in 2008. He took anti-seizure medication after that time which was
Mr. Tuttle is a 54 year-old driver in Wisconsin. He has a history of epilepsy and has remained seizure free since 2007. He takes anti-seizure medication with the dosage and frequency remaining the same since that time. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Tuttle receiving an exemption.
Mr. Warrad is a 54 year-old class B CDL holder in Iowa. He has a history of a seizure disorder and has remained seizure free since 1999. He takes anti-seizure medication with the dosage and frequency remaining the same since 2013. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Warrad receiving an exemption.
Mr. Williams is a 48 year-old class A CDL holder in Nevada. He has a history of a seizure disorder and has remained seizure free since 1987. He takes anti-seizure medication with the dosage and frequency remaining the same since 2002. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Williams receiving an exemption.
Mr. Williams is a 23 year-old driver in Pennsylvania. He has a history of epilepsy and has remained seizure free since 2009. He takes anti-seizure medication with the dosage and frequency remaining the same since that time. If granted the exemption, he would like to drive a CMV. His physician states that he is supportive of Mr. Williams receiving an exemption.
In accordance with 49 U.S.C. 31315 and 31136(e), FMCSA requests public comment from all interested persons on the exemption applications described in this notice. We will consider all comments received before the close of business on the closing date indicated earlier in the notice.
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before June 8, 2015.
Comments should refer to docket number MARAD-2015-0052. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Linda Williams, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23-453, Washington, DC 20590. Telephone 202-366-0903, Email
As described by the applicant the intended service of the vessel
INTENDED COMMERCIAL USE OF VESSEL: “
GEOGRAPHIC REGION: “California”.
The complete application is given in DOT docket MARAD-2015-0052 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under
Submit comments on or before June 8, 2015.
Comments should refer to docket number MARAD-2015-0052. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Linda Williams, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23-453, Washington, DC 20590. Telephone 202-366-0903, Email
As described by the applicant the intended service of the vessel ARTHUR'S WAY is:
The complete application is given in DOT docket MARAD-2015-0052 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before June 8, 2015.
Comments should refer to docket number MARAD-2015-0053. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Linda Williams, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23-453, Washington, DC 20590. Telephone 202-366-0903, Email
As described by the applicant the intended service of the vessel
INTENDED COMMERCIAL USE OF VESSEL: “Bareboat Charter and Skippered Day-Sailboating”
GEOGRAPHIC REGION: Florida.
The complete application is given in DOT docket MARAD-2015-0053 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
Maritime Administration (MARAD), Department of Transportation.
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Comments must be submitted on or before June 8, 2015.
Send comments regarding the burden estimate, including suggestions for reducing the burden, to the Office of Management and Budget, Attention: Desk Officer for the Office of the Secretary of Transportation, 725 17th Street NW., Washington, DC 20503.
Comments are invited on: Whether the proposed collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; the accuracy of the Department's estimate of the burden of the proposed information collection; 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 on respondents, including the use of automated collection techniques or other forms of information technology.
Maritime Administration, U.S. Department of Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590.
The Paperwork Reduction Act of 1995; 44 U.S.C. chapter 35, as amended; and 49 CFR 1.93
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before June 8, 2015.
Comments should refer to docket number MARAD-2015-0054. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Linda Williams, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23-453, Washington, DC 20590. Telephone 202-366-0903, Email
As described by the applicant the intended service of the vessel PINEAPPLE PRINCESS is:
Intended Commercial Use of Vessel: “Day, overnight and weeklong outings, sunset cruises, wedding parties, harbor and near coastal sightseeing for 6 passengers as an OUPV.”
Geographic Region: “Florida”.
The complete application is given in DOT docket MARAD-2015-0054 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
Notice of public meeting and request for information on proposed alternative classification criteria for Class 8 (corrosive) materials.
This notice is to advise interested persons that on Wednesday, June 10, 2015, PHMSA will conduct a public meeting to discuss proposals in preparation for the 47th session of the United Nations Sub-Committee of Experts on the Transport of Dangerous Goods (UNSCOE TDG) to be held June 22 to June 26, 2015, in Geneva, Switzerland. During this meeting, PHMSA is also soliciting comments relative to potential new work items which may be considered for inclusion in its international agenda and feedback on issues that PHMSA may put forward for consideration by the Sub-Committee such as enhanced recognition of alternative test methods relevant to the classification of corrosive materials (see further discussion under the supplementary information section below). PHMSA will also provide an update on recent actions to enhance transparency and stakeholder interaction through improvements to the international standards portion of its Web site.
Also, on Wednesday, June 10, 2015, the Department of Labor, Occupational Safety and Health Administration (OSHA) will conduct a public meeting (see Docket No. OSHA-H022K-2006-0062) to discuss proposals in preparation for the 29th session of the United Nations Sub-Committee of Experts on the Globally Harmonized System of Classification and Labelling of Chemicals (UNSCEGHS) to be held June 29 to July 1, 2015, in Geneva, Switzerland.
PHMSA public meeting: 9:00 a.m. to 12:00 noon EDT.
OSHA public meeting: 1:00 p.m. to 4:00 p.m. EDT.
Conference call-in and “live meeting” capability will be provided for both meetings. Specific information on call-in and live meeting access will be posted when available at
Mr. Steven Webb or Mr. Aaron Wiener, Office of Hazardous Materials Safety, Department of Transportation, Washington, DC 20590; 202/366-8553.
General topics on the agenda for the UNSCOE TDG meeting include:
• Explosives and related matters
• Listing, classification and packing
• Electric storage systems
• Transport of gases
• Miscellaneous pending issues
• Global harmonization of transport of dangerous goods regulations with the Model Regulations
• Guiding principles for the Model Regulations
• Electronic data interchange for documentation purposes
• Cooperation with the International Atomic Energy Agency (IAEA)
• New proposals for amendments to the Model Regulations
• Issues relating to the Globally Harmonized System of Classification and Labeling of Chemicals (GHS)
PHMSA specifically solicits comments relative to efforts by the UN TDG and GHS Sub-Committees relevant to enhancing recognition of additional Class 8 (corrosive) classification assessment methods that are currently included within the GHS but not within the UN Model Regulations for Transport. At its previous session the Sub-Committee considered a U.S. proposal that addressed optional methods for classification of mixtures based on pH and the use of “bridging principles” consistent with the current GHS. During the meeting a number of Sub-Committee members expressed support for the proposal in principle, but suggested the proposal should also address use of the “additivity” classification method consistent with the GHS. Based on comments received, PHMSA is considering submission of a revised proposal including the additivity method as an additional option while maintaining the methods addressed under the previous U.S. paper on this topic (see
Following the 47th session of the UNSCOE TDG, a copy of the Sub-Committee's report will be available at the United Nations Transport Division's Web site at
Surface Transportation Board.
Notice; correction.
The Surface Transportation Board published a document in the
Jonathon Binet, (202) 245-0368. Federal Information Relay Service (FIRS) for the hearing impaired: (800) 877-8339.
In the
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Taxpayer Communications Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Thursday, June 4, 2015.
Janice Spinks at 1-888-912-1227 or (206) 946-3006.
Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Taxpayer Communications Project Committee will be held Thursday, June 4, 2015, at 3:00 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Janice Spinks. For more information please contact: Janice Spinks at 1-888-912-1227 or 206 946-3006, or write TAP Office, 915 2nd Avenue, MS W-406, Seattle, WA 98174, or post comments to the Web site:
The committee will be discussing various issues related to Taxpayer Communications and public input is welcome.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Tax Forms and Publications Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held June 2, 2015.
Donna Powers at 1-888-912-1227 or (954) 423-7977.
Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Tax Forms and Publications Project Committee will be held Tuesday, June 2, 2015, at 1:00 p.m.. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Donna Powers. For more information please contact: Donna Powers at 1-888-912-1227 or (954) 423-7977 or write: TAP Office, 1000 S. Pine Island Road, Plantation, FL 33324 or contact us at the Web site:
Internal Revenue Service (IRS), Treasury.
Notice.
This notice is provided in accordance with IRC section 6039G of the Health Insurance Portability and Accountability Act (HIPPA) of 1996, as amended. This listing contains the name of each individual losing United States citizenship (within the meaning of section 877(a) or 877A) with respect to whom the Secretary received information during the quarter ending March 31, 2015. For purposes of this listing, long-term residents, as defined in section 877(e)(2), are treated as if they were citizens of the United States who lost citizenship.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Taxpayer Assistance Center Improvements Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Wednesday, June 10, 2015.
Otis Simpson at 1-888-912-1227 or 202-317-3332.
Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a meeting of the Taxpayer Advocacy Panel Taxpayer Assistance Center Improvements Project Committee will be held Wednesday, June 10, 2015, at 3:00 p.m. Eastern Time. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Otis Simpson. For more information please contact: Otis Simpson at 1-888-912-1227 or 202-317-3332, TAP Office, 1111 Constitution Avenue NW., Room 1509—National Office, Washington, DC 20224, or contact us at the Web site:
The committee will be discussing various issues related to the Taxpayer Assistance Centers and public input is welcomed.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Joint Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Wednesday, June 24, 2015.
Lisa Billups at 1-888-912-1227 or (214) 413-6523.
Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Joint Committee will be held Wednesday, June 24, 2015, at 1:00 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. For more information please contact Lisa Billups at 1-888-912-1227 or 214-413-6523, or write TAP Office 1114 Commerce Street, Dallas, TX 75242-1021, or post comments to the Web site:
The agenda will include various committee issues for submission to the IRS and other TAP related topics. Public input is welcomed.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Special Projects Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Thursday, June 4, 2015.
Kim Vinci at 1-888-912-1227 or 916-974-5086.
Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a meeting of the Taxpayer Advocacy Panel Special Projects Committee will be held Thursday, June 4, 2015, at 2:00 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Kim Vinci. For more information please contact: Kim Vinci at 1-888-912-1227 or 916-974-5086, TAP Office, 4330 Watt Ave., Sacramento, CA 95821, or contact us at the Web site:
The agenda will include a discussion on various special topics with IRS processes.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Notices and Correspondence Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Thursday, June 11, 2015.
Theresa Singleton at 1-888-912-1227 or 202-317-3329.
Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a meeting of the Taxpayer Advocacy Panel Notices and Correspondence Project Committee will be held Thursday, June 11, 2015, at 12:00 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Theresa Singleton. For more information please contact: Theresa Singleton at 1-888-912-1227 or 202-317-3329, TAP Office, 1111 Constitution Avenue NW., Room 1509—National Office, Washington, DC 20224, or contact us at the Web site:
The agenda will include a discussion on various letters, and other issues related to written communications from the IRS.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
An open meeting of the Taxpayer Advocacy Panel Toll-Free Phone Line Project Committee will be conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service.
The meeting will be held Wednesday, June 17, 2015.
Linda Rivera at 1-888-912-1227 or (202) 317-3337.
Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Toll-Free Phone Line Project Committee will be held Wednesday, June 17, 2015 at 2:30 p.m. Eastern Time via teleconference. The public is invited to make oral comments or submit written statements for consideration. Due to limited conference lines, notification of intent to participate must be made with Linda Rivera. For more information please contact: Ms. Rivera at 1-888-912-1227 or (202) 317-3337, or write TAP Office, 1111 Constitution Avenue NW., Room 1509—National Office, Washington, DC 20224, or contact us at the Web site:
The committee will be discussing Toll-free issues and public input is welcomed.
Department of the Treasury.
Notice and request for comments.
The Department of the Treasury will submit the following information collection request 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 June 8, 2015 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 calling (202) 927-5331, email at
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment.
Comments must be submitted on or before June 8, 2015.
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.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument.
Comments must be submitted on or before June 8, 2015.
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.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument.
Comments must be submitted on or before June 8, 2015.
Submit written comments on the collection of information through
Crystal Rennie, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue
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
a. Number of Respondents: 101,425:
b. Frequency of Response: one time.
c. Annual Burden is 62,856 hours:
d. Estimated completion times based on review by staff personnel:
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-21), this notice announces that the Veterans Benefits Administration, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Comments must be submitted on or before June 8, 2015.
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
Office of Small and Disadvantaged Business Utilization (OSDBU), the Department of Veterans Affairs (VA).
Notice.
VA OSDBU 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 July 7, 2015.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Milagros Ortiz at (202) 461-4279 or Fax (202) 461-4301.
Under the PRA of 1995 (Pub. L. 104-13; 44 U.S.C. 3501-3521), 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, OMB invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of OMB's functions, including whether the information will have practical utility; (2) the accuracy of OMB'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.
Pipeline and Hazardous Materials Safety Administration (PHMSA), Department of Transportation (DOT).
Final rule.
In this final rule, the Pipeline and Hazardous Materials Safety Administration (PHMSA), in coordination with the Federal Railroad Administration (FRA), is adopting requirements designed to reduce the consequences and, in some instances, reduce the probability of accidents involving trains transporting large quantities of flammable liquids. The final rule defines certain trains transporting large volumes of flammable liquids as “high-hazard flammable trains” (HHFT) and regulates their operation in terms of speed restrictions, braking systems, and routing. The final rule also adopts safety improvements in tank car design standards, a sampling and classification program for unrefined petroleum-based products, and notification requirements. These operational and safety improvements are necessary to address the unique risks associated with the growing reliance on trains to transport large quantities of flammable liquids. They incorporate recommendations from the National Transportation Safety Board (NTSB) and from the public comments, and are supported by a robust economic impact analysis.
You may find information on this rulemaking (Docket No. PHMSA-2012-0082) at Federal eRulmaking Portal:
Rob Benedict and Ben Supko, (202) 366-8553, Standards and Rulemaking Division, Pipeline and Hazardous Materials Safety Administration or Karl Alexy, (202) 493-6245, Office of Safety Assurance and Compliance, Federal Railroad Administration, 1200 New Jersey Ave. SE., Washington, DC 20590.
The Pipeline and Hazardous Materials Safety Administration (PHMSA), in coordination with the Federal Railroad Administration (FRA), is issuing this final rule, titled “Hazardous Materials: Enhanced Tank Car Standards and Operational Controls for HHFTs,” in order to increase the safety of flammable liquid shipments by rail. The final rule is necessary due to the expansion in United States (U.S.) energy production, which has led to significant challenges for the country's transportation system. PHMSA published a notice of proposed rulemaking (NPRM) on August 1, 2014. See 79 FR 45015. This final rule addresses comments to the NPRM and amends the existing hazardous materials regulations (HMR; 49 CFR parts 171-180) pertaining to tank car designs, speed restrictions, braking systems, routing, sampling and classification, and notification requirements related to certain trains transporting large quantities of flammable liquids.
Expansion in oil production has resulted in a large volume of crude oil being transported to refineries and other transport-related facilities, such as transloading facilities throughout the country. With a growing domestic supply, rail transportation has emerged as a flexible alternative to transportation by pipeline or vessel, which have historically delivered the vast majority of crude oil to U.S. refineries. The volume of crude oil carried by rail increased 423 percent between 2011 and 2012.
U.S. ethanol production has also increased considerably during the last 10 years and has generated similar growth in the transportation of ethanol by rail.
Crude oil and ethanol comprise approximately 68 percent of the flammable liquids transported by rail. The inherent risk of flammability of these materials is compounded in the context of rail transportation because petroleum crude oil and ethanol are commonly shipped in large quantities, either as large blocks of material in a manifest train or as a single commodity train (commonly referred to as a “unit train”). As detailed in the NPRM, in recent years, train accidents/incidents (train accidents) involving the release of a flammable liquid and resulting in fires and other severe consequences have occurred. See the Regulatory Impact Analysis, posted in the docket, for a detailed description of the accidents considered for this rulemaking.
Federal hazardous materials transportation law (49 U.S.C. 5101-5128) authorizes the Secretary of Transportation (Secretary) to “prescribe regulations for the safe transportation, including security, of hazardous material in intrastate, interstate, and foreign commerce.” The Secretary delegated this authority to PHMSA. 49 CFR 1.97(b). PHMSA is responsible for overseeing a hazardous materials safety program that minimizes the risks to life and property inherent in transportation in commerce. On a yearly basis the HMR provides safety and security requirements for more than 2.5 billion tons of hazardous materials (hazmat), valued at about $2.3 trillion, and hazmat was moved 307 billion miles on the nation's interconnected transportation network.
This rulemaking is intended to reduce the likelihood of train accidents involving flammable liquids, and mitigate the consequences of such accidents should they occur. In this final rule, PHMSA is revising the HMR to establish requirements for any “high-hazard flammable train” (HHFT) that is transported over the U.S. rail network. Based on analysis of the risk of differing train compositions, this rule defines an HHFT as a train comprised of 20 or more loaded tank cars of a Class 3 flammable liquid in a continuous block or 35 or more loaded tank cars of a Class 3 flammable liquid across the entire train. For the purposes of advanced braking systems, this rule also defines a “high-hazard flammable unit train” (HHFUT) as a train comprised of 70 or more loaded tank cars containing Class 3 flammable liquids traveling speeds at greater than 30 mph. The rule ensures that the requirements are closely aligned with the risks posed by the operation of trains that are transporting large quantities of flammable liquids. As discussed further in this preamble and in the accompanying RIA, this rule primarily impacts trains transporting large quantities of ethanol and crude oil, because ethanol and crude oil are most frequently transported in high-volume shipments than when transported in a single train, and such trains would meet the definition of an HHFT. By revising the definition of HHFT from that which was proposed in the NPRM, we have clarified the scope of the final rule and focused on the highest-risk shipments, while not affecting lower-risk trains that
PHMSA and FRA have used a variety of regulatory and non-regulatory methods to address the risks of the bulk transport of flammable liquids, including crude oil and ethanol, by rail. These efforts include issuing guidance, conducting rulemakings, participating in rail safety committees, holding public meetings, enhancing enforcement efforts, and reaching out to the public. All of these efforts are consistent with our system-wide approach.
PHMSA and FRA focus on prevention, mitigation and response to manage and reduce the risk posed to people and the environment by the transportation of hazardous materials by rail. When addressing these issues, PHMSA and FRA focus on solutions designed to reduce the probability of accidents occurring and to minimize the consequences of an accident should one occur.
In this final rule, we are revising the HMR to establish requirements specific to HHFTs. As described in greater detail throughout this document, the final rule takes a system-wide, comprehensive approach consistent with the risks posed by HHFTs. Specifically, Table 1 describes the regulatory changes implemented in this final rule and identifies entities affected by this final rule.
PHMSA and FRA received over 3,200 public comments representing over 182,000 signatories in response to the NPRM and initial RIA. We carefully considered each comment and revised, as appropriate, the final rulemaking to reflect those comments. Table 2 below provides a high-level overview of what was originally proposed in the NPRM versus the amendments being adopted in this final rule.
With regard to the construction of new tank cars and retrofitting of existing tank cars for use in HHFTs, PHMSA and FRA are requiring new tank cars constructed after October 1, 2015 to meet the new design or performance standard, if those tank cars are used as part of an HHFT.
This final rule takes a system-wide, comprehensive approach to rail safety commensurate with the risks associated with HHFTs. Specifically, the requirements in this final rule address:
In this final rule, the proposals in the NPRM have been revised in response to the comments received and the final RIA has been revised to align with the changes made to the final rule. Specifically, the RIA explains adjustments to the methodology used to estimate the benefits and costs resulting from the final rule.
The revised RIA is in the docket and supports the amendments made in this final rule. Table 4 shows the costs and benefits by affected section and rule provision over a 20-year period, discounted at a 7% rate. Table 4 also shows an explanation of the comprehensive benefits and costs (
Please also note that, given the uncertainty associated with the risks of HHFT shipments, Table 4 contains a range of benefits estimates. The low-end of the range of estimated benefits estimates risk from 2015 to 2034 based on the U.S. safety record for crude oil and ethanol from 2006 to 2013, adjusting for the projected increase in shipment volume over the next 20 years. The upper end of the range of estimated benefits is the 95th percentile of a Monte Carlo simulation.
As noted
Under the HMR, hazardous materials are categorized by analysis and experience into hazard classes and, for some classes, packing groups based upon the risks that they present during transportation. The HMR specify appropriate packaging and handling requirements for hazardous materials based on such classification, and require an offeror to communicate the material's hazards through the use of shipping papers, package marking and labeling, and vehicle placarding. The HMR also require offerors to provide emergency response information applicable to the specific hazard or hazards of the material being transported. Further, the HMR (1) mandate training for persons who prepare hazardous materials for shipment or who transport hazardous materials in commerce, and (2) require the development and implementation of plans to address the safety and security risks related to the transportation of certain types and quantities of hazardous materials in commerce.
The HMR also include operational requirements applicable to each mode of transportation and the FRA inspects and audits railroads, tank car facilities, and offerors of hazardous materials for compliance with PHMSA regulations as well as its own rail safety regulations. Additionally FRA's research and development program seeks to enhance all elements of railroad safety, including hazardous materials transportation.
To address our shared concerns regarding the risks associated with rail carriage of flammable liquids, and the large volumes of flammable liquids transported in HHFTs, PHMSA and FRA are focusing on three areas: (1) Proper classification and characterization; (2) operational controls to lessen the likelihood and consequences of accidents; and (3) improvements to tank car integrity. This approach is designed to minimize the occurrence of train accidents and mitigate the damage caused should an accident occur.
This overview section provides a general discussion of the major regulations currently in place that affect the safe transportation of hazardous materials by rail. These regulations pertain to issues such as: (1) Braking; (2) speed restrictions; (3) routing; (4) notification requirements; (5) oil spill response planning; (6) classification; and (7) packaging requirements.
The effective use of braking on a freight train can result in accident avoidance. In addition, the effective use of braking on a freight train can potentially lessen the consequences of an accident by diminishing in-train forces, which can reduce the likelihood of a tank car being punctured and
FRA's brake system safety standards incorporate longstanding inspection and maintenance requirements related to a train's braking systems—air brakes and handbrakes—that have been in existence for well over 100 years. However, FRA's brake system safety standards also anticipate and allow for new technology. See 49 CFR part 232, subpart F. In 1996, FRA published regulations establishing requirements pertaining to the use and design of two-way EOT devices. 62 FR 278 (Jan. 2, 1997). In 2008, FRA published subpart E to part 232, which established design, inspection, maintenance, and training standards for railroads implementing ECP brake system technology. 73 FR 61512 (Oct. 16, 2008). Two-way EOT devices and ECP braking systems have the potential to provide enhanced braking during emergency braking and ECP brakes allow for enhanced braking and better train control during normal operational brake applications. Moreover, in recent years, certain railroads, particularly those in the western half of the U.S., have shifted to using distributed power (DP), to move longer trains. While DP is technically not a braking system, it can provide some enhanced braking during an emergency braking application over conventional braking systems because it provides an additional signal source to speed the application of air brakes.
Three types of braking systems relevant to this rulemaking, two-way end-of-train (EOT) devices, distributed power (DP) systems, and electronically controlled pneumatic (ECP) braking systems, and briefly introduced below. They are discussed in greater detail in the “Advanced Braking Signal Systems” section of this rulemaking.
Two-way EOT devices include two pieces of equipment linked by radio that initiate an emergency brake application command from the front unit located in the controlling (“lead”) locomotive, which then activates the emergency air valve at the rear of the train within one second. The rear unit of the device sends an acknowledgment message to the front unit immediately upon receipt of an emergency brake application command. A two-way EOT device is slightly more effective than conventional air brakes because the rear cars receive the emergency brake command more quickly in an engineer induced emergency brake application.
DP systems use multiple locomotives positioned at strategic locations within the train consist (often at the rear of the train) to provide additional power and train control in certain operations. For instance, a DP system may be used to provide power while climbing a steep incline and to control the movement of the train as it crests the incline and begins its downward descent. The DP system works through the control of the rearward locomotives by command signals originating at the lead locomotive and transmitted to the remote (rearward) locomotives. While distributed power technically is not a braking system, the additional power source in or at the rear of the train consist do provide enhanced braking for a train. The addition of a DP locomotive allows for the braking effort to be distributed throughout the train and allows for a more uniform braking effort than with a conventional air brake system.
ECP brake systems simultaneously send an electronic braking command to all equipped cars in the train, reducing the time before a car's pneumatic brakes are engaged compared to conventional air brakes. They can be installed as an overlay to a conventional air brake system or replace it altogether; however, FRA regulations do require that ECP brake systems be interoperable pursuant to the AAR S-4200 standard, which allows for interchange among the Class I railroads. 49 CFR 232.603.
The simultaneous application of ECP brakes on all cars in a train also significantly improves train handling by substantially reducing stopping distances as well as buff and draft forces within the train, which under certain conditions can result in a derailment. Because ECP brakes do not rely on changes in air pressure passing from car to car, there are no delays related to the depletion and recharging of a train's air brake system. These factors provide railroads with the ability to decrease congestion or to increase volume by running longer trains closer together.
High speeds can increase the kinetic energy involved in and the associated damage caused by an accident. With respect to operating speeds, FRA has developed a system of classification that defines different track classes based on track quality. The track classes include Class 1 through Class 9 and “excepted track.” See 49 CFR 213.9 and 213.307. Freight trains transporting hazardous materials currently operate at track speeds associated with Class 1 through Class 5 track and, in certain limited instances, at or below “excepted track” speed limits. Section 213.9 of the FRA regulations on Track Safety Standards provides the “maximum allowable operating speed” for track Class 1 through Class 5 and “excepted track.” The speed limits range from 10 mph or less up to 80 mph; however, AAR design specifications effectively limit most freight equipment to a maximum allowable speed of 70 mph.
In addition, the rail industry, through the AAR, implements a detailed protocol on recommended operating practices for the transportation of hazardous materials. This protocol, set forth in AAR Circular OT-55-N includes a 50-mph maximum speed for any “key train,” including any train with 20 car loads of “any combination of hazardous material.” In February 2014, by way of Secretary Foxx's
FRA carries out a comprehensive railroad safety program pursuant to its statutory authority. FRA's regulations promulgated for the safety of railroad operations involving the movement of freight address: (1) Railroad track; (2) signal and train control systems; (3) operating practices; (4) railroad communications; (5) rolling stock; (6) rear-end marking devices; (7) safety glazing; (8) railroad accident/incident reporting; (9) locational requirements for the dispatch of U.S. rail operations; (10) safety integration plans governing railroad consolidations, mergers, and acquisitions of control; (11) alcohol and drug testing; (12) locomotive engineer and conductor certification; (13) workplace safety; (14) highway-rail grade crossing safety; and other subjects.
Train accidents are often the culmination of a sequence of events that are influenced by a variety of factors and conditions. Broken rails or welds, track geometry, and human factors such as improper use of switches are leading causes of derailments. Rail defects have caused major accidents involving HHFTs, including accidents in New
While this final rule does not directly address regulations governing the inspection and maintenance of track, securement, and human factors, it does indirectly address some of these issues through the consideration of the 27 safety and security factors as part of the routing requirements. For a summary of on-going FRA related action, including track integrity, securement, crew size, and positive train control, please see the “Recent Regulatory Actions Addressing HHFTs” portion of this rulemaking.
Careful consideration of a rail route with regard to a variety of risk factors can mitigate risk of an accident. For some time, there has been considerable public and Congressional interest in the safe and secure rail routing of security-sensitive hazardous materials (such as chlorine and anhydrous ammonia). The Implementing Recommendations of the 9/11 Commission Act of 2007 directed the Secretary, in consultation with the Secretary of Homeland Security, to publish a rule governing the rail routing of security-sensitive hazardous materials. On December 21, 2006, PHMSA, in coordination with FRA and the Transportation Security Administration (TSA) of the U.S. Department of Homeland Security (DHS), published an NPRM proposing to require rail carriers to compile annual data on specified shipments of hazardous materials, use the data to analyze safety and security risks along rail routes where those materials are transported, assess alternative routing options, and make routing decisions based on those assessments. 71 FR 76834.
In that NPRM, we proposed that the route analysis requirements would apply to certain hazardous materials that PHMSA, FRA and TSA believed presented the greatest transportation safety and security risks. Those hazardous materials included certain shipments of explosives, materials poisonous by inhalation (PIH materials), and highway-route controlled quantities of radioactive materials. We solicited comment on whether the proposed requirements should also apply to flammable gases, flammable liquids, or other materials that could be weaponized, as well as hazardous materials that could cause serious environmental damage if released into rivers or lakes. Commenters who addressed this issue indicated that rail shipments of Division 1.1, 1.2, and 1.3 explosives; Poison Inhalation Hazard (PIH) materials; and highway-route controlled quantities of radioactive materials pose significant rail safety and security risks warranting the enhanced security measures proposed in the NPRM and adopted in a November 26, 2008, final rule. 73 FR 20752. Commenters generally did not support enhanced security measures for a broader list of materials than were proposed in the NPRM.
The City of Las Vegas, Nevada, did support expanding the list of materials for which enhanced security measures are required, to include flammable liquids, flammable gases, certain oxidizers, certain organic peroxides, and 5,000 pounds or greater of pyrophoric materials. While DOT and DHS agreed that these materials pose certain safety and security risks in rail transportation, the risks were not as great as those posed by the explosive, PIH, and radioactive materials specified in the NPRM, and PHMSA was not persuaded that they warranted the additional safety and security measures. PHMSA did note, however, that DOT, in consultation with DHS, would continue to evaluate the transportation safety and security risks posed by all types of hazardous materials and the effectiveness of existing regulations in addressing those risks and would consider revising specific requirements as necessary.
In 2008 PHMSA, in consultation with FRA, issued the final route analysis rule. 73 FR 72182. That rule, now found at 49 CFR 172.820, requires rail carriers to select a practicable route posing the least overall safety and security risk to transport security-sensitive hazardous materials. The route analysis final rule requires rail carriers to compile annual data on certain shipments of explosive, PIH, and radioactive materials; use the data to analyze safety and security risks along rail routes where those materials are transported; assess alternative routing options; and make routing decisions based on those assessments. In accordance with § 172.820(e), the carrier must select the route posing the least overall safety and security risk. The carrier must retain in writing all route review and selection decision documentation. Additionally, the rail carrier must identify a point of contact on routing issues involving the movement of covered materials and provide that contact information to the appropriate State, local, and tribal personnel.
Rail carriers must assess available routes using, at a minimum, the 27 factors listed in appendix D to part 172 of the HMR to determine the safest, most secure routes for the transportation of covered hazardous materials.
FRA enforces the routing requirements of § 172.820 and is authorized, after consulting with PHMSA, TSA, and the Surface Transportation Board, to require a railroad to use an alternative route other than the route selected by the railroad if it is determined that the railroad's route selection documentation and underlying analysis are deficient and fail to establish that the route chosen poses the least overall safety and security risk based on the information available. 49 CFR 209.501.
On January 23, 2014, in response to its investigation of the Lac-Mégantic accident, the NTSB issued three recommendations to PHMSA and three similar recommendations to FRA. Recommendation R-14-4 requested PHMSA work with FRA to expand hazardous materials route planning and selection requirements for railroads to include key trains transporting flammable liquids as defined by the AAR Circular No. OT-55-N. Additionally, where technically feasible, NTSB recommended that rerouting be required to avoid transportation of such hazardous materials through populated and other sensitive areas.
Notification of hazardous materials routes to appropriate personnel, such as emergency responders, of certain hazardous materials can aid in emergency preparation and in some instances emergency response, should an accident occur. As mentioned previously, in accordance with the routing requirements in § 172.820 of the HMR, a rail carrier must identify a point of contact for routing issues that may arise involving the movement of covered materials and provide the contact information to the following:
1. State and/or regional fusion centers that have been established to coordinate with state, local, and tribal officials on security issues within the area encompassed by the rail carrier's rail system;
2. State, local, and tribal officials in jurisdictions that may be affected by a rail carrier's routing decisions and who have contacted the carrier regarding routing decisions.
This serves as the current notification procedure for what have historically been known as the most highly hazardous materials transported by rail. In addition, an emergency order (Docket No. DOT-OST-2014-0067
PHMSA's regulations, see 49 CFR part 130, prescribe prevention, containment, and response planning requirements applicable to transportation of oil
An offeror's responsibility to classify and describe a hazardous material is a key requirement under the HMR. In accordance with § 173.22 of the HMR, it is the offeror's responsibility to properly “class and describe a hazardous material in accordance with parts 172 and 173 of the HMR.” For transportation purposes, classification is ensuring the proper hazard class, packing group, and shipping name are assigned to a particular material. The HMR do not prescribe a specific test frequency to classify hazardous materials. However, the HMR clearly intend for the frequency and type of testing to be based on an offeror's knowledge of the hazardous material, with specific consideration given to the nature of hazardous material involved, the variety of the sources of the hazardous material, and the processes used to handle and prepare the hazardous material. Section 173.22 also requires offerors to identify all relevant properties of the hazardous material to comply with complete hazard communication, packaging, and operational requirements in the HMR. While the HMR do not prescribe specific requirements to quantify properties relevant to packaging selection, the offeror must follow the general packaging requirements in part 173, subpart B. For example, as indicated in § 173.24(e), even though certain packagings are authorized for a specific HMR entry, it is the responsibility of the offeror to ensure that each packaging is compatible with its specific lading. In addition, offerors must know the specific gravity of the hazardous material at certain temperatures to ensure that outage is considered when loading a rail tank car or cargo tank motor vehicle per § 173.24b(a).
Once an offeror has classified and described the material; selected the appropriate packaging; loaded the packaging; and marked, labeled, and placarded the packaging and/or transport vehicle in accordance with the HMR, the offeror must “certify” the shipment per § 172.204 of the HMR. The certification statement indicates the HMR were followed and that all requirements have been met. As such, the offeror is responsible for certifying its material has been properly classified and all packaging requirements have been met. Improper classification can have significant negative impacts on transportation safety as a material may be offered for transportation in an inappropriate package.
The physical and chemical properties of unrefined petroleum-based products are complex and can vary by region, time of year, and method of extraction. Heating, agitation, and centrifugal force are common methods of separation for the initial treatment of unrefined petroleum to reduce the range of values of the physical and chemical properties. These methods eliminate much of the gaseous hydrocarbons, sediments, and water from the bulk material. Blending crude oil from different sources is the most common method to achieve a uniform material. However, there may still be considerable variation between mixtures where separation or blending has occurred at different times or locations. While blending may generate a uniform profile for an individual mixture of the material, it does not eliminate the gaseous hydrocarbons or the related hazards. The separation and blending methods both create a new product or additional byproducts that may result in the need to transport flammable gases in addition to flammable liquids. Manufactured goods and refined products, by definition, are at the other end of the spectrum from unrefined or raw materials. This means that the physical and chemical
Crude oil transported by rail is extracted from different sources and is most often blended in large storage tanks before being loaded into rail tank cars at transloading facilities. In rare cases, the crude oil is transferred directly from a cargo tank to a rail car which may result in more variability of properties among the rail tank cars. PHMSA and FRA completed audits of crude oil loading facilities, prior to the issuance of the February 26, 2014, Emergency Restriction/Prohibition Order, indicated that the classification of crude oil being transported by rail was often based solely on a Safety Data Sheet (SDS). The information is usually generic and provides only basic data and offers a wide range of values for a limited number of material properties. The flash point and initial boiling point ranges on SDS referenced during the audits crossed the packaging group threshold values making it difficult to determine the proper packing group assignment. In these instances, it is likely no validation of the information is performed at an interval that would allow for detection of variability in material properties.
In the case of a flammable liquid (excluded from being defined as a gas per § 171.8 of the HMR), the proper classification is based on the flash point and initial boiling point. See § 173.120 of the HMR. The offeror may additionally need to identify properties such as corrosivity, vapor pressure, specific gravity at loading and reference temperatures, and the presence and concentration of specific compounds (
In addition to the regulations detailing the offeror's responsibility, the rail and oil industry, along with PHMSA's input, have developed a recommended practice (RP) designed to improve the crude oil rail safety through proper classification and loading practices. This effort was led by the API and resulted in the development of American National Standards Institute (ANSI) recognized recommend practice, see ANSI/API RP 3000, “
The NTSB also supports routine testing for classification of hazardous materials, such as petroleum crude oil. On January 23, 2014, as a result of its investigation of the Lac-Mégantic accident, the NTSB issued three recommendations to PHMSA and FRA. Safety Recommendation R-14-6
As mentioned previously, in the classification section, proper classification is essential when selecting an appropriate packaging for the transportation of hazardous materials. The HMR provides a list of authorized packagings for each hazardous material. The hazardous materials table (HMT) of § 172.101 provides the list of packagings authorized for use by the HMR based on the shipping name of a hazardous material. For each proper shipping name, bulk packaging requirements are provided in Column (8C) of the HMT.
The offeror must select a packaging that is suitable for the properties of the material and based on the packaging authorizations provided by the HMR. With regard to package selection, the HMR require in § 173.24(b) that each package used for the transportation of hazardous materials be “designed, constructed, maintained, filled, its contents so limited, and closed, so that under conditions normally incident to transportation . . . there will be no identifiable (without the use of instruments) release of hazardous materials to the environment [and] . . . the effectiveness of the package will not be substantially reduced.” Under this requirement, offerors must consider how the properties of the material (which can vary depending on temperature and pressure) could affect the packaging.
The packaging authorizations are currently indicated in the HMT and part 173, subpart F. DOT Specification 111 tank cars are authorized for low, medium, and high-hazard liquids and solids (equivalent to Packing Groups III, II, I, respectively). Packing groups are designed to assign a degree of danger presented within a particular hazard class. Packing Group I poses the highest danger (“great danger”) and Packing Group III the lowest (“minor danger”).
For most flammable liquids, the authorized packaging requirements for a PG I material are provided in § 173.243 and for PGs II and III in § 173.242. The following table is provided as a general guide for the packaging options for rail transport provided by the HMR for flammable liquids.
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In published findings from the June 19, 2009, incident in Cherry Valley, Illinois, the NTSB indicated that the DOT Specification 111 tank car can almost always be expected to breach in the event of a train accident resulting in car-to-car impacts or pileups.
In addition, PHMSA and FRA reviewed the regulatory history pertaining to flammable liquids transported in tank cars. Prior to 1990, the distinction between material properties that resulted in different packaging, for flammable liquids in particular, was described in far more detail in § 173.119. Section 173.119 indicated that the packaging requirements for flammable liquids are based on a combination of flash point, boiling point, and vapor pressure. The regulations provided a point at which a flammable liquid had to be transported in a tank car suitable for compressed gases, commonly referred to as a “pressure car” (
In 2011, the AAR issued Casualty Prevention Circular (CPC) 1232, which outlines industry requirements for certain DOT Specification 111 tanks ordered after October 1, 2011, intended for use in ethanol and crude oil service (construction approved by FRA on January 25, 2011).
Despite these improvements of the CPC-1232 on April 6, 2015 the NTSB issued additional recommendations related to legacy DOT Specification 111 tank cars as well as the newer CPC-1232 tank cars. These recommendations, R-15-14 and R-15-15, requested that PHMSA require that all new and existing tank cars used to transport all Class 3 flammable liquids be equipped with thermal protection systems that meet or exceed the thermal performance standards outlined in Title 49 Code of Federal Regulations 179.18(a) and be equipped with appropriately sized pressure relief devices that allow the release of pressure under fire conditions to ensure thermal performance that meets or exceeds the requirements of Title 49 Code of Federal Regulations 179.18(a), and that minimizes the likelihood of energetic thermal ruptures.
The August 1, 2014 NPRM extensively detailed the regulatory actions of PHMSA and FRA that were relevant to the transportation of large quantities of flammable liquids by rail. Specifically, the NPRM detailed regulatory actions that addressed prevention, mitigation, and response through risk reduction. For a description of the PHMSA and FRA regulatory actions that were taken prior to the August 1, 2014 NPRM please refer to the “
On August 1, 2014, in conjunction with its NPRM—“Hazardous Materials: Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains (2137-AE91)”, PHMSA, in consultation with the FRA, published an Advanced Notice of Proposed Rulemaking (ANPRM) that sought comment on potential revisions to its regulations that would expand the applicability of comprehensive oil spill response plans (OSRPs) to high-hazard flammable trains (HHFTs) based on thresholds of crude oil that apply to an entire train consist (See Docket PHMSA-2014-0105).
On August 9, 2014, FRA published an NPRM that proposed amendments to strengthen the requirements relating to the securement of unattended equipment. Specifically, FRA proposed to codify many of the requirements already included in its Emergency Order 28, Establishing Additional Requirements for Attendance and Securement of Certain Freight Trains and Vehicles on Mainline Track or Mainline Siding Outside of a Yard or Terminal. FRA proposed to amend existing regulations to include additional securement requirements for unattended equipment, primarily pertaining to trains transporting PIH materials or large volumes of Division 2.1 (flammable gases), Class 3 (flammable or combustible liquids, including crude oil and ethanol), and Division 1.1 or 1.2 (explosives) hazardous materials. For these trains, FRA proposed requiring attendance on all mainline and sidings that are outside of and not adjacent to a yard unless the railroad has determined it would be appropriate to leave the equipment unattended at the specific location and included the location in its securement plan. FRA also proposed requirements relating to job briefings and communication with qualified railroad personnel to verify equipment has been properly secured before leaving it unattended. Attendance would be required for any equipment not capable of being secured in accordance with the proposed and existing requirements. FRA's NPRM also proposed to require railroads to verify securement in instances where they have knowledge that emergency responders accessed unattended equipment. Finally, FRA proposed a new requirement that all locomotives left unattended outside of a yard be equipped with an operative exterior locking mechanism.
In addition to the regulatory initiatives concerning oil spill response and railroad equipment securement discussed above, PHMSA and FRA are committed to clarifying and improving our existing regulations through active and future rulemakings. As a result PHMSA and FRA continue to work with the regulated community and general public to implement existing regulations and improve safety through regulatory action. PHMSA and FRA have many initiatives underway to address freight
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On June 30, 2014 FRA published an information collection request (ICR) notice in the
On August 29, 2014, FRA received a joint comment from the AAR and the American Short Line and Regional Railroad Association (ASLRRA) raising three main points. First, AAR and ASLRRA asserted that the crude oil routing information in the May 7, 2014 emergency order requires railroads to provide to SERCs sensitive information from a security perspective and the information should only be available to persons with a need-to-know for the
On October 3, 2014, FRA published a 30-day ICR notice in the
On April 17, 2015 FRA issued Emergency Order (80 FR 23321) to require that certain trains transporting large amounts of Class 3 flammable liquid through certain highly-populated areas adhere to a maximum authorized operating speed limit.
FRA issued Emergency Order in the interest of public safety to dictate that an appropriate speed restriction be placed on trains containing large quantities of a flammable liquid, particularly in areas where a derailment could cause a significant hazard of death, personal injury, or harm to the environment until the provisions of this final rule were issued and become effective. Further, by limiting speeds for certain higher risk trains, FRA also hopes to reduce in-train forces related to acceleration, braking, and slack action that are sometimes the cause of derailments.
Emergency Order not only applies to legacy DOT-111 tank cars but newer tank cars built to the CPC-1232 standard. While CPC-1232 tank cars have more robust protections than do legacy DOT-111 tank cars, recent accidents have shown that those cars may still release hazardous material when involved in derailments. Derailments in 2015 in Mt. Carbon, WV, Dubuque, IA, and Galena, IL involved CPC-1232 cars and resulted in the release of hazardous materials from those cars.
Analysis of certain speed restrictions below 40 mph indicated that such restrictions could potentially cause harmful effects on interstate commerce, and actually increase safety risks. Increased safety risks could occur if speed restrictions cause rail traffic delays resulting in trains stopping on main track more often and in trains moving into and out of sidings more often requiring more train dispatching. FRA believes the restrictions in Emergency Order will address an emergency situation while avoiding other safety impacts and harm to interstate commerce and the flow of necessary goods to the citizens of the United States. FRA and DOT will continue to evaluate whether additional action with regard to train speeds is appropriate.
The August 1, 2014, NPRM extensively detailed non-regulatory actions taken to address the risks associated with rail shipment of large quantities of flammable liquids prior to the publication of that document. These non-regulatory actions included but were not limited to: (1) Safety Alerts and Advisories, (2) Operation Classification, (3) the DOT Secretary's Call to Action, and (4) PHMSA and FRA outreach and education efforts. Please refer to the “
Safety advisories are documents published in the
On April 17, 2015 PHMSA issued a notice (Notice No. 15-7; 80 FR 22781) to remind hazardous materials shippers and carriers of their responsibility to ensure that current, accurate and timely emergency response information is immediately available to emergency response officials for shipments of hazardous materials, and such information is maintained on a regular basis.
PHMSA Notice 15-7 emphasized that the responsibility to provide accurate and timely information is a shared responsibility for all persons involved in the transportation of hazardous materials. It is a shipper's responsibility to provide accurate emergency response information that is consistent with both the information provided on a shipping paper and the material being transported. Likewise, re-offerors of hazardous materials must ensure that this information can be verified to be accurate, particularly if the material is altered, mixed or otherwise repackaged prior to being placed back into transportation. In addition, carriers must ensure that emergency response information is maintained appropriately, is accessible and can be communicated immediately in the event of a hazardous materials incident.
Also issued on April 17, 2015 was a joint FRA and PHMSA safety advisory notice (FRA Safety Advisory 2015-02; PHMSA Notice No. 15-11; 80 FR 22778). This joint safety advisory notice was published to remind railroads operating an HHFT, defined as a train comprised of 20 or more loaded tank cars of a Class 3 flammable liquid in a continuous block, or a train with 35 or more loaded tank cars of a Class 3 flammable liquid across the entire train, as well as the offerors of Class 3 flammable liquids transported on such trains, that certain information may be
Following recent derailments involving HHFTs, FRA and PHMSA conducted several post-accident investigations and sought to ensure that stakeholders were fully aware of each agency's investigative authority and cooperated with agency personnel conducting such investigations, where time is of the essence in gathering evidence. Therefore, PHMSA and FRA issued the joint safety advisory notice to remind railroads operating HHFTs, and offerors of Class 3 flammable liquids being transported aboard those trains, of their obligation to provide PHMSA and FRA, as expeditiously as possible, with information agency personnel need to conduct investigations immediately following an accident or incident.
FRA issued a safety advisory notice 2015-01 (80 FR 23318) on April 17, 2015 to make recommendations to enhance mechanical safety of tank cars in HHFTs.
As part of PHMSA and FRA's overall rail safety efforts, the administration launched a testing and sampling program (
Operation Classification continues today, and activities include unannounced inspections, data collection, and sampling at strategic terminal and loading locations for crude oil. PHMSA investigators test samples from various points along the crude oil transportation chain: From cargo tanks that deliver crude oil to rail loading facilities, from storage tanks at the facilities, and from pipelines connecting storage tanks to rail cars that would move the crude across the country. Concurrently, with the publication of the August 1, 2014 NPRM, PHMSA issued an update on the results of PHMSA's sampling and testing effort. See Operation Safe Delivery Update.
Since the issuance of PHMSA's “Operation Safe Delivery Update,” PHMSA has continued its testing and sampling activities and refined the collection methods. PHMSA has purchased closed syringe-style cylinders and is collecting all samples using these cylinders. Utilizing these types of cylinders minimizes the opportunity for any dissolved gases to be lost to the air during collection, thus providing increased accuracy. In addition, PHMSA has taken samples at other shale play locations around the United States to compare their characteristics to that of crude oil from the Bakken region. PHMSA plans to provide subsequent updates of its testing and sampling activities as we move forward and to work with the regulated community to ensure the safe transportation of crude oil across the nation.
As mentioned previously the primary intent of PHMSA's sampling and analysis of crude oil is to determine if shippers are properly classifying crude oil for transportation. PHMSA also uses this data to quantify the range of physical and chemical properties of crude oil. While the information and data obtained from the sampling and analysis helped quantify the range of physical and chemical properties of crude oil, this data did not inform the regulatory amendments in the August 1, 2014, NPRM or this rulemaking.
On January 9, 2014, the Secretary issued a “Call to Action” to actively engage all the stakeholders in the crude oil industry, including CEOs of member companies of API and CEOs of the railroads. In a meeting held on January 16, 2014, the Secretary and the Administrators of PHMSA and FRA requested that offerors and carriers identify prevention and mitigation strategies that can be implemented quickly. As a result of this meeting, the rail and crude oil industries agreed to voluntarily consider or implement potential improvements, including speed restrictions in high consequence areas, alternative routing, the use of distributive power to improve braking, and improvements in emergency response preparedness and training. On January 22, 2014, the Secretary sent a letter to the attendees recapping the meeting and stressing the importance of this issue.
• Recommended Practice 3000 (RP 3000)—API published a new set of recommended practices for testing and classifying crude oil for rail shipment and loading it into rail tank cars. These guidelines were the product of extensive work and cooperation between the oil and gas industry, the freight rail industry, and PHMSA to ensure crude shipments are packaged appropriately, and emergency responders have the right information. RP 3000 provides guidance on the material characterization, transport classification, and quantity measurement for overfill prevention of petroleum crude oil for the loading of rail tank cars. RP 3000 identifies criteria for determining the frequency of sampling and testing of petroleum crude oil for transport classification. It discusses how to establish a sampling and testing program, and provides an example of such a program.
• Transportation Technology Center Inc. (TTCI) Training—AAR and Railroad Subscribers committed considerable resources to develop and provide a hazardous material transportation training curriculum applicable to petroleum crude oil transport for emergency responders. This training was completed in the summer of 2014 and continues to be refined.
• Speed Reduction—Railroads began operating certain trains at 40 mph on July 1, 2014. This voluntary restriction applies to any HHFT with at least one non-CPC 1232 tank car loaded with crude oil or one non-DOT specification tank car loaded with crude oil while that train travels within the limits of any high-threat urban area (HTUA) as defined by 49 CFR 1580.3.
PHMSA and FRA are taking a focused approach to increase community awareness and preparedness for response to incidents involving bulk transport of crude oil and other high-hazard flammable shipments by rail such as ethanol. Specific efforts have taken place to develop appropriate response outreach and training tools to mitigate the impact of future incidents. The following are some of the actions taken to by PHMSA to enhance emergency response to rail crude oil incidents over the past year.
In February 2014, PHMSA hosted a stakeholder meeting with participants from the emergency response community, the railroad industry, Transport Canada and Federal partners FRA, and FMCSA. The objective was to discuss emergency preparedness related to incidents involving transportation of crude oil by rail. The discussion topics included: Current state of crude oil risk awareness and operational readiness/capability; familiarity with bulk shippers of crude oil, emergency response plans and procedures; available training resources (sources, accessibility, gaps in training); and the needs of emergency responders/public safety agencies.
In May 2014, in conjunction with the Virginia Department of Fire Programs, PHMSA hosted a “Lessons Learned” Roundtable forum that consisted of a panel of fire chiefs and emergency management officials from some of the jurisdictions that experienced a crude oil or ethanol rail transportation incident. The purpose of this forum was to share firsthand knowledge about their experiences responding to and managing these significant rail incidents. In attendance were public safety officials from Aliceville, AL, Cherry Valley, IL, Cass County, ND, and the Lynchburg, VA fire department. Based on the input received from the forum participants, PHMSA published a “
In June 2014, in partnership with FRA and the U.S. Fire Administration (USFA), PHMSA hosted a stakeholder meeting with hazardous materials response subject matter experts from the public safety, railroads, government, and industry to discuss best practices for responding to a crude oil incident by rail. In coordination with the working group, PHMSA drafted the “
In October 2014, to further promote the “
In December 2014, PHMSA re-engaged the emergency response stakeholder group to allow all parties Federal government, the railroad industry and the response community to provide updates on the various emergency response related initiatives aimed to increase community awareness and preparedness for responding to incidents involving crude oil and other high-hazard flammable shipments by rail.
In addition to PHMSA's efforts mentioned above, in January 2015, The National Response Team (NRT), led by Environmental Protection Agency (EPA), conducted a webinar titled “
Also in January 2015, the Environmental Protection Agency (EPA) along with other Federal partners including FEMA, USCG, DOE, DOT, and DHS hosted conference calls with state officials and representatives from the appropriate offices, boards, or commissions (emergency response and planning, environmental cleanup, energy, and transportation) that play a role in preparing or responding to an incident involving crude-by-rail. The purpose of these discussions was to gain better understanding of how states are preparing to respond to incidents involving crude oil by rail and to identify key needs from each state. Questions centered on what actions (planning, training, exercises, etc.) have been planned or conducted in the state and/or local communities, what communities or areas have the greatest risk, regional actions or activities states have participated in, and any other related concerns states would like to discuss.
Complementing the Federal government's efforts, the railroad industry has also taken on the challenge to address crude oil response. API has built new partnerships between rail companies and oil producers. At the request of FRA, the API is currently developing an outreach program to deliver training to first responders throughout the U.S., particularly in states that have seen a rise in crude oil by rail. This includes working with oil and rail industry members to identify where existing training initiatives and conferences can be utilized to provide the training to as many responders as possible. Lastly, the AAR and API are working together to produce a crude oil by rail safety training video through their partnership with Transportation Community Awareness and Emergency Response (TRANSCAER).
Moving forward, both the railroad industry and the Federal government will continue their efforts to increase preparedness for responding to not only crude oil, but all high-hazard flammable shipments by rail. The stakeholder group will aim to meet again in the spring of 2015 under the unified goal to provide first responders with the key information needed to effectively prepare for and manage the consequences incidents involving bulk shipments of energy products by rail.
In the meantime, PHMSA will continue its efforts to increase community awareness and emergency preparedness through public outreach to state and local emergency responder communities, sustained engagement with experts from emergency response and industry stakeholder groups, and participating on interagency working groups.
As previously discussed, in addition to the efforts of PHMSA and FRA, the NTSB has taken a very active role in identifying the risks posed by the transportation of large quantities of flammable liquids by rail. The NPRM for this rulemaking detailed the actions and recommendations of the NTSB. Since the publication of the August 1, 2014 NPRM, the NTSB has issued additional rail-related safety recommendations. The table below provides a summary of the rail-related NTSB Safety Recommendations and identifies the effect of this action on those recommendations, including those issued to PHMSA and FRA after the issuance of the August 1, 2014 NPRM. It should be noted that although some of these recommendations are not addressed in this rulemaking they are being addressed through other actions, for example, development of guidance materials, outreach to the regulated community, and conducting research projects. Further, some are being considered for other future rulemaking action.
The Department believes this comprehensive rulemaking significantly improves the safety of trains carrying flammable liquids and addresses many on NTSB's rail related recommendations. Following the publication of this rulemaking, PHMSA will issue a formal response to NTSB regarding the recommendations above and how the provisions of this rulemaking address those recommendations.
In addition to the NTSB recommendations above, the Government Accountability Office (GAO), in August 2014, issued a report entitled “Department of Transportation is Taking Actions to Address Rail Safety, but Additional Actions Are Needed to Improve Pipeline Safety.”
The American Association of Railroads (AAR) Manual of Standards and Recommended Practices, Section C—Part III, Specifications for Tank Cars, Specification M-1002, (AAR Specifications for Tank Cars) reference is available for interested parties to purchase in either print or electronic versions through the parent organization Web site. The price charged for this standard helps to cover the cost of developing, maintaining, hosting, and accessing this standard. This specific standard is discussed in greater detail in the following analysis.
In the August 1, 2014, NPRM, PHMSA solicited public comment on whether the potential amendments would enhance safety and clarify the HMR with regard to rail transport as well as the cost and benefit figures associated with these proposals. PHMSA received 3,209 submissions representing more than 181,500 individuals. Comments were received from a broad array of stakeholders, including trade organizations, railroads, intermodal carriers, logistic companies, rail
Many comments received in response to the NPRM are: (1) General statements of support or opposition; (2) personal anecdotes or general statements that do not address a specific aspect of the proposed changes; (3) comments that are beyond the scope or authority of the proposed regulations; or (4) identical or nearly identical letter write-in campaigns sent in response to comment initiatives sponsored by different organizations. The remaining comments reflect a wide variety of views on the merits of particular sections of the proposed regulations. Many include substantive analyses and arguments in support of or in opposition to the proposed regulations. The substantive comments received on the proposed regulations are organized by topic, and discussed in the appropriate section, together with the PHMSA's response to those comments.
Resolution of the comments are discussed within each appropriate section of the final rule (
Almost unanimously, commenters on all sides of the issues stressed the need to introduce harmonized standards for the rail transport of flammable liquids. Rail transport is a cross-border issue. Flammable liquids regularly cross the U.S./Canadian border using an interconnected rail network.
Staff at Transport Canada, PHMSA, and FRA have traditionally interacted on a frequent basis to ensure harmonized efforts. In light of the significant rulemaking efforts underway in the past year in both countries, this interaction has expanded regarding rail safety efforts and the technical aspects of the rulemakings.
In addition to informal staff level discussion, the DOT and Transport Canada have held more formal discussions through the Regulatory Cooperation Council with regard to improvements to rail safety. Further, leadership at both DOT and Transport Canada have met frequently to discuss harmonization efforts. Finally, Secretary Foxx and Transport Minister Lisa Riatt have met on multiple occasions to specifically discuss the topics addressed in this rulemaking.
PHMSA and FRA believe these discussions have led to the development of a harmonized final rulemaking that will not create any barriers to cross border transportation. To the extent possible, the amendments proposed by PHMSA and FRA in this final rule have been harmonized with Canadian regulatory requirements. The table below provides a summary of the areas covered by this rule and corresponding Canadian efforts.
In the September 6, 2013, ANPRM we asked several questions regarding AAR Circular No. OT-55-N including if we should incorporate the “key train” requirements into the HMR, or if it should be expanded to include trains with fewer than 20 cars. Several commenters indicated that additional operational requirements should be based upon the definition for a “key train” as provided by AAR Circular No. OT-55-N. Further, Appendix A to Emergency Order No. 28 mirrors the definition for a “key train” as provided by AAR Circular No. OT-55-N.
While Appendix A to Emergency Order No. 28 and the revised definition of a “key train” under AAR Circular No. OT-55-N both include Division 2.1 (flammable gas) materials and combustible liquids, PHMSA did not propose to include them in the definition of a “high-hazard flammable train” in the August 1, 2014, NPRM. Rather, PHMSA and FRA proposed to define a high-hazard flammable train to mean a single train carrying 20 or more carloads of a Class 3 flammable liquid. PHMSA and FRA asked for specific comment on this definition in the August 1, 2014, NPRM.
In response to the proposed amendments to routing, we received a variety of comments representing differing viewpoints. Specifically, we received comments representing 62,882 signatories regarding the definition of an HHFT. The definition of a “high-hazard flammable train” is a critical aspect for this rulemaking as many of the requirements are tied to that threshold. The table below details the types and amounts of commenters on the HHFT definition.
Below are some examples from commenters that demonstrate the range of opinions on the HHFT definition as it relates specifically to operational controls.
Comments from the concerned public, local government, tribal communities, towns and cities voiced concern with the 20-car threshold, and that the 20-car threshold is an arbitrary number that is not justified in the NPRM. With regard to alternative scopes for this rulemaking, this group of commenters had varied opinions. Some even suggested that a train consisting of one or more tank cars carrying crude oil or any other hazardous material should be classified as an HHFT.
Tribal communities, such as the Quinault Indian Nation and the Prairie Island Indian Community felt the proposed threshold was sufficient but could be even more stringent. Specifically, the Prairie Island Indian Community supported, “designating trains carrying more than 20 tank cars of flammable liquids as “high-hazard flammable train (HHFT).” The Quinault Indian Nation preferred a threshold of a single tank car.
Environmental Groups such as the Sierra Club, Environmental Advocates of New York, Earthjustice, the Natural Resources Defense Council, Forest Keepers, and Oil Change had strong opinions about this threshold and the need to be more stringent. The Sierra Club noted that there are known risks associated with trains transporting less than 20 tank cars loaded with crude oil, particularly in legacy DOT-111 tank cars. The Environmental Advocates of New York suggested eliminating the combustible liquid exception for rail transportation to capture those materials. Finally, a joint comment from Earthjustice, Sierra Club, the Natural Resources Defense Council, Forest Keepers, and Oil Change suggested in addition to lowering the threshold for defining an HHFT, ensuring that diluted bitumen (“dilbit”) is included in any amount towards this definition. Overall environmental groups supported a threshold below 20 tank cars loaded with Class 3 (flammable liquid) materials.
The NTSB suggested using a pre-existing industry standard for route planning, but does not support the use of the 20 tank car threshold for other purposes. Specifically, their proposal was to align the HHFT definition to the OT-55N “Key Train” definition (20 tank cars loaded with any combination of hazardous materials) for Routing. With regard to tank car specifications and retrofits, the NTSB supports a single tank car approach.
Industry stakeholders took issue with the term “high-hazard flammable train” and the term's connotation. The hazmat shipping industry provided a variety of suggestions with most of them indicating that there would be difficulty in determining if a train would meet the proposed definition of an HHFT prior to shipment. The hazmat shipping industry had issues with the ambiguity of the definition for HHFT. Most in the hazmat shipping industry thought the definition would inadvertently include manifest trains that did not pose as high a risk as unit trains. It was also noted that in many situations it would be difficult to pre-determine when an HHFT would be used. The Dangerous Goods Advisory Council (DGAC) stated that the term “HHFT” is not in use within the industry and may be confused with other terminology such as “unit train,” “manifest train,” or “key train.” Proposed definitions from the hazmat shipping industry included:
• Trains consisting of 20 or more tank cars loaded with crude oil or ethanol originating from one consignee to one consignor without intermediate handling.
• A train carrying a continuous block of 20 or more cars of crude oil or ethanol.
• A unit or block train transporting only loaded crude oil and/or ethanol tank cars shipped from a single point of origin to a single destination without being split up or stored en route.
Amongst the rail industry, there was wide agreement that the HHFT definition proposed at the NPRM stage is not a workable definition. The rail industry had issues with the ambiguity of the definition for HHFT. Like the shipping industry, most in the rail industry thought the definition would inadvertently include manifest trains that did not pose as high a risk as unit trains. The rail industry noted that in many situations it would be difficult to pre-determine when an HHFT would be used. There were many comments from the tank car construction and rail industries suggesting the construction of tank cars not be tied to the definition of an HHFT. Specifically, those comments noted the HHFT definition should only be applied to operational requirements. Some claimed this would shift the scope of the requirements to “unit trains” as opposed to capturing “manifest trains.” Finally, AAR estimated (based on Class I railroads reports) that 20 to 60 percent of their trains containing 20 or more tank cars of flammable liquids are in fact “manifest trains.” It was also noted that the emphasis of the NPRM and other voluntary agreements has been on crude oil and ethanol. AAR provided the following suggested definition as a prospective solution: “20 or more tank cars in block or 35 tank cars across the train consist loaded with a flammable liquid.” AAR claimed this definition would focus on the unit train risk while eliminating the inadvertent inclusion of manifest trains.
PHMSA and FRA agree with many comments regarding this issue and the need to refine the definition. Therefore, in this final rule, PHMSA and FRA are adopting a revised definition for a high-hazard flammable train. The adopted definition of an HHFT is as follows:
A
This revision is based on further justification of the threshold, the intent of the definition, and operational concerns raised by commenters. Each of these will be discussed further below.
With regard to the inclusion of all hazardous materials as opposed to just flammable liquids in the definition of an HHFT, PHMSA and FRA proposed to limit the definition to Class 3 Flammable liquids in the August 1, 2014, NPRM. Because the NPRM limited the definition to Class 3 Flammable liquids, we feel expanding the definition to include all hazardous materials is beyond the scope of the NPRM and thus we are unable to include all hazardous materials in this final rule. Further, as evidenced with the incidents detailed in the RIA, we believe the risk posed by the bulk shipments of flammable liquids in DOT specification 111 tank cars should be included in this final rule but a similar risk has not currently been identified with other hazardous materials.
PHMSA and FRA did not intend the proposed definition in the NPRM to include lower risk manifest trains and
One commenter suggested the 20-car threshold was arbitrary and not founded on data. As detailed in the August 1, 2014, NPRM the 20-car threshold was derived from the “key train” requirements contained in AAR Circular No. OT-55-N. The proposed definition in the August 1, 2014, NPRM used the key train definition as a starting point because it is a threshold used in existing railroad practices, and served as a means to separate the higher-risk trains that carry large volumes of flammable liquids. In response to comments from both the September 6, 2013, ANPRM and the August 1, 2014, NPRM the definition has been revised to focus on the specific risks which are the topic of this final rule. Commenters also suggested the revised threshold being adopted in this rulemaking, as it would eliminate the inclusion of most manifest trains and focus on unit trains.
Based on FRA modeling and analysis, 20 tank cars in a continuous block loaded with a flammable liquid and 35 tank cars loaded with a flammable liquid dispersed throughout a train display consistent characteristics as to the number of tank cars likely to be breached in a derailment. The operating railroads commented that this threshold would exclude manifest trains and focus on higher risk unit trains. FRA completed an analysis of a hypothetical train set consisting of 100 cars. The analysis assumes 20 cars derailed. The highest probable number of cars losing containment in a derailment involving a train with a 20-car block (loaded with flammable liquid) located immediately after the locomotive and buffer cars would be 2.78 cars. In addition, the most probable number of cars losing containment in a derailment involving a manifest train consisting of 35 cars containing flammable liquids spread throughout the train would be 2.59 cars. Therefore, 20 tank cars in a block and 35 tank cars or more spread throughout a train display consistent characteristics. If the number of flammable liquid cars in a manifest train were increased from 40 or 45, the most likely number of cars losing containment would be 3.12 and 3.46 cars, respectively. This serves as one basis for the selection of the revised HHFT definition.
Many commenters highlighted the potential for logistical issues when dealing with the proposed definition. Many called it unworkable and ambiguous. PHMSA and FRA have resolved the ambiguity in the definition by further clarifying the types of trains to be included. Furthermore, AAR, who represents the Class 1 railroads in the U.S., provided the basis for the revised definition. AAR suggested this definition would “exclude manifest trains and focus on higher risk unit trains.” Many commenters suggested that we apply the requirements of this rulemaking to a single tank car for simplicity. PHMSA and FRA are not doing so for numerous reasons. First, this revision would include single tank car shipments of flammable liquids which could have a significant impact on small entities that do not transport large amounts of flammable liquids. Second, while we acknowledge applying the requirements to a single tank car may resolve some logistical issues, such a solution would not be cost justified given the number of tank cars affected and the associated risk with manifest trains verses the risk of an HHFT. Third, we feel through fleet management the rail industry will be able to determine the need for cars that will be part of an HHFT. This could potentially limit the number of retrofitted cars. Lastly, as the definition of an HHFT in the August 1, 2014, NPRM specifically provided a 20-car threshold we feel it would be beyond the scope of this rulemaking to change the applicability of the requirements so drastically without notice and comment.
Therefore, based on the above justification, PHMSA and FRA are adding a definition for high-hazard flammable trains in § 171.8. Specifically a
In the NPRM, 79 FR 45062 PHMSA asked whether exceptions for combustible liquids or PG III flammable liquids would incentivize producers to reduce the volatility of crude oil, and what the impacts on costs and safety benefits for degasifying to these levels. The majority of commenters from all backgrounds provided general support for pre-treatment of crude oil prior to transportation. For example, Quantum Energy supported pre-treatment, but stated that the current exceptions for combustible liquids (see § 172.102 Special provisions B1) are not sufficient to incentivize pre-treatment of petroleum crude oil. It further suggested adding a definition for “stabilized crude oil” and providing several exceptions for “stabilized crude oil” throughout the rule.
Some industry stakeholders did not support incentivizing pre-treatment of crude oil. AFPM provided results from a survey of its members on data regarding the characteristics of Bakken crude and cited other studies on the stabilization of crude oil. It stated that the treatment process used in the Bakken region is unlikely to result in Bakken crude's reclassification as a combustible liquid. AFPM stated treated crude should not be regulated differently than non-treated crude because, “[o]nce ignited, the burning intensity of unstabilized and stabilized crude would not substantially differ.”
Commenters also expressed differing views on the role of packing group-based exceptions. Some commenters suggested more stringent packing group-based requirements, such as restricting use of PG III for crude oil. Other commenters recommended various packing group-based exceptions not proposed in the rulemaking.
As with any hazardous material put into transportation by any mode, safety is the Department's top priority, and we will continue to conduct inspections or bring enforcement actions to assure that
Some commenters requested the proposals in the NPRM to be expanded beyond just flammable liquids to include all hazardous materials. This request covered all topics in the rulemaking. The operational controls addressed in this rule are aimed at reducing the risk and consequences of incidents involving rail shipments of Class 3 flammable liquids. The analyses, data, and relevant factors considered in developing this rule are specific to these materials. Information has not been provided to support expanding these restrictions to all hazardous materials or to justify the associated negative impacts on rail fluidity and costs.
Below is a discussion of the amendments relating to tank car construction and retrofitting. This topic is broken down into four areas: new tank car construction, retrofit standard, performance standard, and an implementation timeline.
In the September 6, 2013 ANPRM, PHMSA requested comments pertaining to new construction requirements for DOT Specification 111 (DOT-111) tank cars used in flammable liquid service. See 78 FR 54849. On August 1, 2014, PHMSA, in consultation with FRA, issued an NPRM in response to comments submitted to the ANPRM. See 79 FR 45015. In the NPRM, we proposed three options for newly manufactured tank cars that would address the risks associated with the rail transportation of Class 3 flammable liquids in HHFTs. Though commenters differed on the applicability of new construction requirements for the rail transportation of Class 3 flammable liquids, all support prompt action to address construction standards for tank cars.
Tank cars built to the new standards as adopted in this final rule will be designated “DOT Specification 117” (DOT-117). In addition, we are adopting a performance standard compliance alternative for the design and construction of new tank cars or retrofitting of existing tank cars equivalent to the prescribed DOT Specification 117 standards. Thus, a new or retrofitted tank car meeting the performance criteria will be designated as “DOT Specification 117P” (See “Performance Standard” section). In addition, we are adopting a retrofit standard for existing tank cars meeting the DOT Specification 111 or CPC-1232 standard. Thus, a tank car meeting the retrofit standard will be designated as “DOT Specification 117R” (See “Retrofit Standard” section). In this final rule, we are adopting the requirement that new tank cars constructed after October 1, 2015, used to transport Class 3 flammable liquids in an HHFT, meet either the prescriptive standards for the DOT Specification 117 tank car or the performance standards for the DOT Specification 117P tank car. Other authorized tank car specifications, as specified in part 173, subpart F, will also be permitted; however, use of a DOT specification 111 tank car in an HHFT is prohibited.
The prescribed specifications and the performance standards adopted in this rule were developed to provide improved crashworthiness when compared to the legacy DOT Specification 111 tank car. In addition to adopting revisions to part 179 of the HMR to include the new DOT Specification 117, 117P and 117R tank car standards, we are adopting revisions to the bulk packaging authorizations in §§ 173.241, 173.242, and 173.243 to include the DOT Specification 117, 117P, and 117R tank cars as an authorized packaging for those hazardous materials. We noted that, as stated in the introductory text to §§ 173.241, 173.242, and 173.243, each person selecting a packaging must also consider the requirements of subparts A and B of part 173 of the HMR and any special provisions indicated in column (7) of the HMT.
Lastly, we are incorporating by reference, in § 171.7, appendix E 10.2.1 of the 2010 version of the AAR Manual of Standards and Recommended Practices, Section C—Part III, Specifications for Tank Cars, Specification M-1002, (AAR Specifications for Tank Cars). Appendix E provides requirements for top fittings protection for certain tank car options.
Replacing the current standard for the DOT Specification 111 tank car is not a decision that the Department takes lightly. New construction and retrofit standards will have considerable safety and economic consequences. Consequently, the DOT Specification 117 tank car would be phased in over an aggressive but realistic timeline. We limit our discussion to new tank car standards in this section, but we will separately discuss the retrofit standard, performance standard and implementation timeline in the subsequent sections. We seek to ensure that the car selected will have the greatest net social benefits, with benefits primarily generated from the mitigation of accident severity. We are also aware of, and account for, the large economic effects associated with regulatory changes of this scale, as tank cars are a long-term investment. For these reasons, we proposed in the NPRM three separate DOT Specification 117 options and requested comments on each of them.
The options proposed in the NPRM were designed to enhance the survivability of the tank car and to mitigate the damages of rail accidents with design features. Specifically, the tank car options incorporate several enhancements to increase tank head and shell puncture resistance; thermal protection to extend lading containment while in a pool fire environment; and improved top fitting and bottom outlet protection during a derailment. Under all options, the proposed system of design enhancements will reduce the consequences of a derailment of tank cars transporting flammable liquids in an HHFT. There will be fewer tank car punctures, fewer releases from service equipment (top and bottom fittings), and improved containment of flammable liquid from the tank cars through the use of pressure relief devices and thermal protection systems. The following table summarizes the tank car options proposed in the August 1, 2014, NPRM. Please note the shaded cells in the following table indicate design traits that are the same for more than one proposed option.
In support of this final action, PHMSA and FRA have revised the analysis to account for public comments and further research. The revisions resulted in modified effectiveness rates which can be viewed in the final RIA for this rulemaking, which has been placed into the docket. The final RIA also describes the baseline accidents, model inputs, and the assumptions that were used to develop the effectiveness rates for each tank car option.
Based on the aforementioned, in this final rule, PHMSA and FRA are adopting Option 2 for new construction of tank cars used in a HHFT subject to the enhanced braking requirements addressed in the “Advanced Brake Propagation Systems” section of this rulemaking. The following table lists the design features of the adopted DOT Specification 117 Tank Car:
In response to tank car-related proposals in the NPRM, we received comments representing many differing viewpoints. In sum, we received comments representing approximately 172,000 signatories.
Overall, the vast majority of commenters support PHMSA's efforts to adopt enhanced standards for non-pressure tank cars used to transport flammable liquids. For example, there were nearly 168,700 signatories from the general public, NGOs, and government organizations who requested that PHMSA prohibit the continued use of the existing legacy DOT Specification 111 tank car fleets. There were, however, 1,878 signatories that supported the proposals in the rulemaking. Moreover, there were approximately 159,000 signatories that felt the proposed new tank car standards do not go far enough, including three entities representing tribal communities, the Tulalip Tribes, the Prairie Island Indian Community, and the Quinault Indian Nation. Lastly, there were approximately 40 substantive comments in support of the notion that alignment with Canada is critical for new construction and retrofit designs, as well as retrofit timelines. Below, we discuss the comments specific to each tank car option proposed in the NPRM.
Proposed tank car Option 1 received the least support from the regulated industry (railroads, shippers, offerors, etc.) however it was fully supported by the NTSB, concerned public, environmental groups, local communities, and cities. These groups all requested the most robust tank car specifications be adopted but gave very little consideration to the costs of such standards.
Option 1 is the most robust design proposed; it also is the most costly. The comments of API, Railway Supply Institute Committee on Tank Cars (RSI-CTC), and many others in the rail and shipping industry, do not support Option 1. U.S. Congressman Kurt Schrader echoed many of these commenters concerns when he stated that, “Option 1 appears to introduce controversy, complexity, and additional expense without any meaningful increase in safety.” In his comments, U.S. Congressmen Peter DeFazio stated “. . . the rail industry has major concerns with the viability and effectiveness of ECP brakes and certain roll-over protections that were included in Option l. If the addition of those protections appears likely to significantly delay the rulemaking, I would encourage PHMSA to move forward with Option 2 . . .”
While Option 1 was the most robust tank car proposed in the August 1, 2014, NPRM, the Tulalip Tribes did not believe the design was robust enough. Specifically, the Tulalip Tribes noted that while, “proposed new standards for rail car designs are an improvement,” they are “far from providing an acceptable risk from tank rupture allowing leakage or an explosion.” The Tulalip Tribes continued stating that the:
DOT-111 tanks are only safe from collisions for speeds up to 9 miles per hour. Option one only improves the safe speed for collisions up to 12.3 miles per hour for the shell of the tank. Of the thirteen major crude oil/ethanol train accidents in the U.S. listed in the August 1, 2014
The Tulalip Tribes concluded that “[t]he rail cars need to be designed in a way that the damages caused by a derailment are minimized and speed limits are set at or below the maximum speed that a tanker car can survive without a spill.
In general terms, the arguments against Option 1 typically noted the overall cost of the tank car, weight issues associated with increased safety features, the lack of a substantial increase in safety when compared to other options, and the inclusion of ECP braking and TIH top fittings protection. The typical arguments in support of Option 1 were that it was the most robust tank car option, and the incremental safety benefit is justified given recent accident history.
The Option 2 tank car has most of the safety features as the Option 1 tank car, including the same increase in shell thickness, jacket requirement, thermal protection requirement, and head shield requirement. However, it does not require TIH top fittings protection and the requirement of ECP brake equipment of Option 1. Installation of ECP brake equipment largely makes up the cost differential between the Option 1 and 2 tank cars, and the differences in estimated effectiveness are also largely a result of ECP brakes. Proposed tank car Option 2 received more support than option 1 from the regulated industry, albeit with a variation in shell and head thickness for newly constructed tank cars. Many commenters in the rail industry supported this option with an 8/16-inch thick shell as opposed to the proposed 9/16-inch shell.
In their comments, U.S. Congressman Dave Reichert and Congresswoman Lynn Jenkins state “we strongly encourage PHMSA to consider Option 2 identified in the NPRM.” Another commenter, Bridger, LLC (Bridger) stated “Bridger strongly recommends
Amsted Rail Company, Inc. (Amsted Rail) fully supports Option 2 as does the State of Minnesota which stated that “Minnesota and its agencies support the safety features and performance level represented by the Option 2.” RSI-CTC also supports Option 2 for new tank car requirements but only for those tank cars transporting crude oil and ethanol.
Many commenters were opposed to both Options 1 and 2. AFPM represented many of these sentiments when it stated that, “numerous procedural and substantive flaws of PHMSA's cost-benefit analysis make it clear that Options 1 and 2 would cost far more and provide little in the way of additional safety improvements.”
The arguments against Option 2 were primarily from the NTSB, concerned public, environmental groups, local communities, cities, and towns who, as stated above, supported Option 1. In addition some in the regulated industry expressed their opposition for both options 1 and 2. These entities typically noted the overall cost of the tank car, weight issues associated with increased safety features, and the lack of a substantial increase in safety when compared to other options.
In summary, the arguments in support of Option 2 were provided by a wide range of commenters from the regulated industry. These commenters supported exclusion of ECP braking and TIH top fittings protection. Finally, it should be stressed that many in the regulated industry supported this option with the caveat that the shell thickness be 8/16-inch and not 9/16-inch.
Proposed tank car Option 3 received the most support from the regulated industry for both new construction and retrofitted tank car requirements and the least support from the NTSB, concerned public, environmental groups, local communities, and cities. Option 3 is similar to the jacketed CPC-1232 tank car standard. The option revises the CPC-1232 standards by requiring improvements to the bottom outlet handle and pressure relief valve. It also removes options (1) to build a tank car with the alternative (ASTM A516-70) steel type but with added shell thickness or (2) to build a tank car with a thicker shell but no jacket.
This tank car is a substantial safety improvement over the current DOT Specification 111 but does not achieve the same level of safety as the Option 1 or Option 2 tank cars. This tank car requirement calls for a
In its comments, Honeywell Performance Materials and Technologies asserted, “[n]ew car construction, as proposed with CPC-1232, is the most efficient way to enhance safety of the fleet.”
The Dow Chemical Company (Dow) stated that “Dow believes that Option 3 will be the most feasible for the crude oil and ethanol industries . . .” Dow estimated “that Option 3 will achieve a more optimal balance between safety features (resulting in increased tare weight) and lading quantity, thus reducing the extra number of cars (or trains) that would need to be put on the rails compared to Options 1 and 2. The size of the Option 3 car also makes it less likely to negatively affect loading/unloading rack dimensions or fall protection systems.” Further, Dow “strongly encourages PHMSA to incorporate into the HMR enhanced specifications—as described in CPC-1232—for new DOT Specification 111 builds for Class 3 materials (other than those covered by HM-251).”
U.S. Congressman Rep. Kevin Cramer supports the CPC-1232 standard because the analysis leading to its design has been “fully contemplated.”
In its comments, DGAC stated that it “encourages Option #3 (Enhanced CPC-1232) with jacket and full height headshield.” The Independent Fuel Terminal Operators Association also supports the adoption of Option 3, but only for newly constructed cars built after October 1, 2015. Biggs Appraisal Service LLC offers mixed support for new tank car requirements. It believes this is the option that best fits their interest, but this option still has features that it thinks is unnecessary. It argues that
As mentioned previously, some commenters proposed an alternative tank car that would fall somewhere between the proposed Options 2 and 3. Specifically, in their comments, AAR/API and Hess propose a new tank car design standard with an
Hess continues its support for Option 3 with a thicker shell, stating:
The AAR/API endorsed standard mirrors PHMSA's Options 2 and 3 in all respects, except that the design would require an
In opposition, Greenbrier does not support Option 3 and it noted a fear of having to again revisit this issue in the future if the correct tank car is not selected. Further, the NTSB asserted that the
In summary, the arguments against Option 3 were primarily from the NTSB, concerned public, environmental groups, local communities, cities, and towns and a rail car manufacturer. These arguments were primarily based on the desire to choose the most effective tank car that has the largest increase in benefit over the existing fleet. In addition, these commenters noted the need to adopt the most appropriate tank car now and avoid revisiting the issue in the future. The arguments in support of Option 3 were more widespread amongst the regulated industry. This support was primarily due to the concerns of the weight of tank car, and the lack of the inclusion of ECP braking and TIH top fittings
To address comments more effectively, we have arranged our discussion by tank car component. The following is an overview of the requirements and a discussion of the comments in support and opposed to certain proposed requirements.
The bottom outlet valve (BOV) protection ensures that the BOV does not open during a train accident. The NTSB in recommendation R-12-6 recommends that PHMSA “require all bottom outlet valves used on newly manufactured and existing non-pressure tank cars are designed to remain closed during accidents in which the valve and operating handle are subjected to impact forces.” PHMSA and FRA see this issue as one that can be cost-effectively resolved and in general commenters agreed.
Overall the comments with regard to BOV protection were supportive by both the regulated industry and public stakeholders. For example, Earthjustice, the environmental group, stated that it, “urge[s] PHMSA to take further steps to reduce the risks posed by bottom outlet valves.” The regulated industry also supports this proposal as is evident in Growth Energy's comment that it, “support[s] CPC-1232 design with PRD and BOV protection.” Further, R.L. Banks & Associates, Inc. (RLBA) also supports the requirement to develop better lower product discharge valves and valve protectors and would like to see the development of a performance-based specification for lower discharge openings to ensure that the system meets minimum desired requirements.
Although there was widespread support, some commenters were opposed to BOV improvements. Dow stated that, “in trying to optimize the bottom outlet valve (BOV) for derailments causing the BOV to open, which is a somewhat rare occurrence in terms of total number of derailments, design features that make the valve less safe for loading/unloading operations have the potential to be introduced . . . we believe it is premature to mandate such BOV enhancements.” This was generally the minority opinion as most support changes to the BOV.
PHMSA and FRA disagree with those commenters who oppose improvements to the current BOV designs. Protection of the BOV is currently a regulatory requirement and is invaluable in an accident scenario as it limits the likelihood of a release of lading which could potentially result in a pool fire. A BOV designed to prevent actuation or opening in a derailment is a necessary enhancement. In this final rule, PHMSA is requiring other design enhancements—such as improved puncture resistance and top fittings protection—that will reduce the volume of lading loss from a tank car that is involved in a derailment. Preventing opening of the BOV during a derailment will further reduce the volume lost, thereby mitigating environmental damage as well as the likelihood of a pool fire or the severity of the fire and environmental damage. We note that an AAR task force has been convened to develop a BOV design that would prevent opening during a derailment. We believe that if a car owner and/or offeror chooses not to remove the handle for transportation, an easy to install design will soon be readily available at a low cost. Therefore, in this final rule, for new construction of the DOT-117 tank car, we are adopting as proposed in the NPRM that all bottom outlet handles either be removed or be designed with protection safety system(s) to prevent unintended actuation during train accident scenarios.
Currently, the HMR do not require head shields on tank cars used to transport Class 3 flammable liquids. Further, the CPC-1232 standard currently in effect only requires half-height head shields for newly constructed non-jacketed tank cars. In the August 1, 2014 NPRM, PHMSA and FRA proposed a range of tank car options, each of which included a full-height,
Commenters who addressed the issue in their comments overwhelmingly support full-height head shield on jacketed tank cars subject to the new standard. For example, the NTSB noted in its comments, “[t]he top half of tank car heads are subject to damage and punctures during train derailments and half height head shields fail to provide the protection needed.” RLBA supports the use of full-height head shields for the heads. A concerned public individual, William A. Brake, urged that the new standard require tank cars to be “equipped with
PHMSA and FRA agree with the commenters who support the inclusion of a
Pressure relief devices (PRD) vent gases or vapors under high pressure in order to reduce the risk of a ruptured tank car. The HMR limit the allowable start-to-discharge (STD) pressure of the PRD to approximately one-third of the burst pressure to provide a factor of safety against at tank rupture. In a pool fire, a loaded tank is exposed to extreme heat which results in both an increase in tank pressure as the lading is heated and a reduction in strength of the tank material commensurate with the increasing material temperature. When a tank car is exposed to a pool fire the PRD will maintain a low pressure in the tank and potentially extend the time before a tank car would thermally rupture.
In the Arcadia derailment there were three high-energy thermal failures. In two of the three cases the tank fractured into two pieces and those pieces were thrown from the derailment area. In the third case, the tank was nearly fractured around the entire circumference. The AAR T87.6 task force considered the possibility that the PRDs did not have adequate flow capacity to expel the rapidly increasing pressure and start to discharge pressure rating (STD). Currently, the PRDs on tank car used in Class 3 service have a STD pressure of 75 or 165 psi. The PRD maintains the
A thermal protection system serves to prolong the survivability of a tank exposed to a pool or torch fire by limiting the heat flux into the tank and its lading, thereby delaying the increase in pressure in the tank exceeding the STD pressure of the PRD. If a PRD on a tank car exposed to a pool fire is under the liquid level of the tank, the thermal protection system will delay the release of the lading through the PRD. Based on the results of simulations using the Affect of Fire on Tank Cars (AFFTAC) model, an approved thermal protection delays rupture of a tank until most of the lading has been expelled through the PRD. This results in a lower energy available at the time of rupture.
Most commenters support a redesigned PRD because they consider it as a cost-effective solution that provides considerable safety benefit. Some commenters argue that for a CPC-1232 compliant tank car, any new requirements should be limited to a redesigned PRD and bottom outlet valve protection only. Eighty-Eight Oil LLC stated in its comments, “Eighty-Eight supports allowing the CPC-1232 jacketed fleet to operate for its full useful life with a potential retrofit limited to an enhanced BOV handle and a larger pressure relief valve.” Further, in their comments, Growth Energy and many others support the CPC-1232 design with PRD and BOV protection.
There are currently high flow capacity, reclosing PRD available that are relatively low cost and generally easy to install on new or retrofitted tank cars. Based on these facts and comments received in support of reclosing PRDs, PHMSA is adopting the installation of reclosing PRD as proposed on new construction of DOT-117 specification tank cars.
Thermal protection is intended to limit the heat flux into the lading when exposed to fire. Thermal protection will extend the tank car lading retention for a certain period of time in pool fire conditions. Thermal protection will prevent rapid temperature increase of the lading and a commensurate increase in vapor pressure in the tank. The thermal protection system, by reducing the heat flow rate from the fire to the liquid, lowers the liquid evaporation rate, allows the evaporated vapor to be discharged through the pressure relieve valve without significant tank pressure increase and considerably reduces the possibility of dangerous over pressurization of the tank.
All three DOT Specification 117 options proposed in the NPRM required a thermal protection system sufficient to meet the performance standard of § 179.18 of the HMR, and must include a reclosing pressure release valve. Section 179.18 requires that a thermal protection system be capable of preventing the release of any lading within the tank car, except release through the pressure release device, when subjected to a pool fire for 100 minutes and a torch fire for 30 minutes. Typically, tank cars with thermal protection are equipped with a weather-tight 11-gauge jacket. There was general support for this requirement as there are existing technologies that can vastly improve the thermal survivability of the existing fleet. We have summarized a few selected comments below to provide some idea of the overall comments.
In its comments, RLBA agrees that thermal insulation around the shell and a steel jacket over the thermal insulation will be highly beneficial in protecting the shell from structural thermal damage during a derailment fire and over pressure damage due to cargo expansion thanks to shell heating.
While many commenters echoed the above comments, some commenters such as PBF Energy and the Renewable Fuels Association (RFA) do not think jacketing is necessary. In its opposition, DGAC “believes that an across-the-board requirement for thermal protection and jacketing on all flammable liquid tank cars is not supported by incident data, and may also have unintended consequences detrimental to safety . . . such as making corrosion under the insulation more difficult to detect.”
PHMSA and FRA disagree with commenters opposing the thermal protection requirements as proposed in the NPRM. Furthermore, on April 6, 2015 NTSB issued emergency recommendations stressing the importance of thermal protection in light of the Mount Carbon, WV and Galena, IL derailments. In the train accidents previously discussed, approximately 10 percent of tank car breaches were attributed to exposure to fire conditions. Consistent with current minimum industry standards and Federal regulations for pressure cars for Class 2 materials, the T87.6 Task Force agreed that a survivability time of 100-minutes in a pool fire should be used as a benchmark for adequate performance. The 100-minute survival time is the existing performance standard for pressure tank cars equipped with a thermal protection system and was established to provide emergency responders with adequate time to assess a derailment, establish perimeters, and evacuate the public as needed, while also giving time to vent the hazardous material from the tank and prevent an energetic failure of the tank car.
With regard to the claim that addition of thermal protection and a jacket could have “unintended consequences detrimental to safety . . . such as making corrosion under the insulation more difficult to detect” PHMSA and FRA disagree. In accordance with the current requirements, the owner of the tank car has to develop a requalification program. This program would include an inspection method to check for corrosion to the tank. This is currently done for jacketed and insulated tank cars.
The thermal protection prolongs the survivability of the tank by delaying the moment when pressure in the tank exceeds the start to discharge of the pressure relief valve, thus delaying the release of flammable liquid or the occurrence of an energetic rupture. Because all the thermal protection systems meeting the § 179.18 performance standard that PHMSA studied performed equally well in the simulations, and because the simulations indicated the importance of a reclosing pressure relief valve, PHMSA is not requiring a particular system, but instead is requiring that a thermal protection system meet the performance standard of § 179.18 and include a reclosing PRD for new construction of the DOT-117 specification tank car. Finally, it was consistently noted that there are existing technologies available that can vastly improve the thermal survivability of the existing fleet. Thus, the thermal protection requirements for new construction of the DOT-117 specification tank car as proposed in the NPRM are adopted in this final rule.
Shell and head punctures result in rapid and often complete loss of tank contents. Minimizing the number of cars punctured in a derailment is critical because ignited flammable liquids that result in a pool fire that can quickly affect the integrity of adjacent cars and their ability to contain their lading. In the August 1, 2014 NPRM, PHMSA and FRA proposed a range of head and shell thicknesses ranging from
The NTSB, in support of a thicker shell commented that:
The minimum standards for new DOT-117 tank cars should include: full height
A concerned member of the public, Lynne Campbell, urged the Department to “Select the most protective tank car standards, using the latest technology. Tank Car Option #1 would require
An environmental group, the Sierra Club, requested that “at a minimum, DOT must implement the proposed Pipeline and Hazardous Materials Safety Administration (PHMSA) and Federal Rail Administration (FRA) design option [Option 1] for tank car safety improvements.” Further, in its comments, the Brotherhood of Locomotive Engineers and Trainmen (BLET) fully support
RLBA believes that increasing the shell thickness from
The NPRM modeling used to estimate reduction in risk for increased tank thickness is substantially flawed, and is inconsistent with real-world assumptions on which PHMSA has previously relied and has actually endorsed on the record in this proceeding. This analysis by DOT plainly shows that shell thickness or the effect of a jacket will not result in an appreciable increase in puncture velocity. In this crucial part of the NPRM analysis, by ignoring on the record, and established DOT puncture velocity methods and studies, PHMSA has clearly failed to articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.
Commenter Eighty-Eight Oil, LLC, used the AAR's Conditional Probability of Release Model (CPR) to support a claim that Option 2 and Option 1 (with a
Greenbrier fully supported Option 2, particularly, the
Exxon/Mobil supported Option 2, but with
API (and AAR) also supported a modified Option 2, with an
AFPM, quoted a 2009 study conducted by Volpe that concluded, “shell thickness had a relatively weak effect on preventing releases during derailments.” In its comments AFPM “supports the Option 3 specification for new and retrofitted rail tank cars shipping crude and ethanol in unit trains of 75 cars or more. The Option 3 specification tank car is an enhanced CPC-1232 tank car with a
The Hess Corporation stated, “[t]he AAR/API recommendation supported by Hess is based on the Option 3 tank car proposed by PHMSA, but increases the shell thickness of the jacketed tank car from a
PHMSA and FRA disagree with those who do not support a
The combination of the shell thickness and head shield of Options 1 and 2 provide a head puncture resistance velocity of 18.4 mph. Because the Option 3 tank car has a
The top fitting protection consists of a structure designed to prevent damage to the tank car service equipment under specified loading conditions. As adopted in this final rule, newly constructed tank cars will require top fittings consistent with the AAR's specification for Tank Cars, M-1002, appendix E, paragraph 10.2.1. In general, there was support for some top fittings protection, but not for the dynamic top fittings protections meeting a 9-mph performance standard required for tank cars required for the transportation of TIH materials.
Further, some commenters suggested continued development of top fittings protection. PHMSA is aware that the AAR Tank Car Committee has started a working group to investigate cost effective advancements in existing top fittings protections. PHMSA and FRA are supportive of these efforts as they would apply to both new and retrofitted tank cars. PHMSA and FRA may conduct further testing and develop future regulatory requirements if appropriate. We have summarized a few selected comments below to provide some idea of the overall comments.
RLBA recommended that the development of structures to contain and protect the over pressure device be continued including recessing the device in an inverted dome fastened to the shell.
Earthjustice, an environmental group, strongly urged “PHMSA to require existing tank cars to have additional top-fittings protections (which the Canadian proposed rule would do).”
AAR's comments on top fittings protection were consistent with many other commenters. In particular the AAR noted the importance of top fittings protections yet stressed concern with overly burdensome top fittings standards. AAR stated it “supports enhanced top-fittings protection, but not the 9 mph standard.”
Because there was little substantive opposition to the adoption of enhanced top fittings protection for new construction of the DOT-117 specification tank car, PHMSA and FRA are adopting such requirements consistent with the AAR's specification for Tank Cars, M-1002, appendix E, paragraph 10.2.1 as opposed to dynamic top fittings protections meeting a 9-mph performance standard.
Under proposed Option 1, the DOT Specification 117 tank car would be required to be equipped with a top fittings protection system and nozzle capable of sustaining, without failure, a rollover accident at a speed of 9 mph, in which the rolling protective housing strikes a stationary surface assumed to be flat, level, and rigid and the speed is determined as a linear velocity, measured at the geometric center of the loaded tank car as a transverse vector. Generally this (TIH top fittings protection) requirement was not supported by the regulated community but was supported by those endorsing the most robust tank car possible. Below are a few selected comments to provide some idea of the overall comments.
Dow stated with regard to the top fittings on Option 1 that, “[o]ne rail tank car manufacturer indicated at least $8,000 additional cost for § 179.102-3 dynamic load roll-over protection . . . . The thicker
Another opposing commenter, Greenbrier, stated that it does not support TIH rollover protection, claiming it is an unproven technology. It does, however, support AAR specification M-1002, appendix E, Paragraph 10.2.1 Top Protection.
ADM asserted, “PHMSA assumes without any supporting data that top fittings will decrease the damage to service equipment by 50 percent.”
PHMSA and FRA agree with commenters opposed to the TIH style rollover protection system proposed in Option 1 for new construction of the DOT-117 specification tank car. We disagree that it is “unproven technology.” Specifically, this is not a specific technology but rather a performance standard. Also, the standard exists and is used for tank car transporting PIH commodities. There are thousands of tank cars in operation that meet this standard. We do not believe this is a matter of technology but rather a matter of whether a practical design could be developed, one that will not introduce excessive stresses elsewhere in the tank in the event of a roll-over.
Therefore, while we disagree that it is “unproven technology,” we do not feel the effectiveness of the TIH rollover protection is justified when considering the cost of such a system and thus, we are not adopting such standards in this final rule.
For comprehensive analyses, conclusions, and regulatory codification on the braking proposal, see “Advanced Brake Signal Propagation Systems.”
The discussion below provides some of the supporting analysis that shaped PHMSA and FRA's decisions on the requirements for the new construction of the DOT-117 specification tank cars. For further detail and a more comprehensive discussion of our analysis, see the final RIA for this rulemaking. This section highlights particular areas that were the focus of numerous comments.
Effective October 1, 2015, for new car construction, the adopted specification requirements are the same as proposed Option 2. See the “Advanced Braking Signal Propagation Systems” section for discussion on ECP braking. Industry is currently building DOT-111 tank cars constructed to the CPC-1232 standard. The primary difference between Option 2 and the jacketed DOT/CPC-1232 car is that the former has a
Based on these effectiveness and the associated incremental cost, PHMSA and FRA have chosen the 9/16 thickness due to its increased puncture resistance. See the RIA for this final rule for further analysis.
Many commenters who provided data and analysis in an effort to refute PHMSA and FRA modeling data did so with the use of the Conditional Probability of Release (CPR) modeling. In addition, some commenters challenged PHMSA and FRA modeling as a weakness in our analysis. In July 2014, FRA released a study conducted by Sharma and Associates entitled
The methodology captures several parameters that are relevant to tank car derailment performance, including multiple derailment scenarios, derailment dynamics, impact load distributions, impactor sizes, operating conditions, tank car designs, etc., and combines them into a consistent probabilistic framework to estimate the relative merit of proposed mitigation strategies.
The industry's approach (CPR) to addressing these questions has been to rely on past statistical data from accidents. RA-05-02, a report published by industry, and its more recent derivatives, have been used by the Association of American Railroads (AAR) and other industry partners as a means to address the above questions, in so far, as it relates to thickness changes. This approach has shortcomings, such as:
• Limited applicability—cannot be applied to innovative designs or alternate operating conditions
• Inconsistency—risk numbers seem to change with the version of the data/model being used
• Based on a limited dataset, that may not have good representation from all potential hazards, particularly low probability-high consequence hazards, and car designs/features present only in limited quantities in the general population of tank cars.
While the statistical data may be useful as a general gauge for safety, it does not make a valuable tool for future engineering decisions, or, for setting standards. Therefore, there is a distinct need to develop an objective, analytical approach to evaluate the overall safety performance and the relative risk reduction, resulting from changes to tank car design or railroad operating practices. The research effort described here addresses this need through a methodology that ties together the load environment under impact conditions with analytical/test based measures of tank car puncture resistance capacity, further adapted for expected operating conditions, to calculate resultant puncture probabilities and risk reduction in an objective manner. While not intended to predict the precise results of a given accident, this methodology provides a basis for comparing the relative benefits or risk reduction resulting from various mitigation strategies.
In addition, some commenters challenged PHMSA and FRA modeling as a weakness in our analysis. For example, Dr. Steven Kirkpatrick of Applied Research Associates, Inc., in his September 29, 2014, comments to the NPRM, entitled “
PHMSA and FRA stand behind the assumptions, conclusions, and methodology used in the Sharma Associates study on puncture resistance. In addition, based on the comments received this methodology was modified, where appropriate, to provide better results. Specific modifications are discussed below. For a more comprehensive discussion, see the RIA.
• The effect of derailment occurring at different locations throughout the train was included in the calculations.
• In the NPRM, 12 scenarios were used for each calculated most probable number of cars punctured. The scenarios have been expanded to 18, based on 3 track stiffness values, 3 friction coefficients, and 2 derailment initiating force values.
• Multiple analyses have been conducted in which the impactor distribution was varied towards either larger or smaller impactors.
In addition, the
• PHMSA and FRA believe that the “ground friction coefficient values” used in the Sharma modeling analysis are methodical, reasonable, and adequate for the purposes of evaluating the relative performance of alternative tank car designs and determining the effectiveness rates of the proposed tank car design standards.
• PHMSA and FRA disagree with the Review of Analyses' critique of the Sharma modeling's “assumed impactor distribution” and reiterate that the Sharma modeling's assumptions are generally consistent with “real life observations.” In his critique, Dr. Kirkpatrick states that a larger impactor size should have been used for the analysis. However, in his report, “Detailed Puncture Analyses Tank Cars: Analysis of Different Impactor Threats and Impact Conditions”, file name:TR_Detailed Puncture Analyses Tank Cars_20130321_final.pdf, page 2 (page 20 of PDF file) Dr. Kirkpatrick indicates smaller impactors sizes are appropriate.
“A significant finding from the first phases of the study is that there are many potential impact threats with a relatively small characteristic size. When the combinations of complex impactor shapes and off-axis impactor orientations are considered, many objects will have the puncture potential of an impactor with a characteristic size equal to or smaller than the 6-inch impactor used in previous tank car tests.”
• PHMSA and FRA are confident that the findings for the number of tank cars derailed in derailment simulations are largely consistent with the “spread seen in actual derailment data.”
The methodology used for calculating the effectiveness of the enhanced tank car design features, is covered in detail in the RIA. By combining well-established and new research with recent, directly applicable derailment data, this method appropriately considers the unique risks associated with the operation of HHFTs. The table below provides the calculated effectiveness rates of the proposed new car specification and retrofit specification relative to existing tank cars.
Some commenters raised concerns about potential loss of lading capacity due to the increased weight of the new tank cars. Concerns were raised about the loss of capacity of new or retrofitted tank cars because of the increased weight of the tank car resulting from the added safety features. The additional features that will affect the tare weight of the tank car include an 11-gauge jacket, thicker shell and full height,
The majority of commenters in the rail and shipping industries cited the potential loss of lading capacity due to the increased weight of the new tank cars as a central concern related to the selection of a tank car specification. While most comments from the rail and shipping industries were concerned with potential loss of lading capacity, one commenter, Greenbrier, actually refuted the claims of weight issues made by a larger portion of the regulated community. It noted that there are those:
PHMSA and FRA disagree with commenters' claims that the rule will necessarily reduce the load limit (
Based on the previous discussion as well as the RIA, in this final rule, PHMSA and FRA are adopting Option 2 (see braking section of this rulemaking for discussion of braking systems to be included on tank cars) as the DOT Specification 117 tank car standard for new construction. The table below further summarizes details of the adopted enhanced tank car design standard (DOT specification 117) compared with the DOT 111A100W1 Specification currently authorized.
In the August 1, 2014 NPRM, we proposed to require that existing tank cars meet the same DOT Specification 117 standard as new tank cars, except for the requirement to include top fittings protection. In this final rule, we are adopting retrofit requirements for existing tank cars in accordance with Option 3 from the NPRM (excluding top fittings protection and steel grade). If existing cars do not meet the retrofit standard by the adopted implementation timeline, they will not be authorized for use in HHFT service. See the “Advanced Brake Signal Propagation Systems” section of this rulemaking for discussion of braking systems to be included on tank cars.
In Safety Recommendation R-12-5, the NTSB recommended that new and existing tank cars authorized for transportation of ethanol and crude oil in PG I and II be equipped with enhanced tank head and shell puncture resistance systems and top fittings protection. However, PHMSA chose not to include top fitting protections and changes in steel grade as part of any retrofit requirement, as the costliness of such retrofit is not supported with a corresponding appropriate safety
In consideration of adopting a retrofit standard, two aspects were considered thoroughly: (1) The technical specifications of the retrofit standard compared to the current fleet composition and (2) the corresponding retrofit schedule timeline. The timeline for retrofits will be discussed in greater detail in the upcoming section of this document entitled “Implementation Timeline.” In this section, we will focus on the technical specifications of the retrofit standard when compared with the current fleet composition.
PHMSA firmly believes that reliance on HHFTs to transport millions of gallons of flammable liquids is a risk that must be addressed. For the purposes of flammable liquids, under the proposals in the August 1, 2014 NPRM, the legacy DOT Specification 111 tank car would no longer be authorized for use in an HHFT after the dates specified in the proposed retrofit schedule. In recent derailments of HHFTs, the DOT Specification 111 and CPC-1232 tank car has been identified as providing insufficient puncture resistance, being vulnerable to fire and top-fittings damage, and they have bottom outlet valves that are can be inadvertently opened in accident scenarios. These risks have been demonstrated by recent accidents of HHFTs transporting flammable liquids.
In the August 1, 2014, NPRM, we proposed to limit continued use of the DOT Specification 111 tank car to non-HHFTs. In addition, we proposed to authorize the continued use of legacy DOT Specification 111 tank cars in combustible liquid service. The risks associated with flammable liquids, such as crude oil and ethanol, are greater than those of combustible liquids. The requirements proposed in the NPRM were not applicable to HHFTs of materials that are classed or reclassed as a combustible liquid. Existing HMR requirements for combustible liquids will not change as a result of this final rule. Thus, except for those tank cars intended for combustible liquid service, after the established implementation timeline, any tank car used in a HHFT must meet or exceed the DOT Specification 117, 117P, or the 117R standard. Those tank cars not retrofitted would be retired or repurposed. Further, if it can be demonstrated that an existing tank car can meet the new performance standards, it will be authorized for use in a HHFT as a DOT Specification117P.
We received a variety of comments representing differing viewpoints in response to the proposed tank car retrofit standard. Overall, 45 commenters supported the retrofit of existing fleets; 56 commenters opposed the retrofit of the existing fleets and 41 commenters asserted the retrofit standards as proposed in the NPRM did not go far enough. We have summarized a few selected comments below to provide some idea of the overall comments.
E.I. du Pont de Nemours and Company requests that PHMSA, “authorize the continued use of existing DOT 111 tank cars for non-crude and non-ethanol Class 3 flammable service for the remainder of their useful life. Non-HHFT shipments of crude oil and ethanol also should be permitted in DOT 111 tank cars for the remainder of their useful life.”
Eighty-Eight Oil, LLC asserted its belief that “the CPC-1232 jacketed fleet [should be permitted] to operate for its full useful life with a potential retrofit limited to an enhanced BOV handle and a larger pressure relief valve.”
PHMSA sought to limit the unnecessary retirement or repurposing of tank cars while implementing meaningful safety improvements on the existing fleet. This final rule requires the tank cars used in an HHFT to be retrofitted to specifications equivalent to Option 3 in the NPRM. This enables tank car owners to realize the full useful life of an asset. The final rule does not impact existing DOT-111 tank cars used in Class 3 flammable service that are not a part of an HHFT.
In support of retrofitting existing fleets, GBW noted that:
GBW will be making substantial capital investments and will hire, train, and certify 400 new employees over the next year, creating jobs throughout the United States. Moreover, GBW is making its capital investments now to expand retrofit capacity and conducting hiring activity in advance of a final rule.
In its comments, Bridger noted their economic concerns over an overly burdensome retrofit standard, noting “the economics of retrofitting the older and cheaper DOT-111 tank cars is considerably different from the economics of retrofitting the newer and costlier CPC-1232 tank cars.” Bridger's main concern is that the price of tank cars has increased significantly, with a CPC-1232 costing 80% more (in 2014) than the DOT-111 (in 2008); and it noted this is very important because it is not equitable, as its competitors have less costs per tank car and undergo the same operations (using a retrofitted DOT-111).
The comments of Edward D. Biggs III question whether any other modifications (including jacketing) for DOT 111 tank cars built with normalized steel shells are necessary.
Cargill estimated that it would cost in excess of $45 million to retrofit its existing fleet of tank cars. Cargill expects that retrofitting costs will be $60,000 per tank car, more than twice the figure assumed by PHMSA.
In its comments, AFPM stated that it supports “the Option 3 specification for new and retrofitted rail tank cars shipping crude and ethanol in unit trains of 75 cars or more. The Option 3 specification tank car is an enhanced CPC-1232 tank car with a 7/16” shell and other enhanced safety features. The Option 1 and 2 tank cars with a 9/16” shell provide only negligible safety benefits at a substantial incremental cost.”
The RSI-CTC supported retrofits in accordance with Option 3 for all PG I and PG II flammable liquid tank cars. But it supports only the addition of PRV and BOV protection at requalification for Class 3, PG III tank cars. RLBA echoes RSI-CTC with its recommendation that existing cars be retrofitted with the latest design of self-closing high capacity over pressure devices that meet the same standards as new car construction.
In addition to the previous general comments on the retrofitting of existing tank cars, the following notable issues were frequently cited when discussing the topic. In the following, we discuss comments on each issue, concerns raised and our response to the comments.
Numerous commenters asserted that shop capacity is insufficient to retrofit existing fleets in a timely and cost-effective manner or in accordance with the schedule proposed in the NPRM. Specifically, RSI-CTC noted that there are tiers of retrofitting that vary based on complexity. For example, retrofitting a legacy non-jacketed DOT-111 is a much more intensive process than retrofitting the most recent jacketed CPC-1232. RSI-CTC asked in their
In its comments, Eighty-Eight Oil, LLC stated, “[a]ccording to the regulatory impact analysis in the NPRM (page 89), PHMSA suggests that 66,185 cars can be retrofitted over 3 years, or 22,061 cars per year. This estimate is considerably higher than the AllTranstek study estimate of 3,000 per year or RSI's estimate of 5,700 per year (after a one year ramp up period).”
Honeywell Performance Materials and Technologies stated that the “backlog for present mechanical needs and requalification on all tank cars will be increased.” In addition a report commissioned by RSI and authored by Brattle noted that shop capacity could be a considerable issue when determining a retrofit standard.
In general, commenters expressed concern about the availability of materials, the availability of skilled labor, and facilities to conduct the needed procedures involved in a retrofit. PHMSA and FRA considered these and other concerns when determining a retrofit standard.
PHMSA and FRA understand the concerns with regard to shop capacities. Specifically, concerns about the time that will be required to acquire additional resources needed to build and ramp up facilitates to conduct retrofits, as well as the manufacturing and supply of the materials needed for the components of the tank cars (
Many public commenters raised technical issues and potential implementation problems from an industry-wide retrofit for HHFTs. For example, the API public comment noted issues with the extra weight on stub sills and tank car structures, and issues with head shields and brake wheels/end platforms, and issues with truck replacement. Below is a list of comments that represent concerns over how the retrofit standard will affect the existing trucks of tank cars.
Amsted Rail believes PHMSA underestimated the cost of a new car and, in its comments, lists the prices for several components, suggesting $20,000 for complete car set of new trucks versus the $16,000 amount used by PHMSA.
It is RSI-CTC's understanding that modifications will add 13,000 pounds to cars; that trucks will require modification from 263,000 to 286,000; and that new wheel sets will cost $10,000 per car; and that new roller bearings, axles, and adaptor possibly will be added to the car. In its comments, Amsted Rail Company, Inc. also asserted that trucks will need replacement on 29,302 ethanol tank cars (pre 2011), 28,300 crude oil tank cars (pre CPC-1232), and 36,000 tank cars in “other” Class 3 flammable liquid service.
PHMSA and FRA believe that the majority of tank cars constructed in the last decade are equipped with trucks, save a particular sized bearing and bearing adaptor, that are rated for 286,000 pound gross rail load service. Further, the AAR's Engineering and Equipment Committee rules require replacement of trucks (bolster and side frames) and wheel sets when the gross rail load of a rail car is increased from 263,000 to 286,000 pounds. As a result, what would otherwise be a relatively small cost of approximately $2,000 to replace the bearing and adaptor, car owners are required to replace the trucks and wheel sets at the cost of $24,000/truck. The paucity of data distinguishing the cars that need a major versus minor retrofit leads PHMSA to conservatively assume all DOT legacy tank cars will require the replacement of the trucks and wheel sets.
In the August 1, 2014 NPRM, we proposed, except for top fittings protection, to require existing tank cars that are used to transport flammable liquids as part of a HHFT to be retrofitted to meet the selected option. Those not retrofitted would be retired, repurposed, or operated under speed restrictions for up to five years, based on the packing group assignment of the lading being transported. The following commenters had varying opinions about this assumed strategy.
The RSI-CTC asserted that the minimum early retired tank cars rather than retrofit will be approximately 28% (25,600 tank cars). However, the AAR supports the repurposing of legacy tank cars to Canadian oil sands service. Eastman Chemical Company “. . . also agrees with PHMSA's proposal to retain the exception that permits flammable liquids with a flash point at or above 38 °C (100 °F) to be reclassified as combustible liquids and allow existing DOT Specification 111 tank cars to continue to be authorized for these materials.”
The Massachusetts Water Resources Authority, “supports the requirement of Packing Group III in the enhanced car standards as this provides consistency in providing packaging appropriate to handle all flammable liquids. These flammable liquids pose a safety and environmental risk regardless of the packing group.”
Bridger, does not agree with PHMSA's assumption that DOT-111 jacketed and CPC-1232 jacketed cars would be repurposed for use in Canadian oil sands service, as it requires heating coils and insulation in the tank car.
The Independent Petroleum Association of America (IPAA) stated in its comments, “PHMSA's timeline for DOT-111 railcars is predicated on the assumption that DOT-111s now in use for PG I or PG II hazmat will be moved into PG III service. Even heavy Canadian crudes once mixed with diluents and shipped as “dilbit” or “railbit” are not expected to qualify as PG III materials, and therefore will not qualify as a home for the displaced DOT-111 railcars.”
DGAC asserted, “[t]here is an assumption that all Legacy DOT 111 Jacketed and CPC-1232 Jacketed tank cars would be assigned to Canadian oil sands; however, under Transport Canada, these cars may also have to be retrofitted based on regulations.”
Growth Energy suggests the shift to Canadian oil sands service is greatly overestimated, and underestimates the costs of doing so (requires retrofit for heating coils), costs of moving cars, and the costs of moving leases. According to Exxon Mobil Corporation, “[t]he DOT proposal to move DOT-111 tank cars to oil sands service is not feasible as the diluted bitumen to be shipped is PG I or II and carried predominantly in unit trains. There is limited projected growth in other, non-flammable products moved by rail.”
In their comments, Earthjustice, Forest Ethics, Sierra Club, NRDC, and Oil Change International asserted, “the proposed rule would allow the DOT-111 and other unsafe tank cars to be shifted to tar sands service. The rule is thin on analysis to support this shift. However, on its face, it would be indefensible to allow unsafe tank cars to be used to ship tar sands bitumen diluted with chemicals that contain volatile components. Accidents involving diluted bitumen are notorious for being impossible to clean up.”
Based on these and other comments, PHMSA and FRA acknowledge that the assumption of no retirements and the level of repurposing needed to be revisited. In response to these comments, PHMSA and FRA have made adjustments to their analysis, and the final RIA to account for retirements as opposed to shifting of tank cars to tar sand service.
Many of the comments with regard to new construction also apply to the retrofit specifications. Below PHMSA and FRA discuss the various components of a retrofit tank car specification (see also new construction as many of those comments apply to both new and existing tank cars). The below discussion highlight those comments that were focused on the retrofit standard.
Many commenters posed a concern that a retrofit standard that called for an increased thickness would be technically infeasible and result in the scrapping of existing tank cars. For instance, in its comments, Cargill asserted that it is not feasible to retrofit an existing tank car built with a
PHMSA and FRA understand the concerns of the commenters and note the intent of the rule was not to require adding thickness to existing tank cars, but rather to improve the puncture resistance to the existing cars to be equivalent to a tank with a thicker shell. As it would not be technically feasible to add
The NTSB believes that any retrofits should have top fittings protection, citing incidents in Cherry Valley, IL and Tiskilwa, IL due to where those tank cars breached. NSTB stated they will not consider Safety Recommendation R-12-5 as “acceptable” unless top fittings protection is included in the retrofitting requirements.
PHMSA is aware that the AAR Tank Car Committee has started a task force to evaluate potential advancements in existing top fittings protections. PHMSA and FRA urge industry to consider enhancements that will apply to both new and retrofitted tank cars. PHMSA and FRA are not requiring such protection in a tank car retrofit in this final rule. While we do believe this is an important safety feature, it is not cost justified.
In its comments, the Dow stated, “[it] does support thermal protection for crude oil and ethanol . . . Dow suggests that PHMSA consider non-CPC-1232 cars to be a higher retrofitting priority.” Dow continues, “[h]owever, addition of insulation and a jacket to existing DOT Specification 111 cars may introduce Plate clearance issues, so not all existing cars will be able to be retrofitted. Additionally, methods for attaching heavier jackets to prevent shifting during train handling will require engineering analysis; finite element analysis of the stub sill design may also be necessary to determine if existing designs are capable of handling the increased weight. Estimated cost for all the engineering and AAR approval application fees is $85,000 per certificate of construction, as per a major rail supplier.”
PHMSA and FRA do not agree. As stated above, in the Arcadia derailment, there were three high-energy thermal failures. In two of the three cases, the tank fractured into two pieces and those pieces were thrown from the derailment area. In the third case, the tank was nearly fractured around the entire circumference. In addition, NTSB restated the importance of thermal protection in their April 6, 2015 Recommendations. These recommendations, R-15-14 and 15, requested that PHMSA require that all new and existing tank cars used to transport all Class 3 flammable liquids be equipped with thermal protection systems that meet or exceed the thermal performance standards outlined in Title 49 Code of Federal Regulations 179.18(a) and be equipped with appropriately sized pressure relief devices that allow the release of pressure under fire conditions to ensure thermal performance that meets or exceeds the requirements of Title 49 Code of Federal Regulations 179.18(a), and that minimizes the likelihood of energetic thermal ruptures.
Jackets and thermal protection are critical in the survival of a tank car experiencing a thermal event. Thus, thermal protection is adopted as proposed. However, we do note that the new regulation provides flexibility for innovation to meet the performance standard.
Much like the argument against requiring added thickness to retrofitted cars, many posed the relevant concern that a retrofit standard that called for a change in the type of steel used would be technically infeasible and result in the scrapping of existing tank cars. The RSI-CTC requests that non-normalized steel tank cars should be authorized for retrofit as there are 47,300 DOT-111 tank cars currently in service. Normalizing the steel after the tank car has been constructed is impractical. The requirements to this would create considerable cost which would not increase the ultimate strength of the steel.
Normalization does change the mechanical properties of the steel; specifically, a slight improvement in upper shelf toughness and a shift to a lower ductile-brittle transition temperature. PHMSA and FRA understand the concerns of the commenters and note the intent of the rule was not to require a change to the materials specification to existing tank cars, but rather to improve the puncture resistance to the existing cars to be equivalent to a tank constructed of the referenced steel. PHMSA and FRA believe that should a car owner decide to retrofit a tank car, the owner must consider the material properties of normalized steel on the design of the retrofit.
Except for top fittings protection and steel retrofit, retrofits will conform to Option 3, subject to brake requirements that depend on the tank car's service, and will be designated “DOT Specification 117R.” The retrofit requirements include the addition of an 11-gauge jacket, full height head shield, and a modified bottom outlet configuration.
The prescribed performance standards adopted in this rule were developed to provide improved crashworthiness when compared to the legacy DOT-111 tank car and to foster innovation in the development of tank cars. In the NPRM, PHMSA and FRA proposed a performance standard in which the design, modeling and testing results would be approved by the Associate Administrator for Railroad Safety/Chief Safety Officer at FRA.
Accordingly, the final rule requires that the tank car design must be approved, and the tank car must be constructed to the conditions of an approval issued by the Associate Administrator for Railroad Safety/Chief Safety Officer, FRA. The performance of the tank car is subject to the following:
The tank car must be able to withstand a minimum side impact speed of 12 mph when impacted at the longitudinal and vertical center of the shell by a rigid 12-inch by 12-inch indenter with a weight of 286,000 pounds. Further, the tank car must be able to withstand a minimum head impact speed of 18 mph when impacted at the center of the head by a rigid 12-inch by 12-inch indenter with a weight of 286,000 pounds.
The tank car must be equipped with a thermal protection system. The thermal protection system must be designed in accordance with § 179.18 and include a reclosing PRD in accordance with § 173.31 of this subchapter.
If the tank car is equipped with a bottom outlet, the handle must be removed prior to train movement or be designed with a protection safety system to prevent unintended actuation during train accident scenarios.
Tank cars tanks meeting the performance standard must be equipped per AAR Specifications Tank Cars, appendix E paragraph 10.2.1 (IBR, see § 171.7 of this subchapter). A tank car that meets the performance requirements will be assigned to “DOT Specification 117P.” Builders must be able to demonstrate compliance with the performance standards and receive FRA approval prior to building the cars.
In the August 1, 2014 NPRM, we proposed a risk-based timeline for continued use of the DOT-111 tank car used in HHFTs in §§ 173.241, 173.242, and 173.243. This timeline was based on the packing group requirements in the HMR. The HMR require both the proper classification of hazardous materials and the selection and use of an authorized packaging. Packing groups assign a degree of danger posed within a particular hazard class. Packing Group I poses the highest danger (“great danger”) and Packing Group III the lowest (“minor danger”). In the NPRM, PHMSA proposed a timeline in accordance with the following table:
As discussed in the August 1, 2014 NPRM, PHMSA and FRA were confident the risk-based approach proposed provided sufficient time for car owners to update existing fleets while still prioritizing the highest danger material. Specifically, given the estimates of the current fleet size, composition, and production capacity of tank car manufacturers expressed by
As proposed in the August 1, 2014 NPRM, DOT Specification 111 tank cars may be retrofitted to DOT Specification 117 standards (as a DOT Specification 117R), retired, repurposed, or operated under speed restrictions. Further, we proposed limiting the future use of DOT Specification 111 tank cars only if these tank cars are used in a HHFT. Under the proposal, DOT Specification 111 tank cars would be able to continue to be used to transport other commodities, including flammable liquids, provided they are not in a HHFT. In addition, all retrofitted tank cars (including the DOT-111 tank cars meeting the CPC-1232 standards) are authorized for use for their full service life. This proposal provided tank car owners and rail carriers with the opportunity to make operational changes that focus on the greatest risks and minimize the associated cost impacts. In response to the proposed amendments regarding the retrofit timeline, we received a variety of comments representing differing viewpoints.
Commenters state that it is essential that the U.S. position on retrofit timelines is consistent with Canada's. PHMSA has been in close coordination with Transport Canada to ensure the seamless transition with regard to the retrofit of the existing North American DOT Specification 111 fleets. To that end, PHMSA recognizes the importance of harmonization and does not foresee any issues at this time with cross-border retrofit implementation timelines.
The capability of the industry to handle retrofit tasks and requirements within the proposed timeline was a topic of great interest among commenters. Many questioned PHMSA and FRA's assumptions regarding the retrofit capacity of the industry. The comments summarized and discussed below provide an indication as to the commenters' main concerns on this topic.
The Grain Processing Corporation requests that, “when setting the timeline for compliance, please work closely with car builders to have an accurate understanding of when new cars can reasonably be made available to the market.” This commenter further stated, “current conditions indicate that it will take much more than three to five years to replace non-compliant cars in the market.”
The American Chemistry Council (ACC) stated that tank car shop capacity will not support PHMSA's regulatory timeline and some ACC members have reported waits of approximately two years from when a tank car is ordered until the time it was delivered. The ACC also relayed RSI information stating that the current order backlog is about 53,000 cars.”
The Dakota Gasification Company asserts that:
PHMSA should consider how an influx of a very large number of DOT 111 cars for retrofit in a market already seeing backlogs for routine maintenance work will permit shippers to meet the proposed timelines in the rule. The rulemaking states there are 80,500 DOT 111 cars and 17,300 CPC 1232 cars in Flammable Service or a total of 97,800 cars potentially in need of some form of retrofit. A record number of tank cars have been produced the past few years. Retrofitting this number of cars while keeping up with yearly maintenance and standard repairs will be unattainable within the proposed timeframe given the current shop system.
In addition a report commissioned by RSI and authored by The Brattle Group noted that there could be considerable issues with a five year retrofit standard when considering production levels, fleet size and the predicted growth of both.
Overall, commenters agree that retrofits must occur, but the suggested timelines range from zero to ten years. In addition, RSI and API commissioned separate reports that evaluated the NPRM's proposed timeline and demonstrated the potential detrimental effects of an overly aggressive timeline. PHMSA has summarized and discussed the differing viewpoints on the retrofit schedule.
Generally, the comments of citizens, environmental groups, tribal communities and local government either supported the timeline as proposed in the NPRM or focused on an even more aggressive timeline than proposed. Some commenters even suggested the immediate ban of DOT 111 Specification tank cars. For example, two tribal communities, the Quinault Indian Nation and the Prairie Island Indian Community, represented the views of many citizens, environmental groups when they stressed the need for an immediate and “total phase-out of the DOT 111.” Amtrak encourages PHMSA to require the use of the selected option on as aggressive a schedule as manufacturing and retrofit capabilities permit.
As demonstrated in the final RIA, PHMSA and FRA do not believe a more aggressive timeline than what was proposed in the NPRM is achievable or prudent. In fact, an overly aggressive timeline could have a negative impact on safety or the environment. See the environmental assessment for this rulemaking.
The comments of the regulated industry regarding the implementation timeline varied, but a general consensus for a ten-year time frame emerged. The regulated community was generally consistent in noting that the timeline should account for both the tank car type and the packing group of the material.
In addition to comments on the timeline, PHMSA and FRA received many comments on our packing group based approach. Specifically, many in the regulated community noted that while the proposed method is risk based, it only accounts for the risk of the material itself and not the risks posed by the various types of tank cars used in HHFTs. The general consensus was that a retrofit timeline that accounted for the type of tank car would provide the greatest risk reduction in the shortest amount of time. Below are some relevant comments regarding the proposed timeline.
GBW suggested that, “[w]hile the timeline [for retrofitting] is aggressive, the tank car repair industry, by expanded [sic] capacity at existing facilities and through new entrants into the industry, should be able to meet PHMSA's proposed timeline.”
Further, RSI-CTC stated that PHMSA and FRA should retrofit crude oil and ethanol tank cars first then other Class 3 tank cars. It noted that retrofit capacity is only 6,400 units per year whereas PHMSA assumes 22,061 units per year. RSI-CTC continues, “there are 50K non-jacketed tank cars in service (23K crude and 27K ethanol/legacy and CPC 1232) that cannot be retrofitted by 10/01/2017—only 15K can be retrofitted by that time.”
Growth Energy requested a 3- to 10-year retrofit schedule. Arkema Inc., “agrees with the RSI-CTC's December 5, 2013 recommendation to adopt, at a minimum, a 10-year program allowing compliance to be achieved in phases through modification, re-purposing or retirement of unmodified tank cars in Class 3, flammable liquid service.”
Quantum Energy, Inc. stated, if PHMSA elects not to adopt this exclusion for treated crude oil that they support “at minimum establishing a phase-out date of October 1, 2022 for the use of DOT-111 tank cars in transporting stabilized crude oil.”
The Washington Utilities and Transportation Commission (WUTC) stated that tank cars that meet the AAR CPC-1232 standards and were built after October 1, 2011, should be allowed to continue in service for their economic life, except for the transportation of Packing Group I materials past October 1, 2016. Further, WUTU recommends that the proposed timeline for phasing out DOT Specification 111 tank cars should be expedited for Packing Group I and II materials by a year, and that all existing tank cars more than 10 years old have a thorough tank shell thickness inspection to ensure the tank is suitable for PG II and PG III, Class 3 flammable liquids. Any tank that shows significant signs of corrosion should be taken out of crude, ethanol, and any other Packing Group I or II service immediately.
Suggesting an alternate retrofit strategy, Eighty-Eight Oil, LLC stated, “Eighty-Eight supports a 7 year retrofit schedule.” According to Eighty Eight, the requirements for retrofitting cars will necessitate a longer time frame than proposed in the NPRM, given: the “car cleaning” process and preparation for “hot work” or retrofitting; training workers for tank car repair work; approval (via the AAR) of high-flow pressure relief valve technology; and the enabling of the production of full height head shields within repair shops.
In addition to these comments, RSI-CTC, API, Exxon, APFM and many others in the regulated industry provided specific alternative retrofit timelines which can be viewed in the docket for this rulemaking. PHMSA and FRA reviewed comments, alternative timelines, and data regarding the retrofit timeline and revised our implementation schedule accordingly. PHMSA is confident that retrofits can be accomplished in the revised timeline adopted in this final rule.
In developing the retrofit schedule, PHMSA and FRA examined the available shop capacity, the comments received, historical performance of the rail industry dealing with retrofit requirements, and the potential impacts associated with the retrofit schedule.
PHMSA has accepted feedback regarding its assumption of no retirements and the impracticality of transferring jacketed tank cars to tar sands service. This final rule and the RIA now consider the number of cars that could be retired early as a result of the rule and the associated costs of doing so. PHMSA believes that rail cars will be retired early when their owners have weighed the cost of meeting retrofit requirements against the marginal cost of acquiring a replacement rail car early.
Further, to aid in the analysis of an appropriate retrofit timeline, FRA developed a model to project the tank car retrofit capacity over time. The model is based on Wright's learning curve theory, which suggests that every time the total number of units that have been produced doubles, productivity will increase by a given percentage. This percentage is known as the learning rate.
The starting point of the analysis was to analyze the rail industry's forecast, as represented in the Brattle Group Report commissioned by RSI-CTC. Using the Brattle reports figure of 6,400 retrofits per year the FRA model was able to determine that the Brattle report would have to assume 40 facilities would be required to dedicate one crew to retrofits. After making this determination on the number of facilities, FRA sought to include other variables to model additional potential scenarios. The intent being to depict the extent to which the “heavy retrofit”
To determine the capacity of the industry, FRA used facility registration data to identify 60 current tank car facilities capable of performing heavy retrofits. Further, FRA identified 160 tank car facilities capable of performing light modifications, which include adding a valve and bottom outlet to the jacketed CPC-1232 cars. FRA also accounts for industry concerns regarding the readiness of current tank car facilities to perform retrofit services by maintaining the ramp-up period provided by commenters. In addition to the existing capacity, FRA's model assumes that capacity will increase to a degree over time.
FRA's model indicates the 6,400 retrofits per year would require 40 facilities to dedicate one crew to these retrofits. As a result, the remaining capacity (60 total facilities identified by FRA) would focus on the normal workload including requalifications, bad order repairs, and reassignments. As a result, FRA's model assumes:
• 40 facilities capable of heavy retrofits. FRA selected this number as a conservative estimate—in reality the number of facilities dedicated to heavy retrofits may be higher. It accounts for industry concerns regarding the readiness of current tank car facilities to perform retrofit services;
• A new crew (2 employees) will be added to each facility every 3 months, beginning in month 4;
• After 24 months, no additional resources are added; the only changes in capacity are based on the Wrights learning curve theory,
• The learning rate is 0.95; and
• The learning rate is for the facility, not individuals. It is assumed the crew members all have the required skill set to perform the work.
In support of these assumptions, Figure 2 indicates the cumulative
The most extensive retrofits (the “heavy retrofits”) would need to take place in the initial phases of the implementation timeline, thus making these stages critical to the overall implementation timeline. Stakeholders generally agree that a 120-month timeline for light retrofits is acceptable.
In the NPRM the retrofit timeline was based on a single risk factor, the packing group. The packing group is a characteristic of the hazardous material. In the final rule the retrofit timeline was revised to focus on two risk factors, the packing group of the material and differing types of DOT-111 and CPC-1232 tank cars. By adding the additional risk factor, tank car type, we were able to not only account for the characteristics of the hazardous material but also those of the means of containment of that material. This revision as well as the outputs of FRA model discussed above provided an accelerated risk reduction that more appropriately addresses the overall risk. PHMSA and FRA also modified the overall length of the retrofit to account for issues raised by commenters. The rationale for the change in retrofit schedule is discussed in further detail in the RIA for this final rule.
Based on the commenters' input and additional analysis, in this final rule, PHMSA and FRA are adopting a packing group- and tank car-based implementation timeline for the retrofit of existing tank cars to the NPRM's Option 3 standard when used as part of HHFT. This risk-based retrofit schedule will be codified in authorized packaging section in part 173, subpart F of HMR and the prescriptive retrofit standard is detailed in
Executive Orders 12866, 13563, and 13610 require agencies to provide a meaningful opportunity for public participation. Accordingly, PHMSA invited public comment twice (the September 6, 2013, ANPRM and August 1, 2014, NPRM) on retrofit timeline considerations, including any cost or benefit figures or other factors, alternative approaches, and relevant scientific, technical and economic data. Such comments aided PHMSA and FRA in the evaluation of the proposed requirements. PHMSA and FRA have since revised our proposed retrofit timelines to address the public comments received.
PHMSA and FRA have made regulatory decisions within this final rule based upon the best currently available data and information. PHMSA and FRA are confident that retrofits can be accomplished in the revised timeline adopted in this final rule. However, PHMSA and FRA will continue to gather and analyze additional data. Executive Order 13610 urges agencies to conduct retrospective analyses of existing rules to examine whether they remain justified and whether they should be modified or streamlined in light of changed circumstances, including the rise of new technologies. Consistent with its obligations under E.O. 13610,
To this end, the first phase of the timeline includes a January 1, 2017 deadline for retrofitting non-jacketed DOT-111 tank cars in PG I service. If the affected industry is unable to meet the January 1, 2017 retrofit deadline a mandatory reporting requirement would be triggered. This reporting requirement would require owners of non-jacketed DOT-111 tank cars in PG I service to report to Department of Transportation the following information regarding the retrofitting progress:
• The total number of tank cars retrofitted to meet the DOT-117R specification;
• The total number of tank cars built or retrofitted to meet the DOT-117P specification;
• The total number of DOT-111 tank cars (including those built to CPC-1232 industry standard) that have not been modified;
• The total number of tank cars built to meet the DOT-117 specification; and
• The total number of tank cars built or retrofitted to a DOT-117, 117R or 117P specification that are ECP brake ready or ECP brake equipped.
While this requirement applies to any owner of non-jacketed DOT-111 tank cars in PG I service, the Department of Transportation would accept a consolidated report from a group representing the affected industries. Furthermore, while not adhering to the January 1, 2017 retrofit deadline triggers an initial reporting requirement, it would also trigger a requirement which would allow the Secretary of Transportation to request additional reports of the above information with reasonable notice.
Speed is a factor that contributes to derailments. Speed can influence the probability of an accident, as it may allow for a brake application to stop the train before a collision. Speed also increases the kinetic energy of a train resulting in a greater possibility of the tank cars being punctured in the event of a derailment. The kinetic energy of an object is the energy that it possesses due to its motion. It is defined as the work needed to accelerate or decelerate a body of a given mass.
Based on this calculation, given a fixed mass, if an accident occurred at 40 mph instead of 50 mph, we should expect a reduction of kinetic energy of 36 percent. After consultations with engineers and subject matter experts, we can assume that this would translate to the severity of an accident being reduced by 36%. A slower speed may also allow a locomotive engineer to identify a safety problem ahead and stop the train before an accident occurs, which could lead to accident prevention.
A purpose built model developed for FRA by Sharma and Associates, Inc. was used to simulate a number of derailment scenarios to evaluate the survivability of the tank cars proposed in the NPRM equipped with different brake systems and operating a range of speeds. The results of the simulations were the most probable number of tank cars derailed and punctured. The results were used to calculate the effectiveness of the tank car enhancements, speed reduction and brake systems individually in in combination with one or both of the other parameters. The model and simulation are discussed in detail in the March 2015 letter report prepared by Sharma and Associates, Inc. This letter report is available in the docket for this rulemaking.
As tank car enhancements, brake systems, and speed are interrelated aspects of this rulemaking and can have an effect on each other, various combinations of these variables were evaluated by FRA modeling. For example, by modifying the variables of speed (30 mph-50 mph), tank car enhancements (shell thickness, steel type, jacketing and head shielding), and braking (TWEOT, DP and ECP), FRA was able to create a matrix which could compare the effectiveness and benefits of numerous combinations of these variables. The table below describes the speeds that were evaluated with the various combinations of tank car enhancements and braking systems.
Given the data from FRA and Sharma & Associates, PHMSA anticipates the reductions in the speed of trains that employ less safe tank cars, such as the non-jacketed DOT-111 tank car, will prevent fatalities and injuries and limit the amount of damages to property and the environment in an accident. Simulation results indicate that limited safety benefits would be realized from a reduction in speed as the tank car fleet is enhanced as proposed in this NPRM. Please refer to the RIA for a detailed analysis of the impact of speed on the number of cars derailed and punctured when paired with a range of tank car enhancements and braking options.
In response to the Secretary Foxx's
In the August 1, 2014, NPRM, PHMSA and FRA proposed to add a new § 174.310 to include certain operational requirements for a HHFT. Among those operational requirements was a proposal to limit the speed of an HHFT. Specifically, the NPRM proposed to add a new § 174.310 to Part 174—Carriage by Rail that would establish a 50-mph maximum speed restriction for HHFTs. This 50-mph maximum speed restriction for HHFTs was generally consistent with the speed restrictions that the AAR issued in Circular No. OT-55-N on August 5, 2013.
In § 174.310(a)(3), PHMSA also proposed three options for a 40-mph speed restriction for any HHFT unless all tank cars containing Class 3 flammable liquids meet or exceed the proposed standards for the DOT Specification 117 tank car. The three 40-mph speed limit options are as follows:
All HHFTs are limited to a maximum speed of 40 mph, unless all tank cars containing flammable liquids meet or exceed the proposed performance standards for the DOT Specification 117 tank car.
All HHFTs—unless all tank cars containing flammable liquids meet or exceed the proposed standards for the DOT Specification 117 tank car—are limited to a maximum speed of 40 mph while operating in an area that has a population of more than 100,000 people.
All HHFTs—unless all tank cars containing flammable liquids meet or exceed the proposed standards for the DOT Specification 117 tank car—are limited to a maximum speed of 40 mph while the train travels within the geographical limits of HTUAs.
In addition, PHMSA proposed to add a new § 174.310(a)(3)(iv) to Part 174—Carriage by Rail that would prohibit a rail carrier from operating HHFTs at speeds exceeding 30 mph if the rail carrier does not comply with the proposed braking requirements set forth in the Advanced Brake Signal Propagation Systems section of the NPRM. The intention of this requirement was to further reduce risks through speed restrictions and encourage adoption of newer braking technology while simultaneously reducing the burden on small rail carriers that may not have the capital available to install new braking systems.
On the issue of speed restrictions, PHMSA received public comments representing approximately 90,821 signatories. Comments in response to the NPRM's speed restrictions were wide ranging, with comments both supporting and opposing speed restrictions. Some commenters supported the speed restrictions explicitly as they were proposed in the NPRM. Other commenters opposed the NPRM's speed restrictions and proposed alternatives, such as different speed limits or different geographical standards for use in determining where a speed limit is applicable. Further, many commenters did not directly support or oppose any of the proposed speed restrictions, but rather chose to comment generally. Below is a table detailing the types and amounts of commenters on the speed proposals.
Overall, the comments of citizens, environmental groups, tribal communities and local government representatives supported more restrictive speed limits. These comments were essentially focused on how speed restrictions would provide safety benefits to local communities or the environment. Referencing data from the NPRM, these groups expressed concerns that derailments and releases of crude oil and ethanol present public safety risks and have occurred at lower speeds than the speed limits proposed in NPRM. Environmental groups and affiliated signatories, in particular, voiced concerns that releases of hazardous materials in derailments could have far-reaching adverse impacts on environmental quality, including water quality and biological diversity. Some commenters asked PHMSA to consider making the proposed speed restrictions applicable to specific environmental areas, such as in the vicinity of water resources or national parks. In illustration of these viewpoints, Clean Water Action has stated:
The agencies' promotion of a 40 miles per hour speed, when in fact nine of the major 13 train accidents (Table 3 of the NPRM) occurred with speeds under 40 miles per hour does not seem justified nor is it in the public interest. Fire resulted in 10 of the 13 accidents, three of which were involved in speeds over 40 miles per hour and five of which were between 30 miles per hour and 40 miles per hour. The 6 accidents involving crude oil resulted in over 1.2 million gallons of oil being spilled [. . .] Clean Water Action encourages the agency to analyze reducing travel speeds to 30 mph and lower. [. . .] Clean Water Action respectfully encourages the agency to examine additional speed restrictions in areas near public drinking water supplies and sensitive environments.
Three entities representing tribal communities, the Tulalip Tribes, the Prairie Island Indian Community and the Quinault Indian Nation, expressed specific concerns with regard to the speed restrictions proposed in the August 1, 2014, NPRM. The Tulalip Tribes noted that “[t]he maximum speed limit for the trains should not be higher than the maximum speed the rail cars
In addition, some individual citizens, environmental groups, and local communities expressed concern that speed restrictions might protect some cities and towns while potentially leaving others exposed to safety risks. Consequently, many individual citizens, environmental groups, and local government representatives supported Option 1, the 40-mph speed limit for HHFTs in all areas, or proposed an alternative lower speed limit to be applied as a nation-wide speed limit. These commenters did not address for the costs of implementing Option 1; rather, they emphasized that Option 1's geographical standard (“all areas”) is the most protective, and most beneficial, of the three speed options proposed and would benefit all communities, large and small. As Earthjustice, Forest Ethics, Sierra Club, et al. have expressed:
Imposing a 40 m.p.h. speed limit only in the largest cities or `high-threat urban areas' would be far less protective of the public than requiring safer speed limits in all populated and sensitive areas. First, the option that would focus speed restrictions on areas with more than 100,000 people excludes far too many populated areas that [are] in harm's way. For example, many U.S. cities that have experienced dangerous and potentially deadly HHFT derailments would not be covered by safer speed limits using this threshold, including Lynchburg, Virginia (78,000 people); Painesville, Ohio (20,000 people); and Vandergrift, PA (5,000 people).
Comments from rail network users and operators generally supported less restrictive speed limits. They were essentially concerned with the cost impacts of the proposed speed restrictions. In illustration of these potential cost impacts, the rail network users and operators provided some industry-specific data and analysis on the detrimental effects to network fluidity and the additional costs that would result from the proposed speed restrictions. Overall, these commenters and other stakeholders stated that speed restrictions would lead to: (1) Increased congestion; (2) slower or less predictable delivery times for various products, including crude oil, ethanol, and agricultural commodities; (3) increases in the number of tank cars required to ensure consistent timely delivery service due to increases in transit times; (4) increased costs to shippers and carriers; (5) constrained investments in the rail network's infrastructure and capacity due to reduced rail carrier revenues; (6) diversions of crude oil and ethanol transport to other modes of transport; and (7) slower passenger or commuter rail service.
Several commenters stated that the proposed speed restrictions would result in additional congestion. These commenters emphasized that the rail network is already congested and has “fluidity” issues. Dow and the DGAC suggested that the proposed speed restrictions could inadvertently increase the risk of incidents due to congestion. According to multiple commenters, increased congestion and subsequent reductions in network fluidity could “ripple” across the rail network and would affect various commodities that are transported by rail, not just crude oil and ethanol.
PHMSA received comments from a coalition of agri-business organizations that have been affected by “service disruptions” and “severe backlogs,” including the Agricultural Retailers Association, National Corn Growers Association, U.S. Dry Bean Council, and various state associations. According to these commenters, the agricultural sector has succeeded at producing agricultural commodities, such as grain and oilseed, at “record or near-record” levels, but faces difficulty in making timely deliveries due to increased demand for freight rail service. This increased demand is due in part to “non-agricultural segments of the U.S. economy,” such as crude oil production, and has caused a relative scarcity of rail service supply and competition among shippers seeking to use rail transport. These commenters have stated that the NPRM's proposed speed restrictions would further strain the transport of commodities.
Affirming these commenters' concerns, the Energy Information Administration (EIA) has stated that rail traffic has increased by 4.5 percent from January through October 2014 compared to the same period in 2013. Over the same period, carloads of crude oil and petroleum products have increased 13 percent, and these shipments of crude oil and petroleum are occurring in the parts of the U.S. where there is also strong demand to move coal and grain by rail.
In response to these congestion issues, the Surface Transportation Board (STB) called hearings in April and September 2014 to address rail “service problems,” and in October, STB required “weekly data reports” from all Class I railroads.
Among the proposed speed restrictions, many rail users and operators and other stakeholders have expressed that Option 1—a 40-mph speed limit for HHFTs in all areas—would have the greatest negative impact on network fluidity. The Independent Petroleum Association of America (IPAA) and the North Dakota Petroleum Council (NDPC) delineated how Option 1, in particular, would create a chain of effects in the rail network and increase costs to shippers or carriers:
The consequences of the proposed 40-mph speed restriction in all areas would be significantly longer turnaround times for unit trains, thus necessitating the need to have more railcars in the shipping fleet. Longer turnaround times alone will make railcars in short supply on the first day the new rule takes effect. A 10-mph reduction in speed equates to a twenty percent increase in turnaround time (assuming 50 mph average train speed), requiring a twenty percent increase in fleet size.
Other commenters have described how transit times and costs to shippers and carriers would increase. The Alaska Railroad Corporation stated that a common route from Anchorage to Fairbanks, Alaska, would “take an extra 69 minutes” with a maximum speed of 40 mph. Bridger has stated that “an increase in round-trip transit time for Bridger's unit trains from North Dakota to the East Coast from 15 days to 20
Rail users and operators predicted that the proposed speed restrictions would constrain their ability to invest in the rail network's infrastructure (
Rail users and operators and other stakeholders have projected that reduced network fluidity due to speed restrictions could result in rail-to-highway diversions or other modal shifts. As the American Association of Private Rail Car Owners (AAPRCO) commented, “Since the railroad network is already near or over capacity in many places, and consists overwhelmingly of single and double-track lines, widespread, new speed restrictions would have a major impact [...]. The impact in some cases could be diversion of freight to less-safe highways.” Commenters have stated, if the proposed speed restrictions were to negatively influence rail network fluidity, some crude oil and ethanol transport by rail would be diverted to highway transport, and this would expose users of the nation's highways to increased flammable cargos transported by trucks.
Rail users and operators have stated that the proposed speed restrictions and subsequent reductions in network fluidity would have adverse effects on passenger or commuter rail, and they state that network fluidity is already stressed for these types of rail. The National Railroad Passenger Corporation (Amtrak) has commented:
Amtrak believes that any significant slowing of the general railroad system could have an adverse effect on the performance of intercity passenger rail service, which has already been slowed by the recent increase of freight traffic, including the increase in the number of Key Crude Oil Trains.
Overly restrictive speeds will reduce the fluidity of the rail network and may reduce rail capacity for both people and freight. Passenger rail service via ACE Train carries over 1 million riders from Stockton to San Jose each year servicing major technology employers in Silicon Valley providing high wage opportunities for San Joaquin residents. Slowing freight will delay transit along this important trade rail corridor.
Regarding industry data or projections, PHMSA often times could not corroborate the data provided by industry stakeholders. Some commenters did not supply data, while others supplied only limited data. PHMSA made efforts to acquire and analyze different data that was required for the RIA and the rulemaking's decision-making process.
Despite having voiced some cautions about speed restrictions, some rail network users and operators expressed their support for the voluntary speed restrictions that were agreed upon by industry members as a result of Secretary Foxx's
Regarding Option 2, the 40-mph speed limit in areas with a population of 100,000 or more, commenters raised additional concerns. One commenter stated that the risk to a population from a train accident depends less on the size of the population in a given area than on the proximity of that population to the railway. Thus, Option 2 might not accurately address the true number of people threatened by railway accidents. The Kansas City Southern Railway Company stated that the term “area” is “unacceptably vague,” and Option 2 is therefore “unworkable.” This concern was echoed by other commenters.
Some commenters expressed that Option 2 would also adversely impact network fluidity. While significantly less restrictive in a geographical sense than Option 1, some commenters, such as Amsted Rail and the National Shippers Strategic Transportation Council, still considered Option 2 to be overly restrictive or costly.
Some commenters considered Option 2 to be an acceptable “compromise” between competing concerns for the efficiency of the rail transportation system and enhanced safety. According to the State of Minnesota:
Option 1, a 40 MPH speed limit in all areas, would have extensive negative effects on the shipment capacity, reliability, cost, and overall system velocity for Minnesota and its market connections. Option 2, a 40 MPH limit in areas with more than 100,000 people, would be an acceptable limit for trains using tank cars not conforming with the improved performance specifications, and would put relatively limited strain on system velocity and capacity compared to Option 1. The cost benefit analysis supports this compromise order.
Nevertheless, relatively few commenters expressed support for Option 2 as proposed in the NPRM. Comparatively, there was much wider support for Option 1 and Option 3 as proposed in the NPRM, with different groups of commenters expressing their respective support for each.
Regarding the NPRM's 30-mph speed limit, some commenters were in support, echoing the rationale that reduced speeds enhance the safety profile of conventional braking systems. Other commenters thought that the 30-mph speed limit should be adopted, but asserted that it would be more appropriate to make it a requirement for all tank cars that did not meet or exceed the standards of Specification DOT-117. Different commenters asked that the
Some commenters were opposed to the 30-mph speed limit. These commenters either opposed speed restrictions in general or they supported higher or less restrictive speed limits. For many rail users and operators and other stakeholders, the 30-mph speed limit appeared to be unnecessary in light of the 50-mph maximum speed limit and the 40-mph speed limit in HTUAs, which have already gained support as voluntary speed restrictions for certain tank cars transporting crude oil. Further, multiple commenters pointed out that some of the enhanced braking systems proposed in the NPRM—namely, two-way EOT devices and DP braking systems—are already widely adopted by industry. If two-way EOT devices and DP braking systems are already widely adopted, the 30-mph speed limit would not be generally applicable to HHFTs, unless the 30-mph speed limit also required HHFTs to equip and/or operate ECP braking systems. For more information regarding ECP braking systems, please see the Braking Section of the final rule.
In addition to the aforementioned comments, PHMSA received other comments in relation to speed restrictions. These comments have been grouped together where appropriate and paraphrased.
As a safety organization, PHMSA works to reduce the safety risks inherent in the transportation of hazardous materials in commerce by all modes of transportation, and in this rulemaking, has focused its efforts on the safety of the transportation of large quantities of Class 3 flammable liquids by rail. To demonstrate that speed restrictions relate directly to safety risks, PHMSA has provided data to demonstrate the relationship between speeds, kinetic energy, tank car punctures in a derailment, and subsequent releases of hazardous material into the environment (See RIA). As a result of the Sharma modeling, PHMSA agrees with the commenters' concerns that derailments and releases of hazardous material could have adverse impacts on public safety and the environment and has proposed to reduce safety risks through the implementation of speed restrictions.
In addition to demonstrating that its proposed speed restrictions will benefit public safety, PHMSA must evaluate the impact of its regulations on diverse stakeholders. In some cases, PHMSA is required by law to conduct and publish a cost/benefit analysis, among other legal requirements. Therefore, while some of the proposed speed restrictions are more restrictive and may lead to greater safety benefits than others, PHMSA must consider concurrently the cost of implementing each proposed speed restriction and evaluate the net effect on a diverse set of stakeholders. PHMSA must also consider the costs and benefits to the various stakeholders of alternatives. As such, the costs imposed on industry and society at large by the proposed speed restrictions are an important factor in our regulatory analysis and decision-making.
PHMSA believes that an overly restrictive speed limit would present costs that outweigh benefits, and this was echoed by many commenters. These commenters expressed the outlook that the proposed speed restrictions would present significant new costs, caused primarily by substantial negative effects on rail network fluidity. As a result of its understanding of commodity flows and rail network fluidity, PHMSA agrees that speed restrictions could result in: An increase in the number of tank cars needed to ensure consistent delivery service due to increases in transit or “turn” times; increased congestion; slower or less predictable delivery times for some products transported by rail, including crude oil, ethanol, and agricultural commodities; slower passenger or commuter rail service; and increased costs to shippers and carriers. Moreover, if an overly restrictive speed limit were codified in the final rule, the negative effect on network fluidity could become an indefinite burden on carriers, shippers, rail passengers, and other stakeholders, since adding capacity to the rail network would likely be costly, time-intensive, and in some cases not feasible.
Therefore, if the proposed speed restrictions were to significantly hinder rail network fluidity, PHMSA believes that some diversion of crude oil and ethanol transport to highways could occur. Given substantial rail-to-truck diversions, the proposed speed restrictions might also lead to increased safety risks in the wider transportation system, especially the highway transportation system, which could in turn result in increased highway accidents involving Class 3 flammable liquids and increased costs related to responding to or mitigating highway accidents. In other words, the proposed speed restrictions could shift safety risks from rail transportation to highway transportation. PHMSA has taken this into consideration and generally agrees with this line of reasoning as presented by commenters.
Many concerned citizens and local communities stated that rural areas or small towns should have the same speed restrictions and safety protections as highly populated areas. This is a valid statement, which PHMSA considered. However, in terms of potential injuries and fatalities, PHMSA believes that the damages from a derailment in a densely populated area are more likely to be catastrophic, than damages from a derailment in a less densely populated area. Further, the application of speed restrictions to densely populated areas is less costly because only a small portion of the rail network is located within the limits of these areas and railroad operating practices already account for other kinds of restrictions,
PHMSA determined that there is a trade-off between the safety benefits of the proposed speed restrictions and the costs incurred by rail network operators and users, including offerors, tank car manufacturers, tank car-related businesses, rail carriers, rail passengers, and consumers of products transported by rail. PHMSA found that the proposed speed restriction that offers the greatest safety benefits is also the most costly; conversely, the least costly speed restriction offers the least safety benefits.
To further refine this analysis, PHMSA has focused its attention on identifying the proposed speed restriction that confers the greatest amount of benefit per dollar of cost. PHMSA has determined that Option 3 confers the greatest amount of benefits per dollar of costs, which lends support for the implementation of a 40-mph speed limit in HTUAs. See the Final RIA for detailed cost and benefit figures.
Accordingly, PHMSA has decided not to apply the 40-mph speed limit to all areas (Option 1) because this would be overly restrictive and highly costly to a variety of stakeholders, and it confers the least benefits per dollar of costs. PHMSA has also taken into consideration the fact that Option 2 has a lower benefit-cost ratio than Option 3, which lends further support for Option 3 and raises concerns about Option 2.
Regarding Option 2, PHMSA agrees with some of the commenters' concerns and acknowledges some of the potential problems presented by Option 2's geographical standard, “an area [. . .]
Regarding Option 3, PHMSA believes that the implementation of Option 3 would yield significant safety benefits, especially in the nation's most populated areas where derailments are more likely to be catastrophic. PHMSA also believes that the costs of implementing Option 3 are justified. PHMSA is confident that the geographical standard, HTUAs, is practical and well-defined and thus, would be understood for compliance and enforcement purposes. Namely, the HTUA designation has been codified since 2008 in 49 CFR Section 1580.3. In addition, PHMSA recognizes the importance of industry cooperation to date on the issue of a 40-mph speed limit in HTUAs. For these reasons, PHMSA is electing to adopt Option 3, a 40-mph speed limit for HHFTs in HTUAs.
PHMSA must also conduct its final rulemaking with due consideration to the scope of its proposed rulemaking. Some of the commenters suggested alternative, more restrictive speed limits that were significantly lower than the speed limits proposed in the NPRM. These speed limits cannot be adopted because PHMSA must codify regulations in its Final Rule that are reasonably aligned with what PHMSA has proposed in previous stages of the rulemaking in order to afford the public and interested parties an opportunity to comment on the agency's proposed actions.
Other commenters suggested alternative lower speed limits that are approximate or comparable to the proposed speed restrictions. For example, the City of Chicago suggested a 35-mph speed limit in HTUAs. These alternative lower speed limits that were approximate or comparable to the speed restrictions proposed in the NPRM were duly considered, but PHMSA is not electing to adopt them. PHMSA was not provided with sufficient data to demonstrate concretely that any one alternative lower speed limit would be superior to the speed restrictions proposed in the NPRM. These commenters either did not disclose how a given damage reduction estimate was formulated, or their suggestion for an alternative speed limit lacked an empirical basis.
The BLET and other commenters have stated that additional accident modeling could be conducted at different speeds, such as 30 mph. PHMSA believes additional accident modeling could help determine if alternative lower speed limits would reduce the severity of an accident more effectively than the proposed speed restrictions. In response to this and other comments about the costs and benefit calculations related to speed, further modeling was conducted from speeds of 30 mph through 50 mph (See table 22).
In contrast to alternative lower or more restrictive speed limits, some commenters suggested a different, less restrictive alternative: PHMSA should not impose new speed restrictions at all. For example, Biggs Appraisal Service has stated, “The railroads have speed limits on every section of track that they operate. [. . .] Why put additional restrictions on the railroads when they already have systems in place that work?” Regarding this point, PHMSA recognizes that there are FRA regulations in place pertaining to speed restrictions and track classes, and some railroads have voluntarily chosen to implement speed restrictions. However, the FRA regulations relate to track classes and do not address the specific risks of HHFTs, and the voluntary speed restrictions in place do not carry the weight of law. PHMSA believes that the increased number of derailments and accidents in recent years has demonstrated that the speed limit systems in place require enhancements, such as the proposed speed restrictions. Accident modeling data has shown that reducing speeds from 50 mph to 40 mph is an effective way to reduce safety risks, namely the number of punctures that occur in a derailment. To implement no speed restriction at all would require a deliberate decision to forego certain safety benefits.
In the NPRM, PHMSA proposed an additional speed restriction of 30 mph for tank cars that are not equipped and operated with either a two-way EOT device or a DP system. Furthermore, the NPRM proposed requirements for certain tank cars to be equipped with ECP braking systems. These proposals and related comments are discussed in the “Advanced Brake Signal Propagation” section below.
Various commenters expressed concerns for the environment and thought speed restrictions should be applicable in environmentally sensitive areas, such as in the vicinity of water resources or navigable waterways. In response, PHMSA affirms that our organizational mission includes protecting the environment from the risks of transporting hazardous materials in commerce. PHMSA acknowledges the importance of environmental concerns and that speed restrictions may be an effective way to protect the environment from releases of hazardous material. Releases of hazardous materials in a derailment could have significant adverse impacts in these areas. Further, these areas might not be highly populated or part of a designated HTUA and consequently, might not be protected by the proposed speed restrictions.
Citizens Acting for Rail Safety (CARS) suggested using the Environmental Protection Agency (EPA)'s definition of “environmentally sensitive areas” or using a pipeline safety definition, which pertains to “areas that are unusually sensitive to environmental damage.” PHMSA believes these sources might provide a sound basis for defining an environmentally sensitive area, or similar areas, in order to extend the use of speed restrictions and offer specific protections to the environment. However, under 49 CFR 172.820, routing analyses are required of railroads carrying certain hazardous materials. The final rule will codify these same routing requirements for railroads transporting Class 3 flammable liquids in a HHFT. By performing a routing analysis, railroads transporting flammable liquids in a HHFT will be required by the HMR to consider, among other things, “environmentally sensitive or significant areas,” and they must base their routing selection on the analysis. PHMSA believes this is ultimately a more effective approach to reducing risks to environmentally sensitive areas than the promulgation of speed restrictions that are specific to those areas. Further, in the NPRM, PHMSA did not propose a definition for the designation of environmentally sensitive areas nor did it propose to base speed restrictions on environmental criteria. PHMSA believes it would be outside the scope of this rulemaking to require lower speeds in these areas.
PHMSA would like to respond to other comments related to speed restrictions enumerated below.
PHMSA has cooperated and will continue to cooperate with Transport Canada and other appropriate international bodies. PHMSA seeks to harmonize the proposed operational controls whenever it is feasible and justified. As of April 23, 2014, Canada issued an Emergency Directive that established a 50-mph maximum speed limit for certain trains carrying “Dangerous Goods,” which is comparable to the 50-mph maximum speed limit established through the cooperation of the Department and AAR. These actions demonstrate that PHMSA and Transport Canada have already achieved harmonization in some respects.
Nevertheless, speed restrictions do not necessarily need to be harmonized between Canada and the U.S. In the final rule, PHMSA is implementing a geographical standard for speed restrictions that is specific to U.S. geography. Also, train speeds can be adjusted fairly easily, and differences in speed limits between localities in the U.S. and Canada would not present an undue burden on locomotive operators. Harmonization of speed restrictions is not essential.
PHMSA typically uses the hazardous materials classes (Hazard Classes 1 through 9) to distinguish the risks of different hazardous materials. In recent years, increased crude oil and ethanol production have presented increased risks to the rail transportation system, but other types of flammable liquids could present similar risks. By defining a HHFT as a train with a continuous block of 20 or more tank cars or a total of 35 or more tank cars containing a Class 3 flammable liquid, we address the specific risks of increasing crude oil and ethanol production while also anticipating the potential for future risks presented by the increased production or transport of other Class 3 flammable liquids.
PHMSA disagrees with commenters who suggested that the proposed speed restrictions only apply to crude oil, or alternatively, only to crude oil and ethanol. PHMSA believes that Class 3 flammable liquids present similar risks and as such, basing the proposed speed restrictions on a given hazardous material's classification as Class 3 would be a comprehensive and responsive approach to mitigate these risks.
Comments suggesting that proposed speed restrictions should apply to the transport of all hazardous materials by rail were considered. However, PHMSA did not propose this in the NPRM, and this suggestion cannot be adopted in the Final Rule due to concerns that it is not reasonably aligned with what has been proposed. Moreover, the operational controls addressed in this rule, including speed restrictions, are aimed at reducing the risk and consequences of incidents involving rail shipments of Class 3 flammable liquids. The analyses, data, and relevant factors considered in developing this rule are specific to these materials. Information has not been provided to support expanding these restrictions to all hazardous materials or to justify the associated negative impacts on rail fluidity and costs.
Various commenters have identified factors that contribute to costs or benefits that PHMSA has not included in its cost/benefit analysis. PHMSA published a Draft RIA alongside the proposed rule to address the requirements of Executive Order 12866, to explain the basis of its cost/benefit analysis, and also to encourage stakeholder discussion of cost/benefit analyses pertinent to this rulemaking. Since the NPRM, PHMSA has improved upon its cost/benefit analyses and has published a final regulatory impact analysis in conjunction with the final rule based on comments received and data provided.
An “enhanced” tank car is one that meets or exceeds the retrofit standards or the standards set forth by Specification DOT-117. Specification DOT-117 tank cars and retrofitted tank cars have advanced technology and present less safety risks to the rail transportation system, the public, and the environment than “legacy” Specification DOT 111 tank cars. In addition, PHMSA believes that there should be incentives for tank car owners and lessors to retrofit or upgrade their fleet of tank cars. By retrofitting or upgrading their tank cars, a carrier can transport their tank cars at speeds above the proposed speed restrictions, and this could advantageously shorten transit times for offerors and carriers with retrofitted tank cars.
Technological improvements are oftentimes the “triggering” or “initiating” event for a new rulemaking or some other regulatory action. PHMSA agrees that there is a possibility that speed restrictions could be reduced or eliminated amid significant technological improvements in the rail transportation industry.
PHMSA agrees with this point of view. Based on commenter feedback, we have revised the NPRM's proposed HHFT definition to comprise trains with a continuous block of 20 or more tank cars or trains with a total of 35 or more tank cars carrying Class 3 flammable liquids. In doing so, PHMSA seeks to address higher risk unit train configurations. In other words, PHMSA seeks to regulate trains that transport a substantial number of Class 3 flammable liquid-carrying tank cars while avoiding unwarranted regulation of trains that transport smaller quantities of flammable liquids in a “manifest” train. For additional information regarding the scope of the Final Rule, please refer to the section describing the definition of an HHFT.
While track conditions and quality are an important part of rail safety, PHMSA believes that creating a system of speed restrictions based on these track factors is not warranted at this time. PHMSA did not propose in the NPRM to base speed limits on these factors. The commenters did not provide sufficient data to show how and to what degree new speed restrictions would relate to track conditions or quality. The commenters did not propose any specific system for the implementation of speed restrictions based on track conditions or quality.
Further, FRA regulations codified in 49 CFR part 213—Track Safety Standards already enforce a system of speed limits based on track classes. One commenter stated that the aforementioned FRA regulations render the NPRM's speed restrictions “redundant.” On this point, PHMSA disagrees because the proposed speed restrictions are specific to the risks of
Also, the Final Rule extends the routing requirements of § 172.820 to the transport of Class 3 flammable liquids by rail in HHFTs. Under these routing requirements, railroads transporting HHFTs will be required to consider “track type, class, and maintenance schedule” and “track grade and curvature,” among other factors, in their choice of routes. Railroads moving HHFTs must base their routing decision on this analysis, effectively taking into consideration the potential problems presented by track conditions, classes, or quality.
One commenter stated that a 30-mph speed limit should be in place for the segments of track that are in use for passenger service. Trains in freight rail service and passenger rail service share significant portions of the nation's rail infrastructure, so implementing this suggestion would be overly restrictive.
PHMSA considered different geographical standards in its development of the proposed speed restrictions, and commenters offered various alternative geographical standards, including references to Bureau of the Census criteria or data for urban areas. However, the commenters did not submit an accompanying cost/benefit analysis of the alternative geographical standards, and these alternatives in many cases were not adequately elaborated so that PHMSA could analyze whether or not they would be superior to the proposed speed restrictions.
The NTSB proposed the “potential impact radius” (PIR) model as an alternative geographical standard. NTSB likened PIR to an approach used by PHMSA's gas pipeline regulations. PIR might be an effective geographical standard for pipeline safety, but it is not clear if this standard would also be suitable for rail transportation safety. Rail transport involves a wider variety of commodities and amounts transported, which presents a wider variety of risks that are mode-specific. On this basis, PHMSA does not believe that PIR would be better than the geographical standards proposed in the NPRM. Furthermore, PHMSA believes that the HTUA designation is in fact responsive to the need for greater protections in the areas that present the greatest risks or “potential impact.”
One commenter stated that the HTUA designation is “irrelevant” in the context of reducing rail safety risks, as it was designed for the identification of terrorist targets. PHMSA disagrees. The HTUA designation is also applicable to the reduction of rail safety risks because it encompasses many areas that, if they were involved in a derailment, could result in widespread damages. The likelihood that a derailment would result in catastrophic damages is greater in HTUAs than most other areas. A different commenter criticized Option 3 and the HTUA designation because it was seen as overly restrictive and includes “dozens of areas.” PHMSA disagrees on the basis that only approximately 7% of the rail network is located within the limits of HTUAs.
Regarding alternative geographical standards, PHMSA affirms that there are costs involved in creating new regulatory standards, potential issues with implementation and clarity, and benefits involved in consistencies between federal regulations. In this respect, the HTUA designation would be easier, more effective, and clearer to implement in accordance with a 40-mph speed limit because it has been codified since 2008 in Title 49, CFR. Accordingly, rail network users and operators already have a compliance history with this regulation. Conversely, rail network operators are not familiar with PIR and other alternative geographical criteria, and there would be a particular cost attached to introducing novel geographical criteria.
According to the Michigan Agri-Business Association, the Michigan Farm Bureau, and businesses in the ethanol industry, slow rail service has already impacted the ability of ethanol producers to effectively ship and deliver ethanol to consumers. To that effect, Homeland Energy Solutions has stated that the presently slow rail service has been difficult to overcome and additional speed restrictions applicable to ethanol transport will further hinder the industry, potentially causing some producers to shut down.
In response, PHMSA asserts there are many factors that might be slowing existing rail operations. Reduced speed is only one factor that might result in slow rail service. For example, the contributing factors of poor rail service might include the rapid increase in the production and transport of crude oil and subsequent displacement of other commodities in the rail system. In such a case, poor service could not necessarily be attributed to PHMSA's proposed speed restrictions. Nevertheless, PHMSA is also concerned with the impact of the proposed speed restrictions on rail network fluidity, and seeks to limit their potential negative effects.
The AAR proposed and implemented voluntary speed restrictions to mitigate the risks of crude oil transport. Thus far, these voluntary speed restrictions have not been applicable to ethanol transport by rail. When considering additional speed restrictions, PHMSA looks at cost/benefit analysis from a holistic perspective and does not give any one industry or stakeholder a preference in its analysis. PHMSA seeks to extend the safety benefits of the proposed speed restrictions to the transport of all Class 3 flammable liquids, including ethanol, as well as limit the negative effect of these speed restrictions on overall rail network fluidity and the costs borne by all industry participants, including ethanol producers.
PHMSA acknowledges that, after the final rule takes effect, the adopted speed restrictions will have a direct impact on ethanol producers and carriers. There will be an increase in burden or costs to shippers and carriers of ethanol if, prior to the rulemaking, they had moved ethanol above 50 mph. Union Pacific has stated, “Freight trains often operate at speeds between 50 mph and 70 mph.” Thus, freight trains could have moved ethanol above 50 mph prior to the rulemaking.
Nevertheless, commenters did not adequately relate to what degree the 50-mph maximum speed limit would decrease the actual operating speeds of HHFTs carrying ethanol. Overall, fewer commenters expressed concerns about the 50-mph speed limit than about the three 40-mph speed limits. In addition, industry cooperation with the Department has already established 50 mph as a maximum speed limit for certain trains. In Canada, Transport Canada issued an Emergency Directive in April 2014 requiring all companies to not operate a “Key Train” at speeds that exceed 50 mph. For these reasons, it is PHMSA's understanding that the 50-mph maximum speed limit is a common industry practice and implementing this speed limit would not drastically change the maximum speeds at which most trains carrying hazardous materials, including ethanol, operate.
In addition to the 50-mph maximum speed limit, ethanol shippers and carriers are directly affected by the 40-mph speed limit in HTUAs as a result
For other carriers or entities within the ethanol industry, Option 3 might introduce new costs to them, but PHMSA believes the costs are justified by additional safety benefits. Since Option 3 refers to a 40-mph speed limit in HTUAs, only a small portion of the rail network—around 7% of the nation's track—will be affected by this new speed restriction. On balance, Option 3 is the least costly of the three speed options proposed and concentrates its protections in the areas where a derailment is most likely to be catastrophic and safety benefits are greatest. The ability to limit the cost impacts of the proposed speed restrictions on industry, including ethanol shippers, carriers, and others, has lent support to PHMSA's decision to implement Option 3. PHMSA believes the new costs to ethanol industry participants are limited and justifiable.
PHMSA does not intend to unjustifiably introduce costs into the operations of stakeholders, especially those who qualify as small businesses or small entities. For this reason, and in compliance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), PHMSA must conduct a regulatory flexibility analysis addressing the rulemaking's economic impact given that the rulemaking is likely to “have a significant economic impact on a substantial number of small entities.” The rulemaking's RFA demonstrates that the impact to small entities as a result of this rulemaking will be limited and should not cause any small entities to cease operations. Please refer to the RFA section for additional explanation of the final rule's impact on small entities.
PHMSA believes the speed restrictions should be codified. Recommended practices, such as voluntary speed restrictions, do not carry the weight of law. Recommended practices do not provide legal recourse in the event a railroad moves an HHFT at speeds exceeding voluntary speed restrictions thus increasing the likelihood of catastrophic damage in a train accident. Further, without the codification of these requirements, the speed restrictions could be lifted altogether in a premature manner, increasing safety risks. Codifying the speed restrictions will ensure that the safety benefits of speed restrictions are realized indefinitely and cannot be prematurely lifted without the appropriate procedural requirements. Further, this codification allows PHMSA and FRA to ensure compliance by exercising oversight and taking appropriate enforcement actions.
Regarding increased delays to vehicles stopped at railroad crossings, commenters did not provide specific data regarding the time or cost burden of this kind of delay. PHMSA recognizes this could be a consequence of the proposed speed restrictions, but is unable at this time to quantify the time burden or cost of increased vehicle delays at railroad crossings. PHMSA expects the cost of these delays would not be substantial.
Regarding train configurations and the proposed speed restrictions, PHMSA seeks to limit the implementation of speed restrictions to train consists with a substantial number of tank cars carrying Class 3 flammable liquids. In practical terms, PHMSA seeks to limit the effect of the proposed speed restrictions so that “manifest” trains would not be regulated to the same degree as a unit train of Class 3 flammable liquid.
PHMSA has revised its definition of an HHFT in response to commenter feedback on typical train configurations involving Class 3 flammable liquids, including crude oil and ethanol. The revised definition would allow rail carriers to configure up to 34 tank cars carrying flammable liquids so long as there are not 20 or more tank cars in a continuous block. A train that distributes hazmat-carrying tank cars (
PHMSA agrees that the proposed speed restrictions might result in externalities, such as reduced noise disturbances. PHMSA has taken into consideration the most significant externalities that would result from this rulemaking. PHMSA's review of the comments, analysis of costs and benefits, and coordination between regulatory, economic, and technical subject matter experts has facilitated a critical evaluation of the NPRM's proposed speed restrictions.
The following table summarizes the NPRM's proposed speed restrictions and presents some of PHMSA's analysis as to whether or not a given speed restriction would be an effective regulation.
In the final rule, PHMSA and FRA are adopting requirements for speed restrictions for HHFTs. Specifically, this rulemaking adds a new § 174.310 to Part 174—Carriage by Rail. Section 174.310(a)(2) establishes a 50-mph maximum speed restriction for HHFTs. In addition, § 174.310(a)(2) establishes a 40-mph speed limit for HHFTs within the limits of high-threat urban areas (HTUAs) as defined in 49 CFR 1580.3, unless all tank cars containing a Class 3 flammable liquid meet or exceed the retrofit standards, the performance standard, or the standards for the DOT Specification 117 tank car provided in Part 179, Subpart D of the Hazardous Materials Regulations (HMR). The 40-mph speed limit for HHFTs within the limits of HTUAs is in line with Option 3 proposed in the NPRM.
In addition as discussed previously on April 17, 2015 FRA issued Emergency Order 30 to require that certain trains transporting large amounts of Class 3 flammable liquid through certain highly-populated areas adhere to a maximum authorized operating speed limit.
Since the passage of the First Safety Appliance Act of March 2, 1893, freight train operations in the U.S. have traditionally relied on air brakes to slow and stop a train.
Brake signal propagation systems are interconnected arrangements of braking components that operate together to slow or stop a train. Compared to conventional air brakes, these systems can reduce the number of cars impacted (
Two-way EOT devices include two pieces of equipment linked by radio that initiate an emergency brake application
DP systems use multiple locomotives positioned at strategic locations within the train consist (often at the rear of the train) to provide additional power and train control in certain operations. For instance, a DP system may be used to provide power while climbing a steep incline and to control the movement of the train as it crests the incline and begins its downward descent. The DP system works through the control of the rearward locomotives by command signals originating at the lead locomotive and transmitted to the remote (rearward) locomotives. DP systems are a mature technology and are in widespread use on Class I railroads, particularly those operating west of the Mississippi River. While distributed power technically is not a braking system, the additional power source in or at the rear of the train consist can provide enhanced braking for a train.
ECP brake systems simultaneously send an electronic braking command to all equipped cars in the train, reducing the time before a car's pneumatic brakes are engaged compared to conventional air brakes. They can be installed as an overlay to a conventional air brake system or replace it altogether; however, FRA regulations do require that ECP brake systems be interoperable pursuant to the AAR S-4200 standard, which allows for interchange among the Class I railroads. 49 CFR 232.603. The modeling performed for the NPRM by Sharma & Associates suggested that ECP brakes could reduce the severity of an accident when emergency braking is applied by 36 percent (meaning that 36 percent fewer cars would be expected to puncture in the event of a derailment of a 100 car train) compared to conventional air brakes.
The simultaneous application of ECP brakes on all cars in a train also significantly improves train handling by substantially reducing stopping distances as well as buff and draft forces within the train, which under certain conditions can result in a derailment. Because ECP brakes do not rely on changes in air pressure passing from car to car, there are no delays related to the depletion and recharging of a train's air brake system. These factors provide railroads with the ability to decrease congestion or to increase volume by running longer trains closer together.
Because U.S. railroads have traditionally relied on conventional air brakes, existing tank cars and locomotives (to a lesser extent) have not been built with ECP brake technology installed. All cars in a train, as well as locomotives, must be equipped with wiring to allow the brake system to be relayed through the entire train before the train can operate in ECP brake mode.
Given the increased risks associated with an accident involving HHFTs, we specifically requested comments in the September 6, 2013, ANPRM on the use of advanced brake signal propagation systems to reduce the number of cars and energy associated with derailments. Based on comments to the ANPRM and the FRA simulation data described above, in the August 1, 2014, NPRM we proposed to require that each HHFT be equipped with an enhanced brake signal propagation system (
• HHFTs are to be equipped with a two-way EOT device as defined in 49 CFR 232.5 or a DP system as defined in 49 CFR 229.5, by October 1, 2015.
• After October 1, 2015, a tank car manufactured in accordance with proposed § 179.202 or § 179.202-11 for use in a HHFT must be equipped with ECP brakes.
• After October 1, 2015, HHFTs comprised entirely of tank cars manufactured in accordance with proposed § 179.202 and § 179.202-11 (for Tank Car Option 1, the PHMSA and FRA Designed Car, only), except for required buffer cars, must be operated in ECP brake mode as defined by 49 CFR 232.5.
To reduce the burden on small carriers that may not have the capital available to install new braking systems, we proposed an exception. If a rail carrier does not comply with the proposed braking requirements above, we proposed that the carrier may continue to operate HHFTs at speeds not to exceed 30 mph. Additionally, we sought specific comment on the capacity of tank car and locomotive manufacturing and retrofit facilities to install advanced brake signal propagation systems, estimated costs of ECP braking systems, alternative simulations or modeling data to validate the results of the FRA commissioned analysis, and the interaction of safety and environmental benefits when coupled with speed restrictions or enhanced tank car standards. The table below details the types and amounts of commenters on the braking proposals.
Most of the commenters support the proposed requirements for enhanced braking systems beyond conventional air brakes on HHFTs. Of those commenters who identified the braking issue in their response, approximately 98 percent of signatories specifically supported mandating ECP brakes for HHFTs. Whereas, two percent of signatories opposed specifically mandating ECP brakes for HHFTs in favor of two-way EOT devices, DP systems, any enhanced braking, or no enhanced braking.
Environmental groups, concerned public, other governmental organizations, Indian tribes, local governments, towns and cities, NGOs and trade associations were among the main groups supporting the mandating of ECP brakes for HHFTs. It should be noted that while 98 percent of signatories supported ECP brakes, these commenters largely did not provide additional data supporting the proposal in the NPRM. Some concerned public commenters supported expanding the braking proposal to require that all tank cars transporting hazardous materials be equipped with ECP brakes. In an online write-in campaign, over 3,000 public commenters state: “[t]hree levels of brakes for tank car standards are offered but ALL tank cars carrying hazardous materials should be equipped with the highest level of brakes and brake signaling systems.”
Other concerned public, Congressional, Indian tribes and environmental group commenters expressed support for ECP brakes as proposed in the NPRM. Most stated generally that they were in favor of the most stringent and advanced brakes available for HHFTs. The Regional Tribal Operations Committee commented that the final rule must “require state-of-the art braking systems for crude-by-rail trains to protect the public in the face of what the [NTSB] has called `unacceptable public risks.” Cost was not generally discussed by those commenters who supported ECP brakes, and cost did not appear to be a deciding factor in selection of a braking option for the commenters who supported use of ECP braking systems. Specifically, these commenters desired the tank car braking enhancements that would result in the greatest improvements in safety for those in proximity to the rail network as well as for environmentally sensitive areas along such routes.
Commenters such as environmental groups and state agencies supported ECP braking based on the modeling data provided by PHMSA and FRA. The Center for Biological Diversity, in its comment with almost 23,000 signatories, stated:
Given that the ECP system would only reduce the potential for tank car punctures by 36%, it is unconscionable to allow the option of a potentially cheaper distributed power system, which would only reduce accident severity by 18%. . . . Given the imminent hazard that HHFTs pose to human health and the environment, the most effective brake system that has been shown to be readily available for these trains must be employed, and PHMSA must not offer a choice that would drastically increase the severity of accidents.
Clean Water Action supports ECP brakes in their comment stating “[t]o slow HHFTs[,] all rail cars should be equipped with the [ECP] brake system whose effectiveness has been shown to be 36%.” It also comments that, “[e]ven though industry believes the ECP adds significant time and cost investment and the benefits will not be realized for months or years in the future, the technology seems to offer significant benefits such as real time monitoring, reduced wear and tear on the brake system, and fuel savings.” Clean Water Action further noted that, “[i]t would have been encouraging for the industry to embrace a proven technology rather than to suggest ECP offers marginal benefits,” particularly when the increased effectiveness of DP systems is only 18 percent. The California Public Utilities Commission and California Governor's Office of Emergency Services in their joint comment also noted that the 2006 study, “ECP Brake System for Freight Service: Final Report,”
Additionally, some commenters noted that EOT devices or DP systems are already the base standard for industry and expressed concerns that codifying the requirement to equip one of those two systems would not increase safety in any significant manner. The BLET stated in its comment that, “. . . the EOT requirement already exists in 49 CFR 232.407.” As a result, it contended that the proposed EOT device “requirement was picked simply to have no economic impact on railroads because they were already complying with this rule.” The BLET noted that, “achieving cost savings is a worthy goal,” but urged that “it cannot be a goal that comes at the risk of providing no additional safety benefits by preservation of the status quo.” Further, the BLET contended that, “[t]he use of distributed power is also currently being done for business purposes of being able to run longer, heavier trains due to more locomotive tractive effort provided at the rear or within a train.”
The Brotherhood of Maintenance of Way Employees Division (BMWED) and the Brotherhood of Railroad Signalmen (BRS) in their joint comment support ECP braking if the requirement also includes a restoration of the 1,000-1,500 mile interval for brake and mechanical inspections to be performed by a qualified inspector.
Concerned public, shippers, trade associations, other governmental organizations, and rail carriers were the main groups commenting in opposition to ECP brakes for HHFTs in favor of two-way EOT devices, DP systems, any enhanced braking or no enhanced braking. While these commenters represented a small minority of the overall number of signatories who identified braking systems in their response, several of these commenters provided cost analyses or brake system effectiveness data to compare against
Prior to publication of the August 1, 2014, NPRM, FRA conducted simulations using the Train Energy & Dynamics Simulator (TEDS) program developed by Sharma & Associates to demonstrate the increased effectiveness of ECP brakes compared to conventional brakes, EOT devices, and DP systems. The simulations were conducted to better understand the effect on energy dissipation and stopping distance of different brake signal propagation systems. The results of these simulations suggested that advanced brake signal propagation systems, especially ECP brake systems, decrease brake signal propagation time(s) and decreased kinetic energy of a train in a derailment compared to the conventional air brake system. Many commenters in opposition to ECP brakes challenged PHMSA and FRA's effectiveness claims in the NPRM.
AAR challenged the modeling done by Sharma & Associates based on several factors. It states that the number of simulations was too limited and conducted on trains of 80 cars or less.
While these figures do tend to show that ECP brakes are more effective than DP systems, the figures developed by TTCI are indeed lower than those presented in the Sharma & Associates modeling. However, it is unclear what brake ratio TTCI used in its modeling.
Additionally, while TTCI “reproduces” certain recorded stopping distances in derailments, it does not actually simulate a derailment. Instead, the TTCI model simply calculates the energy dissipation as a train is slowed to stop when a blocking force is applied. The blocking force is intended to act as a surrogate for the force applied by the cars in a derailment, but this is a poor corollary to a derailment outcome because energy dissipation by itself is insufficient to quantify damages. It does not take into account other factors, such as location of impact and size of impactors that are of equal importance to energy. Therefore, we question the exactness of TTCI's results with respect to modeling the effectiveness of ECP brakes.
AAR also suggests that the conditional probability of release (CPR; the probability of a release if a tank car is in an accident), will also depend on the specific tank car specification selected by PHMSA. For example, if the CPR is five percent that means there will only be a five percent chance of a release from the 1.2 to 1.6 cars derailing due to the absence of ECP brakes, everything else being equal.
Union Pacific concluded that multiple remote trains (
Honeywell Performance Materials and Technologies commented in opposition of ECP braking based on how ECP brake systems operate stating, “the new design is not compatible with present fleet braking systems” and “[i]t is our understanding that all cars, including the locomotive, in a train would need to be equipped with the ECP brakes to be effective.” Concerns that all cars in a train must be equipped with ECP brakes in order for the system to function was echoed by other commenters in opposition of ECP brakes. Bridger commented that “cars equipped with ECP brakes cannot be intermixed with cars equipped with conventional airbrakes. Thus, any tank cars set out en-route for defects will be difficult to move to destination. This will slow the cycle times on the cars and may also add operational costs for the railroads in having to make special movements to `rescue' stranded ECP equipped cars.”
BNSF submitted that the benefits of ECP brakes—in the context of avoiding the spillage or ignition of flammable liquids moved by rail—do not come close to justifying the costs, complexity and lost productivity that would result from an ECP brake requirement, especially when compared to realizing the benefits from a DP system, which is proven technology. BNSF goes on to state that a train equipped with ECP brakes, on average, would have approximately two fewer cars per train derail than a similar train equipped with DP. BNSF has experience with ECP brakes on unit trains in a captive, closed-loop environment. What BNSF has found is that the ECP braking equipment is more expensive to maintain, requires specialized skills and
The Independent Petroleum Association of America (IPAA), BNSF and Plains Marketing, LP opposed ECP brakes noting that there are only two known manufacturers of ECP brakes, and that all current sales are overseas. BNSF noted that the systems of the two manufacturers (New York Air Brake and Wabtec) are not believed to be interoperable. In addition, these manufacturers do not currently produce ECP brake components in sufficient volumes to handle this regulatory requirement. Amsted Rail stated that there are only six trains currently operating with ECP brakes in the United States.
AAR, Greenbrier, Amsted Rail, the National Grain & Feed Association, RSI and AFPM provided cost estimates per tank car for ECP brakes ranging from $5,300 to $15,000—above the PHMSA estimate of $3,000 for new construction and $5,000 for retrofits.
AAR, Bridger and AFPM provided cost estimates per locomotive for ECP brakes ranging from $20,000 to $88,000—in contrast to the PHMSA estimate of $79,000. These commenters also indicated that PHMSA underestimated the size of the affected locomotive fleet.
AAR commented that 9,849 carmen, 27,143 engineers, and 41,015 conductors would need training—above the PHMSA estimate of 4,500 engineers and 4,500 conductors. The majority of commenters in opposition to ECP brakes stated that the cost of equipping the system is too high. Additionally, many were concerned that the installation process and overlay of these braking systems is too complex. PHMSA and FRA discuss the cost-benefit analysis of ECP braking in further depth in the RIA.
Many commenters both in support of and opposition to ECP brakes mentioned positive train control (PTC) in their comments. PTC is a set of highly advanced technologies designed to automatically stop or slow a train before certain types of accidents occur. PTC is designed to prevent train-to-train collisions, derailments caused by excessive speed, unauthorized incursions by trains onto sections of track where maintenance activities are taking place, and movement of a train through a track switch left in the wrong position.
BNSF commented that ECP brake implementation would require a re-write of the PTC algorithm, which would then need to go through the FRA approval process. Furthermore, physical and logical interfaces between ECP brake and PTC equipment would have to be designed and tested. BNSF is not currently aware of any adverse interactions between the two systems. Additionally, it commented that rail shop capacity is already strained due to the PTC mandate, and would be further congested by a requirement for ECP brakes.
This final rule requires all HHFTs operating in excess of 30 mph to have enhanced braking systems. The type of enhanced brake system that a railroad will be required to use is based on a refined approach that allows PHMSA and FRA to implement real brake system safety improvements by taking into consideration the amount of Class 3 flammable liquids being transported by a train as well as the type of operation that the train uses to transport Class 3 flammable liquids. At a baseline level, any train that contains a continuous block of 20 or more loaded tank cars or a total of at least 35 loaded tank cars throughout the train consist containing Class 3 flammable liquids must have in place, at a minimum, a functioning two-way EOT device or a DP system to assist in braking. Based on FRA analysis and modeling by Sharma & Associates conducted in March 2015, it is expected that a two-way EOT device or DP locomotive at the rear of a train can reduce the number of cars punctured by 13-16 percent compared to conventional air brakes. However, with longer, heavier trains it is necessary to factor in train control issues. Therefore, PHMSA and FRA have specific braking requirements for trains that are transporting 70 or more loaded tank cars of Class 3 flammable liquids at speeds in excess of 30 mph. These requirements are intended to further enhance safety based on the operations conducted for longer, heavier trains.
Any high-hazard flammable unit train (HHFUT) operating in excess of 30 mph must have a functioning ECP brake system that complies with the requirements of 49 CFR part 232, subpart G. PHMSA and FRA define an HHFUT as a single train consisting 70 or more tank cars loaded with Class 3 flammable liquids. This definition is intended to capture those operations where tank cars and locomotives are primarily used in captive service trains that are transporting large quantities of Class 3 flammable liquids (such as crude oil and ethanol) and are running in a continuous loop. The ECP braking requirement goes into effect as of January 1, 2021 for any HHFUT transporting one or more loaded tank car of a Packing Group I flammable liquid, and goes into effect as of May 1, 2023 for all other HHFUTs.
While PHMSA and FRA are establishing a requirement to implement ECP brake systems for certain operations, we recognize that the railroad industry may develop a new brake system technology or an upgrade to existing technology that is not addressed in 49 CFR part 232, subparts E (for two-way EOTs) and G (for ECP braking systems). This rulemaking is not intended to “lock in” the status quo with respect to ECP brake systems as the only form of brake system that can be used on unit trains operating in excess of 30 mph while transporting 70 or more loaded tank cars of flammable liquids. In the event that a new technology is developed, railroads should apply to FRA to obtain special approval for the technology pursuant to part 232, subpart F.
Finally, PHMSA and FRA believe that it makes practical sense to except trains operating at speeds not exceeding 30 mph from the requirements related to HHFUTs. This enables shortline and regional railroads and railroads without the capital necessary to equip unit trains with ECP brakes or that choose not to equip their trains with these systems to continue transporting Class 3 flammable liquids, albeit at slower speeds in order to protect public safety and the environment. It also is important to note that such railroads will be required to transport Class 3 flammable liquids in
ECP braking is a proven technology that is a reliable and effective way to slow and stop a train, and to prevent accidents from occurring, while also allowing for more efficient operations. ECP brakes have been used in North American railroad operations since at least 1998. PHMSA and FRA recognize that there have been hurdles in the deployment of ECP brakes. However, the technology has continued to improve since 1998 and carriers are in a better position now to ensure that ECP brakes are successfully implemented. The railroad industry has effectively addressed crosstalk and interoperability issues and has updated AAR Standard S-4200 accordingly. We expect that concerns related to maintenance and repair issues that arise during normal operations will be resolved through adequate training of operating crews and maintenance personnel, which has been factored into the cost of this rule.
There are currently six unit coal trains being operated with ECP brake systems in the U.S. These began as waiver test trains; however, all but one are now in regular revenue service. NS began operating unit coal trains using ECP braking systems in 2007,
Some commenters have noted that there has not been widespread adoption of ECP brakes in the U.S. There are a number of factors that contribute to this. First, the positive train control (PTC) requirement diverted significant capital (financial and human) toward signal systems at a time when those resources might have otherwise been directed at ECP brakes. Second, it has been difficult to implement ECP brakes outside of a limited type of service in part because they are not compatible with the conventional air brakes (this is particularly true stand-alone systems, which are less expensive). This means that ECP brakes would only be used on unit trains that are in captured service and both the car owner and the railroad agree on its use. Further, the limited usage contributes to unfamiliarity with the technology and likely contributes to many of the operational and maintenance difficulties expressed by railroads in their comments. Third, there are market inefficiencies that have limited implementation of ECP brakes. ECP brakes are most likely to be implemented on a voluntary basis where owner of ECP-equipped cars has control over a seamless operation of unit trains from the originating location to the delivery location, such as what is found in Australia or South Africa. In the U.S. most cars owners have little incentive install ECP brakes because they tend to bear most of the upfront cost of installing the braking system, while most of the benefits (such as decreased fuel consumption) are realized by a separate entity, the operating railroad. Notwithstanding, car owners might still have an incentive to install ECP brakes if they were to realize greater utilization due to less inspections. However, FRA understands that railroads effectively eliminated the incentive to install ECP brakes by treating such cars as being in premium service, resulting in higher cost per use.
AAR contends that most of the benefits from ECP brakes, such as more efficient fuel consumption and reduced wheel wear, are currently realized through the widespread use of dynamic braking. PHMSA and FRA did not address this issue in the NPRM and it was not raised until after the close of the comment period.
PHMSA and FRA also accept that benefits related to wheel savings should be reduced to account for the use of dynamic braking, but that they should be reduced by less than 85 percent suggested by AAR. Railroads will continue to experience brake induced wheel wear where pneumatic brakes are used, but if the railroads rely on dynamic braking they will face a cost not considered in other parts of the analysis, increased rail wear, with an attendant increased risk of broken rail accidents and increased track maintenance costs. PHMSA and FRA estimate that the use of dynamic braking
Although PHMSA and FRA agree with those commenters who support ECP braking on unit trains, we disagree with the suggestion from the BMWED and BRS that FRA should restore the 1,000-1,500 mile interval requirement for brake/mechanical inspections. The 3,500 mile interval has a proven record of safety in the seven years of operations on the NS and BNSF railroads. The use of real-time equipment health monitoring capabilities on ECP-equipped trains is an effective safety tool that justifies the extended inspection intervals. Allowing for longer distances between inspection stoppages provides a benefit to railroads without decreasing safety by keeping safe equipment in-service for longer periods of time (each brake test and mechanical inspection can take from two to eight hours to complete and may delay a train even longer depending on available personnel and scheduling). As of October 2014, NS initiated train operations under a 5,000 mile inspection waiver to test the effectiveness of a longer inspection interval on the unit coal train that it runs with BNSF in a loop between the Powder River Basin and Macon, GA.
ECP brake systems based on the AAR S-4200 standard also have been exported successfully for use in Canada, Australia, and South Africa. As an example, the Quebec Cartier Mining Railway (QCM) in Quebec, Canada began using ECP-equipped trains in 1998.
By setting the HHFUT threshold at 70 tank cars of flammable liquids, we expect to maximize the benefits of ECP brakes on the higher risk trains whose tank cars are primarily in dedicated service, while reducing the implementation challenges that would be caused by requiring ECP brakes for any train meeting the definition of an HHFT. By focusing the ECP brake system requirements on trains over the 70-car threshold that travel in excess of 30 mph, we ensure that trains with the greatest associated risk (based on volume of product) will be equipped with the advanced brake signal propagation system that has the highest known effectiveness in reducing the kinetic energy of a train during a derailment. This will reduce the number of cars derailed and punctured. We base our decision on estimates related to an average 100-car unit train transporting Class 3 flammable liquids. FRA and PHMSA's modeling shows the risk posed by a 100-car ECP-equipped unit train made up of DOT-117 tank cars, traveling at 50 mph is approximately the same as a 64-car train of the same cars traveling at the same speed operating with a two-way EOT device. We have established a baseline cut-off at 70 cars in an effort to maximize the return on investment for ECP brakes, by capturing only those trains transporting Class 3 flammable liquids in dedicated service.
In the NPRM, PHMSA and FRA relied on data produced by Sharma & Associates that showed a 36 percent effectiveness rate of ECP brakes over conventional air brakes, as expressed in the probable number of cars punctured. In March 2015, Sharma & Associates performed additional modeling that takes into account the comments received after publication of the NPRM and additional accident information provided by FRA.
Puncture hazards result from a variety of factors, including operating conditions, speed of the train, and the type of tank car involved, which can make it difficult to objectively quantify the overall safety improvement that ECP brakes provide. The updated model provided by Sharma & Associates encapsulates a variety of factors in an effort to assess the real-world impact of the various braking alternatives considered in the NPRM. The Sharma model is validated by the general agreement between the actual number of tank cars punctured in 22 hazardous material derailments provided by FRA and those predicted by the model.
The March 2015 Letter Report from Sharma & Associates used the most probable number of tank cars punctured to evaluate the benefits of the tank car enhancements, brake systems, and speed. The derailment scenarios were simulated for a 100-car train at different speeds with the first car subjected to a brief lateral force to initiate the derailment. At the point of derailment, Sharma & Associates applied a retarding force to all of the cars in the train that was equivalent to an emergency brake application. For a train with
Based on the analysis in the 2015 Letter Report from Sharma & Associates, PHMSA and FRA believe that ECP brakes, in isolation, can be expected to reduce the number of cars punctured by up to 30 percent when compared to conventional air brake systems (with a minimal variation based on train speed), while a two-way EOT device or DP locomotive at the rear of the train is projected to reduce the number of cars punctured by up to 16 percent. These numbers are reflected in the table below, for DOT-117 and DOT-117R type tank cars.
Sharma modeling indicates the ECP brake system always provides an advantage over the conventional air brake system in terms of likely number of tank cars punctured. This is true regardless of the location of the derailment within the train because the brakes are being applied to each car in the train at the same time. However, a number of commenters suggested that the scenarios modeled by Sharma & Associates may overstate the effectiveness of ECP brake systems because its model focused on measuring derailments at the front of a train. As a result, FRA conducted further analysis based on the simulations of derailments at different points in the train. FRA's simulations considered derailments at locations with 100, 80, 50, and 20 cars trailing the point of derailment. A polynomial fit of the resulting derailment and puncture results data from the simulations enabled FRA to evaluate the results of a derailment at any location in the train through interpolation and extrapolation. The results of the evaluation indicated that POD does impact the estimated number of cars punctured for any of the simulated brake systems, including a reduction in the estimated number of cars punctured for trains operated in ECP brake mode. This is expected given that if a derailment occurs at the 50th car in a train rather than the first car in the train, there are fewer cars to derail after the POD. However, in every simulation, the likely number of cars punctured on a train that uses ECP braking to effectuate an emergency stop was lower than the likely number of cars punctured on a train that uses a two-way EOT device or DP system with the locomotive at the rear to effectuate the same emergency stop. See Tables 29 and 30.
Using this information, PHMSA and FRA conducted further analysis of the data. We estimated effectiveness at 30, 40, and 50 mph, and took a weighted average of those results based on severity, using information about the quantity of product released that is in the historical record. PHMSA and FRA assigned historical derailments under 35 mph to the 30 mph effectiveness rate, assigning derailments between 35 and 45 mph to the 40 mph effectiveness rate, and assigning derailments over 45 mph to the 50 mph effectiveness rate. This analysis is reflected in Table 30, below.
As there were comments related to placing a DP locomotive in the middle of the train, approximately two-thirds from the front (
The results of the simulations in the March 2015 Letter Report from Sharma & Associates and the FRA analysis of the data show that advanced brake signal propagation systems reduce the rates of puncture in derailing tank cars relative to a conventional air brake system, with ECP brake systems demonstrating the best overall performance. The risk reduction benefits for ECP brake systems are most pronounced for long trains. As trains become shorter, the differences in puncture rates become diminished between ECP brakes and two-EOT devices or DP systems with a locomotive at the rear because of the limited time needed to initiate emergency braking. Thus, additional requirements for advanced brake signal propagation systems are feasible for addressing risks related to HHFTs, and ECP brake systems are particularly appropriate for HHFUTs. A full explanation of the benefits calculation can be found in the RIA.
In the RIA for this final rule, PHMSA and FRA revised the assumptions made for the August 1, 2014, NPRM, including the following: Increased the estimate on the per car cost of installing ECP brakes, reduced the number of tank cars required to be equipped with ECP brakes, increased the number of locomotives required to be equipped with ECP brakes, and reduced the per locomotive cost for ECP-equipped locomotives.
Many of the commenters noted that our estimate for retrofitting a tank car with ECP brakes was low. In the NPRM, we estimated that the cost to implement the ECP brake system requirements would range between $3,000 and $5,000 per car. PHMSA and FRA now believe that the appropriate cost estimate is between $7,000 and $8,000. For our analysis we used $7,633 per car, which is based on the estimated number of new and retrofit cars that will need to have ECP brakes applied. Our updated cost estimate is for an overlay system and includes the cost of maintenance for the system.
For the NPRM, PHMSA and FRA determined that all of the tank cars in the fleet would need to be equipped with ECP brakes. To reduce the costs and for the purposes of this final rule, we have assumed that only tank cars that are part of unit trains carrying Class 3 flammable liquids would need ECP brakes, as they are the only train consists that would be required to operate with an ECP braking system. Thus, over a calculated 20-year period, we reduced the number of tank cars needing ECP brakes from more than 130,000 to 60,231.
Many of the commenters also noted that we were not equipping enough locomotives with ECP brakes in our cost estimates. In the NPRM, we estimated that 900 locomotives would need to be equipped with ECP brakes. For the purposes of the final rule, this number was increased to 2,532. This number was derived based on the determination that there would be approximately 633 HHFUTs on the U.S. rail network at peak crude oil production. PHMSA and FRA estimated that there would be an average of three locomotives per unit train and included a 25 percent spare ratio to account for locomotives that are out-of-service or potentially diverted to other uses. AAR suggested that the entire Class I locomotive fleet would need to be ECP-equipped, but with our revised estimates, which consider the number of locomotives needed operate 633 HHFUTs, we feel that AAR significantly overstates the number of locomotives that need to be ECP-equipped.
In the NPRM, we also assumed that all of the locomotives would be retrofitted with ECP brakes at a cost of $80,000 per locomotive. The rail industry currently purchases around 1,000 new locomotives every year due to retirements of older locomotives and growth in rail transport demand. PHMSA and FRA assume that new locomotives will be ordered with ECP
Regarding the availability of ECP brakes, both known manufacturers of ECP systems (New York Air Brake and Wabtec) provided comments to the NPRM. Neither expressed the concern that they would be unable to manufacture the amount of components necessary to meet any regulatory requirements as other commenters claim. Regarding comments raising concerns about the interoperability of ECP braking systems from the two manufacturers, PHMSA and FRA believe that newly built systems will be built to the updated industry standard, AAR S-4200, which requires full compatibility (interoperability) of ECP braking systems in accordance with 49 CFR 232.603.
Railroads are required to operate an HHFT with either a two-way EOT device or a DP system immediately once the final rule becomes effective. There are two deadlines for the implementation of the requirements pertaining to HHFUTs. The first requires that trains meeting the definition of an HHFUT comprised of at least one tank car loaded with a Packing Group I flammable liquid be operated with an ECP braking system by January 1, 2021, when traveling in excess of 30 mph. The second requires that all other trains meeting the definition of an HHFUT (
ECP brake systems have not been installed on a widespread basis throughout the U.S. fleet of locomotives and rail cars. As discussed above, NS and BNSF have used ECP brakes on six unit coal trains, but U.S. railroads have not used ECP brake systems in conjunction with unit trains transporting flammable liquids, such as crude oil and ethanol. FRA and PHMSA estimate that there will be 633 HHFUTs on the U.S. rail network at peak crude oil production, and the railroad industry will need 2,532 locomotives and 60,231 tank cars to be ECP-equipped in order to comply with the ECP braking requirements. We revised our estimates from the NPRM based on comments received that manufacturers will produce approximately new 1,000 locomotives per year and more than 11,000 tank cars per year could be fitted with ECP brakes (with approximately one third of those being new car construction and two thirds of those being retrofits on existing tank cars). By establishing the dual implementation schedule for ECP brake systems, we are providing the railroads and manufacturers of locomotives and tank cars with the ability to establish a realistic schedule to equip the locomotives and tank cars with ECP brake systems in a timely and efficient manner. However, there is a possibility that as railroads amass ECP-equipped trains, some trains will be run in ECP brake mode in advance of the deadline. The expectation is that railroads will have incentives to put ECP-equipped trains in service once acquired to take advantage of the business benefits related to operating in ECP brake mode (
Although there is not a specific training requirement in this final rule, FRA and PHMSA recognize that the implementation of ECP brake systems will require training for operating employees and inspection personnel that perform service on trains equipped with ECP brakes. The substantive training requirements for each railroad employee or contractor are addressed in 49 CFR 232.605. We expect that railroads will comply with the ECP braking system training requirements in § 232.605 to ensure that applicable railroad personnel have the knowledge and skill necessary to perform service related to ECP braking systems.
In the NPRM, we assumed that 9,000 employees would need to be trained on ECP brake systems. After a review of comments, we increased the estimate of additional people that need to be trained on ECP brake systems to about 51,500 employees based on a percentage of ton mileage. This includes carmen who had not been considered in the training calculations in the NPRM. Also, in the NPRM, we assumed a two-week training period; however, based on FRA participation in ECP brake training experience, we determined that the number of hours needed to trains these employees would be substantially less. Carmen that are not involved in performing single car tests can be trained in a one-day formal training session and a week of intermittent on the job training. Single car test users will need an additional half-day of formal training and an additional week of on the job training.
ECP brake technology provides separate safety benefits not captured in FRA's PTC regulations. PTC-preventable overspeed derailments may occur because of an inadequate or improperly functioning brake system, but accidents involving brake failure were never counted among PTC-preventable accidents. Only one accident in the group of accidents reviewed by PHMSA and FRA for this rulemaking, at Rockford, IL, had the potential to have been prevented by PTC technology, and then only if ancillary features were adopted. In that accident, a flash flood caused the track's base to wash away. Railroad procedures require trains be warned of flash flood threats, which usually leads to a speed restriction. It is not a requirement of the PTC regulations, but if a railroad had its PTC system in place and the speed restriction warning was automated, it would have restricted the train's speed, making it likely the crew would have been able to stop in half the range of vision.
Although ECP braking systems typically are directed at different types of incidents than those that are PTC-preventable, PHMSA and FRA do believe that the use of ECP brakes coupled with the implementation of PTC technology could result in significant safety benefits. Trains equipped with electronics throughout the train consist will be able to use that electronic network as a platform for future safety innovations, such as hand brake and hatch sensors.
While commenters such as BNSF raised concerns, PHMSA and FRA do not believe that the implementation of the ECP brake system requirement will necessitate a rewrite of braking algorithms on HHFUTs operating over PTC routes. We do recognize that using ECP brakes systems will allow for real-time equipment health monitoring and
Based on the above discussion, a new section § 174.310(a)(3) is being created to adopt new braking requirements for HHFTs. Specifically, this provision requires that a HHFT (as defined in § 171.8) must be equipped and operated with a two-way EOT device or DP system. Heightened braking requirements are being adopted to cover trains that transport 70 or more tank cars of flammable liquids while operating over 30 mph. Unit trains that meet this threshold must be equipped with ECP brakes and must be operated in ECP brake mode based on a dual implementation schedule. The first requires that trains meeting the definition of an HHFUT comprised of at least one tank car loaded with a Packing Group I material be operated with an electronically controlled pneumatic (ECP) braking system after January 1, 2021. The second requires that all other trains meeting the definition of an HHFUT be operated with an ECP braking system after May 1, 2023.
PHMSA and FRA have made regulatory decisions within this final rule based upon the best currently available data and information. PHMSA and FRA are confident that ECP implementation can be accomplished by the compliance date adopted in this final rule. However, PHMSA and FRA will continue to gather and analyze additional data. Executive Order 13610 urges agencies to conduct retrospective analyses of existing rules to examine whether they remain justified and whether they should be modified or streamlined in light of changed circumstances, including the rise of new technologies. Consistent with its obligations under E.O. 13610, Identifying and Reducing Regulatory Burdens, PHMSA and FRA will retrospectively review all relevant provisions in this final rule, including industry progress toward ECP implementation.
In its recommendation, R-14-6, the NTSB recognized the importance of requiring “shippers to sufficiently test and document the physical and chemical characteristics of hazardous materials to ensure the proper classification, packaging, and record-keeping of products offered in transportation.” PHMSA supports NTSB's recommendation. As discussed previously, PHMSA and FRA audits of crude oil facilities indicated the classification of crude oil transported by rail was often based solely on a generic Safety Data Sheet (SDS). PHMSA believes that establishing documentation and criteria for classification sampling and testing frequency will increase consistency and accuracy of the data and improve confidence in package selection, hazard communication, and ultimately safety in the transportation of hazardous materials. Considering the challenges posed by materials with variable composition and potentially variable properties, such as crude oil, providing criteria for sampling and testing a critical first-step in safe transportation.
Given the responsibility on the offeror to properly classify materials,
• Frequency of sampling and testing to account for appreciable variability of the material, including the time, temperature, means of extraction (including any use of a chemical),
• Sampling at various points along the supply chain to understand the variability of the material during transportation;
• Sampling methods that ensure a representative sample of the entire mixture, as packaged, is collected;
• Testing methods to enable complete analysis, classification, and characterization of the material under the HMR;
• Statistical justification for sample frequencies;
• Duplicate samples for quality assurance purposes; and
• Criteria for modifying the sampling and testing program.
This proposal would also add a § 173.41(b), linking the shipper's certification requirements, as prescribed in § 172.204, to this sampling and testing program for mined gases and liquids.
In addition, the proposed § 173.41(c) would require that the sampling and testing program be documented in writing and retained while the program remains in effect. The proposed section requires the sampling and testing program must be reviewed and revised and/or updated as necessary to reflect changing circumstances. The most recent version of the sampling and testing program, must be made available to the employees who are responsible for implementing it. When the sampling and testing program is updated or revised, all employees responsible for implementing it must be notified and all copies of the sampling and testing program must be maintained as of the date of the most recent version.
PHMSA further proposed to add a new § 173.41(d) that would mandate that each person required to develop and implement a sampling and testing program maintain a copy of the sampling and testing program documentation (or an electronic file thereof) that is accessible at, or through, its principal place of business and must make the documentation available upon request, at a reasonable time and location, to an authorized official of DOT.
In response to the proposed requirements for a sampling and testing program, we received a number of comments representing approximately 65,200 signatories. The majority of these signatories were part of write-in campaigns for environmental groups. Below is a table detailing the types and amounts of commenters on the classification plan proposal.
Most industry stakeholders were either content with the measures currently in place to classify mined gases or liquids or supported use of API RP 3000.
Industry stakeholders questioned the need for regulatory amendments expanding the existing classification requirements. Several industry stakeholders stated that there is no justification for creating additional classification requirements because misclassification has had no role in the derailments or impact on safety. Specifically Exxon Mobil stated that Bakken crude oil is not different from other light crudes and is correctly classified. It referenced API modeling, which has indicated that Bakken crude will behave similarly to other crudes in a fire. AFPM further stated that the “only misclassification” PHMSA found during investigations was incorrect packing group on shipping papers for cargo tank motor vehicles, but crude oil was otherwise communicated and packaged appropriately. PHMSA received support for implementing an enhanced classification and characterization from a wide range of commenters including local governments, safety organizations, and individual citizens among others. Many comments in support of the rulemaking highlighted the importance of proper classification for emergency responders.
Although the classification of crude oil has not caused derailments, we disagree that expanding existing classification requirements will not impact transportation safety. In this rulemaking, PHMSA is proposing new or amended requirements as part of a comprehensive approach to improving the safe transportation of flammable liquids by rail. This includes ensuring that proper packaging, operational controls, and hazard communication requirements are met, all of which are important to mitigate the negative effects of derailment, and are determined by classification. As discussed previously, PHMSA and FRA audits of crude oil facilities indicated the classification of crude oil transported by rail was often based solely on a Safety Data Sheet (SDS). While the classification of manufactured products is generally well understood and consistent, unrefined petroleum-based products potentially have significant variability in their properties as a function of time, location, method of extraction, temperature at time of extraction, and the type and extent of conditioning or processing of the material. Unrefined petroleum-based products refers to hazardous hydrocarbons that are extracted from the earth and have not yet been refined. These products may undergo initial processing such as for the removal of water and light gases, and which may undergo further processing, but have not gone through a quality assurance/quality control process such that the properties of the product being offered for transportation are known and consistent. As such, we believe it is necessary to require development and adherence to a consistent and comprehensive sampling and testing program, and to provide oversight for such a program.
Several commenters indicated that the term “characterization” was not defined, unnecessary, or requires clarification. This term was used in the March 6, 2014 Emergency Order regarding classification to highlight the comprehensive nature of the existing requirements. DGAC, API and other commenters stated that the term “characterization” is not used elsewhere in the regulations and is confusing. Industry stakeholders also expressed concern that the types of testing required for characterization was unclear. Local and other government representatives, environmental groups, individuals, and others supported use of the term “characterization.”
As used in the NPRM and March 6, 2014 Emergency Order, the term characterization was intended to convey the comprehensive nature of the offeror's responsibility to fully classify and describe their material in accordance with Parts 172 and 173. This includes identifying additional properties of the hazardous material which are not specified by the proper shipping name, but are necessary to meet packaging requirements in Part 173. We agree that the current classification requirements as required by § 173.22 encompasses the requirement to fully describe the material, including considering all appropriate hazard classes, selecting the correct packing group, selecting the most appropriate proper shipping name, and obtaining complete information to follow all packaging instructions. However, we disagree that hazard class testing is sufficient to provide the information necessary to comply with § 173.22. Therefore, we are clarifying the sampling and testing program to include a requirement to “identify properties relevant to the selection of packaging through testing or other appropriate means,” in place of using the term “characterization.” This provides greater specificity and clarity to the purpose and type of testing required.
Several commenters addressed the inclusion of specific materials in the sampling and testing program requirements, with some commenters preferring broader applicability and some narrower. Comments ranged from supporting expanding the applicability of classification sampling and documentation requirement to all hazardous materials, clarifying the definition of “mined liquids and gases” to specify inclusion of hazardous byproducts and wastes or materials derived from hydraulic fracking or other methods of extraction, and limiting the applicability of the definition to only include petroleum crude oil. Commenters on both sides were concerned that the phrase “mined liquids and gases” did not clearly specify which materials were covered by the rulemaking. Trade Associations such as API, AFPM and DGAC stated that the term “mined liquids and gases” is “not used by the petroleum industry.” Other commenters questioned which specific materials met the definition of “mined liquids and gases.”
We disagree with NTSB's request to expand the sampling and testing program to all hazardous materials.
We disagree with commenters who suggested the sampling and testing program should be expanded to address all other byproducts or wastes created by the extraction process of all mined liquids and gases, including byproducts or wastes created by the hydraulic fracturing of natural gas. The HMR already requires classification of all hazardous materials before transportation and compliance with all packaging requirements. Commenters did not provide sufficient data to justify expanding costs and recordkeeping for a sampling and testing program to these additional materials.
We also disagree with commenters who suggested the testing and sampling requirements should be limited to only petroleum crude oil. As stated previously, the extraction process and initial conditioning of petroleum crude oil may include the production of other unrefined petroleum-based products, which may have variable properties that must be identified.
We agree with commenters that state the phrase `mined liquids and gases' needs further clarification. As proposed, the term “mined liquids and gases” referred to liquids and gases extracted from the earth through methods such as wells, drilling, or hydraulic fracturing. While the term “mined liquids and gases” was proposed in the rulemaking, the RIA only included offerors related to the production and extraction of petroleum liquids, liquefied petroleum gases (including propane), and natural gases when measuring affected entities. No data was provided by commenters to justify benefits from expanding the definition beyond petroleum liquids, liquefied petroleum gases, and natural gases extracted from the earth. This list includes both unrefined and refined petroleum-based products. However, unrefined products have the greatest potential for variability of chemical and physical properties. The properties of refined petroleum-based products shipped from extraction sites are consistent. Therefore, we are clarifying the scope of this section to apply to unrefined petroleum based products. Specifying “unrefined petroleum-based products” refers to hazardous hydrocarbons that are extracted from the earth and have not yet been refined. This includes petroleum-based liquid and gas wastes and byproducts, such as condensates, which exhibit variability. Furthermore, use of the term “unrefined” provides greater clarification to the other requirements of the testing and sampling program. Therefore, specifying unrefined petroleum-based products clarifies the identification of mined liquids and gases with variable properties intended by the NPRM, without creating an undue burden.
Some commenters addressed the question in the NPRM asking for information on the variability within a region. API identified several factors that affect variability, not addressed in the NPRM, such as, “stability of petroleum crude oil to be loaded, single source vs. multiple sources, type of tank car loading facility, changes in crude oil production characteristics.” It further stated that the requirement to include factors affecting variability in § 173.41(a)(1) describe the materials in the form they are extracted from the ground, but not the form they are shipped. Similarly, API and other commenters express concern that the requirement in § 173.41(a)(3) to sample material “as packaged” suggests that sampling may only be performed after the crude oil has been loaded into a transport vehicle.
We agree with API, that the intent of these requirements is to capture factors that may contribute to variability of the material as offered for transportation. We are clarifying § 173.41(a)(1) to specify that the program must account for “any appreciable variability of the material” with a list of recommended factors. This provides offerors the flexibility to identify the factors contributing to variability in their specific operation. We are also amending § 173.41(a)(3) to replace “as packaged” with “as offered” to clarify that the sampling may occur before the crude oil has been loaded into a transport vehicle.
Commenters expressed interest in clarifying the responsibility for development and execution of the sampling and testing program. For example, one consultant stated, “the term `offeror' and sampling program requirements are too broad to effectively determine who is ultimately responsible for compliance.” Individuals and environmental groups suggested specifying that “each operator” or “custody transfer point” should be responsible for complying with the sampling and testing program. Industry stakeholders, including AFPM, recommended “less prescriptive mandates” for the sampling program and suggested duplicate sampling provided an undue burden. Commenters also suggested providing statistical justification for sample frequencies was an undue burden, or that the provision should be delayed to allow time for compliance. Public and environmental groups supported more detailed mandates to ensure uniformity, thoroughness, and clarity. While some commenters supported certification requirements, others recommended removing the requirement or modifying the language. Commenters on both sides agreed the requirement to sample “along the supply chain” is not sufficiently clear, and should be clarified.
The one area where the concerned public, environmental groups, and industry stakeholders agreed was that API RP 3000 should be adopted or permitted as a method of compliance with the proposed requirements. API further described that many requirements in the proposed paragraph § 173.41(a)(1) would align with API RP 3000 requirements, if clarifications were made. API provided detailed recommendations for amending the requirements in § 173.41. In addition to areas mentioned elsewhere in the comment summary, API recommended changing the requirement for “statistical justification” to “quality control justification” to allow other equivalent methods for quality control, changing the requirement for duplicate sampling to allow other equivalent methods, and removing the requirement to specify criteria for changing the program.
We disagree that the responsibility for compliance with the program is unclear. It is the responsibility of the offeror to certify compliance with the sampling and testing program. The term “offeror” is used throughout the regulations to specify applicability for transportation functions and is defined under “person who offers” in § 171.8. In response to comments stating that “sampling along the supply chain” is unclear, we are clarifying this language. The intent of this provision is to require sampling both before the product is initially offered and when changes that may affect the properties of the material occur (
We disagree the other requirements of the program are unnecessary, unclear, or overly burdensome, as each provision is designed to ensure adequate sampling and testing to address the unique characteristics and variability of the properties of these materials. Moreover, these requirements align with and provide greater specificity regarding existing regulations requiring proper classification. However, we also agree
Finally, we are not adopting API RP 3000 as a requirement at this time. As indicated in the NPRM, we did not contemplate or propose adopting API RP 3000 in the NPRM, as it had not yet been finalized. Furthermore, the boiling point test specified in the API RP 3000 does not align with the requirements currently authorized in the HMR. Shippers must continue to use the testing methods for classification of flammable liquids outlined in § 173.120 and flammable gases in § 173.115. However, API RP 3000 is otherwise consistent with the sampling program requirements in paragraph 173.41(a)(1)-(6) and may be used to satisfy these adopted sampling provisions. Furthermore, voluntary use of API RP 3000 provides guidance for compliance with these provisions, but still allows flexibility for meeting requirements through other methods.
Comments regarding the specific testing methodology ranged from specifying more limited sampling and testing program requirements to mandating a more robust, detailed sampling and testing program. Local and state governments, environmental groups, and individuals recommended mandating who performs testing (
Requiring third-party oversight of testing program or specifying tests could only be performed by third party without financial interest in company is not necessary as PHMSA and FRA will already have oversight of the sampling and testing program requirements for unrefined petroleum-based products. As part of the requirements adopted in this rule, each person required to develop a sampling and testing program make the documentation available upon request to an authorized official of the Department of Transportation. This provides sufficient oversight and will ensure that offerors are complying with the requirements. Should an offeror not comply, PHMSA and FRA officials will be able to take enforcement action. In addition, requiring dissemination of test results to third parties is not necessary as the emergency response guidebook already provides information on the hazards of specific materials and through the routing requirements, fusion centers can provide a mechanism for authorized individuals to acquire information about the amount of those materials transported.
PHMSA did not propose requiring third-party involvement with testing or submitting test results to a third party in the NPRM and, as such, is not adopting any such requirements. PHMSA did not propose regulatory changes to classification test procedures, and as such, is not adopting any such requirements. Furthermore, in the NPRM, PHMSA stated that we are not proposing a requirement for the retention of test results.
PHMSA requested comments on the role of vapor pressure in classifying flammable liquids and selecting packagings, as well as whether vapor pressure thresholds should be established. Under existing requirements and those proposed in this final rule, shippers must select all appropriate tests for the changing factors appropriate to the location and nature of their activities, and follow requirements under § 173.115 relating to vapor pressure when applicable. Individuals, government organizations, and environmental groups such as Delaware Riverkeeper Network supported mandating vapor pressure testing to increase safety and accuracy. Environmental groups and offeror Quantum Energy also suggested packaging selection should be based on vapor pressure. Industry stakeholders, such as the Dangerous Goods Advisory Council (DGAC) and AFPM stated vapor pressure testing was unnecessary.
PHMSA did not propose any other specific changes related to vapor pressure in the NPRM and, as such, is not adopting any such requirements. We appreciate the comments received on this issue and will consider them in any future action.
PHMSA has continued its testing and sampling activities and refined the collection methods. As mentioned previously, PHMSA has purchased closed syringe-style cylinders and is collecting samples using these cylinders. Utilizing these types of cylinders minimizes the opportunity for any dissolved gases to be lost during collection, thus providing increased accuracy. In addition, PHMSA has taken samples at other shale play locations around the United States to compare their characteristics to that of crude oil from the Bakken region. PHMSA continues to examine the role of vapor pressure in the proper classification of crude oils and other flammable liquids. Further we continue to explore collaborative research opportunities examining the classification of flammable liquids. Any specific regulatory changes related to vapor pressure would consider further research and be handled in a future rulemaking.
Furthermore, since the publication of the NPRM, the North Dakota Industrial Commission issued Oil Conditioning Order No. 25417, which requires operators of Bakken crude oil produced in the state of North Dakota to separate the gaseous and light hydrocarbons from all Bakken crude oil that is to be transported. The order also prohibits blending of Bakken crude oil with specific materials.
PHMSA appreciates any action that improves the safe transportation of crude oil or other hazardous material. As with any hazardous material put into transportation by any mode, safety is our top priority, and we will continue to conduct inspections or bring enforcement actions to assure that shippers comply with their responsibilities to properly characterize, classify, and package crude oil regardless of how it is treated prior to transport. We also continue to work with various stakeholders, including other government agencies such as the Department of Energy, to understand best practices for testing and classifying crude oil. See also Section VI “Crude Oil Treatment” for additional discussion on this issue.
This comprehensive rule seeks to improve the safety of bulk shipment of all flammable liquids across all packing groups, and is not limited to Bakken crude. The enhanced tank car standards and operational controls for high-hazard flammable trains are not directly impacted by the order recently imposed in North Dakota. Any specific regulatory changes related to treatment of crude oil would consider further research and be handled in a separate action.
Commenters suggested other changes affecting the applicability of the sampling and testing program. AFPM recommended addressing “exemptions” or “less prescriptive alternatives.” Some trade associations suggested exempting materials from requirements for the classification program when transported in DOT-117s. Other commenters suggested exempting petroleum crude oil from the sampling requirements when assigned to packing group I or when crude oil is pre-treated. Commenters also recommended changes to the packing group assignment and classification process for Class 3. Environmental groups recommended requiring either Bakken crude oil or all petroleum crude oil to be classified as Packing Group I. Industry stakeholders agreed that crude oil should be permitted to be classified as packing group III. AAR recommended prohibiting use of the combustible liquid reclassification criteria for petroleum crude oil. Government representatives, environmental groups and individuals suggested prohibiting the use of Packing Group III for Class 3 flammable liquids.
In the NPRM, PHMSA asked how to provide flexibility and relax the sampling and testing requirements for offerors who voluntarily use the safest packaging and equipment replacement standards. However, we did not propose exemptions from the sampling and testing program or changes to the assignment of packing groups for petroleum crude oil or in the NPRM and, as such, is not adopting any such requirements. The current hazard classification criteria are sufficient for assigning packing group when proper sampling and testing occurs. We disagree that pre-treatment of crude oil, use of DOT-117 tank cars, or other exemptions discussed by commenters adequately ensures the safest packaging and equipment replacement standards to justify opting out of the sampling and testing requirements for the materials adopted by this rulemaking. Furthermore, these exemptions do not provide an equivalent level of safety for identifying properties to ensure compliance with packaging requirements in Part 173. The sampling and testing program is important to accurately classify these materials for transportation and fully comply with the packaging and operational controls in the HMR. Therefore, we are not limiting the assignment of packaging group for petroleum crude oil, or providing exceptions to the sampling and testing program for applicable materials.
Based on the justification above, PHMSA is adopting the proposed standardized sampling and testing program requirements for unrefined petroleum-based products with changes intended to clarify the intent of requirements. This sampling and testing program requirements for unrefined petroleum-based products will be codified in the new § 173.41. We are not incorporating API RP 3000 by reference. However, shippers may still use API RP 3000 as a voluntary way to comply with the newly adopted sampling requirements. It should be noted that all of the testing provisions of API RP 3000 do not align with the requirements in the HMR. As the testing provisions were not proposed to be modified, shippers must continue to use the testing methods for classification of flammable liquids outlined in § 173.120 and flammable gases in § 173.115. It should be noted that PHMSA may consider the adoption of the non-codified testing provisions of API RP 3000 in a future rulemaking.
PHMSA proposed in the August 1, 2014 NPRM, in § 174.310(a)(1), to modify the rail routing requirements specified in § 172.820 to apply to any HHFT. The routing requirements discussed in the NPRM reflect the practices recommended by the NTSB in recommendation R-14-4, and are in widespread use across the rail industry for security-sensitive hazardous materials (such as chlorine and anhydrous ammonia). As a result, rail carriers would be required to assess available routes using, at a minimum, the 27 factors listed in Appendix D to Part 172 (hereafter referred to as Appendix D) of the HMR to determine the safest, most secure routes for security-sensitive hazardous materials. Additionally, the requirements of § 172.820(g) require rail carriers to establish a point of contact with state and/or regional fusion centers who coordinate with state, local, and tribal officials on security issues as well as state, local, and tribal officials that may be affected by a rail carrier's routing decisions and who directly contact the railroad to discuss routing decisions. This requirement will in essence capture threshold notification requirements for HHFTs as discussed in further detail in the next section.
In response to the proposed amendments to routing, we received comments representing approximately 87,359 signatories. An overwhelming majority of commenters expressed support for additional routing requirements for HHFTs. The majority of commenters supported the amendment as proposed in the NPRM; however, some commenters supported the expansion of the routing requirements beyond what was in the NPRM. Some industry commenters expressed opposition to additional routing requirements for HHFTs. Commenters also took the opportunity to identify other issues related to routing beyond the proposal to require rail carriers who transport HHFTs to perform routing assessments. Below is a table detailing the types and amounts of commenters on the routing proposal.
Commenters who either supported the proposal in the NPRM or the expansion of the proposal in the NPRM were primarily concerned members of the public, environmental groups, tribal communities, local governments, and Congressional representatives. Commenters in support, such as Congressman Michael E. Capuano, recognized the value of expanding the scope of the route planning regulations to include routing HHFTs away from dense population centers and environmentally sensitive areas, stating, “I fully support requiring HHFT carriers to perform a routing risk analysis and then select their route based on the findings of that analysis.”
Additionally, the NTSB commented, “we believe that the proposed rule, if implemented, would satisfy the intent of Safety Recommendation R-14-4,” which urges an expansion of the route planning requirements to include trains transporting flammable liquids.
The Prairie Island Indian Community provided a specific example of a community that could be directly affected by the implementation of the routing requirements. They noted that their community is home to “hundreds of tribal member residents, potentially thousands of visitors and employees at the Treasure Island Resort and Casino, a dry cask storage facility currently hosting 988 metric tons of spent nuclear fuel, an operating nuclear power plant with two reactors and approximately
Some commenters proposed expanding upon the existing risk factors listed in appendix D. Recommended expansions to appendix D included a factor to avoid routes that pass through areas that experience a high density of commuters at peak times. Additionally, environmental groups and concerned public urged considering a route's proximity to watersheds and water supplies. Environmental advocate Scenic Hudson, Inc. commented that the route assessment should include avoiding National Parks and other historical landmarks, such as those identified by the National Trust for Historic Preservation or designated as National Heritage Areas by Congress.
PHMSA and FRA recognize the assertion by some commenters that the list of 27 risk factors in appendix D should be expanded to address various additional specific risk factors. These comments are beyond the scope of this rulemaking. In the NPRM, PHMSA and FRA did not propose revisions to appendix D, nor did we solicit comments on revising the current list of risk factors in appendix D. However, given the number of concerns raised by commenters on this particular issue, PHMSA and FRA believe it is important to clarify that the 27 factors currently listed in appendix D are inclusive of the more specific factors that several commenters suggested adding to the list. For example, “watersheds” are expected to be considered under risk factor number 13 in appendix D entitled “environmentally sensitive or significant areas”, and “national landmarks” are expected to be considered in risk factor number 12 entitled “proximity to iconic targets.” Also, it is important to emphasize that, in addition to numerous other factors, a route assessment must address venues along a route (stations, events, places of congregation), areas of high consequence, population density, and the presence of passenger traffic along a route. Hence, the concerns raised by commenters, while beyond the scope of this rulemaking, are generally already addressed by the risk factors in appendix D.
Commenters also expressed concerns regarding the risk analysis done by rail carriers and how that information is used, shared or evaluated. Many commenters shared concern that routing choices by carriers are not disclosed to the public and are kept secret. Some commenters also supported increased oversight of routing analyses, either through evaluation by a third party or governmental entities.
These route analysis and selection requirements exist for the transportation of security-sensitive materials, such as poisonous-by-inhalation materials, certain explosives and certain radioactive materials. As such, information about the analyses and routes of shipments should only be released to those with a need-to-know, in order to maintain confidentiality for both business and security purposes. In accordance with voluntary practices and existing requirements, including the Secretary's May 7, 2014 Emergency Order (Docket No. DOT-OST-2014-0067), routing information is shared with appropriate state, local, and Tribal authorities.
Furthermore, as § 172.820(e) states, rail carriers must restrict the distribution, disclosure, and availability of information contained in all route review and selection decision documentation (including, but not limited to, comparative analyses, charts, graphics or rail system maps) to covered persons with a need-to-know, as described in 49 U.S.C. Parts 15 and 1520, which govern the protection of sensitive security information. DOT provides oversight for route analysis, selection and updating. As § 172.820(e) provides, rail carriers must maintain all route review and selection documentation, which DOT may review in the course of its regulatory and enforcement authority. Specifically, FRA personnel oversee compliance with routing regulations by completion of regular security audits of Class I and shortline railroads (Class II and III). Part of the security audit involves review of route selection documentation to ensure that the selection was completed, documented, and considered the appropriate risk factors specified in appendix D to part 172.
Additionally, PHMSA and FRA received comments that supported allowing an “opt out” for communities to choose not to allow HHFTs to be transported through their areas. Additionally, King County, WA voiced support for the proposed requirements, but urged the use of the information gathered from the route analyses to identify critical infrastructure needs along a route such as additional crossing gates, signals and track integrity to avoid collision and derailment.
PHMSA believes these comments are outside the scope of the requirements proposed in the NPRM. PHMSA did not propose any provisions for communities to make unilateral decisions to disallow HHFT shipments, and such a requirement may call into question issues of preemption. Also, local government crude by rail prohibitions could have detrimental impacts on the fluidity of the entire national rail network, including passenger service. With respect to the use of route analysis information for the purpose of improving infrastructure, PHMSA and FRA believe that by expanding the routing requirements to HHFTs, more routes will be analyzed, and infrastructure needs will be identified by the railroads as an indirect benefit. However, codifying the use of this information for purposes beyond route analysis and selection was not proposed and is outside the scope of this rulemaking.
Commenters who opposed additional routing requirements for HHFTs include trade associations, rail carriers and rail-carrier related businesses. While these commenters represented a minority of those who responded to routing proposals from the NPRM, concerns and issues were raised. The AAR, the Institute for Policy Integrity and the Illinois Commerce Commission (ICC) state that PHMSA needs to be aware of the implications of expanding the additional routing requirements to HHFTs. These commenters assert that such an expansion will narrow the routes over which HHFTs may operate and will force HHFTs to travel the same lines thus causing distributional effects on the network. AAR stated that network fluidity would be negatively impacted by clogging certain routes. In addition, the ICC stated that the AAR and ASLRRA have put in place voluntary agreements with the Department to mitigate the consequences of an incident, should one occur, and that those are sufficient. A concerned public commenter noted that the number of factors a route analysis should be narrowed from 27 to 5-7.
PHMSA and FRA disagree with comments in opposition to expanding routing requirements to rail carriers transporting HHFTs. We believe that any effects on the network that negatively impact fluidity or distributional effects will be minor compared to the safety benefits of the proposed requirements. Commenters who expressed concern regarding the negative impact that applying routing requirements to HHFTs would have on the rail network did not provide data to support their claims. Additionally, comments implying a strain on the network caused by increased operational requirements focused on
Also, as required by § 172.820(g), a carrier transporting an HHFT will be required to establish a point of contact with a State or regional fusion center, which have been established to coordinate with state, local and tribal officials on security issues. Additionally, a carrier transporting an HHFT will be required to establish a point of contact with state, local, and tribal officials in jurisdictions that may be affected by a rail carrier's routing decisions and who directly contact the railroad to discuss routing decisions. In turn, state, local, and tribal officials can use this to inform local emergency responders along routes traveled by HHFTs. By limiting the routes HHFTs travel on, it will allow resources for emergency response capabilities to be focused on heavily trafficked routes while minimizing risk to vulnerabilities adjacent to the rail network. PHMSA and FRA believe that this will further bolster the ability for state and local officials to respond to rail related incidents while furthering communication between the railroads and state and local governments and the availability of this information to first responders through established emergency communication networks, such as fusion centers.
Based on the above justification, PHMSA and FRA are modifying the rail routing requirements specified in § 172.820 to apply to any HHFT, as the term is defined in this final rule (§ 171.8; See discussion in HHFT section). We estimate the cost impact to be approximately $15 million, as Class 1 railroads have already been required to perform these analyses for materials already subject to routing requirements (poisonous-by-inhalation, certain explosives, and certain radioactive materials). Therefore, the cost impact is primarily limited to shortline and regional railroads (Class 2 and Class 3). We anticipate this to be a minimal burden on shortline railroads, as they typically operate a single route and therefore would lack alternative routes to analyze. It should be noted that ASLRRA did not comment on this specific proposal.
The amendments in this final rulemaking relating to rail routing will require rail carriers transporting an HHFT to: (1) Conduct an annual route analysis considering, at a minimum, 27 risk factors listed in Appendix D prior to route selection; and (2) identify a point of contact for routing issues, and who to directly contact the railroad to discuss routing decisions, and provide this information to state and/or regional fusion centers and state, local, and tribal officials in jurisdictions that may be affected by a rail carrier's routing decisions. In addition, PHMSA and FRA believe that the requirement for rail carriers to establish fusion center contacts will address the need for notification requirements, as discussed in further detail in the “Notification” section below. By not adopting the separate notification requirements proposed in the NPRM and instead relying on the expansion of the existing route analysis and consultation requirements of § 172.820, to include HHFTs, we are focusing on the overall hazardous materials regulatory scheme.
On May 7, 2014, DOT issued an Emergency Order (“the Order”) requiring each railroad transporting one million gallons or more of Bakken crude oil in a single train in commerce within the U.S. to provide certain information in writing to the State Emergency Response Commissions (SERCs) for each state in which it operates such a train. The notification made under the Order must include estimated frequencies of affected trains transporting Bakken crude oil through each county in the state, the routes over which it is transported, a description of the petroleum crude oil and applicable emergency response information, and contact information for at least one responsible party at the host railroads. In addition, the Order required that railroads provide copies of notifications made to each SERC to FRA upon request and to update the notifications when Bakken crude oil traffic materially changes within a particular county or state (a material change consists of 25 percent or greater difference from the estimate conveyed to a state in the current notification). DOT issued the Order under the Secretary's authority to stop imminent hazards at 49 U.S.C. 5121(d). The Order was issued in response to the crude oil railroad accidents previously described, and it is in effect until DOT rescinds the Order or a final rule codifies requirements and supplants the requirements in the Order.
In the August 1, 2014, NPRM, PHMSA proposed to codify and clarify the requirements of the Order and requested public comment on the various parts of the proposal. As also previously discussed, there have been several significant train accidents involving crude oil in the U.S. and Canada over the past several years, resulting in deaths, injuries, and property and environmental damage. These accidents have demonstrated the need for improved awareness of communities and first responders of train movements carrying large quantities of hazardous materials through their communities, and thus being prepared for any necessary emergency response.
In the August 1, 2014, NPRM, PHMSA specifically proposed to add a new section (§ 174.310), “Requirements for the operation of high-hazard flammable trains,” to subpart G of part 174. We proposed notification requirements in paragraph (a)(2) of this section. Unlike many other requirements in the August 1, 2014 NPRM the notification requirements were specific to a single train that contains one million gallons or more of UN 1267, Petroleum crude oil, Class 3, as described by § 172.101 of this subchapter and sourced from the Bakken shale formation in the Williston Basin (North Dakota, South Dakota, and Montana in the United States, or Saskatchewan or Manitoba in Canada). As proposed rail carriers operating trains that transport these materials in this amount would be required to within 30 days of the effective date of the final rule to provide notification to the SERC or other appropriate state delegated entities in which it operates within 30 days of the effective date of the final rule. Information required to be shared with SERCs or other appropriate state delegated entity would include the following:
• A reasonable estimate of the number of affected trains that are expected to travel, per week, through each county within the State;
• The routes over which the affected trains will be transported;
• A description of the petroleum crude oil and applicable emergency response information required by subparts C and G of part 172 of this subchapter; and,
• At least one point of contact at the railroad (including name, title, phone number and address) responsible for serving as the point of contact for the State Emergency Response Commission and relevant emergency responders related to the railroad's transportation of affected trains.
In addition, as proposed in the August 1, 2014 NPRM, railroads would be required to update notifications prior to making any material changes in the estimated volumes or frequencies of trains traveling through a county and provide copies to FRA upon request. In response to the proposed notification requirement for rail shipments of crude oil, we received a number of comments representing approximately 99,856 signatories.
Overall, the vast majority of commenters support PHMSA's efforts to establish some level of notification requirements for the operation of trains carrying crude oil as proposed in 49 CFR 174.310(a)(2). However, they are divided on certain aspects of the proposed notification to SERCs of petroleum crude oil train transportation. The overwhelming majority of commenters suggested a lower threshold to trigger the notification requirements. In the NPRM, PHMSA proposed a threshold of one million gallons for a single train containing UN1267, Petroleum crude oil, Class III, sourced from the Bakken region. With near unanimity, commenters believe the one million gallons threshold is too high and the idea of limiting it to just Bakken crude oil was too narrow (
In the NPRM, PHMSA proposed regulations consistent with the Order (
Again, the majority of commenters who expressed their viewpoints regarding the proposed notification requirements asked for PHMSA to lower the threshold and therefore expand the applicability of notification requirements. For example, the NTSB commented that “[a] threshold of one million gallons (approximately 35 tank car loads) is significantly above a reasonable risk threshold and should be lower. At a minimum the threshold should be set no higher than the value of an HHFT (20 cars).” These proposals were echoed by the environmental groups, congressional interest, the concerned public, and in particular the Massachusetts Water Resources Authority and Division of Emergency Management. Other commenters such as Flat Head Lakers suggested an even lower threshold; for example, “[t]he threshold for this reporting requirement should be 35,000 gallons per train; the amount carried by one tank car, rather than one million gallons.” To further illustrate the point, some commenters such as Powder River Basin wanted the notification threshold reduced even more by stating “[w]e ask DOT to broaden its advance notification requirements to include all trains transporting any quantity of Class III (flammable liquid) material.” Finally, the Wasatch Clean Air Coalition suggested the lowest threshold possible, stating “SERCs should be notified of residue” when crude oil trains are passing through their States. We received only one opposing comment that the requirements were too strict from AFPM, which said “SERC notifications should be tied to shipments of crude oil or ethanol in `unit trains,' meaning trains that have 75 cars or more shipping crude oil or ethanol.” This viewpoint is significantly greater than the one million gallons trigger proposed in the NPRM.
DOT agrees with the majority of commenters who believe the one million gallons threshold for triggering the notification requirements is too lenient. As previously noted, the order required “each railroad transporting one million gallons or more of Bakken crude oil in a single train in commerce within the U.S. provide certain information in writing to SERCs for each state in which it operates such a train.” After careful consideration of the comments and after discussions within PHMSA and FRA, we believe that using the definition of the HHFT for notification applicability is a more conservative approach for affecting safer rail transportation of flammable liquid material, and it is a more consistent approach because it aligns with the proposed changes to other operational requirements, including routing. Furthermore, the routing requirements adopted in this final rule reflect the substance of NTSB Safety Recommendation R-14-4, and are in widespread use across the rail industry for security-sensitive hazardous materials (such as chlorine and anhydrous ammonia).
Each state is required to have a SERC under the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA). 42 U.S.C. 11001(a). The EPCRA is intended to help local entities plan for emergencies involving hazardous substances.
In response to this request and other questions regarding the order, DOT issued a Frequently Asked Questions (FAQs) guidance document to address these inquiries.
In the NPRM, PHMSA proposed requirements for notification to SERCs consistent with the notification language of the Order (
Commenters had varied opinions regarding who the appropriate recipient of this information should be (
Environmental groups such as the Sierra Club commented that “rail operators carrying volatile crude in any amount must be required to notify states and emergency responders of the crude compositions, quantities, and frequency of transport; and that this information must be made available to the public.” Some commenters wanted the notification applicability expanded greatly, and Delaware Riverkeeper Network noted that SERCs should be “notified of sampling and testing results, and that those results should be made available to the general public, SERCs, the DOT, fusion centers, Tribal emergency responders, and local [emergency responders] ERs.” Numerous commenters also stated that they believed “local emergency responders should be provided with information about all hazmat traveling through their jurisdictions,” including villages, towns, and cities. Some commenters also provided general support for notification requirements described in AAR Circular No. OT-55-N,
DOT agrees with the general scope of the commenters who suggested making more information available for first responders and emergency planners, but we disagree on the best method to disseminate the information to the members of this community. As previously noted, the Order required “each railroad transporting one million gallons or more of Bakken crude oil in a single train in commerce within the U.S. provide certain information in writing to the SERCs for each state in which it operates such a train.” While we proposed the same language in the NPRM as it related to setting up the notification requirements and the SERCs, after careful review of the comments and discussions within PHMSA and FRA, we believe that using the definition of the HHFT for notification applicability and emergency response is appropriate. This will align it with the proposed changes to the § 172.820 requirements, and since those will be expanded to apply to HHFTs, the notification requirements in paragraph (g) of § 172.820 will now cover all flammable liquids transported in an HHFT, including crude oil and ethanol. The expansion of the routing requirements and deferring to the reporting requirements therein, as adopted in this final rule, reflect the NTSB recommendation R-14-4, and enable industry to make use of current practices for security-sensitive hazardous materials (such as chlorine and anhydrous ammonia).
After issuance of the Order, railroads were concerned that certain routing and traffic information about crude oil transport required to be provided to SERCs would be made available to the public under individual states' “Sunshine” laws. DOT engaged in discussions with railroads and invited states to participate to address this valid concern, and the FAQ document was the outcome of those discussions. As is explained in the aforementioned FAQ document, DOT preferred that this information be kept confidential, and acknowledged that railroads may have an appropriate claim that this information constitutes confidential business information, but that such claims may differ by state depending on each state's applicable laws. DOT also encouraged the railroads to work with states to find the most appropriate means for sharing this information (including fusion centers or other mechanisms that may have established confidentiality protocols). However, the Order and DOT's subsequent guidance did not require nor clarify that states sign confidentiality agreements to receive this information, and did not designate or clarify that the information could be considered Sensitive Security Information (SSI) under the procedures governing such information at 49 CFR part 15. DOT understands that despite confidentiality concerns, railroads are complying with the requirements of the
In the NPRM, PHMSA proposed notification requirements consistent with the Order. However, we did not include any specific language regarding public access to sensitive information requirements, but we did ask readers to comment on two questions: (1) Whether PHMSA should place restrictions in the HMR on the disclosure of the notification information provided to SERCs or to another state or local government entity; and (2) Whether such information should be deemed SSI, and the reasons indicating why such a determination is appropriate, considering safety, security, and the public's interest in this information.
Commenters had varying opinions on this issue. A concerned member of the public indicated, “I do NOT recommend that the public be informed of train schedules due to terrorism concerns,” while others asserted, “I support the community's right to know,” and “residents within the zone around train routes that could be affected need to know what's going through their communities and over their water supplies, where it will pass and when, in order to make decisions about personal exposure.” Environmental groups including Earthjustice, Forest Ethics, Sierra Club, NRDC, and Oil Change International commented, “[t]here should be no restrictions on the disclosure of information provided to SERCs or other emergency responders.” The NTSB stated, “[c]lassifying route information about hazardous materials as SSI would unreasonably restrict the public's access to information that is important to safety. While the general public may not require detailed information such as: Numbers, dates, and times — people should know if they live or work near a hazardous materials route.”
Certain industry groups, like the AFPM, suggested that “PHMSA should clarify that SERC notifications are sensitive security information exempt from state Freedom of Information Acts and sunshine laws.” As for rail carriers, many of them supported Great Northern Midstream's assertion that “disclosing private information in the public domain with respect to origination and destination, shipper designation or otherwise, introduces the potential for act of terrorism with no corresponding benefit from such disclosure.” It went on to say that PHMSA must “mandate to preempt state law requiring notification to any party other than emergency response (
The Department of Transportation cannot limit the sharing of information to State Emergency Response Commissions to trains containing more than one million gallons of Bakken crude oil. Railroad carriers are required by the Implementing Recommendations of the 9/11 Commission Act of 2007 (9/11 Act, Public Law 110-53) to share all routing and cargo shipment information with state, local, and tribal authorities. Section 1512 of the 9/11 Act requires railroad carriers to conduct vulnerability assessments and draft security plans. The Department of Homeland Security (DHS) is required to review these assessments and plans in consultation with public safety and law enforcement officials. DHS can't properly consult with these officials if they don't know what is being transported through their jurisdiction. Similarly, DHS can't seek input from state and local officials if they don't know the routes by which the goods are being transported.
Finally, Senators Wyden, Merkley, Boxer, and Feinstein stated, “[b]ecause railroads provide crude oil routes online, reporting information to emergency responders (with no limits on `information sharing') should not pose additional security concern.”
DOT agrees with the commenters that this is a difficult and complex issue, and widespread access to security sensitive information could be used for criminal purposes when it comes to crude oil by rail transportation. For example, the FBI and the federal Bureau of Alcohol, Tobacco, Firearms and Explosives are participating in a vandalism investigation of a November 2014 incident in Vivian, S.D., where a two-foot piece of the rail line was blown up using the explosive tannerite.
Fusion Centers are established on a State and regional basis, with one of their purposes being to share emergency response information. Railroads currently routinely share data on their shipments with Fusion Centers. Given that railroads and Fusion Centers have already established protocols for sharing information under existing confidentiality agreements, in some situations, there might be advantages to States and railroads in utilizing Fusion Centers instead of SERCs for the sharing of information required by this EO. DOT also noted that there is an existing mechanism for Tribal Nations to interact with the Fusion Centers through the State, Local, Tribal and Territorial Government Coordinating Council. Similarly, DOT recognizes that individual States may have an agency other than the SERC or Fusion Center that is more directly involved in emergency response planning and preparedness than either the SERC or Fusion Center.
Expansion of the routing requirements in this final rule addresses the NTSB's recommendation R-14-4 and are in widespread use across the rail industry
In addition, on January 27, 2015, AAR's Safety and Operations Management Committee approved changes to OT-55 (AAR Circular No. OT-55-O), and those changes became effective January 27, 2015, and superseded OT-55-N, which was previously issued August 5, 2013. AAR's OT-55-O revised the Transportation Community Awareness and Emergency Response Implementation (TRANSCAER®) program listed in Section V. Section V states that “railroads will assist in implementing TRANSCAER, a system-wide community outreach program to improve community awareness, emergency planning and incident response for the transportation of hazardous materials.” Specifically, the key revised text of OT-55-O “[u]pon written request, AAR members will provide bona fide emergency response agencies or planning groups with specific commodity flow information covering all hazardous commodities transported through the community for a 12 month period in rank order.”
The request must be made using the form included as Appendix 3 by an official emergency response or planning group with a cover letter on appropriate letterhead bearing an authorized signature. The form reflects the fact that the railroad industry considers this information to be restricted information of a security sensitive nature and that the recipient of the information must agree to release the information only to bona fide emergency response planning and response organizations and not distribute the information publicly in whole or in part without the individual railroad's express written permission. It should be noted that commercial requirements change over time, and it is possible that a hazardous materials transported tomorrow might not be included in the specific commodity flow information provided upon request, since that information was not available at the time the list was provided.
In summary, Section V is now revised to require “all hazardous commodities transported through the community for a 12 month period in rank order” instead of just the top 25 commodities. In addition, Section V was inserted with a 12 month period, which will help emergency response agencies or planning groups in planning for a whole year.
In the NPRM, PHMSA proposed regulatory text consistent with the Order which specified notification of information regarding the transportation specific to Bakken crude oil. With regard to singling out Bakken crude oil from crude oil extracted from other geographic locations, DOT acknowledges that under the current shipping paper requirements there is no distinction between Bakken crude oil and crude oil sourced from other locations. This may present compliance and enforcement difficulties, particularly with regard to downstream transportation of Bakken crude oil by railroads after interchange(s) with an originating or subsequent rail carrier. Previously, DOT explained in the FAQs document that railroads and offerors should work together to develop a means for identifying Bakken crude oil prior to transport, such as a designating a Standard Transportation Commodity Code (STCC) that would identify crude oil by its geographic source. DOT also stated that for purposes of compliance with the Order, crude oil tendered to railroads for transportation from any facility directly located within the Williston Basin (North Dakota, South Dakota, and Montana in the United States, or Saskatchewan or Manitoba in Canada) is Bakken crude oil.
In the NPRM, PHMSA solicited comments surrounding commodity type, and if the applicability of notification requirements should be expanded to include threshold quantities of all petroleum crude oils or all HHFTs (versus only trains transporting threshold quantities of Bakken crude oil), and even commodity types (
Commenters generally stated that crude oil sourced from the Bakken shale formation should not be the only determining factor of commodity type for notification purposes. Congressman Michael Capuano stated that he “supports carrier notification for both Bakken crude oil and ethanol shipments.” Environmental groups, like Powder River Basin, have the view that “any quantity of Class III (flammable liquid) material, including combustible liquids” should be included, “not just Bakken crude oil.” Trade associations, like the Independent Petroleum Association of America (IPAA), assert that it “do[es] not support any distinction between Bakken crude and other oil types.” The NTSB echoed these opinions and said, “SERC notification requirements should extend to ethanol due to similar risks in a pool fire to crude oil,” and that “SERC notification requirements should extend to crude oil sourced from other regions, not just the Bakken formation, since Bakken crude is not significantly different from other crude oil or flammable liquids.” Local communities, cities, and towns were consistent in their belief as expressed by the City and County of Denver that “notification requirement should be extended to apply to all HHFTs, not only those transporting Bakken petroleum crude oil.” NGO's like the National Fire Protection Association (NFPA) thought that “all crude oil and ethanol should be included” and that “NFPA has not found any reference to similar requirements on notification of SERCs regarding ethanol train transportation. This seems to be an omission in this proposed rulemaking and NFPA questions whether there should be a companion requirement that applies specifically to ethanol.” Rail carriers believe, as expressed by Continental Resources, Inc., that “all petroleum crude oil” should be included, and that there is “no significant difference between Bakken and other crude. Also, [we] do not support a separate STC code for Bakken.”
DOT agrees with comments that Bakken crude oil should not be the determining factor (with respect to a commodity type) for notification requirements. As previously noted, the Order required “each railroad transporting one million gallons or more of Bakken crude oil in a single train in commerce within the U.S. provide certain information in writing to the SERCs for each state in which it operates such a train.” Although we were consistent with this instruction in the NPRM, we now agree with the vast majority of commenters that applicability should be broadened to include more commodity types and/or source locations of crude oil. This final rule invokes the notification requirements for HHFT. This aligns it with the proposed changes to the § 172.820 requirements which also will now apply to HHFTs, and thus, the associated notification requirements in paragraph (g) of § 172.820 will now cover more than crude oil sourced from the Bakken formation and more commodity types (
Based on the above discussion, PHMSA and FRA are removing the notification requirement language proposed in the NPRM under § 174.310(a)(2) and is instead using as a substitute the contact information
Not adopting the separate notification requirements proposed in the NPRM and instead relying on the expansion of the existing route analysis and consultation requirements of § 172.820 to include HHFTs would allow this change to function within the overall hazardous materials regulatory scheme. This provides for consistency of notification requirements for rail carriers transporting material subject to routing requirements,
The National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272) directs agencies to use voluntary consensus standards in lieu of government-unique standards except where inconsistent with law or otherwise impractical. Section 171.7 lists all standards incorporated by reference into the HMR and informational materials not requiring incorporation by reference. The informational materials not requiring incorporation by reference are noted throughout the HMR and provide best practices and additional safety measures that while not mandatory, may enhance safety and compliance. In this final rule, we are redesignating paragraphs (k)(2) through (k)(4) as (k)(3) through (k)(5) and adding a new paragraph (k)(2) to incorporate by reference the AAR Manual of Standards and Recommended Practices, Section C—III, Specifications for Tank Cars, Specification M-1002 (AAR Specifications for Tank Cars), Appendix E, Design Details implemented April 2010.
Section 171.8 provides definitions and abbreviations used within the HMR. In this final rule, we are adding a new definition for
Section 172.820 prescribes additional safety and security planning requirements for transportation by rail. Paragraph (a) of this section provides the applicability for when a rail carrier must comply with the requirements of this section. In this final rule, we are revising § 172.820(a) to add a new applicability requiring that any rail carrier transporting an HHFT (as defined in § 171.8) must comply with the additional safety and security planning requirements for transportation by rail.
Paragraph (b) of this section requires rail carriers compile commodity data to inform their route analyses. PHMSA is revising this paragraph to account for rail carriers' initial analysis and require that commodity data be compiled no later than 90 days after the end of the calendar year; and that in 2016, the data must be compiled by March 31. In addition, this section requires the initial data cover six months, from July 1, 2015 to December 31, 2015. For their initial analysis, rail carriers are only required to collect data from the six-month period described in this section, additional data may be included, but is not required by this final rule. In this final rule we are providing rail carriers the option to use data for all of 2015 in conducting their initial route analyses. Regardless if six or 12 months of data are used, a rail carrier's initial route analysis and selection process must be completed by March 31, 2016. For subsequent route analyses, commodity data from the entire previous calendar year (
In this final rule, we are adding a new section 173.41 prescribing a sampling and testing program for unrefined petroleum-based products. This section specifies what must be included in a sampling and testing program in paragraph (a). Paragraph (b) of this section requires shippers to certify that unrefined petroleum-based products are offered in accordance with this subchapter, to include the requirements prescribed in paragraph (a). Paragraph (c) provides the requirements for documentation, retention, review and dissemination of the sampling and testing program. Finally, paragraph (d) of this section states that each person required to develop a sampling and testing program make the documentation available upon request to an authorized official of the Department of Transportation.
Section 173.241 prescribes the bulk packaging requirements for certain low hazard liquids and solid materials which pose a moderate risk. Paragraph (a) provides which specifications of rail tank cars may be used to transport hazardous materials when directed to this section by Column (8C) of the § 172.101 HMT. In this final rule, we are revising paragraph (a) to add an authorization for DOT Specification 117 tank cars and to prohibit the use of DOT Specification 111 tank cars for Class 3 (flammable liquids) in Packing Group III in HHFT service, after May 2025. Additionally, we are authorizing the retrofitting of DOT Specification 111 tank cars to allow their use after May 2025 provided they meet the requirements of the DOT-117R specification or the DOT-117P performance standard as specified. Finally, the section notes that conforming retrofitted tank cars are to be marked “DOT-117R” and conforming performance standard tank cars are to be marked “DOT-117P.”
Section 173.242 prescribes the bulk packaging requirements for certain medium hazard liquids and solids, including solids with dual hazards. Paragraph (a) provides which specifications of rail tank cars may be
Section 173.243 prescribes the bulk packaging requirements for certain high-hazard liquids and dual hazard materials which pose a moderate risk. Paragraph (a) provides which specifications of rail cars may be used to transport hazardous materials when directed to this section by Column (8C) of the § 172.101 HMT. In this final rule, we are revising paragraph (a) to add an authorization for DOT Specification 117 tank cars and to prohibit the use of DOT Specification 111 tank cars for Class 3 (flammable liquids) in Packing Group I, in HHFT service, after the dates in the following table unless they are retrofitted to meet the performance standard DOT-117P or the requirements of the DOT-117R specification as specified:
In this final rule, we are adding a new section 174.310 prescribing requirements for the operation of HHFTs. A rail carrier must comply with these additional requirements if they operate an HHFT (as defined in § 171.8). Paragraph (a)(1) requires that any rail carrier operating an HHFT is subject to the additional safety and security planning requirements in § 172.820 (
The heading for § 179.200 is revised to include the DOT-117 specification.
The heading for § 179.200-1 is revised by stating that tank cars built under the DOT-117 specification must meet the applicable requirements of §§ 179.200, 179.201, and 179.202.
Section 179.202-1 prescribes the applicability of the DOT-117 tank car standards and specifies that each tank built under such specification must conform to the general requirements of § 179.200 and the prescriptive standards in §§ 179.202-1 through 179.202-11, or the performance standard requirements of § 179.202-12.
Section 179.202-3 authorizes a DOT-117 tank car to be loaded to a gross weight on rail of up to 286,000 pounds (129,727 kg) upon approval by the Associate Administrator for Safety, Federal Railroad Administration (FRA). This section also provides a reference to § 179.13 which provides authorization for a gross weight on rail of up to 286,000 pounds (129,727 kg).
Section 179.202-4 specifies that the wall thickness after forming of the tank shell and heads on a DOT-117 tank car must be, at a minimum,
Section 179.202-5 specifies that the DOT-117 specification tank car must have a tank head puncture resistance system constructed in conformance with the requirements in § 179.16(c). Additionally, the section specifies the tank car must be equipped with full height head shields with a minimum thickness of
Section 179.202-6 specifies that the DOT-117 specification tank car must be equipped with a thermal protection system. The thermal protection system
Section 179.202-7 specifies that the thermal protection system on a DOT-117 specification tank car must be covered with a metal jacket of a thickness not less than 11 gauge A 1011 steel or equivalent and flashed around all openings to be weather tight. It also requires that a protective coating be applied to the exterior surface of a carbon steel tank and the inside surface of a carbon steel jacket.
Section 179.202-8 prescribes minimum standards for bottom outlet handle protection on a DOT-117 specification tank car. In this final rule, we are requiring that if the tank car is equipped with a bottom outlet, the handle must be removed prior to train movement or be designed with protection safety system(s) to prevent unintended actuation during train accident scenarios.
Section 179.202-9 prescribes the top fittings protection standard for DOT-117 specification tank cars. In this final rule, we are adopting as proposed, to incorporate by reference in § 171.7, Appendix E 10.2.1 of the 2010 version of the AAR Manual of Standards and Recommended Practices, Section C—Part III, Specifications for Tank Cars, Specification M-1002, (AAR Specifications for Tank Cars). Thus, a DOT-117 specification tank car must be equipped with top fittings protection in accordance with the incorporated standard.
Section 179.102-10 prescribes ECP braking construction standards for DOT-117 specification tank cars. Specifically, paragraph (a) requires by January 1, 2021, each rail carrier operating a high-hazard flammable unit train as defined in § 171.8, comprised of at least one tank car loaded with a Packing Group I material must ensure the train meets the ECP braking capability requirements. In addition paragraph (b) requires by May 1, 2023, each rail carrier operating a high-hazard flammable unit train as defined in § 171.8, and not described in paragraph (a) of this section, must ensure the train meets the ECP braking capability requirements. Finally, paragraph (c) permits alternate brake systems to be submitted for approval through the processes and procedures outlined in 49 CFR part 232, subpart F.
A table is provided in § 179.202-11 to indicate the individual specification requirements for a DOT-117 specification tank car.
Section 179.202-12 provides an optional performance standard that a DOT-117 specification tank car may be manufactured to and is designated and marked as “DOT-117P.” Paragraph (a) describes the approval process for the design, testing, and modeling results that must be reviewed and approved by the Associate Administrator for Railroad Safety/Chief Safety Officer of the FRA. Paragraph (b) describes the approval process to operate at 286,000 gross rail load (GRL). Paragraph (c) specifies that a DOT-117P specification tank car must be equipped with a tank-head puncture-resistance system in accordance with the performance standard in § 179.18. Paragraph (d) specifies that a DOT-117P specification tank car must be equipped with a thermal protection system. The thermal protection system must be designed in accordance with the performance standard in § 179.18 and include a reclosing PRD conforming to § 173.31 of this subchapter. Paragraph (e) specifies that if the tank car is equipped with a bottom outlet, the handle must be removed prior to train movement or be designed with protection safety system(s) to prevent unintended actuation during train accident scenarios. Paragraph (f) specifies that the tank car tank must be equipped with top fittings protection conforming to AAR Specifications Tank Cars, appendix E paragraph 10.2.1. Paragraph (g) prescribes ECP braking construction standards for DOT-117P specification tank cars. Specifically, paragraph (g)(1) requires by January 1, 2021, each rail carrier operating a high-hazard flammable unit train as defined in § 171.8, comprised of at least one tank car loaded with a Packing Group I material must ensure the train meets the ECP braking capability requirements. In addition paragraph (g)(2) requires by May 1, 2023 each rail carrier operating a high-hazard flammable unit train as defined in § 171.8, not described in paragraph (g)(1) of this section must ensure the train meets the ECP braking capability requirements. Finally, paragraph (g)(3) permits alternate brake systems to be submitted for approval through the processes and procedures outlined in 49 CFR part 232, subpart F.
Section 179.202-13 prescribes the retrofit standards for existing non-pressure tank cars. Non-pressure tank cars retrofitted to meet the standards prescribed in this section are designated and marked “DOT-117R.” Paragraph (a) prescribes the applicability of the DOT-117R tank car standards and specifies that each tank retrofitted under such specification must conform to the general requirements of § 179.200 and the retrofit standards in this section, or the performance standard requirements of § 179.202-12. Paragraph (b) authorizes a DOT-117 tank car to be loaded to a gross weight on rail of up to 286,000 pounds (129,727 kg) upon approval by the Associate Administrator for Safety, Federal Railroad Administration (FRA). Paragraph (c) requires that the original construction provided a wall thickness after forming of the tank shell and heads at a minimum of
As previously mentioned Emergency Order authority is granted to the Department and permits the Department to take action on safety issues that constitute an imminent hazard to the safe transportation of hazardous materials. Railroad transportation of hazardous materials in commerce is subject to the authority and jurisdiction of the Secretary of Transportation (Secretary), including the authority to impose emergency restrictions, prohibitions, recalls, or out-of-service orders, without notice or an opportunity for hearing, to the extent necessary to abate the imminent hazard. 49 U.S.C. 5121(d). Therefore an emergency order can be issued if the Secretary has found that an unsafe condition or an unsafe practice is causing or otherwise constitutes an imminent hazard to the safe transportation of hazardous materials.
Currently the Department has four emergency orders in affect that are relevant to rail shipment of large quantities of flammable liquids. Below we will discuss those orders and how the amendments adopted in this rulemaking affect those Emergency Orders. Emergency Orders remain in effect until the Secretary determines that an imminent hazard no longer exits or a change in applicable statute or Federal regulation occurs that supersedes the requirements of the Order, in which case the Secretary will issue a Rescission Order.
Emergency Order 28 was issued on August 7, 2013 and addressed safety issues related to securement of certain hazardous materials trains. Specifically, this order requires trains with (1) Five or more tank carloads of any one or any combination of materials poisonous by inhalation as defined in Title 49 CFR 171.8, and including anhydrous ammonia (UN1005) and ammonia solutions (UN3318); or (2) 20 rail carloads or intermodal portable tank loads of any one or any combination of materials listed in (1) above, or, any Division 2.1 flammable gas, Class 3 flammable liquid or combustible liquid, Class 1.1 or 1.2 explosive,
While this final rulemaking does not address train securement, on August 9, 2014, FRA published an NPRM that proposed amendments to the brake system safety standards for freight and other non-passenger trains and equipment to strengthen the requirements relating to the securement of unattended equipment. Specifically, FRA proposed to codify many of the requirements already included in emergency order 28. FRA proposed to amend existing regulations to include additional securement requirements for unattended equipment, primarily for trains transporting poisonous by inhalation hazardous materials or large volumes of Division 2.1 (flammable gases), Class 3 (flammable or combustible liquids, including crude oil and ethanol), and Class 1.1 or 1.2 (explosives) hazardous materials. For these trains, FRA also proposed additional communication requirements relating to job briefings and securement verification. Finally, FRA proposed to require all locomotives left unattended outside of a yard to be equipped with an operative exterior locking mechanism. Attendance on trains would be required on equipment not capable of being secured in accordance with the proposed and existing requirements.
As this final rulemaking does not address train securement emergency order 28 remains currently unaffected. The upcoming final rule in response to comments from FRA's August 9, 2014 NPRM that proposed amendments to the brake system safety standards for freight and other non-passenger trains and equipment to strengthen the requirements relating to the securement of unattended equipment will address the status of emergency order 28 upon adoption.
This emergency order was published on February 25, 2014. Subsequently a revised and amended emergency order was published on March 6, 2014. This emergency order required those who offer crude oil for transportation by rail to ensure that the product is properly tested and classified in accordance with Federal safety regulations. Further the EO required that all rail shipments of crude oil are properly classed as a flammable liquid in Packing Group (PG) III material be treated as a PG I or II material, until further notice. The Amended Emergency Order also authorized PG III materials to be described as PG III for the purposes of hazard communication.
The primary intent of this emergency order was to address unsafe practices related to the classification and packaging of petroleum crude oil. Misclassification is one of the most dangerous mistakes to be made when dealing with hazardous materials because proper classification is the critical first step in determining how to package, handle, communicate about, and safely transport hazardous materials. Misclassification may indicate larger problems with company management, oversight, and quality control. Petroleum crude oil may contain dissolved gases or other unanticipated hazardous constituents, may exhibit corrosive properties and also may exhibit toxic properties.
In this rulemaking we have adopted requirements for a testing and sampling program to ensure better classification and characterization of unrefined petroleum-based products. As part of this requirement the HMR now require an offeror to prepare a written sampling and testing program for unrefined petroleum-based products. This program must address: (1) A frequency of sampling and testing that accounts for any appreciable variability of the material (2) Sampling prior to the initial offering of the material for transportation and when changes that may affect the properties of the material occur; (3) Sampling methods that ensures a representative sample of the entire mixture, as offered, is collected; (4) Testing methods that enable classification of the material under the HMR; (5) Quality control measures for sample frequencies; (6) Duplicate samples or equivalent measures for quality assurance; (7) Criteria for modifying the sampling and testing program; (8) Testing or other appropriate methods used to identify properties of the mixture relevant to packaging requirements.
Furthermore the offeror is required to certify that program is in place, document the testing and sampling program, and make program information available to DOT personnel, upon request. The primary intent of this requirement is of address unsafe practices related to the classification and packaging of mined products.
As the March 6, 2014 emergency order and the requirements adopted in this rulemaking related to classification and characterization address the same safety issue the March 6, 2014 emergency order is no longer necessary. Therefore the requirements adopted in this rule supersede the March 6, 2014 emergency order and make it no longer necessary once the rule becomes effective.
This emergency order was published on May 7, 2014. This emergency order required all railroads that operate trains containing one million gallons of Bakken crude oil to notify SERCs about the operation of these trains through their States. Specifically, this notification should identify each county, or a particular state or commonwealth's equivalent jurisdiction (
The primary intent of this emergency order was to eliminate unsafe conditions and practices that create an imminent hazard to public health and safety and the environment. Specifically, this emergency order was designed to inform communities of large volumes of crude oil transported by rail through their areas and to provide information to better prepare emergency responders for accidents involving large volumes of crude oil.
In this rulemaking we have adopted notification requirements for large volumes of crude oil transported by rail. These requirements were designed to codify the requirements of the May 7, 2014 EO. While some amendments to the original proposal are made, the requirements adopted in this rulemaking align with the intent of the May 7, 2014 emergency order.
As the May 7, 2014 emergency order and the requirements adopted in this rulemaking related to notification address the same safety issue, the May 7, 2014 emergency order is no longer necessary. Therefore the requirements adopted in this rule supersede the May 7, 2014 emergency order and make it no longer necessary once the information sharing portion of the routing requirements come into full force. Therefore this emergency order will remain in effect until March 31, 2016.
FRA Emergency Order No. 30 (“Emergency Order 30” or “order”) was issued on April 27, 2015 and mandated that trains affected by this order not exceed 40 miles per hour (mph) in high-threat urban areas (HTUAs) as defined in 49 CFR part 1580. Under the order, an affected train is one that contains: 1) 20 or more loaded tank cars in a continuous block, or 35 or more loaded tank cars, of Class 3 flammable liquid; and, 2) at least one DOT Specification 111 (DOT-111) tank car (including those built in accordance with Association of American Railroads (AAR) Casualty Prevention Circular 1232 (CPC-1232)) loaded with a Class 3 flammable liquid. FRA determined at that time that public safety compelled the issuance of Emergency Order 30 due to the recent railroad accidents involving trains transporting petroleum crude oil and ethanol and the increasing reliance on railroads to transport voluminous amounts of these flammable liquids in recent years. For more information regarding this order, see the April 27, 2015, publication in the
The final rule will implement speed restrictions for HHFTs, including a maximum operating speed of 40 mph for HHFTs in HTUAs, with an effective date of July 7, 2015. As such, the final rule affects the same population of tank cars as defined above and codifies the same speed restriction that was implemented through Emergency Order 30. Thus, the final rule replaces Emergency Order 30 upon the effective date of the final rule.
This final rule is considered an economically significant regulatory action under section 3(f) of Executive Order 12866 and was reviewed by the Office of Management and Budget (OMB), because it has an expected annual impact of more than $100 million. The final rule is considered a significant regulatory action under the Regulatory Policies and Procedures order issued by the Department of Transportation (DOT) (44 FR 11034, February 26, 1979). PHMSA prepared a Regulatory Impact Analysis addressing the economic impact of this final rule, and placed it in the docket for this rulemaking.
Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) require agencies to regulate in the “most cost-effective manner,” to make a “reasoned determination that the benefits of the intended regulation justify its costs,” and to develop regulations that “impose the least burden on society.” Executive Order 13610, issued May 10, 2012, urges agencies to conduct retrospective analyses of existing rules to examine whether they remain justified and whether they should be modified or streamlined in light of changed circumstances, including the rise of new technologies. DOT believes that streamlined and clear regulations are important to ensure compliance with important safety regulations. As such DOT has developed a plan detailing how such reviews are conducted.
Additionally, Executive Orders 12866, 13563, and 13610 require agencies to provide a meaningful opportunity for public participation. Accordingly, PHMSA invited public comment twice (the September 6, 2013, ANPRM and August 1, 2014, NPRM) on these considerations, including any cost or benefit figures or factors, alternative approaches, and relevant scientific, technical and economic data. These comments aided PHMSA and FRA in the evaluation of the proposed requirements. PHMSA and FRA have since revised our evaluation and analysis to address the public comments received.
Flammable liquids include a wide variety of chemical products. In accordance with this action, Class 3 (Flammable liquids) are subject to the provisions contained in this final rule when shipped in a HHFT. Class 3 (Combustible liquids) are not subject to the provisions of the final rule (
The U.S. is now the global leader in crude oil production growth. With a growing domestic supply, rail transportation, in particular, has emerged as a flexible alternative to transportation by pipeline or vessel. The volume of crude oil carried by rail increased 423 percent between 2011 and 2012.
The Bakken region of the Williston basin is now producing over one million barrels of oil per day
Expansion in oil production has led to increasing volumes of product transported to refineries. Traditionally, pipelines and oceangoing tankers have delivered the vast majority of crude oil to U.S. refineries, accounting for approximately 93 percent of total receipts (in barrels) in 2012. Although other modes of transportation—rail, barge, and truck—have accounted for a relatively minor portion of crude oil shipments, volumes have been rising very rapidly. With a growing domestic supply, rail transportation, in particular, has emerged as a flexible alternative to transportation by pipeline or vessel. The transportation of large volumes of flammable liquids by poses a risk to life, property, and the environment. The volume of flammable liquids shipped by rail unit trains has been increasing rapidly since 2006, representing a growing risk. Figure 1 (restated here) provides the Average weekly U.S. rail carloads of crude oil and petroleum products from 2006 through 2014. The figure below visually demonstrates the considerable increase in crude oil and petroleum shipments by rail.
Figure 4 shows the recent strong growth in crude oil production in the U.S., as well as growth in the number of rail carloads shipped. Figure 4 also shows forecasted domestic crude oil production from the Energy Information Administration (EIA) and PHMSA's projected strong demand for the rail shipment of crude oil.
Rail accidents involving crude oil have risen along with the increase in crude oil production and rail shipments of crude oil. Figure 5 shows this rise.
Based on these train accidents, the projected continued growth of domestic crude oil production, and the growing number of train accidents involving crude oil, PHMSA concludes that the potential for a train accident involving crude oil has increased, which has raised the likelihood of a catastrophic train accident that would cause substantial damage to life, property, and the environment.
In the last ten years, the production of ethanol has increased dramatically due to the demand for ethanol-blend fuels. U.S. production of ethanol was 14.3 billion gallons in 2014.
Ethanol is a flammable colorless liquid; a polar solvent that is completely miscible in water. It is heavier than air, and has a wider flammable range than gasoline, with a Lower Explosive Limit (LEL) to an Upper Explosive Limit (UEL) range of 3.3% to 19%. The flash point for pure ethanol is 55 °F, and for denatured ethanol it can be much lower depending on the amount of denaturant used. Ethanol is still considered a flammable liquid in solutions as dilute as 20%, with a flash point of 97 °F. At colder temperatures (below about 51 °F), the vapor pressure of ethanol is outside the flammable range. Ethanol is shipped with a flammable liquids placard and North American 1987 designation.
According to a June 2012 white paper by the AAR, U.S. ethanol production has increased considerably during the last 10 years and has generated similar growth in the transportation of ethanol by rail. Between 2001 and 2012, the number of rail carloads of ethanol increased by 650 percent. Similarly the number of rail carloads of crude oil has also exponentially increased. Unfortunately, this growth in rail traffic has been accompanied by an increase in the number of rail accidents involving ethanol and crude oil. Figure 7 below plots the total number of rail accidents involving ethanol during the last 13 years compared to the total carloads of ethanol. The left axis shows the total number of rail derailments and the right axis shows total carloads shipped.
In the final RIA PHMSA and FRA analyzed the impacts associated with a system-wide, comprehensive final rule that addresses the risk associated with the transportation of flammable liquids in HHFTs. Final rule provisions include:
• Routing Requirements
• Tank Car Specifications;
• Speed Restrictions;
• Advanced Brake Signal Propagation Systems; and
• Classification of Unrefined Petroleum-based Products.
This approach is designed to mitigate damages of rail accidents involving flammable materials, though some provisions could also prevent accidents. The RIA discusses, consistent with this final rule, five requirement areas. Although we analyze the effects of individual requirements separately, this final rule is a system-wide approach covering all requirement areas.
PHMSA received over 3,200 public comments representing over 182,000 signatories in response to the August 1, 2014 NPRM and initial RIA. This final rule has been revised in response to the comments received and the final RIA has been revised to align with the changes made to the final rule. Specifically, the RIA explains adjustments to the methodology used to estimate the benefits and costs resulting from the final rule.
The analysis shows that expected damages based on the historical safety record are expected to exceed $4.1 billion (undiscounted) and that damages from high-consequence events could reach $12.6 billion (undiscounted) over a 20-year period in the absence of the rule.
The revised RIA is in the docket and supports the amendments made in this final rule. Table 4 (restated here) shows the costs and benefits by affected section and rule provision over a 20-year period, discounted at a 7% rate. Table 4 (restated here) also shows an explanation of the comprehensive benefits and costs (
Please also note that, given the uncertainty associated with the risks of HHFT shipments, Table 4 (restated here) contains a range of benefits estimates. The low-end of the range of estimated benefits estimates risk from 2015 to 2034 based on the U.S. safety record for crude oil and ethanol from 2006 to 2013, adjusting for the projected increase in shipment volume over the next 20 years. The upper end of the range of estimated benefits is the 95th percentile from a Monte Carlo simulation.
The
As described in greater detail throughout this document, the final rule is a system-wide, comprehensive approach consistent with the risks posed by high-hazard flammable materials transported by rail. Specifically, requirements address: (1) Proper classification and characterization, (2) operational controls to lessen the likelihood and consequences of train accidents and (3) tank car integrity. The RIA discusses, consistent with this final rule, five requirement areas: Rail Routing, Enhanced Tank Car Standards, Speed Restrictions, Braking, and Classification of unrefined petroleum-based products.
The final rule would result in costs to the private sector that exceed $151 million in any one year and those costs and benefits associated with this rulemaking have been discussed under paragraph A, Executive Order 12866, Executive Order 13563, Executive Order 13610 and DOT Regulatory Policies and Procedures, of this section. In addition, the RIA provides a detailed analysis of the public sector costs associated with the proposed requirements. The RIA is available in the public docket for this rulemaking. PHMSA invites comments on these considerations, including any unfunded mandates related to this rulemaking.
Executive Order 13132 requires agencies to assure meaningful and timely input by state and local officials in the development of regulatory policies that may 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.”
This final rule has been analyzed in accordance with the principles and criteria contained in Executive Orders 13132 (“Federalism”). The amendments in the final rule will not have any direct effect on the states, or their political subdivisions; it will not impose any compliance costs; and it will not affect the relationships between the national government and the states, or political subdivisions, or the distribution of power and responsibilities among the various levels of government.
Several of the issues addressed in this final rule are subject to our preemption authority,
We received comments from state and local governments representing approximately 200 signatories. State and local governments unanimously supported the goal of this rulemaking to enhance safety of rail transportation for flammable liquids. Many local and state governments acknowledged the preemption authority of the federal government. Local and state governments also provided comments on specific proposals in the NPRM, which are discussed in the “Summary and Discussion of Comments” portion of this rulemaking. Therefore, the amendments in the final rule will not have any direct effect on the states, or their political subdivisions; it will not impose any compliance costs; and it will not affect the relationships between the national government and the states, or political subdivisions, or the distribution of power and responsibilities among the various levels of government.
Executive Order (E.O.) 13175 (“Consultation and Coordination with Indian Tribal Governments”) requires
PHMSA analyzed this final rule in accordance with the principles and criteria prescribed in E.O. 13175. As a result, PHMSA has determined that this rulemaking does not significantly or uniquely affect tribes, and does not impose substantial direct effects or compliance costs on such governments. Moreover, under Federal hazardous material transportation law (49 U.S.C. 5125) and the Federal Rail Safety Act (49 U.S.C. 20106), the federal government has a superseding preemption with regard to hazardous materials regulation and railroad safety. Therefore, the funding and consultation requirements of E.O. 13175 do not apply, and a tribal summary impact statement is not required.
We received approximately 6 comments from tribal governments addressing the NPRM. All the comments from Indian tribal governments addressed concerns about the environmental, economic, and safety impacts of crude oil train derailments in tribal lands. In general, comments from Indian tribal governments provided support for specific proposals in the NPRM or suggested stricter measures than proposed. For example, multiple tribal governments supported the 40-mph speed limit in all areas or recommended that speed restrictions be slower than proposed. Some comments submitted by Indian tribal governments provided recommendations that were beyond the scope of this rulemaking.
In the August 1, 2014 NPRM preceding this rulemaking, PHMSA asked for comment on the possible impacts of the notification requirements on Tribal Emergency Response Commissions (TERCs) or other tribal institutions. Overall, Indian tribal governments supported enhanced notification requirements on the basis that tribal governments or local communities have the right-to-know about hazardous materials shipments within their jurisdictions. We also received several comments from environmental groups and individuals that supported notification to TERCS or other tribal authorities. However, as stated in the “Summary and Discussion of Comments” PHMSA believes adopting the notification (and information sharing) requirements under § 172.820 for HHFTs constitutes a better approach than adopting the notification requirements proposed in the NPRM. Section 172.820 requires notification to Fusion Centers, which includes an existing mechanism for Tribal Nations to interact with the Fusion Centers through the State, Local, Tribal and Territorial Government Coordinating Council. Please refer to the aforementioned “Summary and Discussion of Comments” section for additional summary and discussion related to the notification issue.
Based upon on the discussion of comments throughout this rule, including those of Indian Tribal Governments, and the corresponding analysis of those comments, PHMSA and FRA are confident we have been responsive to the concerns of all our stakeholders including Indian Tribal Governments. As previously stated, we expect that several issues addressed in this final rule are subject to federal preemption authority,
Other NPRM proposals that were discussed within the comments submitted by Indian tribal governments do not uniquely affect Indian tribal governments and were addressed by a wide variety of commenters. PHMSA has discussed these proposals in the appropriate comment summaries found in other sections of this rulemaking.
The Regulatory Flexibility Act (5 U.S.C. 601
The Regulatory Flexibility Act also requires an agency to conduct a final regulatory flexibility assessment (FRFA) unless it determines and certifies that a rule is not expected to have a significant impact on a substantial number of small entities. PHMSA is not able to certify that the final rule will not have a significant economic impact on a substantial number of small entities. PHMSA and FRA received comments and data from several commenters on the IRFA, and that information was used to make this determination. Therefore, PHMSA is publishing this FRFA that discusses the requirement areas of this final rule and provides the rationale the agencies used for assessing what impacts will be borne by small entities. PHMSA considered comments received in the public comment process when making a determination in the FRFA.
This FRFA was developed in accordance with the Regulatory Flexibility Act.
(1) A succinct statement of the need for and objectives of the rule.
PHMSA and FRA are promulgating the final rule in response to recent train accidents involving the derailment of HHFTs. Shipments of large volumes of flammable liquids pose a significant risk to life, property, and the environment. For example, on December 30, 2013, a train carrying crude oil derailed and ignited near Casselton, North Dakota, prompting authorities to issue a voluntary evacuation of the city and surrounding area. On November 8, 2013, a train carrying crude oil to the Gulf Coast from North Dakota derailed in Alabama, spilling crude oil in a nearby wetland and igniting into flames. On July 6, 2013, a catastrophic railroad accident occurred in Lac-Mégantic, Quebec, Canada when an unattended freight train containing hazardous materials rolled down a descending grade and subsequently derailed. The derailment resulted in a fire and multiple energetic ruptures of tank cars, which, along with other effects of the accident, caused the confirmed death of 47 people. In addition, this derailment
In this final rule, PHMSA and FRA are adopting revisions to the HMR to ensure that the rail requirements address the risks posed by the transportation on railroads of HHFTs. This rulemaking addresses risks in three areas: (1) Proper classification and characterization of the product being transported, (2) operational controls to decrease the likelihood and consequences of train accidents, and (3) tank car integrity to decrease the consequences of train accidents. Promulgating this rulemaking in these areas is consistent with the goals of the HMR: (1) To ensure that hazardous materials are packaged and handled safely and securely during transportation; (2) to provide effective communication to transportation workers and emergency responders of the hazardous materials being transferred; and (3) to minimize the consequences of an incident should one occur.
(2) A summary of the significant issues raised by the public comments in response to the IRFA, a summary of the assessment of the agency of such issues, and a statement of any changes made to the proposed rule as a result of such comments.
For an extensive review of the comments raised please see the preamble discussion for this rule. The only issue raised in direct response to the IRFA itself was the number of entities that would be affected. Bridger, LLC expressed the concern that the use of “offerors” and “railroads” excluded entities such as bulk terminals. The following section provides a detailed estimate of the number of entities affected. Commenters also questioned the number of small railroads that would be affected. ASLRRA commented that 160 small railroads would be affected, not 64 as estimated in the IRFA. To the extent those railroads would be affected, as discussed below, the only impact would be the cost of conducting the required routing analysis and some rerouting.
(3) A description and an estimate of the number of small entities to which the rule will apply or an explanation of why no such estimate is available.
The universe of the entities considered in an FRFA generally includes only those small entities that can reasonably expect to be directly regulated by the regulatory action. Small railroads and offerors are the types of small entities potentially affected by this final rule.
A “small entity” is defined in 5 U.S.C. 601(3) as having the same meaning as “small business concern” under section 3 of the Small Business Act. This includes any small business concern that is independently owned and operated, and is not dominant in its field of operation. Title 49 U.S.C. 601(4) likewise includes within the definition of small entities non-profit enterprises that are independently owned and operated, and are not dominant in their field of operation.
The U.S. Small Business Administration (SBA) stipulates in its size standards that the largest a “for-profit” railroad business firm may be, and still be classified as a small entity, is 1,500 employees for “line haul operating railroads” and 500 employees for “switching and terminal establishments.” Additionally, 5 U.S.C. 601(5) defines as small entities governments of cities, counties, towns, townships, villages, school districts, or special districts with populations less than 50,000.
Federal agencies may adopt their own size standards for small entities in consultation with SBA and in conjunction with public comment. Pursuant to that authority, FRA has published a final Statement of Agency Policy that formally establishes small entities or small businesses as being railroads, contractors, and hazardous materials offerors that meet the revenue requirements of a Class III railroad as set forth in 49 CFR 1201.1-1, which is $20 million or less in inflation-adjusted annual revenues, and commuter railroads or small governmental jurisdictions that serve populations of 50,000 or less. See 68 FR 24891 (May 9, 2003) (codified as appendix C to 49 CFR part 209). The $20 million limit is based on the Surface Transportation Board's revenue threshold for a Class III railroad. Railroad revenue is adjusted for inflation by applying a revenue deflator formula in accordance with 49 CFR 1201.1-1. This definition is what PHMSA is using for the rulemaking.
Not all small railroads would be required to comply with the provisions of this rule. Most of the approximately 738 small railroads that operate in the United States do not transport hazardous materials. Based on comments from ASLRRA, the rule could potentially affect 160 small railroads because they transport flammable liquids in HHFTs. Therefore, this final rule would impact 22 percent of the universe of 738 small railroads.
Almost all hazardous materials tank cars, including those cars that transport crude oil, ethanol, and other flammable liquids, are owned or leased by offerors. The adopted requirements for a testing and sampling program will directly affect shippers as they will now be required to create a document with a sampling and testing program for unrefined petroleum-based products. In addition, some of the other provisions in this rulemaking may indirectly affect offerors. DOT believes that a majority, if not all, of these offerors are large entities. DOT used data from the DOT/PHMSA Hazardous Materials Information System (HMIS) database to screen for offerors that may be small entities.
In analyzing the NPRM, from the DOT/PHMSA HMIS database and from industry sources, DOT found 731 small offerors that might be impacted. Based on further information available on the companies' Web sites, all other offerors appeared to be subsidiaries of large businesses. Also, in analyzing the NPRM, PHMSA found that out of these 731, only 297 owned tank cars that would be affected. All the other 434 offerors either did not own tank cars or have tank cars that would not be affected by the final rule. Additionally, no small offerors commented on PHMSA's ANPRM or NPRM for this proceeding. In both the ANPRM and the NPRM, PHMSA invited commenters to bring forth information that might assist it in assessing the number of small offerors that may be economically impacted by the requirement set forth in the proposed rule for development of the FRFA, but received no comments.
In reviewing SBA guidance for compliance with the Regulatory Flexibility Act, PHMSA determined that the appropriate standard for determining whether a small entity is impacted by the final rule is not whether the entity owns an affected tank car, but whether the entity is required to provide a tank car that conforms to the final rule when it loads the product. No entity, other the shipper loading the product, is required to provide a tank car that conforms to the final rule. Thus an entity leasing a tank car to load it is impacted as much as an entity owning a tank car to load it.
In addition, offerors of unrefined petroleum-based products may be subject to the newly adopted sampling and testing plan for all modes of transportation. The DOT/PHMSA HMIS database lists 1,568 entities described using NAICS 424710 for “Petroleum Bulk Stations and Terminals.” Of these, 1,444, or 92.09 percent are small entities. In addition, offerors of unrefined petroleum-based products may also include additional entities. The DOT/PHMSA HMIS database lists 186 entities described using NAICS 211111 for “Crude Petroleum and Natural Gas Extraction.” Of these, 122 are small entities. The DOT/PHMSA HMIS database lists 58 entities described using NAICS 211112 for “Natural Gas Liquid Extraction.” Of these, 34 are small entities. It is impossible to tell from the database if an entity has been recorded multiple times because of a name change or other corporate reorganization, such as a merger or acquisition. Likewise, entities that have ceased business may remain on the list. The important number is the percentage of entities, as both small entities and large entities may either have multiple listings or have ceased business. For purposes of this analysis, PHMSA assumes that half of the 1,444 small entities recorded in the database, or 722 small entities, are actually in business and affected by the final rule. In the analysis below, assuming a smaller number of entities results in a larger impact per entity, and is therefore more conservative.
(4) A description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities that will be subject to the requirement and the type of professional skills necessary for preparation of the report or record.
For a thorough presentation of cost estimates, please refer to the RIA, which has been placed in the docket for this rulemaking.
This rulemaking has requirements in three areas that address the potential risks: (1) Proper classification and characterization of the product being transported, (2) operational controls to decrease the likelihood of accidents, and (3) tank car integrity. Requirements for braking, speed restrictions, and tank car production would not impact any small entities. Most small railroads affected by this rule do not operate at speeds higher than those imposed for speed restrictions or travel long distances over which the reduced speed would cause a significant economic impact. Any small railroad that operates at speeds 30 mph or less would also not be impacted by the braking requirement. Additionally, in a February 12, 2014, letter to the Secretary, ASLRRA announced that it recommended to its members to voluntarily operate unit trains of crude oil at a top speed of no more than 25 mph on all routes.
PHMSA and FRA believe that offerors may see modest increases in their lease rates as a result of enhanced tank car standards. PHMSA and FRA recognize that new tank car standards could potentially increase the rate charged to lessees since tank cars will cost more to construct and tank cars owners will seek similar returns on their investments. Given competition among suppliers of tank cars, the rates charged will be the prevailing market rate, and there will be a tendency for this rate to decrease as the supply of enhanced tank cars increases over time due to new manufacturing and effective retrofitting practices. To that effect, the implementation timeline has been specifically designed to incorporate industry data on the current manufacturing and retrofit capacity and to minimize short run supply impacts that may increase rates before the supply of enhanced tank cars expands.
Further, commenters have noted that lease rates have gone up in recent years. PHMSA and FRA believe, and commenters have confirmed, that the primary driver of recent increases in lease rates is due to the growth of the transport of crude oil by rail. In other words, increased demand for tank cars capable of carrying crude oil, relative to their supply, is responsible for most of the increase in lease rates. Once this regulation is promulgated and the industry has certainty on the new car standard for moving high volume flammable liquid shipments, we believe the industry will ramp up construction and lease rates will decrease. Additionally, also in the February 12th letter to the Secretary, the ASLRRA noted that it will support and encourage the development of new tank car standards including, but not limited to, adoption of a 9/16-inch tank car shell.
Section 174.310(a)(3) would expand hazardous materials route planning and selection requirements for railroads. This would include HHFTs transporting flammable materials and, where technically feasible, require rerouting to avoid transportation of such hazardous materials through populated and other sensitive areas. Approximately 160 short line and regional railroads carry crude oil and ethanol in train consists large enough that they would potentially be affected by this rule. While PHMSA and FRA believe this number may be an overestimation of the number of affected small entities affected this figure was used in the FRFA as a conservative estimate.
The NPRM stated that the affected Class III railroads are already compliant with the routing requirements established by HM-232E (71 FR 76834), and there were no comments on this statement. In general, at the time that rule was promulgated, it was assumed that the small railroads impacted, due to their limited size, would, on average, have no more than two primary routes to analyze. Thus, the potential lack of an alternative route to consider would minimize the impact of this requirement. Because the distance covered by the small railroads' routes is likely contained within a limited geographic region, the hours estimated for analyses are fewer than those estimated for the larger railroads. Further, because the industry associations have developed simplified forms for the routing analysis for use by small railroads, and because small railroads usually have a very limited number of routing choices, the level of skill required to complete the routing analysis for a small railroad is much lower than would be required on a larger railroad.
Finally, this final rule will also require any offeror who offers a hazardous material for transportation to develop, implement, and update its sampling and testing programs related to classification and characterization of the hazardous material if it is an unrefined petroleum-based product. PHMSA believes that there would be an initial cost for each offeror of approximately $3,200 for the first year, and additional costs of $800 annually thereafter. PHMSA believes that this section would not significantly burden any of these small entities.
PHMSA estimates the total cost to each small railroad to be $8,715 in the first year and $3,637 for subsequent years, with costs growing with increases in real wages.
In conclusion, PHMSA believes that although some small railroads will be directly impacted, they will not be impacted significantly as the impact will amount to significantly less than one percent of an average small railroad's annual operating revenue. Information available indicates that none of the offerors will be significantly affected by the burdens of the rule. Therefore, these requirements will likely not have a significant economic impact on any small entities' operations. In the NPRM, PHMSA had sought information and comments from the industry that might assist in quantifying the number of small offerors who may be economically impacted by the requirements set forth in the proposed rule, but did not receive any comments.
(5) A description of the steps the agency has taken to minimize the significant adverse economic impact on small entities consistent with the objectives of applicable statutes, including a statement of factual, policy, and legal reasons for selecting the alternative adopted in the final rule, and why each of the other significant alternatives to the rule considered by the agency was rejected.
PHMSA re-evaluated and re-defined “High-Hazard Flammable Train” to minimize the significant adverse economic impact on small entities. This definition served as the basis for many of the requirements in the NPRM and in this final rule. Be revising this definition we have narrowed the scope of the rulemaking to more appropriately focus on the risks of the transport of large volumes of flammable liquids by rail. This narrowing of the scope also limits the impact on small entities. We believe the new definition excludes the inclusion of manifest trains (which could represent a larger portion of smaller railroads) from the requirements of this rule.
Specifically, PHMSA and FRA revised the definition from “20 or more tank cars in a train loaded with a flammable liquid” to “a continuous block of 20 or more tank cars or 35 or more cars dispersed through a train loaded with a flammable liquid” based on public comment.
PHMSA and FRA did not intend the NPRM proposed definition to include lower risk manifest trains and had crafted the definition with the idea of capturing the higher risk bulk shipments seen in unit trains. Based on FRA modeling and analysis, 20 tank cars in a continuous block loaded with a flammable liquid and 35 tank cars or more total dispersed throughout a train loaded with a flammable liquid display consistent characteristics as to the number of tank cars likely to be breached in a derailment. See “Definition of High-Hazard Flammable Train” section of this rule for a description of the modeling. The operating railroads commented that this threshold will exclude lower risk manifest trains and focus on higher risk unit trains. It should be noted that commenters also suggested this threshold, as it would eliminate the inclusion of most manifest trains and focus on unit trains.
In addition to the above change that effects the entire rulemaking action, PHMSA is addressing six requirements areas in this final rule, and believes it is appropriate to address the impacts on small entities separately for each requirement area.
PHMSA and FRA are requiring rail carriers develop and implement a plan that will result in the use of a safer and more secure route for certain trains transporting an HHFT. This may appear more burdensome than it will be, because FRA has helped to develop tools to facilitate analysis of routing, working with both the AAR and ASLRRA, ensuring that the tool will be readily available to small railroads. To assist railroads with evaluating primary and alternative routes for origin-destination pairs, the U.S. Department of Transportation awarded the Railroad Research Foundation (RRF), a non-profit affiliate of AAR, a Railroad Safety Technology Grant for a risk management tool that will help with the analysis of the 27 factors required in analyzing rail routing. The grant provided $1.54 million for enhancement and ongoing implementation of the Rail Corridor Risk Management System (RCRMS). RCRMS was developed for railroads with alternative routing and is therefore not effective for smaller or Class II/III railroads with limited route or no alternative routes. These railroads were responsible for developing their own analysis and documentation. Accordingly the Hazmat Transportation Analytical Risk Model (H-TRAM) model was developed as a result of an FRA Grant provided to RRF on behalf of ASLRRA. More recently, FRA funded an independent verification and validation of the model.
The rail routing requirements specified in § 172.820 are being modified to apply to any HHFT, as the term is defined in this final rule (§ 171.8; See discussion in HHFT section). Rail carriers would be required to assess available routes using, at a minimum, the 27 factors listed in Appendix D to Part 172 of the HMR to determine the safest, most secure routes for security-sensitive hazardous materials. Additionally, the requirements of § 172.820(g) require rail carriers to establish a point of contact with state and/or regional Fusion Centers who coordinate with state, local and tribal officials on security issues as well as state, local, and tribal officials that may be affected by a rail carrier's routing decisions and who directly contact the railroad to discuss routing decisions.
To assist railroads with evaluating primary and alternative routes for origin-destination (OD) pairs, the U.S. Department of Transportation awarded the Railroad Research Foundation (RRF), a non-profit affiliate of the AAR, a Railroad Safety Technology Grant for a risk management tool that will help with the analysis of the 27 minimum factors to consider. The grant provided $1.54 million for enhancement and ongoing implementation of the Rail Corridor Risk Management System (RCRMS). RCRMS was developed for railroads with alternative routing and is, therefore, not effective for smaller or Class II or Class III railroads with limited or no alternative routes. These railroads were responsible for developing their own analysis and documentation. Accordingly, the Hazmat Transportation Analytical Risk Model (H-TRAM) was developed through an FRA Grant provided to RRF on behalf of the ASLRRA. Most recently, FRA funded an independent verification and validation of the model.
There has long been considerable public and Congressional interest in the safe and secure rail routing of security-sensitive hazardous materials. In 2008, PHMSA, in coordination with FRA and the Transportation Security Administration (TSA), issued a final rule requiring, among other things, that rail carriers compile annual data on certain shipments of explosive, toxic by inhalation (TIH or PIH), and Class 7 (radioactive) materials; use the data to analyze safety and security risks along rail routes where those materials are transported; assess alternative routing options; and make routing decisions
The 2008 rule also requires rail carriers transporting “security sensitive materials” to select the safest and most secure route to be used in transporting those materials, based on the carrier's analysis of the safety and security risks on primary and alternate transportation routes over which the carrier has authority to operate.
The NTSB report of January 23, 2014, stated that at a minimum, the route assessments, alternative route analysis, and route selection requirements should be extended to key trains transporting large volumes of flammable liquid (NTSB Recommendation R-14-4). Additionally, in their comment on the NPRM, NTSB stated that the proposal to subject carriers transporting HHFTs to the routing requirements in 172.820 would satisfy the intent of R-14-4.
Although Class I rail carriers committed to voluntarily apply routing requirements to trains carrying 20 carloads or more of crude oil as a result of the Secretary's Call-to-Action:
• The voluntary actions do not extend beyond Class I railroads;
• The voluntary actions do not apply to all HHFTs;
• The proposed routing requirements would have provided a check on higher risk routes or companies; and
• The routing requirements would ensure that rail carriers continue their voluntary actions in the future.
Route planning and route selection provisions currently required for explosive, PIH, or Class 7 (radioactive) materials are not required for HHFTs. If the rule is not adopted, railroads would not be required to conduct route risk analysis nor are they required to reroute shipments over lower-risk routes. Specific identified criteria for the route and alternate route analyses may not be uniformly considered by all railroads, and written analyses of primary and alternate routes including safety and security risks would not be required. While the railroads are expected to continue voluntarily implementing these measures for crude oil, they have not made a similar commitment for ethanol trains (though PHMSA believes some of them may do so). The costs to society, the government, and the rail industry of an accident involving large shipments of flammable liquid are high. If no action is taken, the threat of catastrophic accidents in large populated areas or other sensitive environments will continue. This option would not result in any modification of § 172.820 to include HHFTs. PHMSA and FRA are not considering this alternative.
This alternative, adopted in the final rule, applies safety and security routing assessments and rerouting to HHFTs. Railroads would be required to assess current routing of these trains as well as practical alternative routes. Railroads would have to choose the lowest risk practical route to move HHFTs. This alternative focuses the routing requirements on the flammable liquid shipments that pose the greatest risk to public safety. Additionally, the final rule requires rail carriers to establish a point of contact with (1) state and/or regional Fusion Centers who coordinate with state, local and tribal officials on security issues and (2) state, local, and tribal officials that may be affected by a rail carrier's routing decisions and who directly contact the railroad to discuss routing decisions.
This alternative requires railroads to balance these factors to identify the route that poses the lower risk. As such, they may, in certain cases, choose a route that eliminates exposure in areas with high population densities but poses a risk for more frequent events in areas with very low densities. In other cases the risk of derailment may be so low along a section of track that, even though it runs through a densely populated area, it poses the lowest total risk when severity and likelihood are considered. Glickman's estimate of safety improvements achievable by routing changes is based on an examination of how routing might vary as a rail carrier applies progressively heavier weights on various safety factors.
Based on the determination of need, minimal cost of implementation and a vast majority of commenters supporting the proposal, PHMSA and FRA have chosen this alternative. It should be noted that the definition of HHFT has been narrowed to a train carrying 20 or more loaded tank cars in a continuous block or 35 or more loaded tank cars throughout the train consist loaded with flammable liquids (see above for discussion on HHFTs). PHMSA and FRA anticipate that this will lessen the impact on small businesses such as short line and regional railroads by eliminating a large percentage of manifest or mixed freight trains.
The costs of this alternative are discussed in great detail in the RIA. The total burden on small railroads over 20 years, for 160 small railroads affected, the cost, discounted at 7 percent. will be $7,236,778. The average cost per small railroad will be $45,230 over 20 years, discounted at 7 percent.
In this final rule, we are adopting requirements for new tank cars constructed after October 1, 2015, used to transport Class 3 flammable liquids in an HHFT to meet either the prescriptive standards for the DOT Specification 117 tank car (consistent with Option 2 of the NPRM except for the braking component) or the performance standards for the DOT Specification 117P tank car. Other authorized tank specification as specified in part 173, subpart F will also be permitted however, manufacture of a DOT specification 111 tank car for use in an HHFT is prohibited. In this final rule, we are also adopting retrofit requirements for existing tank cars in accordance with proposed Option 3 from the NPRM (excluding top fittings protection and steel grade). If existing cars do not meet the retrofit standard, they will not be authorized use in HHFT service after a packing group and tank car specification-based implementation timeline. This in effect would adopt different constructions standards for new and retrofitted cars used in an HHFT.
Tank cars built to the new standards as adopted in this final rule will be designated “DOT Specification 117.” In addition, we are adopting a performance standard for the design and construction of new tank cars or retrofitting of existing tank cars equivalent to the prescriptive DOT Specification 117 standards. Thus, a new or retrofitted tank car meeting the performance criteria will be designated as “DOT
Under the HMR, the offeror (shipper) must select a packaging that is suitable for the properties of the material. The DOT Specification 111 tank car is one of several cars authorized by the HMR for the rail transportation of many hazardous materials. The DOT Specification 111 tank car, which can be jacketed or unjacketed, is used for the almost all of crude oil and ethanol service by rail.
The alternatives proposed in the August 1, 2014 NPRM were intended to address the survivability of a tank car and to mitigate the damages of rail accidents far superior to those of the current DOT Specification 111 tank car. Specifically, the alternatives incorporate several enhancements to increase tank head and shell puncture resistance; thermal protection to survive a pool fire environment; and improved top fitting and bottom outlet protection during a derailment. These improvements are consistent with several NTSB safety recommendations. Under all alternatives, the proposed system of design enhancements would reduce the consequences of a derailment of tank cars transporting flammable liquids in an HHFT. There will be fewer tank car punctures, fewer releases from service equipment (top and bottom fittings), and delayed release of flammable liquid from the tank cars through pressure relief devices and thermal protection systems.
On August 1, 2014, PHMSA, in consultation with the FRA, issued an NPRM in response to comments submitted as a result of an ANPRM. In the NPRM, we proposed three alternatives for newly manufactured tank cars to address the risks associated with the rail transportation of Class 3 flammable liquids in HHFTs. In this final rule, PHMSA considered the three tank car options and the status quo to address this emerging risk and they are as follows:
This alternative would continue to authorize the use of the non-jacketed and jacketed DOT Specification 111 tank cars, including upgraded CPC-1232 non-jacketed and jacketed tank cars, for the transportation of crude oil and ethanol. This alternative imposes no benefits or costs to society as it would require no change to the current crude oil and ethanol tank car packaging.
This alternative would mandate that newly manufactured and existing tank cars used for flammable liquids in a HHFT meet the Option 1 prescriptive or performance standard after a certain date in accordance with the following:
• 286,000 lb. GRL tank car that is designed and constructed in accordance with AAR Standard 286;
• Wall thickness after forming of the tank shell and heads must be a minimum of
• Thermal protection system in accordance with § 179.18, including a reclosing pressure relief device;
• Minimum 11-gauge jacket constructed from A1011 steel or equivalent. The jacket must be weather-tight as required in § 179.200-4;
• Full-height,
• Bottom outlet handle removed or designed to prevent unintended actuation during a train accident;
• ECP brakes; and
• Roll-over protection (
This alternative achieves the highest safety enhancements of any of the options considered, and thus is expected to yield the highest benefit to safety and the environment. It also has the highest cost of any of the three tank car alternatives.
The second alternative considered is described as the AAR 2014 car. This proposed standard was based on the AAR's updated new tank car standard, and approximately 5,000 of these new cars have been ordered by BNSF Rail Corporation.
As proposed in the NPRM, the Option 2 car would be required for both newly manufactured tank cars and existing tank cars used for flammable liquids in a HHFT. Tank cars could meet either the prescriptive or an equivalent performance standard. Under this alternative, tank cars have most of the safety features as the Option 1 tank car, including the same increase in shell thickness, but lack TIH top fittings protection and ECP brake equipment. In essence, examining these cars side by side in the following analysis provides a de facto comparison of the costs and benefits of equipping HHFTs with ECP braking.
This alternative provides the second highest benefits and the second highest costs of the three tank car options. This option was selected for new constructions (See braking section for discussion on braking required).
The third alternative considered is an enhanced, jacketed CPC-1232 tank car. It also has the same improvements made to the bottom outlet handle and pressure relieve valve as the Option 1 and Option 2 tank cars. This standard is the new tank car configuration PHMSA believes would have been built for HHFT service in the absence of regulation, based on commitments from two of the largest rail car manufacturers/leasers.
As proposed, the Option 3 car would be required for both newly manufactured tank cars and existing tank cars used for flammable liquids in a HHFT. Tank cars must meet either the prescriptive or performance standard in accordance with the proposed phase-out schedule. Because the industry has committed to building Enhanced Jacketed CPC-1232 standard tank cars for HHFT service, this alternative would not impose higher costs for newly manufactured tank cars. It would, however, impose costs associated with retrofitting older DOT Specification 111 tank cars to the new prescriptive or performance standard.
This alternative tank car design car has all of the safety features of the Option 2 car, except that it has
Although this tank car design is a substantial safety improvement over the current DOT Specification 111 tank car, it does not achieve the same level of safety as the first two mandated alternatives considered. It is, however, the least costly alternative considered. This option was selected for retrofitting
All small shippers will be directly impacted by this requirement, as the shipper is the regulated entity that must provide the packaging for shipping, in this case, the tank cars. It does not matter whether the small shipper owns the tank cars or leases them. The burden of the rulemaking and therefore the cost of tank cars will be imposed on the shippers, either through purchase costs, retrofit costs, or through higher lease payments. The estimated cost per tank car is a good estimate of the final cost to the shippers. A lease transaction only changes the method by which a shipper pays for the tank cars.
As noted above, small shippers are about 92 percent of all shippers. PHMSA assumes that small shippers on average ship half as much as the average shipper. Therefore, for this analysis, PHMSA estimates that small shippers ship 46 percent, half of 92 percent of the affected hazardous materials, and PHMSA assumes that they use the same percentage of tank cars, and therefore incur as a group, the same percentage of the total costs estimated in the economic analysis for retrofit of all tank cars. PHMSA's RIA cost estimate for the Final Rule tank car mandate is $1.78 billion discounted at 7 percent, and $2.27 billion discounted at 3 percent. The total burden on small shippers will therefore be 46 percent of that, or $0.819 billion discounted at 7 percent, and $1.04 billion discounted at 3 percent. The average cost per small shipper would be $0.819 billion discounted at 7 percent, and $1.04 billion discounted at 3 percent divided by 722 shippers, which yields costs per small shipper of $1.134 million discounted at 7 percent, and $1.672 million discounted at 3 percent. However, PHMSA believes that small shippers can pass on those costs to other parties in the supply chain, because all shippers face the same cost constraints. PHMSA believes this is not a substantial burden on any affected entity.
PHMSA is requiring a 50-mph maximum speed limit for HHFTs in all areas. This action aligns with existing operational requirements imposed by AAR Circular No. OT-55-N. PHMSA expects there will be no costs associated with a speed restriction of 50 mph, as this action codifies current industry best practices. As such, PHMSA does not believe the 50-mph maximum speed limit for HHFTs will affect small entities, including small offerors and small railroads that qualify as small businesses. Small railroads (Class II and Class III railroads) customarily do not operate at speeds in excess of 50 mph, so the impact of reducing the maximum speed of HHFTs to 50 mph is expected to be minimal and potentially costless.
In further support of this view, PHMSA refers to a February 12, 2014 letter to the Secretary from the American Short Line and Regional Railroad Association (ASLRRA). In this letter, ASLRRA announced that they would recommend a 25-mph speed limit for unit trains carrying crude oil on all routes. Thus, small railroads will not be burdened by the 50-mph speed limit provided they are adhering to ASLRRA's recommended speed restriction.
PHMSA is also requiring a 40-mph speed limit for HHFTs within the limits of a High Threat Urban Area (HTUA), unless all tank cars containing flammable liquids meet or exceed the retrofit standards or the standards for the DOT Specification 117 tank car. Similar to the aforementioned 50-mph speed limit, the 40-mph speed limit for HHFTs in HTUAs is also generally consistent with voluntary commitments made by AAR “Railroad Subscribers” as a result of recent cooperation with the Department. Further, given ASLRRA's additional recommendation of a 25-mph speed limit for certain short line and regional trains carrying crude oil, small railroads should not be burdened by the 40-mph speed limit in HTUAs. PHMSA believes that most small railroads are adhering to ASLRRA's recommendation.
Speed is a factor that contributes to derailments. Speed can influence the probability of an accident, as it may allow for a brake application to stop the train before a collision. Speed also increases the kinetic energy of a train resulting in a greater possibility of the tank cars being punctured in the event of a derailment. As more tank cars are punctured in a derailment, the likelihood and severity of releases of hazardous materials into the environment increases. Conversely, lower speeds reduce kinetic energy, reducing the possibility of puncture in a derailment, which in turn reduces the severity of hazardous material releases into the environment.
The growth in the production and transport of crude oil and ethanol in recent years has been accompanied by an increase in the number of rail derailments involving crude oil and ethanol. Given the projected continued growth of domestic crude oil and ethanol production and transport, and the growing number of train accidents involving crude oil and ethanol, PHMSA concludes that the potential for future severe train accidents involving HHFTs has increased substantially. As our organizational mission, PHMSA seeks to improve the safety of the transportation of hazardous materials in commerce, which includes reducing the incidence and severity of train derailments involving hazardous materials. Therefore, PHMSA has adopted certain speed restrictions as a way to lessen damages that would occur in the event of a derailment and to improve the overall safety of rail transportation of large quantities of Class 3 flammable liquids.
PHMSA considered a range of alternatives relative to the adopted speed restrictions. Namely, PHMSA considered; the “no action” alternative, the various speed restrictions proposed in the NPRM, and different speed restrictions proposed by commenters.
The “no action” alternative is the choice to uphold the status quo and forego new regulation related to speed restrictions. It is equivalent to the current regulatory environment absent this rulemaking. There is reason to believe that the “no action” alternative has some merit. Chiefly, trade associations and the industry at-large have made significant efforts to improve railroad safety, including the issuance of voluntary or recommended speed restrictions. If voluntary speed restrictions were indistinguishable to the adopted speed restrictions, and small railroads perfectly and uniformly adhered to these voluntary speed restrictions, PHMSA might not need to codify the adopted speed restrictions. However, these voluntary or recommended speed restrictions are inferior to the codified adopted speed restrictions in that they do not carry the weight of law. Further, PHMSA was not provided with sufficient evidence to show that 100 percent of small railroads were adhering to the voluntary or recommended speed restrictions. PHMSA has assumed that this kind of adherence is occurring, but cannot certify it. Moreover, the adopted speed restrictions are not indistinguishable to the voluntary ones. The voluntary speed restrictions apply to “Key Crude Oil Trains,” or similar trains, whereas PHMSA has expanded the scope of the
The 40-mph speed limits for HHFTs in all areas. This is option 1 in the NPRM. In this alternative, all HHFTs are limited to a maximum speed of 40 mph, unless all tank cars meet or exceed the performance standards for the DOT Specification 117 tank car.
The 40-mph speed limits for areas with populations of more than 100,000 people alternative is option 2 in the NPRM. In this alternative, all HHFTs—unless all tank cars containing flammable liquids meet or exceed the standards for the DOT Specification 117 tank car—are limited to a maximum speed of 40 mph while operating in an area that has a population of more than 100,000 people.
The 40-mph speed limits for HHFTs in HTUA. This is option 3 in the NPRM. In this alternative, all HHFTs—unless all tank cars containing flammable liquids meet or exceed the standards for the DOT Specification 117 tank car—are limited to a maximum speed of 40 mph while the train travels within the geographical limits of HTUAs. This was the most cost effective option proposed in the rulemaking.
In the NPRM, PHMSA proposed three 40-mph speed limits, including the adopted 40-mph speed limit in HTUAs, as well as two other 40-mph speed limits applicable to all areas and to areas with “a population of more than 100,000 people.” Thus, PHMSA's consideration of alternatives was publicly stated at the NPRM stage, and PHMSA afforded the public an opportunity to comment on the validity and expected impacts of these proposed speed limits. In the NPRM, the 40-mph speed limit in HTUAs was cited as Option 3, and the 40-mph speed limit in all areas and the 40-mph speed limit in any area with a population of more than 100,000 people were cited as Option 1 and Option 2, respectively.
Option 1 and Option 2 were not adopted for a variety of reasons that affect small and large entities alike. Option 1 and Option 2 are not as cost-effective and would be burdensome and overly restrictive relative to the 40-mph speed limit in HTUAs (Option 3). This sentiment was echoed by many commenters, including ASLRRA. According to PHMSA's cost/benefit analysis and commenter input, PHMSA has reason to believe that the implementation of Option 1 and Option 2 would create an unjustifiable burden on small entities, as well as on large railroads and offerors, and thus are not practical alternatives for small entities. Please refer to the Final RIA, as well as other sections of the rulemaking, for further summary and discussion of the NPRM's proposed 40-mph speed limits.
PHMSA is confident that the adopted speed restrictions—a 40-mph speed limit in HTUAs and a 50-mph speed limit for all HHFTs—constitute the best course of action and small carriers will be able to comply without undue burden. In fact, PHMSA expects that the adopted speed restrictions will impose only limited costs on small entities and will yield more safety benefits per unit of cost than other alternatives over time. ASLRRA's recommendation of a 25-mph speed limit to member railroads lends concrete support to this outlook.
In addition to the alternatives proposed in the NPRM, various commenters offered alternatives that could be applied to small entities, such as small rail carriers. Various commenters suggested that PHMSA align the speed restrictions with different geographical criteria. Nevertheless, ASLRRA and AAR did not suggest that different geographical criteria be applied specifically to small rail carriers. On the contrary, ASLRRA's recommended 25-mph speed restriction specifically applied to short lines and regional rail lines carrying crude oil as a “unit”
Most small railroads affected by this rule do not operate at speeds higher than the speed restrictions required or travel long distances over which the reduced speed would cause a significant impact. Additionally, in a February 12, 2014, letter to the Secretary, ASLRRA announced that they recommend to their members to voluntarily operate unit trains of crude oil at a top speed of no more than 25 mph on all routes.
The only small railroads that are likely to be affected by the speed restrictions are those that have relatively short mileage connecting two or more larger railroads, and that may operate at speeds higher than 30 mph. Those railroads do not originate HHFT, but let the larger railroads operate HHFTs over their track. Therefore there will be no speed restrictions imposed on these small railroads, only larger railroads operating over the small railroads' track.
The only Class III railroad which both has Class 4 or higher track (speeds above 40 mph) and also hauls crude oil or ethanol is also a commuter railroad serving a large city, and therefore not a small entity. Thus, the speed restrictions will not result in any net impact on small entities.
PHMSA and FRA are requiring that rail carriers transporting certain quantities of flammable liquids to equip trains with advanced braking systems. Specifically, this final rule requires all HHFTs operating in excess of 30 mph to have enhanced braking systems. At a baseline level, any train that contains a continuous block of 20 or more loaded tank cars or a total of at least 35 loaded tank cars throughout the train consist containing Class 3 flammable liquids (an HHFT) must have in place, at a minimum, a functioning two-way EOT device or a DP system to assist in braking.
With longer, heavier trains it is necessary to factor in train control issues. Therefore, PHMSA and FRA have specific braking requirements for trains that are transporting 70 or more loaded tank cars of Class 3 flammable liquids (referred to as high-hazard flammable trains or “HHFUTs”) at speeds in excess of 30 mph. By January 1, 2021, any HHFUT transporting one or more tank car loaded with a Packing Group I flammable liquid will be required operate using an ECP brake system that complies with the requirements of 49 CFR part 232, subpart G. All other HHFUTs must be equipped with operative ECP brake systems by May 1, 2023, when traveling in excess of 30 mph.
Braking systems reduce kinetic energy and therefore help prevent and mitigate the effects of train accidents. Since the First Safety Appliance Act of March 2, 1893, freight train operations in the U.S. have traditionally relied on air brakes to slow and stop a train. This conventional air brake system has proven to be reliable, but it has drawbacks. When a train is long and heavy, as is typically the case in the context of an HHFT, a conventional air brake system can easily take over one-half mile to bring a train
If the braking requirements were not adopted, the damages estimated in the absence of this rulemaking would not be reduced, where possible, by advanced braking options. This alternative would also impose no costs. This alternative would also not codify voluntary agreements between the Class I railroads and the Department for Key Crude Oil trains. While those voluntary agreements would remain in place, it would not expand the requirements for advanced braking to other trains transporting flammable liquids that have been identified as high risk, nor would it include a requirement for ECP braking systems. PHMSA and FRA have not chosen this alternative.
Alternative 2 would require each HHFT to be equipped and operated with either a two-way EOT device, as defined in 49 CFR 232.5 of this title, or DP, as defined in 49 CFR 229.5 of this title. This alternative would not mandate a requirement for ECP braking systems. Additionally, this alternative is closest to the voluntary agreements differing in that it applies to HHFTs and not a Key Crude Oil train. PHMSA and FRA believe this alternative would result in decrease in the number of tank cars punctured in a derailment by 13-16% compared to conventional braking systems. This alternative was considered but was not chosen.
This is the alternative proposed in the NPRM. Alternative 3 would require an HHFT to be equipped and operated with either a two-way EOT device, as defined in 49 CFR 232.5 of this title, or DP, as defined in 49 CFR 229.5 of this title. Additionally, a tank car manufactured in accordance with proposed § 179.202 or § 179.202-11 for use in a HHFT would be equipped with ECP brakes. HHFTs comprised entirely of tank cars manufactured in accordance with proposed § 179.202 and § 179.202-11 (for Tank Car Option 1 the PHMSA and FRA Designed Car, only), except for required buffer cars, would be operated in ECP brake mode as defined by 49 CFR 232.5. To reduce the burden on small carriers that may not have the capital available to install new braking systems, we proposed an exception. If a rail carrier does not comply with the proposed braking requirements above, we proposed that the carrier may continue to operate HHFTs at speeds not to exceed 30 mph.
This alternative would require that rail carriers transporting certain quantities of flammable liquids to equip trains with advanced braking systems. Specifically, this alternative would require all HHFTs operating in excess of 30 mph to have enhanced braking systems. At a baseline level, any train that contains a continuous block of 20 or more loaded tank cars or a total of at least 35 loaded tank cars throughout the train consist containing Class 3 flammable liquids (an HHFT) must have in place, at a minimum, a functioning two-way EOT device or a DP system to assist in braking.
With longer, heavier trains it is necessary to factor in train control issues. Therefore, this alternative would require specific braking requirements for trains that are transporting 70 or more loaded tank cars of Class 3 flammable liquids at speeds in excess of 30 mph. Under this alternative, by January 1, 2021, any high-hazard flammable unit train (HHFUT) containing one or more tank cars loaded with a Packing Group I flammable liquid, operating in excess of 30 mph must have a functioning ECP brake system that complies with the requirements of 49 CFR part 232, subpart G. Whereas all other HHFUTs must be equipped with operative ECP brake systems by May 1, 2023, when traveling in excess of 30 mph. This was the selected option.
Most small railroads affected by this rule do not operate at speeds higher than the speed restrictions required or travel long distances over which the reduced speed would cause a significant impact. Any small railroad that operates at speeds 30 mph or less would also not be impacted by the braking requirement. Additionally, in a February 12, 2014, letter to the Secretary, ASLRRA announced that they recommend to their members to voluntarily operate unit trains of crude oil at a top speed of no more than 25 mph on all routes.
ASLRRA commented to the docket that small railroads often operate older locomotives, and that retrofitting those locomotives to work with ECP brakes would be cost-prohibitive. PHMSA believes that the railroads that have the older locomotives hauling HHFTs are the same railroads that would not be adversely impacted by operating trains at speeds of 30 mph or less.
The only small railroads that are likely to be affected by the braking requirements are those that have relatively short mileage connecting two or more larger railroads, and that may operate at speeds higher than 30 mph. Those railroads do not originate HHFT, but let the larger railroads operate HHFTs over their track. PHMSA believes that all HHFTs from larger railroads will be assembled so that locomotives and cars with ECP brakes are kept together, so there will be no speed restrictions imposed. Thus, the speed restrictions will not result in any net impact on small entities.
The final rule requires any offeror of unrefined petroleum-based products for transportation to develop, implement, and update a sampling and testing program related to the classification and identification of properties for packaging selection of these materials (see “Summary and Discussion of Public Comments” for plan details). PHMSA believes that there would be an initial cost for each offeror of approximately $3,002 for the first year, and additional costs of $810 annually thereafter, for a total value, discounted at 7 percent over 20 years, of $10,514. PHMSA believes that this adopted section will not significantly burden any of these small entities.
The offeror's responsibility to classify and describe a hazardous material is a key requirement under the HMR. Improper classification and failure to identify applicable material properties can have significant negative impacts on transportation safety. Proper classification is necessary ensure proper packaging, operational controls, and hazard communication requirements are met, all of which are important to mitigate the negative effects of a train derailment or other hazardous materials incident.
While the classification of manufactured products is generally well understood and consistent, unrefined petroleum-based products potentially have significant variability in their properties as a function of history, location, method of extraction, temperature at time of extraction, and the type and extent of conditioning or processing of the material. Manufactured goods and refined products, by definition, are at the other end of the spectrum from unrefined or raw materials. This means that the physical and chemical properties are more predictable as they are pure substances or well-studied mixtures. PHMSA and FRA audits of crude oil loading facilities, prior to the issuance of the February 26, 2014. Emergency Restriction/Prohibition Order, indicated that the classification of crude oil being transported by rail was often based solely on a Safety Data Sheet (SDS). The information is generic, providing basic data and ranges of values for a limited number of material properties. In these instances, it is likely no validation of the information is performed at an interval that would allow for detection of variability in material properties.
The industry would continue the status quo and sample the material based on the existing classification and characterization methods. Rail derailment and other accidents involving shipments of crude oil or other unrefined petroleum-based products that have been improperly classified may create potential risks for emergency responders. If PHMSA had adopted alternative 1, then there would be no added costs or benefits to the rule.
Under this alternative, PHMSA would require a documented sampling and testing plan for shippers of these mined gases and liquids in transportation. This plan would enable PHMSA and shippers of this commodity to more easily ascertain the specific classification and characteristics of the commodity and help to minimize potential risks when responding to a derailment and accident. Offerors would also certify that program is in place, document the testing and sampling program, and make program information available to DOT personnel, upon request.
This option was proposed in rulemaking, but only offerors petroleum-based products (
This is the alternative adopted in this rulemaking. Under this alternative, PHMSA requires a documented sampling and testing plan for offerors of unrefined petroleum-based products in transportation. This plan will enable PHMSA and shippers of this commodity to more easily ascertain the specific classification and properties of the commodity and help to minimize potential risks when responding to a derailment or other accident. Offerors must also certify that program is in place, document the testing and sampling program, and make program information available to DOT personnel, upon request.
This revised definition narrows the scope of affected offerors from those offering all “mined liquids and gases” to only “unrefined petroleum-based products.” While the savings from the proposed definitions are not quantified, the clarification ensures that additional offerors will not be inadvertently impacted.
PHMSA believes that there would be an initial cost for each offeror of approximately $3,002 for the first year, and additional costs of $810 annually thereafter, for a total value, discounted at 7 percent over 20 years, of $10,514. PHMSA believes that this adopted section will not significantly burden any of these small entities.
On May 7, 2014, DOT issued an Emergency Order
After careful consideration of the comments and after discussions within PHMSA and FRA, we believe that for the final rule using the definition of the HHFT for notification applicability is a more conservative approach for affecting safer rail transportation of flammable liquid material; and is a more consistent approach because it aligns with the changes to other operational requirements, including routing.
The primary intent of the Order was to eliminate unsafe conditions and practices that create an imminent hazard to public health and safety and the environment. Specifically, the Order was designed to inform communities of large volumes of crude oil transported by rail through their areas and to provide information to better prepare emergency responders for accidents involving large volumes of crude oil. DOT issued the Order under the Secretary's authority to stop imminent hazards at 49 U.S.C. 5121(d). The Order was issued in response to the crude oil railroad accidents previously described, and it is in effect until DOT rescinds the Order or a final rule codifies requirements and supplants the requirements in the Order.
The adopted action is that DOT is removing the notification requirement language proposed in the NPRM and is instead using as a substitute the contact information language requirement that is already part of the additional planning requirements for transportation by rail found in § 172.820 of the HMR that now applies to HHFTs. As provided in § 172.820(g), each HHFT must identify a point of contact (including the name, title, phone number and email address) related to routing of materials identified in § 172.820 in its security plan and provide this information to: (1) State and/or regional Fusion Centers (established to coordinate with state, local and tribal officials on security issues and which are located within the area encompassed by the rail carrier's system); and (2) State, local, and tribal officials in jurisdictions that may be affected by a rail carrier's routing decisions and who directly contact the railroad to discuss routing decisions.
Recent accidents have demonstrated the need for action in the form of additional communication between railroads and emergency responders to ensure that the emergency responders are aware of train movements carrying large quantities of flammable liquid through their communities in order to better prepare emergency responders for accident response.
This alternative would maintain implementation of the Order issued on May 7, 2014. PHMSA estimated there are essentially no new costs associated with this alternative, and thus no burdens on small entities, because rail carriers are already subject to the Order.
This alternative utilizes the contact information language requirement that is already part of the additional planning requirements for transportation by rail found in § 172.820 of the HMR. As provided in § 172.820(g), each HHFT must identify a point of contact (including the name, title, phone number and email address) related to routing of materials identified in § 172.820 in its security plan and provide this information to: (1) State and/or regional Fusion Centers (established to coordinate with state, local and tribal officials on security issues and which are located within the area encompassed by the rail carrier's system); and (2) State, local, and tribal officials in jurisdictions that may be affected by a rail carrier's routing decisions and who directly contact the railroad to discuss routing decisions.
This is the favored alternative since it adds no additional cost and provides for consistency of notification requirements for rail carriers transporting material subject to routing requirements,
This alternative effectively would return to the status quo prior to the publication of the emergency order. This EO was designed to inform communities of large volumes of crude oil transported by rail through their areas and to provide information to better prepare emergency responders for accidents involving large volumes of crude oil. As the primary intent of this EO was to eliminate unsafe conditions and practices that created an imminent hazard to public health and safety and the environment removal of this order without a corresponding action to reduce the risk is not acceptable and thus not selected.
Small entities affected by this provision have been providing notification for crude oil shipments under the Emergency Order. As the notification utilizes the contact information language requirement that is already part of the additional planning requirements for transportation by rail found in § 172.820 of the HMR the impact on the small entities is included in the routing impacts. For a discussion of those impacts see the routing section of the FRFA.
There will be no burden on small offerors that are not shippers, except those who must classify mined liquids and gases. Those small entities will face a total cost, discounted at 7 percent over 20 years, of $10,514 per small entity.
The total impact per small shipper, before considering market forces, discounted at 7 percent over twenty years, will be $1.134 million discounted at 7 percent, and $1.672 million discounted at 3 percent, the costs of upgrading tank cars. However, PHMSA believes that small shippers can pass on those costs to other parties in the supply chain, because all shippers face the same cost constraints.
The total impact per small railroad, discounted at 7 percent over twenty years, will be $45,230, the cost of routing analysis.
PHMSA has identified no additional significant alternative to this final rule that meets the agency's objective in promulgating this rule, and that would further reduce the economic impact of the rulemaking on small entities.
Under the Paperwork Reduction Act of 1995, no person is required to respond to an information collection unless it has been approved by OMB and displays a valid OMB control number. Section 1320.8(d) of Title 5 of the CFR requires that PHMSA provide interested members of the public and affected agencies an opportunity to comment on information and recordkeeping requests. In the August 1, 2014 NPRM, PHMSA requested a new information collection from the Office of Management and Budget (OMB) under OMB Control No. 2137-0628 entitled “Flammable Hazardous Materials by Rail Transportation.” PHMSA stated
In the NPRM, we requested comment on whether PHMSA should require reporting of data on the total damages that occur as a result of train accidents involving releases of hazardous material, including damages related to fatalities, injuries, property damage, environmental damage and clean-up costs, loss of business and other economic activity, and evacuation-related costs. Currently, PHMSA only collects some of this information, and data verification is inconsistent. Further, we requested comments on whether PHMSA should require reporting on every car carrying hazardous material that derails, whether that car loses product or not. Such reporting would assist PHMSA in assessing the effectiveness of different kinds of cars in containing the hazardous materials that they carry. In response to the NPRM, PHMSA received general comments from the following individuals related to information collection:
The AFPM commented that the criteria for modifying the sampling and testing program and what it seeks to address is vague. It adds that this will be another unnecessary paperwork requirement with no corresponding benefit. The AFPM survey and other studies confirm that Bakken Crude oils are correctly classified. They maintain that identification of flammable liquids by geographic, regional, or even a particular country of origin serves no known purpose except to impose unnecessary paperwork requirements.
We disagree that expanding existing classification requirements will not impact transportation safety. PHMSA and FRA audits of crude oil facilities indicated the classification of crude oil transported by rail was often based solely on a SDS. While the classification of manufactured products is generally well-understood and consistent, unrefined petroleum-based products potentially have significant variability in their properties as a function of time, location, method of extraction, temperature at time of extraction, and the type and extent of conditioning or processing of the material. As such, we feel it is necessary to require development and adherence to a consistent and comprehensive sampling and testing program, and to provide oversight for such a program.
The Waterkeeper Alliance noted that according to the proposed regulations, the new sampling and testing program must be “documented in writing and retained while it remains in effect.” Specifically, PHMSA is requiring that offerors keep on hand the most recent versions of the program documentation, provide that version to employees responsible for conducting the testing, and provide documentation to the DOT upon request. Waterkeeper recommended that PHMSA should, at a minimum, require that this information be submitted to FRA (and the public, upon request) and be kept on hand with the railroad or offeror so that responsible packaging decisions can be made based on that data.
PHMSA did not propose requiring third-party involvement with testing or submitting test results to a third party in the NPRM and, as such, is not adopting any such requirements. PHMSA did not propose regulatory changes to classification test procedures, and as such, is not adopting any such requirements. Furthermore, in the NPRM, PHMSA stated that we are not proposing a requirement for the retention of test results.
In the August 1, 2014 NPRM, PHMSA posed the question, “PHMSA assumes no unjacketed tank cars would be in PG I service in 2015 and 2016, in the absence of this rule. Does this assumption match the expected service of unjacketed tank cars?” Bridger firmly answered no, and in its comments asserted, “Bridger note[d] that PHMSA assumes no non-jacketed tank cars would be in PG I service in 2015 and 2016, in the absence of this rule. Bridger adds that, “PHMSA is under a mistaken belief that railcar manufacturers have stopped marketing railcars that are not Enhanced CPC-1232 railcars.” Further, Bridger LLC stated that “before PHMSA makes this key assumption regarding the rule, it should require the railcar manufacturers to provide accurate data and information regarding its marketing and manufacturing activities, issuing an information collection notice if necessary.” Based on the substantive public comment received in response to the NPRM, in this final rule, PHMSA is confident its revised assumptions regarding fleet composition and new and existing outstanding tank car order configurations precludes the need to prepare an information collection notice.
The George Washington University urged PHMSA to be consistent with the requirements of the Paperwork Reduction Act, and with the text of its proposal. The George Washington University added PHMSA should commit to collecting the information needed to measure the rule's success.
In the NPRM PHMSA used data from the Hazmat Intelligence Portal from June 2014. For the Final Rule PHMSA pulled updated data from November 2014 and now estimates that there will be approximately 1,804 respondents up from 1,538, based on a review of relevant active registrations on the PHMSA Hazmat Intelligence Portal, each developing an average of one sampling and testing plan each year. First year hourly burden is estimated at 40 hours per response, or 72,160 burden hours; hourly burden for each subsequent year is estimated at 10 hours per response, or 18,040 burden hours. PHMSA assumes a Chemical Engineer is the labor category most appropriate to describe sampling methodologies, testing protocols, and present test results. The mean hourly wage for a Chemical Engineer was $45.56 in 2014, according to the Bureau of Labor Statistics. We inflate this wage by 60 percent to account for fringe benefits and overhead of $27.94 per hour, for a total weighted hourly wage of $75.05. At an average hourly cost of $75.05 per hour, first year burden cost for this proposed requirement is estimated at $5,415,605.00; burden cost for each subsequent year is estimated at $1,353,902.00.
PHMSA estimates that there will be approximately 170 respondents (10 for Class II Railroads; 160 for Class III Railroads) each submitting an average of one routing collection response each year, and each subsequent year. Hourly burden is assumed to be 40 hours per response, or 6,800 burden hours each year. PHMSA used a labor rate that combines two employee groups listed in the Bureau of Labor Statistics May 2012 Industry-Specific Occupational Employment and Wage Estimates: NAICS 482000—Rail Transportation occupational code 11-0000 “Management Occupations” and occupation code 43-6011 “Executive Secretaries and Executive Administrative Assistants.” A combination of these two groups will
For the first year, PHMSA estimates that there will be approximately 170 respondents (10 for Class II Railroads; 160 for Class III Railroads). Class II Railroads are expected to submit 170 routing security analysis responses per year, based on the number of feasible alternate routes to consider after future possible network changes, with each response taking approximately 80 hours each, or 4,000 hours. At an average hourly cost of $62.25 per hour, first year burden cost for Class II Railroads is estimated at $249,000.00. Class III Railroads are expected to submit 320 routing security analysis responses per year, with each response taking approximately 40 hours, or 12,800 hours. At an average hourly cost of $62.25 per hour, first year burden cost for Class III Railroads is estimated at $796,800.00. Railroads will also be required to provide an alternate routing security analysis. Class II Railroads are expected to submit 40 routing security analysis responses per year, based on the number of feasible alternate routes to consider after future possible network changes, with each response taking approximately 120 hours each, or 4,800 hours. At an average hourly cost of $62.25 per hour, first year burden cost for Class II Railroads is estimated at $298,800.00. Class III Railroads are expected to submit 160 alternate routing security analysis responses per year, with each response taking approximately 20 hours, or 3,200 hours. At an average hourly cost of $62.25 per hour, first year burden cost for Class III Railroads is estimated at $199,200.00.
PHMSA assumes that new route analyses are necessary each year based on changes in commodity flow, but that after the first year's route analyses are completed, analyses performed on the same routes in subsequent years will take less time. For each subsequent year, PHMSA estimates that there will be approximately 170 respondents (10 for Class II Railroads; 160 for Class III Railroads). Class II Railroads are expected to submit 50 routing security analysis responses per year, with each response taking approximately 16 hours each, or 800 hours. At an average hourly cost of $62.95 per hour, subsequent year burden cost for Class II Railroads is estimated at $49,800.00. Class III Railroads are expected to submit 320 routing security analysis responses per year, with each response taking approximately 8 hours, or 2,560 hours. At an average hourly cost of $62.95 per hour, first year burden cost for Class III Railroads is estimated at $159,360.00. Railroads will also be required to provide an alternate routing security analysis. For each subsequent year, PHMSA estimates that there will be approximately 170 respondents (10 for Class II Railroads; 160 for Class III Railroads). Class II Railroads are expected to submit 40 routing alternate security analysis responses per year, with each response taking approximately 12 hours each, or 480 hours. At an average hourly cost of $62.95 per hour, subsequent year burden cost for Class II Railroads is estimated at $29,800.00. Class III Railroads are expected to submit 160 alternate routing security analysis responses per year, with each response taking approximately 2 hours, or 320 hours. At an average hourly cost of $62.95 per hour, first year burden cost for Class III Railroads is estimated at $19,920.00.
PHMSA estimates there will be 289 incidents over 20 years, for an average of 15 incidents per year, involving the derailment and release of crude oil/ethanol. Each report would be submitted by a single respondent and would take approximately 2 additional hours to submit per response, compared to the current requirements. At an average hourly cost of $62.95 per hour, burden cost is estimated at $1,825.55. We do not currently have sufficient data to estimate the number of respondents and responses that would be required if PHMSA extended incident reporting requirements to derailments not involving a product release.
We estimate that the total information collection and recordkeeping burden for the requirements as specified in this final rule will be as follows:
OMB No. 2137-0628, “Flammable Hazardous Materials by Rail Transportation” First Year Annual Burden:
Total Annual Number of Respondents: 1,989.
Total Annual Responses: 2,559.
Total Annual Burden Hours: 103,789.
Total Annual Burden Cost: $7,384,533.55.
Subsequent Year Burden:
Total Annual Number of Respondents: 1,989.
Total Annual Responses: 2,559.
Total Annual Burden Hours: 29,029.
Total Annual Burden Cost: $2,037,988.
Requests for a copy of this information collection should be directed to Steven Andrews or T. Glenn Foster, Office of Hazardous Materials Standards (PHH-12), Pipeline and Hazardous Materials Safety Administration, 1200 New Jersey Avenue SE., Washington, DC 20590-0001, Telephone (202) 366-8553.
The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4375), requires that Federal agencies analyze the environmental impacts of proposed actions. If an agency does not anticipate that a proposed action will have a significant impact on the environment, the Council on Environmental Quality (CEQ) regulations provide for the preparation of an environmental assessment (EA) to determine whether a proposed action has significant effects and therefore requires an environmental impact statement or finding of no significant impact (FONSI). The EA must include discussions of (1) the need for the proposed action, (2) alternatives to the proposed action as required by NEPA section 102(2)(E), (3) the environmental impacts of the proposed action and alternatives, and (4) the agencies and persons consulted (40 CFR 1508.9(b)).
This Final EA includes responses to public comments received on the EA in the NPRM. One change in the Final EA is the addition of an alternative in response to various comments for expedited DOT Specification 111 (DOT-111) tank car usage discontinuance, “Alternative of 2018 Removal of DOT-111 Tank Cars from Service.” PHMSA has likewise not carried the “ANPRM Alternative,” found in the NPRM draft EA, forward in this Final EA. This is because the ANPRM included several actions that are not within the scope of this rulemaking. As discussed below, PHMSA considered, but eliminated from detailed consideration, an immediate removal of DOT-111 tank cars. Lastly, this Final EA now also includes additional data and calculations to support discussions.
The purpose of this rulemaking is to address serious safety and environmental concerns revealed by recent train accidents involving high-hazard flammable trains (HHFTs). This final rule is designed to lessen the
U.S. crude oil production has risen sharply in recent years, with much of the increased output moving by rail. In 2008, U.S. Class I railroads originated 9,500 carloads of crude oil. In 2013, the number of rail carloads of crude oil surpassed 400,000. The Association of American Railroads (AAR) reported 229,798 carloads in the first half of 2014. In 2013, there were over 290,000 carloads of ethanol originated in the United States. This data suggests an increasing need to transport flammable liquids by rail.
The growing reliance on trains to transport large volumes of flammable liquids, particularly crude oil and ethanol, under the current regulatory framework, poses a risk to life, property, and the environment. These risks of HHFTs have been highlighted by the recent derailments of trains carrying crude oil in Casselton, North Dakota; Aliceville, Alabama; Lac-Mégantic, Quebec, Canada and Mount Carbon, West Virginia and recent derailments of trains carrying ethanol in Arcadia, Ohio and Cherry Valley, Illinois. This rule also addresses the National Transportation Safety Board (NTSB) recommendations regarding accurate classification, enhanced tank car integrity, rail routing, and oversight.
In developing this rule, PHMSA considered the following alternatives:
In the no action alternative, PHMSA would not issue a final rule, and the current regulatory standards would remain in effect. This would allow for the indefinite continued use of the DOT-111 tank cars to transport crude oil and ethanol.
In addition, the no action alternative would result in no new operational controls. Specifically, a classification and sampling plan would not be adopted. Selection of the no action alternative would not include mandates to sample and test materials, and carriers/offerors might engage or continue to engage in the practice of using inaccurate safety data sheets (SDSs) to classify their products. HHFT carriers also would not be required to consider the 27 safety and security factors to determine routing. Moreover, if PHMSA selected the no action alternative, the requirement to communicate with state and/or regional fusion centers about routing decisions would not take effect, and information would not be as easily available to authorized personnel.
Finally, no action would continue the status quo with regard to braking systems. The final rule proposes a two-tiered, cost-effective and risk-based solution to reduce the number of cars and energy associated with train accidents. Without action, the current braking systems would continue to be used and the highest-risk train sets (larger HHFTs) would continue using the same braking systems.
The selected alternative, which was originally discussed in the draft EA, and is more fully discussed in the preamble has a phase-out schedule depicted in Table EA1 below. The amendments included in this alternative are more fully addressed in the preamble and regulatory text sections of this final rule. However, they generally include:
• New defined term of “High-hazard flammable train;”
• Rail routing requirements as specified in Part 172, Subpart I of the HMR;
• Sampling and testing program designed to ensure proper classification and characterization of unrefined petroleum-based products;
• Phase in requirements for updated braking devices and braking systems;
• Speed restrictions for rail cars that do not meet the safer DOT-117 standard; and
• Phase-out DOT-111 cars in HHFTs and require DOT-117 for such HHFTs, as follows.
This alternative includes the same amendments as the selected alternative above, but would discontinue the use DOT-111 cars in HHFTs on a more accelerated schedule than the selected alternative. Specifically, for the purposes of analyzing this alternative in the environmental assessment, the retrofit deadlines for Non Jacketed DOT-111 tank cars in PG I service, Non Jacketed DOT-111 tank cars in PG II service, and Jacketed DOT-111 tank cars in PG I and PG II service would all be expedited to meet a deadline of October 1, 2018 (41 months). In this environmental assessment and its
PHMSA received a range of comments asking that it consider an immediate ban or other expedited discontinuance of all DOT-111 tank cars for crude and ethanol transport. PHMSA considered the impacts of immediately banning the use of the DOT-111 tank car in HHFTs. However, PHMSA concluded in the regulatory impact analysis (RIA) included in this rulemaking that an immediate ban of the DOT-111 tank car is not a reasonable alternative because the rail industry could not replace rail cars immediately and would not be able to immediately switch to other transportation modes. This would cause supply chain disruptions, increased shipping costs, and increased reliance on trucks to make up for lost transport capacity. This increased reliance on trucks could have detrimental environmental and safety implications. As such, PHMSA concluded that a ban by 2016 would be impractical. Therefore, PHMSA more fully examined the impacts of a schedule that would phase out the use of all DOT-111 tank cars in PG I and PG II service by 2018, which is more aggressive than the selected alternative.
If PHMSA were to select the no-action alternative, current regulations would remain in place, and no new provisions would be added. However, the safety and environmental threats that result from the increasing use of HHFTs would not be addressed. The existing threat of derailment and resulting fire, as exhibited in serious accidents like Lac-Mégantic, Quebec, which resulted in 47 fatalities, and Aliceville, Alabama, where we estimate that 630,000 gallons of crude oil entered navigable waters, destroying a several acres of wetlands and forest, would continue. Clean-up is ongoing for both of these accidents. For more information on safety and environmental risks, please see the RIA.
As noted in the Final Rule, NTSB has identified these tank cars as vulnerable to puncture. No action would allow for the long term continuation of transportation of flammable liquids by rail in large volumes in the DOT-111 tank car. In addition, if no action were taken PHMSA would not adopt the DOT-117 tank car standard for new construction. This would lead to market uncertainty and leave important safety benefits unrealized.
If PHMSA selected the no action alternative, the safety benefits of the sampling program would not be realized. These requirements are intended to ensure the proper safety precautions are applied to each carload. Without these protections, first responders could face greater challenges in responding to incidents, and their efforts could be less effective at mitigating the impacts of a release.
Selection of the no action alternative would also not include requirements to share routing selection information with state authorities and/or fusion centers. This requirement is intended to aid first responders to best respond to incidents to mitigate the effects of a release.
If PHMSA selected the no action alternative, speed restrictions would not take effect. Speed restrictions decrease the kinetic energy involved in accidents and are intended to decrease the amount of hazardous materials released when a derailment or incident occurs. Similarly, the no action alternative would not include the safety benefits of more advanced braking systems to reduce the likelihood or severity of derailments.
In considering the various alternatives, PHMSA analyzed the following potential environmental impacts of each amendment in the selected alternative.
The extension of the existing rail routing requirements in 49 CFR 172.820 to include HHFTs will require that rail carriers consider safety and security risk factors such as population density along the route; environmentally-sensitive or significant areas; venues along the route (stations, events, places of congregation); emergency response capability along the route; etc., when analyzing and selecting routes for those trains. Use of routes that are less sensitive could mitigate the safety and environmental consequences of a train accident and release, were one to occur. It is possible that this requirement and consideration of the listed risk factors could cause rail carriers to choose routes that are less direct, potentially increasing the emission of greenhouse gases and other air pollutants. PHMSA, however, concluded that the reduction in risk to sensitive areas outweighs a slight increase in greenhouse gases. Furthermore, consideration of emergency response capabilities along the route could result in better environmental mitigation in the event of a release. The purpose of environmental mitigation is to decrease impacts to environmental media such as air and water.
Next, the requirement for offerors to develop sampling and testing plans is intended to ensure that unrefined petroleum products are properly characterized to ensure that: (1) The proper regulatory requirements are applied to each shipment to minimize the risk of incident, (2) first responders have accurate information in the event of a train accident, and (3) the characteristics of the material are known and fully considered so that offerers and carriers are aware of and can mitigate potential threats to the integrity of rail tank cars. PHMSA believes that this provision will reduce the risk of release of these materials.
PHMSA has calculated in the RIA that braking and speed restrictions, especially for older DOT-111 tank cars, will reduce the likelihood of train accidents that result in the release of flammable liquids. PHMSA has also shown that the braking requirements could improve fuel efficiency, thereby reducing greenhouse gas emissions. The effective use of braking on a freight train can result in some accident avoidance. In addition, the effective use of braking on a freight train can potentially lessen the consequences of an accident by diminishing in-train forces, kinetic energy, etc., which can reduce the likelihood of a tank car being punctured and decrease the likelihood of a derailment. Lessening the likelihood of derailments translates into a reduction in the probability of releases into the environment.
These benefits are amplified when a train operates in ECP brake mode, particularly as train length increases to 70 or more cars. The system-wide implementation of ECP brakes on high-hazard flammable unit trains also will potentially improve the efficiency of the rail system by permitting trains to run closer together because of the improved performance of the brake system. The final rule cites business benefits related to operating in ECP brake mode (
PHMSA concluded that the phasing-out of DOT-111 tank cars in HHFTs will reduce risk of release because of the improved integrity and safety features of the DOT-117. The DOT-117 will provide bottom outlet protection and a
The DOT-117 tank car must have a thermal protection system, capable of surviving a 100-minute pool fire after a train accident. The 100-minute survivability period is intended to provide emergency responders time to assess an accident, establish perimeters, and evacuate the public as needed. This thermal protection is critical in limiting human health risks to the public and first responders and limiting environmental damage in the event of a train accident. The introduction of the new DOT-117, along with the phase-out of the DOT-111 used in HHFTs will result in the manufacturing of some new tank cars to replace retirements and to accommodate new investment. PHMSA recognizes that performed a quantitative analysis the newer tank cars are heavier such that their transport will result in somewhat greater use of fuel and in turn greater release of air pollutants, including carbon dioxide. However, PHMSA has discussed in the RIA that the increased integrity of the tank cars, designed to reduce the risk of release of high-hazard flammable materials to the environment, causing air and likely water pollution, positively outweighs a relatively small increase in air pollution.
While the nature of the phase-out is intended to minimize the unintended impacts of an accelerated phase-out, increased manufacture of replacement rail tank cars could nevertheless result in greater short-term release of greenhouse gases and use of resources needed to make the new tank cars, such as steel. PHMSA, however, concluded that these possible temporary increases are far outweighed by the increased safety and integrity of each railcar and each train and the decreased risk of release of crude oil and ethanol to the environment. The phase out of older tank cars will not create a solid waste burden on the environment because they will be recycled. Any environmental burdens will be limited to energy inputs and pollutants from the recycling and manufacture processes, which we do not expect to be significant since in the absence of this rule, the same number of tank cars would eventually be built. The only difference under this rule is that the same number of tank cars will be built to the new standard.
If PHMSA were to select the provisions of this additional Final EA alternative, we recognize that some safety and environmental risks could be reduced in the short-term. For example, due to improved integrity of new tank cars, such as puncture resistance and thermal protection, rail incidents would be less likely to result in release of crude oil or ethanol to the environment. Also, the releases that still occurred would likely be smaller in volume. These avoided or decreased release amounts would avoid increased water, soil, and air pollution. PHMSA recognizes that derailment of HHFTs has resulted in water, soil, and air pollution. Such releases also pose risk to human health and public safety.
PHMSA examined and performed a quantitative analysis of a 2018 phase-out alternative in this Final EA, which includes an expedited phase out of all DOT-111s in PG I and PG II service. PHMSA used this alternative, which requires removal from service of all DOT-111 tank cars for transport of crude oil and ethanol by the end of 2018, as a quantitative baseline. In its analysis of the full impacts of removal of DOT-111 tank cars by the end of 2018, PHMSA found disadvantages to this alternative. As explained more specifically in Appendix A, the transportation capacity lost to the retirement of the DOT-111 tank cars would likely cause crude and ethanol transportation to be shifted to truck/highway transportation (
Furthermore, PHMSA had to consider the costs of such a drastic regulatory change to industry, energy production, and the public. Comments submitted by industry indicated that costs imposed by a 2018 complete removal of the entire DOT 111 fleet would be prohibitive and that such an action would potentially disrupt supply, which could affect the public in the form of higher energy prices. Further, such a sudden removal would greatly constrain the capacity of manufacture and repair required for other tank cars, potentially resulting in shortages for transport of other commodities.
PHMSA weighed the benefit of reductions in releases from rail accidents that would result from the 2018 removal of DOT-111 tank cars against increased air pollution and highway accidents, often resulting in releases, that would result from a temporary modal shift, along with extremely high cost to industry and the public, and the other regulatory provisions in this rulemaking that are also aimed at reducing derailments and releases. Upon consideration of all these factors, PHMSA recognizes the need to upgrade the rail car fleet, but found that a targeted phase-out of the DOT-111 tank cars was the most prudent and protective approach.
PHMSA received various comments on this rulemaking. Some commented directly on the NPRM EA, while others commented more generally on the rule while focusing their comments on environmental matters. We have tried to address both types of comments here.
The RSI's comments suggested that PHMSA's proposed retrofit schedule could result in modal shift. RSI suggested that from 2015-2025, over-the-road trucks needed to replace railcar capacity would emit 6.41 million more tons of carbon dioxide (CO
The selected alternative considers comments submitted by the RSI with regard to the retrofit capacity of rail yards and the build capacity of tank car manufacturers. PHMSA has carefully considered retrofit and build capacity, and concluded that its selected alternative will not result in any shift to highway transportation due to shortages of compliant tank cars. PHMSA agrees that shifting transportation to highway would increase emissions and the risk of incidents due to higher rates of highway traffic incidents than rail incidents. However, under this final rule, as explained in more detail below, PHMSA concluded that there will not be any losses of capacity from retrofits or excessive retirements of tank cars that will lead to a backlog of new tank car orders (such a backlog would represent lost rail car capacity that would require more shipments by truck), and thus no modal shift will occur under the final rule; the final rule was carefully drafted to avoid modal shift.
Nonetheless, in order to better address comments received in response to the NPRM (relating to environmental matters) and NPRM EA, PHMSA simulated the impact of a schedule in which DOT-111 tank cars in PG I and PG II service would be phased out by 2018, which was proposed in the NPRM and supported by some environmental organizations. The full details of this analysis are provided in Appendix A. Such a scenario would lead to increased retirements and unplanned new orders of tank cars. Initially, these new orders plus existing planned orders would exceed the build capacity of rail car manufacturers. Because crude oil and ethanol producers would still need to move their products, the lack of suitable tank cars would likely result in modal shift from rail transportation to highway transportation, which would result in greater air pollution. The backlog of orders would be eliminated after 2019, which would result in a shift back to rail, eliminating related increased emissions. Under the selected alternative, a mode shift does not occur. Table EA2 provides PHMSA's analysis of increased emissions resulting from a 2018 phase-out of DOT-111 tank cars. As stated previously, due to increased modal shifts that would be necessitated, we expect magnified pollution and negative safety effects for phase-outs prior to 2018.
RSI cites analyses prepared for them by the Brattle Group (a consulting firm specializing in economic analysis) estimating that replacing lost rail capacity in 2017 with truck transportation for crude oil and ethanol shipments in North America would require approximately 20,000 trucks carrying over 370,000 truckloads on North American highways. In 2018, the year in which the loss of capacity would be fully felt, RSI further cites the Brattle Group, indicating that replacement transportation would require approximately 70,000 trucks carrying almost 1.6 million loads and that over the road (OTR) truckers spilled 58 percent more total liquid hazardous material from 2002-2009 than railroads per year and per billion ton-miles. AAR has also expressed concern that, “[t]he result would be the diversion of traffic off the rail network and onto less safe and less environmentally friendly modes of transportation.” AAR also commented that rail is an environmentally superior form of transportation.
PHMSA's calculations for increased emissions were lower than those provided by RSI. In particular, PHMSA's selected alternative would result in no shift to highway transportation. PHMSA's analysis also does not concur with RSI that the less stringent phase-out schedule in the selected alternative would lead to 6.41 million additional tons of CO
The Center for Biological Diversity (CBD), Clean Water Action, Delaware River Keeper, Earthjustice, Environment New Jersey, and Powder River Basin Resource Council have all expressed concern about the integrity of the DOT-111 tank cars and propose that these cars be removed from service immediately, as opposed to PHMSA's planned phase-out.
PHMSA expects additional air emissions, spills and fatalities in 2019 as a result of the shift to highway transportation. Our analyses indicate that the amendments in this final rule will actually realize much greater savings in these areas over the long-term. The RIA prepared for this final rule examines a period from 2015 to 2034, but benefits would continue to accrue beyond this analysis period. We have therefore decided that it is not prudent to modify the regulation in response to these comments.
The CBD and ADM commented that an Environmental Impact Statement (EIS), as opposed to an EA, is required under NEPA. PHMSA determined that an EA was appropriate to determine whether to prepare an EIS or a FONSI. An EIS is necessary when a proposed action will have significant environmental impacts. At the outset, PHMSA performed a NEPA best practice environmental checklist analysis for this rulemaking, examining all facets of the environment that could potentially be impacted. This rulemaking does not authorize and will not result in new construction of rail infrastructure or new transportation of hazardous materials. These factors, which impact the environment, are already in existence and are ongoing. Since the primary purpose and function of the rulemaking is to decrease the already existing risk of releases of crude oil and ethanol, the rulemaking does not result in any significant new environmental impacts. Based on the analysis completed for this EA, PHMSA does not agree that this rulemaking could result in significant environmental impacts that would require the preparation of an EIS, and therefore PHMSA intends to issue a FONSI.
The CBD noted in its comments that PHMSA should initiate an Endangered Species Act consultation with FWS/NMFS in order to fully assess areas where HHFTs have the potential to impact listed species and critical habitat. As stated above, the intent of this rule is to prevent releases of hazardous chemicals to the environment. This rulemaking is not authorizing any new impacts to protected species or habitats, as rail transportation of hazardous materials and high-hazard flammable material is ongoing and rail infrastructure already exists. Increased regulation of ongoing transportation of hazardous materials will not jeopardize continued existence of any species and will not result in the destruction of habitat. Therefore, no consultation is required. While the routing provisions included in this rulemaking could alter the routes HHFTs take, the “Rail Risk Analysis Factors” that rail operators must consider in selecting routes include the consideration of “environmentally sensitive and significant areas.” See Appendix D to Part 172. Therefore, PHMSA concluded that improved routing selection and the eventual universal use of safer tank cars will result in a reduction in risk to endangered species.
Riverkeeper 2266 stated its concerns regarding potential oil spills entering the Hudson River. Riverkeeper asserted that the characteristics of the River would make cleanup especially difficult and complicated. Riverkeeper 2266 also commented that spills could hurt the tourist-based economy, wildlife, and riverfront communities. Lastly, Riverkeeper 2266 and others expressed concerns that PHMSA's new safety standards only apply to trains of 20 cars or more with Class 3 flammable liquids, even though devastating effects to the environment could also occur for trains with 19 or fewer cars.
In the NPRM, PHMSA proposed to define HHFT to mean a single train carrying 20 or more carloads of a Class 3 flammable liquid. This definition aligns with the definition of “Key Train” in OT-55N. Many commenters raised concerns regarding the ambiguity of this definition as it would be applied to crude oil and ethanol trains and suggested that this definition would inadvertently include manifest trains that did not pose as high a risk as unit trains. PHMSA subsequently revised the definition of HHFT to “20 or more loaded tank cars of a Class 3 flammable liquid in a continuous block or a single train carrying 35 or more loaded tank cars of a Class 3 flammable liquid throughout the train.” While the point regarding the potential environmental impacts associated the transport 19 or less tank cars of flammable liquid cars is valid, the focus of the final rule is on trains in which the flammable liquid cars are concentrated in large blocks.
Commenters, such as ADM, Clean Water Action Pennsylvania, and Earthjustice commented that an Environmental Justice (EJ) assessment should be included in the EA. Earthjustice's
This rulemaking has no role in the siting of already existing railroad lines. This rulemaking also does not authorize new hazardous materials transportation; these activities are ongoing. The purpose of the rulemaking is to decrease the risk of release of crude oil and ethanol. PHMSA has calculated in the RIA that consideration of the Rail Risk Analysis Factors will reduce risk of release in general, especially in densely populated areas, as railroad operators will now be required to consider population density, places of congregation, and presence of passenger traffic, among other factors to encourage selection of the most prudent routes. PHMSA, therefore, does not agree that there is potential for this rulemaking to have a disparate impact on low income or minority populations. Consideration of the Rail Risk Analysis Factors will reduce risk of release in densely populated areas where low income and minority populations are likely to be located.
This rulemaking also has no impact on historic preservation or wetlands and floodplains because it does not authorize any new construction. It is also not reasonable that this rulemaking would indirectly or cumulatively result in new construction. It simply attempts to make existing hazardous materials
PHMSA worked closely with the FRA, EPA, and DHS/TSA in the development of this final rulemaking for technical and policy guidance. PHMSA also considered the views expressed in comments to the ANPRM and NPRM submitted by members of the public, state and local governments, and industry.
The provisions of this rule build on current regulatory requirements to enhance the transportation safety and security of shipments of hazardous materials transported by rail, thereby reducing the risks of release of crude oil and ethanol and consequent environmental damage. PHMSA has calculated that this rulemaking will decrease current risk of release of crude oil and ethanol to the environment. Therefore, PHMSA finds that there are no significant environmental impacts associated with this final rule.
PHMSA performed calculations to analyze the additional air emissions, hazardous materials incidents, quantity of hazardous material spilled, fatalities, and injuries from two options to phase-out DOT-111 rail tanks cars. As discussed, PHMSA calculated these impacts to be minimal for the selected alternative because no shift to highway transportation is anticipated.
The schedule for retrofitting DOT-111 and CPC-1232 tank cars and mandating use of tank cars that comply with the new standards is not expected to reduce tank car capacity for shipping crude and ethanol. Consequently, the deleterious effects of shipments being shifted to highway transportation on trucks will be avoided. The new tank car standards and other provisions of the rule are expected to reduce the risk of hazardous materials incidents, and the severity of those incidents that do occur. As discussed under “Selected alternative” in Section 3 of the Final EA, this alternative is anticipated to provide positive benefits for the environment and safety.
The alternative of prohibiting use of all DOT-111 tank cars in 2018 is the scenario that PHMSA staff could envision as physically possible that would both (a) negatively impact railroads and shippers' ability to continue transport of crude oil and ethanol by rail and (b) have the greatest chance of resulting in modal shift. PHMSA calculates that a modal shift resulting from a decrease in the number of tank cars authorized to transport flammable liquids, notably crude oil and ethanol, would have significant deleterious effects on safety and the environment. The evaluation of this scenario assumes that there will be a sufficient number of trucks and drivers to handle the additional volume of crude oil and ethanol. Because it is unclear whether this additional trucking capacity would actually be available, these results can be considered an upper limit on potential environmental impacts.
Per ton-mile of transportation, cargo tank motor vehicles (CTMVs) emit significantly higher levels of volatile organic compounds, non-volatile hydrocarbons, carbon monoxide, oxides of nitrogen, carbon dioxide, and particulate matter than freight rail. In addition, the fatality and injury rate per ton-mile from accidents is significantly higher than from freight rail. In estimating the size of this modal shift, PHMSA employs several key assumptions.
1. There are approximately 33,000 DOT-111 tank cars in service that transport high-hazard flammable material.
2. Rail tank car manufacturers have an annual build capacity of roughly 24,000 cars.
3. Under this alternative, a total phase-out of DOT-111s would occur by the end of 2018. Shippers would find alternative methods to transport their products to account for any of the 33,000 DOT-111s not replaced by this time.
4. Shippers or carriers will spread out replacing/removing from service DOT-111 tank cars over time.
Please see the RIA prepared for this rule for additional information on these assumptions.
Based on these assumptions, PHMSA estimated that at the end of 2018, there would be a backlog of 12,239 DOT-111 tank cars that would not meet the retrofit deadline, but that these would be replaced by new, compliant tank cars by the end of 2019. In the meantime, their carrying capacity would shift to CTMVs. The capacity and backlog of tank cars is presented in the table below.
PHMSA concluded that 47,000 million ton miles of ethanol would be transported per year by rail between 2015 and 2018, and that about 108,000 million ton miles of crude oil will be transported on average per year. PHMSA concluded that about 96 percent of ethanol transported by rail is currently shipped in DOT-111 tank cars, and that about 29 percent of crude oil transported by rail is shipped in these tank cars. Assuming these proportions in the hypothetical scenario, DOT-111s would be used to transport about 45,300 million ton miles of ethanol (96% × 47,000) and 31,500 million ton miles of crude oil (29% × 108,000). All told, about 76,869 million ton miles of crude and ethanol would be shipped in DOT-111 tank cars on average per year, and each of the 32,831 DOT-111 tank cars in crude and ethanol service would handle on average 1.7 million ton miles per year. That is, the loss of each individual DOT-111 tank car would require a shift of 1.7 million ton miles of crude or ethanol per rail tank car to another mode.
Rail car manufacturers have excess capacity for replacing some, but not all, of older DOT-111s. The backlog presented by a complete DOT-111 phase out by 2018 translates into lost DOT-111 rail-car capacity that would have to be handled by CTMVs. Table EA7 equates the lost capacity to ton-miles shifted to CTMV. It is important to note that these are the maximum amounts of ton-miles that could be shifted to truck. These amounts will be constrained by the availability of trucks and drivers to handle these additional loads.
1. A standard semi-truck weighs 20,000 pounds, a tank trailer weighs about 13,000 pounds, and the maximum gross vehicle weight rating for a tractor-trailer is 80,000 pounds. Each truck can transport up to 47,000 pounds of ethanol or crude oil.
2. A fully utilized tractor trailer travels up to 500 miles per day for up to 300 days per year, or a total of 150,000 miles per year.
3. Trucks will make return trips empty, so their maximum annual transport capacity is halved.
A typical semi-truck/tank-trailer combination can transport up to 1.7652 million ((((47,000 × 150,000) ÷ 2,000) ÷ 2) ÷ 1,000,000) ton miles of crude or ethanol per year. A mode shift of 15,200 million ton miles would require an additional 8,861 trucks. This is a relatively small addition to the current number of such vehicle combinations currently operating. PHMSA concluded that the availability of trucks is unlikely to constrain the amount of crude oil and ethanol that could be shifted to highway transportation.
PHMSA applied the ton-miles shifted to CTMV presented in Table EA7 to the emissions per ton-mile presented in Table EA6 to calculate the additional emissions that result from constraining rail car capacity by an expedited 2018 retirement schedule for DOT-111s.
PHMSA examined the additional hazardous material incidents and quantities of hazardous material released that could occur from a mode shift to CTMVs.
Multiplying the annual the ton-miles (the “Percent DOT-111 Ton-Miles Shifted to CTMV” column) presented in Table EA7 by the “difference” row for hazardous material incident and release rates in Table EA9 yields the additional number of hazardous material incidents and quantity of hazardous material incident released, which are presented in Table EA10. PHMSA concluded that a shift to truck for transporting crude oil and ethanol that would have been transported in DOT-111 tank cars would lead to nearly 30 additional hazardous material incidents and over 158,000 additional gallons of hazardous material per incident released in 2019.
Lastly, PHMSA examined the additional transportation fatalities, and injuries that could occur from a mode shift to CTMVs. Table EA11 presents accident, fatality, and injury rates per million ton mile for rail and CTMV.
Multiplying the ton-miles presented
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under Executive Order 13609, agencies must consider whether the impacts associated with significant variations between domestic and international regulatory approaches are unnecessary or may impair the ability of American businesses to export and compete internationally. In meeting shared challenges involving health, safety, labor, security, environmental, and other issues, regulatory approaches developed through international cooperation can provide equivalent protection to standards developed independently while also minimizing unnecessary differences.
Similarly, the Trade Agreements Act of 1979 (Public Law 96-39), as amended by the Uruguay Round Agreements Act (Public Law 103-465), prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. For purposes of these requirements, Federal agencies may participate in the establishment of international standards, so long as the standards have a legitimate domestic objective, such as providing for safety, and do not operate to exclude imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.
PHMSA participates in the establishment of international standards in order to protect the safety of the American public, and we have assessed the effects of the proposed rule to ensure that it does not cause unnecessary obstacles to foreign trade. Accordingly, this rulemaking is consistent with Executive Order 13609 and PHMSA's obligations under the Trade Agreement Act, as amended.
For further discussion on the impacts of harmonization see the “Harmonization” portion of “Miscellaneous Relevant Comments” Section of this rulemaking.
This final rule is published under the authority of 49 U.S.C. 5103(b), which authorizes the Secretary of
A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.
Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” 66 FR 28355, May 22, 2001. Under the Executive Order, a “significant energy action” is defined as any action by an agency (normally published in the
PHMSA has evaluated this action in accordance with Executive Order 13211. See the environmental assessment section for a more thorough discussion of environmental impacts and the supply, distribution, or use of energy. PHMSA has determined that this action will not have a significant adverse effect on the supply, distribution, or use of energy. Consequently, PHMSA has determined that this regulatory action is not a “significant energy action” within the meaning of Executive Order 13211.
Exports, Hazardous materials transportation, Hazardous waste, Imports, Incorporation by reference, Reporting and recordkeeping requirements.
Hazardous materials transportation, Hazardous waste, Labeling, Packaging and containers, Reporting and recordkeeping requirements, Security measures.
Hazardous materials transportation, Packaging and containers, Radioactive materials, Reporting and recordkeeping requirements, Uranium.
Hazardous materials transportation, Rail carriers, Reporting and recordkeeping requirements, Security measures.
Hazardous materials transportation, Incorporation by reference, Railroad safety, Reporting and recordkeeping requirements.
In consideration of the foregoing, we are amending title 49, chapter I, subchapter C, as follows:
49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 section 4 (28 U.S.C. 2461 note); Pub. L. 104-121, sections 212-213; Pub. L. 104-134, section 31001; 49 CFR 1.81 and 1.97.
(k) * * *
(2) AAR Manual of Standards and Recommended Practices, Section C—III, Specifications for Tank Cars, Specification M-1002 (AAR Specifications for Tank Cars), Appendix E, Design Details, implemented April 2010; into §§ 179.202-9, and 179.202-12(f).
49 U.S.C. 5101-5128; 44701; 49 CFR 1.81 and 1.97.
The additions read as follows:
(a) * * *
(4) A high-hazard flammable train (HHFT) as defined in § 171.8 of this subchapter.
(b) * * *
(1) * * *
(i) A rail carrier subject to additional planning requirements of this section based on paragraph (a)(4) of this section, must complete the initial process by March 31, 2016, using data for the six month period from July 1, 2015 to December 31, 2015; or
(ii) A rail carrier subject to additional planning requirements of this section based on paragraph (a)(4) of this section, must complete the initial process by March 31, 2016, using data for all of 2015, provided the rail carrier indicates in their initial analysis that it has chosen this option.
49 U.S.C. 5101-5128, 44701; 49 CFR 1.81 and 1.97.
(a)
(1) A frequency of sampling and testing that accounts for any appreciable variability of the material (
(2) Sampling prior to the initial offering of the material for transportation and when changes that may affect the properties of the material occur (
(3) Sampling methods that ensure a representative sample of the entire mixture, as offered, is collected;
(4) Testing methods that enable classification of the material under the HMR;
(5) Quality control measures for sample frequencies;
(6) Duplicate sampling methods or equivalent measures for quality assurance;
(7) Criteria for modifying the sampling and testing program; and
(8) Testing or other appropriate methods used to identify properties of the mixture relevant to packaging requirements (
(b)
(c)
(d)
(a)
(1) DOT Specification 111 tank cars and DOT Specification 111 tank cars built to the CPC-1232 industry standard are no longer authorized for use in high-hazard flammable train service unless retrofitted prior to the dates in the following table:
(2) Conforming retrofitted tank cars are to be marked “DOT-117R.”
(3) Conforming performance standard tank cars are to be marked “DOT-117P.”
(a)
(1) DOT Specification 111 tank cars and DOT Specification 111 tank cars built to the CPC-1232 industry standard are no longer authorized for use in high-hazard flammable train service unless retrofitted prior to the dates in the following table:
(2) Conforming retrofitted tank cars are to be marked “DOT-117R.”
(3) Conforming performance standard tank cars are to be marked “DOT-117P.”
(a)
(1) DOT Specification 111 tank cars and DOT Specification 111 tank cars built to the CPC-1232 industry standard are no longer authorized for use in high-hazard flammable train service unless retrofitted prior to the dates in the following table:
(2) Conforming retrofitted tank cars are to be marked “DOT-117R.”
(3) Conforming performance standard tank cars are to be marked “DOT-117P.”
49 U.S.C. 5101-5128; 49 CFR 1.81 and 1.97.
(a)
(1)
(2)
(3)
(ii) By January 1, 2021, each rail carrier operating a high-hazard flammable unit train (HHFUT) comprised of at least one tank car loaded with a Packing Group I material, at a speed exceeding 30 mph must ensure the train is equipped with ECP brakes that meet the requirements of 49 CFR part 232, subpart G, except for buffer cars, and must be operated in ECP brake mode as established in 49 CFR part 232, subpart G.
(iii) By May 1, 2023, each rail carrier operating a high-hazard flammable unit train (HHFUT) not described in paragraph (a)(3)(ii) of this section, at a speed exceeding 30 mph must ensure the train is equipped with ECP brakes that meet the requirements of 49 CFR part 232, subpart G, except for buffer cars, and must be operated in ECP brake mode as established in 49 CFR part 232, subpart G.
(iv) Each buffer car in an high-hazard flammable unit train that is not equipped with ECP brakes will be counted in determining the percentage of cars with effective and operative brakes during the operation of the train, as required under 49 CFR 232.609.
(v) Alternate brake systems may be submitted for approval through the processes and procedures outlined in 49 CFR part 232, subpart F.
(4)
(i) DOT Specification 117, or 117P performance standard in part 179, subpart D of this subchapter; or
(ii) An authorized tank specification as specified in part 173, subpart F of this subchapter.
(5)
(i) The total number of tank cars retrofitted to meet the DOT-117R specification;
(ii) The total number of tank cars built or retrofitted to meet the DOT-117P specification;
(iii) The total number of DOT-111 tank cars (including those built to CPC-1232 industry standard) that have not been modified;
(iv) The total number of tank cars built to meet the DOT-117 specification; and
(v) The total number of tank cars built or retrofitted to a DOT-117, 117R or 117P specification that are ECP brake ready or ECP brake equipped.
(vi) Entities required to submit a report under this paragraph shall submit subsequent follow-up reports containing the information identified in this paragraph within 60 days of being notified by PHMSA and FRA.
(b) [Reserved]
49 U.S.C. 5101-5128; 49 CFR 1.81 and 1.97.
Each tank built under these specifications must conform to the general requirements of § 179.200 and the prescriptive standards in §§ 179.202-1 through 179.202-11, or the performance standard requirements of § 179.202-12.
A tank car may be loaded to a gross weight on rail of up to 286,000 pounds (129,727 kg) upon approval by the Associate Administrator for Safety, Federal Railroad Administration (FRA). See § 179.13.
The wall thickness after the forming of the tank shell and heads must be, at a minimum, 9/16 of an inch AAR TC-128 Grade B, normalized steel, in accordance with § 179.200-7(b).
The DOT-117 specification tank car must have a tank head puncture resistance system in conformance with § 179.16(c). The full height head shields must have a minimum thickness of
The DOT-117 specification tank car must have a thermal protection system. The thermal protection system must conform to § 179.18 and include a reclosing pressure relief device in accordance with § 173.31 of this subchapter.
The entire thermal protection system must be covered with a metal jacket of a thickness not less than 11 gauge A1011 steel or equivalent; and flashed around all openings so as to be weather tight. A protective coating must be applied to the exterior surface of a carbon steel tank and the inside surface of a carbon steel jacket.
If the tank car is equipped with a bottom outlet, the handle must be removed prior to train movement or be designed with protection safety system(s) to prevent unintended actuation during train accident scenarios.
The tank car tank must be equipped with top fittings protection conforming to AAR Specifications for Tank Cars, appendix E paragraph 10.2.1 (IBR, see § 171.7 of this subchapter).
(a) By January 1, 2021, each rail carrier operating a high-hazard flammable unit train as defined in § 171.8, comprised of at least one tank car loaded with a Packing Group I material must ensure the train meets the ECP braking capability requirements as prescribed in § 174.310 of this subchapter.
(b) By May 1, 2023, each rail carrier operating a high-hazard flammable unit train
(c) Alternate brake systems may be submitted for approval through the processes and procedures outlined in 49 CFR part 232, subpart F.
In addition to § 179.200, the individual specification requirements are as follows:
(a)
(b)
(c)
(2) Minimum head impact speed: 18 mph when impacted at the center of the head by a rigid 12-inch by 12-inch indenter with a weight of 286,000 pounds.
(d)
(e)
(f)
(g)
(2) By May 1, 2023, each rail carrier operating a high-hazard flammable unit train
(3) Alternate brake systems may be submitted for approval through the processes and procedures outlined in 49 CFR part 232, subpart F.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(2) By May 1, 2023, each rail carrier operating a high-hazard flammable unit train as defined in § 171.8, not described in paragraph (i)(1) of this section must ensure the train meets the ECP braking capability requirements as prescribed in § 174.310 of this subchapter.
(3) Alternate brake systems may be submitted for approval through the processes and procedures outlined in 49 CFR part 232, subpart F.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
The MSRB filed with the Commission a proposed rule change consisting of proposed new Rule G-42, on duties of non-solicitor municipal advisors, and proposed amendments to Rule G-8, on books and records to be made by brokers, dealers, municipal securities dealers, and municipal advisors (the “proposed rule change”). The MSRB requests that the proposed rule change be approved with an implementation date six months after the Commission approval date for all changes.
The text of the proposed rule change is available on the MSRB's Web site at
In its filing with the Commission, the MSRB included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The MSRB has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
Following the financial crisis of 2008, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).
Proposed Rule G-42 would establish the core standards of conduct and duties of municipal advisors when engaging in municipal advisory activities. The proposed rule draws on aspects of existing law and regulation under other relevant regulatory regimes, including those applicable to brokers, dealers and municipal securities dealers under MSRB rules and the Exchange Act, investment advisers under the Investment Advisers Act of 1940
In summary, the core provisions of Proposed Rule G-42 would:
• Establish certain standards of conduct consistent with the fiduciary duty owed by a municipal advisor to its municipal entity clients, which includes, without limitation, a duty of care and of loyalty;
• Establish the standard of care owed by a municipal advisor to its obligated person clients;
• Require the full and fair disclosure, in writing, of all material conflicts of interest and legal or disciplinary events that are material to a client's evaluation of a municipal advisor;
• Require the documentation of the municipal advisory relationship, specifying certain aspects of the relationship that must be included in the documentation;
• Require that recommendations made by a municipal advisor are suitable for its clients, or determine the suitability of recommendations made by third parties when appropriate; and
• Specifically prohibit a municipal advisor from engaging in certain activities, including, in summary:
○ Receiving excessive compensation;
○ delivering inaccurate invoices for fees or expenses;
○ making false or misleading representations about the municipal advisor's resources, capacity or knowledge;
○ participating in certain fee-splitting arrangements with underwriters;
○ participating in any undisclosed fee-splitting arrangements with providers of investments or services to a municipal entity or obligated person client of the municipal advisor;
○ making payments for the purpose of obtaining or retaining an engagement to perform municipal advisory activities, with limited exceptions; and
○ entering into certain principal transactions with the municipal advisor's municipal entity clients.
In addition, the proposed rule change would define key terms used in Proposed Rule G-42 and provide supplementary material. The supplementary material would provide additional guidance on the core concepts in the proposed rule, such as the duty of care, the duty of loyalty, suitability of recommendations and “Know Your Client” obligations; provide context for issues such as the scope of an engagement, conflicts of interest disclosures, excessive compensation and the impact of client action that is independent of or contrary to the advice of a municipal advisor, and the applicability of the proposed rule change to 529 college savings plans (“529 plans”) and other municipal
Section (a) of Proposed Rule G-42 would establish the core standards of conduct and duties applicable to municipal advisors. The approach toward the core standards and duties in Proposed Rule G-42 flows from the distinctions drawn in the Dodd-Frank Act between a municipal advisor's duties owed to clients that are municipal entities and those duties owed to clients that are obligated persons. The Dodd-Frank Act specifically deems a municipal advisor to owe a fiduciary duty to its municipal entity clients.
A municipal advisor and any person associated with such municipal advisor shall be deemed to have a fiduciary duty to any municipal entity for whom such municipal advisor acts as a municipal advisor, and no municipal advisor may engage in any act, practice, or course of business which is not consistent with a municipal advisor's fiduciary duty or that is in contravention of any rule of the Board.
Subsection (a)(i) of Proposed Rule G-42 would provide that each municipal advisor in the conduct of its municipal advisory activities for an obligated person client is subject to a duty of care. Subsection (a)(ii) would provide that each municipal advisor in the conduct of its municipal advisory activities for a municipal entity client is subject to a fiduciary duty, which includes, without limitation, a duty of loyalty and a duty of care. The standards contained in these subsections would not supersede any more restrictive provisions of state or other laws applicable to the activities of municipal advisors.
Proposed supplementary material would provide guidance on the duty of care and the duty of loyalty. Generally, in lieu of providing detailed requirements, the duties would be described in terms that would empower the client to, in large part, determine the scope of services and control the engagement with the municipal advisor (with the municipal advisor's agreement).
Paragraph .01 of the Supplementary Material would describe the duty of care to require, without limitation, a municipal advisor to: (1) Exercise due care in performing its municipal advisory activities; (2) possess the degree of knowledge and expertise needed to provide the municipal entity or obligated person client with informed advice; (3) make a reasonable inquiry as to the facts that are relevant to a client's determination as to whether to proceed with a course of action or that form the basis for any advice provided to the client; and (4) undertake a reasonable investigation to determine that the municipal advisor is not basing any recommendation on materially inaccurate or incomplete information. The duty of care that would be established in section (a) of Proposed Rule G-42, would also require the municipal advisor to have a reasonable basis for: Any advice provided to or on behalf of a client;
Paragraph .02 of the Supplementary Material would describe the duty of loyalty to require, without limitation, a municipal advisor, when engaging in municipal advisory activities for a municipal entity, to deal honestly and with the utmost good faith with the client and act in the client's best interests without regard to the financial or other interests of the municipal advisor. Paragraph .02 would also provide that the duty of loyalty would preclude a municipal advisor from engaging in municipal advisory activities with a municipal entity client if it cannot manage or mitigate its conflicts of interest in a manner that will permit it to act in the municipal entity's best interests.
Paragraph .03 of the Supplementary Material would specify that a municipal advisor is not required to disengage from a municipal advisory relationship if a municipal entity client or an obligated person client elects a course of action that is independent of or contrary to advice provided by the municipal advisor.
Paragraph .04 of the Supplementary Material would specify that a municipal advisor could limit the scope of the municipal advisory activities to be performed to certain specified activities or services if requested or expressly consented to by the client, but could not alter the standards of conduct or impose limitations on any of the duties prescribed by Proposed Rule G-42. Paragraph .04 would provide that, if a municipal advisor engages in a course of conduct that is inconsistent with the mutually agreed limitations to the scope of the engagement, it may result in negating the effectiveness of the limitations.
Paragraph .07 of the Supplementary Material would state, as a general matter, that, municipal advisors may be subject to fiduciary or other duties under state or other laws and nothing in Proposed Rule G-42 would supersede any more restrictive provision of state or other laws applicable to municipal advisory activities.
Section (b) of Proposed Rule G-42 would require a municipal advisor to fully and fairly disclose to its client in writing all material conflicts of interest, and to do so prior to or upon engaging in municipal advisory activities. The provision would set forth a non-exhaustive list of scenarios under which a material conflict of interest would arise or be deemed to exist and that would require a municipal advisor to provide written disclosures to its client.
Paragraph (b)(i)(A) would require a municipal advisor to disclose any actual or potential conflicts of interest of which the municipal advisor becomes aware after reasonable inquiry that could reasonably be anticipated to impair the municipal advisor's ability to provide advice to or on behalf of the client in accordance with the applicable standards of conduct (
Under subsection (b)(i), if a municipal advisor were to conclude, based on the exercise of reasonable diligence, that it had no known material conflicts of interest, the municipal advisor would be required to provide a written statement to the client to that effect.
Subsection (b)(ii) would require disclosure of any legal or disciplinary event that would be material to the client's evaluation of the municipal advisor or the integrity of its management or advisory personnel. To facilitate the use of existing records, a municipal advisor would be permitted to fulfill this disclosure obligation by identifying the specific type of event and specifically referring the client to the relevant portions of the municipal advisor's most recent SEC Forms MA or MA-I
Paragraph .05 of the Supplementary Material would provide that the required conflicts of interest disclosures must be sufficiently detailed to inform the client of the nature, implications and potential consequences of each conflict and must include an explanation of how the municipal advisor addresses or intends to manage or mitigate each conflict.
Paragraph .06 of the Supplementary Material would provide that a municipal advisor that inadvertently engages in municipal advisory activities but does not intend to continue the municipal advisory activities or enter into a municipal advisory relationship
Section (c) of Proposed Rule G-42 would require each municipal advisor to evidence each of its municipal advisory relationships by a writing, or writings created and delivered to the municipal entity or obligated person client prior to, upon or promptly after the establishment of the municipal advisory relationship. The documentation would be required to be dated and include, at a minimum:
• the form and basis of direct or indirect compensation, if any, for the municipal advisory activities to be performed, as provided in proposed subsection (c)(i);
• the information required to be disclosed in proposed section (b), including the disclosures of conflicts of interest, as provided in proposed subsection (c)(ii);
• a description of the specific type of information regarding legal and disciplinary events requested by the Commission on SEC Form MA and SEC Form MA-I, as provided in proposed subsection (c)(iii), and detailed information specifying where the client may electronically access the municipal advisor's most recent Form MA and each most recent Form MA-I filed with the Commission;
• the date of the last material change to the legal or disciplinary event disclosures on any SEC Forms MA or MA-I filed with the Commission by the municipal advisor, as provided in proposed subsection (c)(iv);
• the scope of the municipal advisory activities to be performed and any limitations on the scope of the engagement, as provided in proposed subsection (c)(v);
• the date, triggering event, or means for the termination of the municipal advisory relationship, or, if none, a statement that there is none, as provided in proposed subsection (c)(vi); and
• any terms relating to withdrawal from the municipal advisory relationship, as provided in proposed subsection (c)(vii).
Proposed Rule G-42(c) also would require municipal advisors to promptly amend or supplement the writing(s) during the term of the municipal advisory relationship as necessary to reflect any material changes or additions in the required information. For example, if the basis of compensation or scope of services materially changed during the term of the relationship, the municipal advisor would be required to amend or supplement the writing(s) and promptly deliver the amended writing(s) or supplement to the client. The same would be true in the case of material conflicts of interest discovered after the relationship documentation was last provided to the client. The amendment and supplementation requirement in proposed section (c) would apply to any material changes and additions that are discovered, or should have been discovered, based on the exercise of reasonable diligence by the municipal advisor. Any amendments or supplementation also would be subject to the requirements of the proposed rule change that would apply as if it were the first relationship documentation provided to the client.
Proposed Rule G-42(c) is modeled in part on Rule G-23, which requires a broker, dealer or municipal securities dealer (“dealer”) that enters into a financial advisory relationship with an issuer to evidence that relationship in writing prior to, upon or promptly after the inception of that relationship. Like Rule G-23, proposed section (c) would not require that the writing(s) evidencing the relationship be a bilateral agreement or contract. For example, if state law provided for the procurement of municipal advisory services in a manner that did not require a writing sufficient to establish a bilateral agreement, a municipal advisor could send its client a writing, such as a letter that references the procurement document and contains the terms and disclosures required by proposed Rule G-42(b) and (c) to evidence its municipal advisory relationship with its municipal entity or obligated person client.
Section (d) of Proposed Rule G-42 would provide that a municipal advisor must not recommend that its client enter into any municipal securities transaction or municipal financial product unless the municipal advisor has determined, based on the information obtained through the reasonable diligence of the municipal advisor, whether the transaction or product is suitable for the client.
As to both types of review, the municipal advisor would be required under proposed section (d) to inform its municipal entity or obligated person client of its evaluation of the material risks, potential benefits, structure and other characteristics of the recommended municipal securities transaction or municipal financial product; the basis upon which the advisor reasonably believes the recommended transaction or product is, or is not, suitable for the client; and whether the municipal advisor has investigated or considered other reasonably feasible alternatives to the recommended municipal securities transaction or municipal financial product that might also or alternatively serve the client's objectives. The proposed rule does not include requirements regarding how such information must be communicated by the municipal advisor to the client, and a municipal advisor would be permitted to choose the appropriate method by which to communicate the information
Section (d), like other provisions of Proposed Rule G-42, would reflect the basic principle that the client controls the scope of the engagement with its municipal advisor (with the agreement of the municipal advisor). For example, a municipal advisor's engagement may be limited in scope because the municipal advisor's client already reached a decision regarding a particular municipal securities transaction or municipal financial product, or engaged another professional to undertake certain duties in connection with a municipal securities transaction or municipal financial product. Paragraph .04 of the Supplementary Material would provide that a municipal advisor and its client could limit the scope of the municipal advisory relationship to certain specified activities or services. A municipal advisor, however, would not be permitted to alter the standards of conduct or duties imposed by the proposed rule with respect to that limited scope.
The proposed rule change would adopt, and apply to municipal advisors, the existing MSRB interpretive guidance regarding the general principles currently applicable to dealers for determining whether a particular communication constitutes a recommendation of a securities transaction.
Paragraph .08 of the Supplementary Material would provide guidance related to a municipal advisor's suitability obligations. Under this provision, a municipal advisor's determination of whether a municipal securities transaction or municipal financial product is suitable for its client must be based on numerous factors, as applicable to the particular type of client, including, but not limited to: the client's financial situation and needs, objectives, tax status, risk tolerance, liquidity needs, experience with municipal securities transactions or municipal financial products generally or of the type and complexity being recommended, financial capacity to withstand changes in market conditions during the term of the municipal financial product or the period that municipal securities to be issued are reasonably expected to be outstanding, and any other material information known by the municipal advisor about the client and the municipal securities transaction or municipal financial product, after the municipal advisor has conducted a reasonable inquiry.
In connection with a municipal advisor's obligation to determine the suitability of a municipal securities transaction or a municipal financial product for a client, which should take into account its knowledge of the client, paragraph .09 of the Supplementary Material would require a municipal advisor to know its client. The obligation to know the client would require a municipal advisor to use reasonable diligence to know and retain essential facts concerning the client and the authority of each person acting on behalf of the client, and is similar to requirements in other regulatory regimes.
As a practical matter, it is understood that a client could at times elect a course of action either independent of or contrary to the advice of its municipal advisor. Paragraph .03 of the Supplementary Material would provide that the municipal advisor would not be required to disengage from the municipal advisory relationship on that basis.
Subsection (e)(i) of Proposed Rule G-42 would prohibit discrete conduct or activities that would conflict, or would be highly likely to conflict, with the core standards of conduct—the duty of loyalty and the duty of care—applicable to municipal advisors under Proposed Rule G-42 and the Exchange Act.
Paragraph (e)(i)(A) would prohibit a municipal advisor from receiving compensation from its client that is excessive in relation to the municipal advisory activities actually performed for the client. Paragraph .10 of the Supplementary Material would provide additional guidance on how compensation would be determined to be excessive. Included in paragraph .10 are several factors that would be considered when evaluating the reasonableness of a municipal advisor's compensation relative to the nature of the municipal advisory activities performed, including, but not limited to: the municipal advisor's expertise, the complexity of the municipal securities transaction or municipal financial product, whether the fee is contingent upon the closing of the municipal securities transaction or municipal financial product, the length of time spent on the engagement and whether the municipal advisor is paying any other relevant costs related to the municipal securities transaction or municipal financial product.
Paragraph (e)(i)(B) would prohibit municipal advisors from delivering an invoice for fees or expenses for municipal advisory activities that does not accurately reflect the activities actually performed or the personnel that actually performed those activities. This provision would not prohibit a municipal advisor from including a discount for the services it actually performed, if accurately disclosed.
Paragraph (e)(i)(C) would prohibit a municipal advisor from making any representation or submitting any information that the municipal advisor knows or should know is either materially false or materially misleading due to the omission of a material fact, about its capacity, resources or knowledge in response to requests for proposals or in oral presentations to a client or prospective client for the purpose of obtaining or retaining an
Paragraph (e)(i)(D) would prohibit municipal advisors from making or participating in two types of fee-splitting arrangements: (1) Any fee-splitting arrangement with an underwriter on any municipal securities transaction as to which the municipal advisor has provided or is providing advice; and (2) any
Paragraph (e)(i)(E) would, generally, prohibit a municipal advisor from making payments for the purpose of obtaining or retaining an engagement to perform municipal advisory activities. However, the provision contains three exceptions. The prohibition would not apply to: (1) Payments to an affiliate of the municipal advisor for a direct or indirect communication with a municipal entity or obligated person on behalf of the municipal advisor where such communication is made for the purpose of obtaining or retaining an engagement to perform municipal advisory activities; (2) reasonable fees paid to another municipal advisor registered as such with the Commission and MSRB for making such a communication as described in subparagraph (e)(i)(E)(1); and (3) payments that are permissible “normal business dealings” as described in MSRB Rule G-20. The proposed rule change, however, would not prescribe parameters that would effectively limit a client's ability to decide the source of funds for the payment of fees for services rendered by the municipal advisor.
Subsection (e)(ii) of Proposed Rule G-42 would prohibit a municipal advisor to a municipal entity, and any affiliate of such municipal advisor, from engaging in a principal transaction directly related to the same municipal securities transaction or municipal financial product as to which the municipal advisor is providing or has provided advice. The ban on principal transactions would apply only with respect to clients that are municipal entities. The ban would not apply to principal transactions between a municipal advisor (or an affiliate of the municipal advisor) and the municipal advisor's obligated person clients. Although such transactions would not be prohibited, importantly, all municipal advisors, including those engaging in municipal advisory activities for obligated person clients, are currently subject to the MSRB's fundamental fair-practice rule, Rule G-17.
Paragraph .07 of the Supplementary Material would provide an exception to the ban on principal transactions in subsection (e)(ii) in order to avoid a possible conflict with existing MSRB Rule G-23, on activities of financial advisors. Specifically, the ban in subsection (e)(ii) would not apply to an acquisition as principal, either alone or as a participant in a syndicate or other similar account formed for the purpose of purchasing, directly or indirectly, from an issuer all or any portion of an issuance of municipal securities on the basis that the municipal advisor provided advice as to the issuance, because such a transaction is the type of transaction that is addressed, and, in certain circumstances, prohibited by Rule G-23. The purpose of this provision would be to avoid a potential conflict in MSRB rules and provide, until such time as the MSRB may further review and potentially amend Rule G-23, that the specific prohibition against principal transactions contained in subsection (e)(ii) would not prohibit such underwriting transactions, as they are already addressed and prohibited in certain circumstances by Rule G-23.
For purposes of the prohibition in proposed subsection (e)(ii), subsection (f)(i) would define the term “engaging in a principal transaction” to mean “when acting as a principal for one's own account, selling to or purchasing from the municipal entity client any security or entering into any derivative, guaranteed investment contract, or other similar financial product with the municipal entity client.” This definition draws on the statutory language regarding principal transactions in the Investment Advisers Act.
Section (f) of Proposed Rule G-42 would provide definitions of the terms “engaging in a principal transaction,” “affiliate of the municipal advisor,”
The regulation of municipal advisors, as the SEC has recognized,
The proposed amendments to Rule G-8 would require each municipal advisor to make and keep any document created by the municipal advisor that was material to its review of a recommendation by another party or that memorialize its basis for any conclusions as to suitability.
Section 15B(b)(2) of the Exchange Act
The Board shall propose and adopt rules to effect the purposes of this title with respect to transactions in municipal securities effected by brokers, dealers, and municipal securities dealers and advice provided to or on behalf of municipal entities or obligated persons by brokers, dealers, municipal securities dealers, and municipal advisors with respect to municipal financial products, the issuance of municipal securities, and solicitations of municipal entities or obligated persons undertaken by brokers, dealers, municipal securities dealers, and municipal advisors.
Section 15B(b)(2)(C) of the Exchange Act
be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in municipal securities and municipal financial products, to remove impediments to and perfect the mechanism of a free and open market in municipal securities and municipal financial products, and, in general, to protect investors, municipal entities, obligated persons, and the public interest.
Section 15B(b)(2)(L)(i) of the Exchange Act
The MSRB believes that, the proposed rule change is consistent with Sections 15B(b)(2),
In this regard, neither the Dodd-Frank Act nor the recently-adopted SEC Final Rule prescribe the duties and obligations of municipal advisors beyond a general statement that municipal advisors shall be deemed to have a fiduciary duty to any municipal entity for whom the municipal advisor acts as a municipal advisor. Adoption of Proposed Rule G-42 will fulfill the need for regulatory guidance with respect to the standards of conduct and duties of municipal advisors and the prevention of breaches of a municipal advisor's fiduciary duty to its municipal entity clients. Proposed Rule G-42 also will establish standards of conduct and duties for municipal advisors when engaging in municipal advisory activities for obligated persons and provide guidance to these municipal advisors as to what conduct would satisfy these duties and obligations.
The MSRB believes that by articulating specific standards of conduct and duties for municipal advisors, Proposed Rule G-42 will assist municipal advisors in complying with the statutorily-imposed requirements of the Dodd-Frank Act, and help prevent failures to meet those requirements. The proposed rule change will aid municipal entities and obligated persons that choose to engage municipal advisors in connection with their issuances of municipal securities as well as transactions in municipal financial products by promoting higher ethical and professional standards of such municipal advisors. The MSRB also believes that articulating standards of conduct and duties of municipal advisors will enhance the ability of the MSRB and other regulators to oversee the conduct of municipal advisors, as contemplated by the Dodd-Frank Act.
The MSRB believes the proposed rule change will enhance municipal entity and obligated person protections by ensuring that these entities have access to sufficient information to make meaningful choices, based on the merits of the municipal advisor, when considering engaging a municipal advisor by requiring municipal advisors to provide detailed disclosures of material conflicts of interest and certain other information prior to or upon the establishment of the municipal advisory relationship. As a result, municipal advisor clients will be able to evaluate municipal advisors on this objective set of information. These protections will also be enhanced as a result of the proposed rule change's guidance for municipal advisors that could assist advisors in complying with, or help prevent breaches of, their fiduciary duty and duty of care, as well as other applicable obligations such as the duty of fair dealing (which is owed under MSRB Rule G-17 by all municipal advisors to all persons). To the extent that this guidance, provided in the supplementary material in the proposed rule change, would increase the likelihood of compliance by municipal advisors, municipal entities and obligated persons will benefit. Investors in municipal bond offerings will also benefit from the proposed rule change to the extent that a municipal entity or obligated person issuing bonds that uses a municipal advisor is more likely to receive services that reflect a higher ethical and professional standard than otherwise would be the case.
The proposed rule change would also, to some extent, prescribe means for municipal advisors to help prevent breaches of these duties, which would include, among others: Requirements for the information that must be included in the documentation of the municipal advisory relationship; specified activities (such as certain principal transactions) that would be explicitly prohibited; and disclosure requirements that must accompany a municipal advisor's recommendation regarding a municipal security or a municipal financial product.
Section 15B(b)(2)(L)(iv) of the Exchange Act
not impose a regulatory burden on small municipal advisors that is not necessary or appropriate in the public interest and for the protection of investors, municipal entities, and obligated persons, provided that there is robust protection of investors against fraud.
The MSRB believes that the proposed rule change is consistent with Section 15B(b)(2)(L)(iv) of the Exchange Act
The MSRB recognizes that municipal advisors would incur costs to meet the standards of conduct and duties contained in the proposed rule changes. These costs also could include additional compliance and recordkeeping costs. To ensure compliance with the disclosure obligations of the proposed rule change, municipal advisors could incur costs by seeking advice from legal and compliance professionals when preparing disclosures to clients. However, the MSRB believes that some of these costs are accounted for in the SEC Final Rule which requires disclosure of at least some similar information, such as the disclosure of disciplinary events. Proposed Rule G-42 could also impose additional costs on municipal advisors by requiring the disclosure of additional information directly to clients, some of which must already be submitted to the SEC on SEC Forms MA
As to the potential costs associated with additional recordkeeping requirements, the SEC recognized in its economic analysis
The MSRB believes that any increase in municipal advisory fees attributable to the additional costs of the proposed rule change will be minimal and that at least the element of fixed costs per municipal advisory firm will be spread across the number of advisory engagements for each firm. The MSRB recognizes, however, that for smaller municipal advisors with fewer clients, the cost of compliance with the proposed rule change's standards of conduct and duties could represent a greater percentage of annual revenues, and, thus, such advisors could be more likely to pass those costs along to their advisory clients.
The MSRB also recognizes that, as a result of these costs, some municipal advisors could decide to exit the market, curtail their activities, consolidate with other firms, or pass the costs on to municipal entities and obligated persons in the form of higher fees. The MSRB believes, however, that by articulating the core standard of conduct and duties and obligations of municipal advisors and by prescribing means that would prevent breaches of these duties, the proposed rule change will reduce possible confusion and uncertainty about what is required in order to comply with relevant provisions of the Dodd-Frank Act. Therefore, the proposed rule change likely will reduce certain costs of compliance that might have otherwise been incurred by allowing municipal advisors to more quickly and accurately determine compliance requirements.
The MSRB also believes that the proposed rule change is consistent with Section 15B(b)(2)(G) of the Exchange Act,
The proposed rule change would require, under the proposed amendments to Rule G-8, that a municipal advisor make and keep records of any document created by the municipal advisor that was material to its review of a recommendation by another party or that memorializes the basis for any conclusions as to suitability. The MSRB believes that the proposed amendments to Rule G-8 related to recordkeeping (with the ensuing application of existing Rule G-9 on records preservation) would promote compliance and facilitate enforcement of Proposed Rule G-42, other MSRB rules, and other applicable securities laws and regulations.
Section 15B(b)(2)(C)
In determining whether these standards have been met, the MSRB was guided by the Board's Policy on the Use of Economic Analysis in MSRB Rulemaking.
The proposed rule may also provide a range of benefits to municipal entities, investors and municipal advisors. Municipal entities and obligated persons will have access to more information about municipal advisors
The MSRB considered whether costs associated with the proposed rule change, relative to the baseline, could affect the competitive landscape by leading some municipal advisors to exit the market, curtail their activities, consolidate with other firms, or pass costs on to municipal entity and obligated person clients in the form of higher fees. In addition, the MSRB considered whether the costs associated with the proposed rule, relative to the baseline, could create barriers to entry for firms wishing to offer to engage in municipal advisory activities.
The MSRB recognizes that some municipal advisors may exit the market as a result of the costs associated with the proposed rule relative to the baseline. However, the MSRB believes municipal advisors may exit the market for a number of reasons other than costs associated with the proposed rule. The MSRB also recognizes that some municipal advisors may consolidate with other municipal advisors in order to benefit from economies of scale (
It is also possible that competition for municipal advisory activities may be affected by whether incremental costs associated with requirements of the proposed rule are passed on to advisory clients. The amount of costs passed on may be influenced by the size of the municipal advisory firm. For smaller municipal advisors with fewer clients, the incremental costs associated with the requirements of the proposed rule may represent a greater percentage of annual revenues, and, thus, such advisors may be more likely to pass those costs along to their advisory clients. As a result, the competitive landscape may be altered by the potentially impaired ability of smaller firms to compete for advisory clients.
In addition to the factors noted above that may affect smaller advisory firms, the MSRB understands that some small municipal advisors and sole proprietors may not employ full-time compliance staff and that the cost of ensuring compliance with the requirements of the proposed rule may be proportionally higher for these smaller firms.
The MSRB believes these costs represent only those necessary to achieve the purposes of the Exchange Act. Relative to draft Rule G-42 as initially published for comment,
Further, while exit, consolidation, or a reduced number of new market entrants may lead to a reduced pool of municipal advisors, the SEC concluded in the SEC Final Rule (on the permanent registration of municipal advisors) that the market would be likely to remain competitive despite the potential exit of some municipal advisors (including small entity municipal advisors), consolidation of municipal advisors, or lack of new entrants into the market.
The MSRB solicited comment on the proposed rule change in the First Request for Comment, requesting comment on a draft of Rule G-42 and draft amendments to Rules G-8 and G-9, and a second notice requesting comment on a revised draft of Rule G-42 and draft amendments to Rules G-8 and G-9.
The MSRB received forty-six comment letters in response to the First Request for Comment,
Under Proposed Rule G-42(a), a municipal advisor would be subject to a duty of care as to its obligated person clients under subsection (a)(i) and a fiduciary duty as to its municipal entity clients under subsection (a)(ii) when engaging in municipal advisory activities for such clients. Several commenters raised concerns relating to the proposed standards of conduct that would apply to municipal advisors.
In the First Request for Comment, the MSRB proposed that a municipal advisor be subject to a fiduciary duty when engaging in municipal advisory activities for municipal entity clients. Subsequently, in the Second Request for Comment, the MSRB asked whether the Revised Draft Rule should uniformly apply the proposed fiduciary standard to a municipal advisor in its relationships with all of its clients, including obligated persons. A number of commenters opposed extending the application of the fiduciary standard to municipal advisors in connection with their obligated person clients.
The MSRB believes that the application of the fiduciary standard is appropriately limited to municipal advisors when engaging in municipal advisory activities for or on behalf of municipal entity clients and strikes the appropriate balance. Proposed Rule G-42 establishes a minimum standard, which, as noted by NABL, does not limit an obligated person client and its municipal advisor from agreeing to a higher standard of conduct, or incorporating other requirements or protections in the municipal advisory relationship.
Proposed paragraph .01 of the Supplementary Material provides that a municipal advisor acting in accordance with the duty of care must undertake reasonable investigation to determine that it is not basing any recommendation made to a client on materially inaccurate or incomplete information. In response to the First and Second Request for Comment, ICI stated that municipal advisors to 529 college savings plans (“529 plans”) should not be required to verify the veracity or completeness of the information provided to the municipal advisor by authorized state employees or officials who are authorized to act on behalf of the 529 plan. ICI requested that paragraph .01 of the Supplementary Material be revised not to require municipal advisors to investigate whether information is materially inaccurate or incomplete when it is provided to the municipal advisor by persons who are authorized by the client to act on behalf of a state's 529 plan.
Neither the First Request for Comment nor the Second Request for Comment contemplated that municipal advisors in municipal advisory relationships with 529 plans would be exempted or excluded, in whole or in part, from the proposed core standards of conduct, including aspects of the duty of care that a municipal advisor owes to a client. The MSRB believes that exempting municipal advisors from the proposed core standards of conduct would reduce the protections that Congress through the Dodd-Frank Act intended to provide to municipal entity clients and investors in 529 plan securities.
In response to the Second Request for Comment, Sanchez commented that the MSRB lacks the statutory authority to define “fiduciary duty” or to prescribe means designed to effectuate the performance of that duty.
As discussed above, the Exchange Act grants the MSRB statutory authority to adopt rules with respect to municipal advisors engaging in municipal advisory activities that are designed to, among other things, prevent fraudulent and manipulative acts and practices, and acts, practices or courses of business that are not consistent with a municipal advisor's fiduciary duty to its clients.
In response to the First Request for Comment, NABL stated that the Initial Draft Rule should draw on established common law and similar standards that NABL believes are intended to provide substantive guidance regarding fiduciary duties (
In developing Proposed Rule G-42, the MSRB consulted various codes of conduct and sources of federal and state law regarding the duties and obligations of a fiduciary that apply to professionals who are, or, in certain relationships, may be, fiduciaries. Some provisions of the proposed rule reflect principles incorporated from MSRB Rule G-17, including the duties of dealers to issuers, while other provisions were based on principles and requirements in the Investment Advisers Act. The MSRB believes the Investment Advisers Act is particularly relevant in developing a rule regarding fiduciary duties and obligations, and notes that the SEC also considered the Investment Advisers Act informative as it developed the SEC Final Rule.
A number of commenters raised concerns that Proposed Rule G-42 implicitly and inappropriately imposes fiduciary duty obligations on municipal advisors whose clients are obligated persons without a demonstrated need for a more robust regulatory framework than that adopted by Congress or the SEC.
NAHEFFA suggested that the duty of care and the requirements of the Initial Draft Rule G-42(b)-(f) be revised to state that municipal advisors owe a fiduciary duty only to their municipal entity clients. In the alternative, NAHEFFA requested that the MSRB provide clarification on the legal and practical distinctions among the standards and duties and obligations of municipal advisors vis-à-vis both types of clients, including a clarification that an alleged violation of the duty of care would be subject to review under a negligence standard and an alleged violation of the duty of loyalty would require evidence of intent. Generally, NAHEFFA supported either a revised Rule G-42, or a separate rule that would simplify and reflect the duties and obligations of a municipal advisor with respect to its obligated person clients. NAHEFFA suggested that, as to obligated person clients, the duty should be to exercise professional judgment and expertise in providing services and to deal fairly with its clients. Similarly to NAHEFFA, BDA requested that the MSRB revise Proposed Rule G-42 to more clearly state and distinguish between the duties and obligations that municipal advisors would owe to each of the two types of clients.
ABA commented that the MSRB lacked the requisite authority to impose a fiduciary duty on municipal advisors with respect to their obligated person clients, and that even if it had the authority, such a standard would be unworkable since banks would have difficulty identifying which of their many customers were obligated persons. ABA stated that the extension of a fiduciary duty to municipal advisors in their relationship with their obligated person clients would result in a significant risk that banks would inadvertently violate regulatory requirements by becoming an unwitting municipal advisor with respect to a client they did not know was an obligated person. Moreover, the banks would run the corresponding risk of violating the attendant fiduciary duty applicable to such municipal advisor.
More specifically, Sanchez commented that the language in Revised Draft Rule G-42(b)(i)(A) and (b)(i)(G) appeared to import the duty of loyalty and duty of care into representations of obligated persons by using the phrase “unbiased and competent advice” with respect to advice provided to or on behalf of obligated persons. He suggested that these provisions be revised to say “impair its ability to render advice to or on behalf of the obligated person in accordance with the standards of conduct required in clause (a)” in lieu of the phrase referencing “unbiased and competent advice.”
Neither the Initial Draft Rule nor the Revised Draft Rule would deem municipal advisors to owe a fiduciary duty to obligated person clients, and the MSRB disagrees with the view that either the Initial or Revised Draft Rule implicitly and inappropriately imposed fiduciary duty obligations to such clients. After carefully considering the comments, the MSRB has not modified Proposed Rule G-42(a), on standards of conduct. Further, Proposed Rule G-42 follows the approach taken in the Dodd-Frank Act, deeming a municipal advisor to owe a fiduciary duty only to its municipal entity clients. However, although the Exchange Act fiduciary duty standard would not apply to a municipal advisor advising an obligated person client, all municipal advisors are subject to fair-dealing obligations under MSRB Rule G-17, which already requires a municipal advisor to deal fairly with
The MSRB agrees with Sanchez's specific comments regarding paragraphs (b)(i)(A) and (b)(i)(G) of the Revised Draft Rule and has revised the proposed rule change to clearly differentiate between the handling of conflicts of
NAHEFFA requested that the MSRB clarify the legal distinctions between the duty of care and duty of loyalty, and suggested that the state of mind standard to determine a violation of the duty of care should be negligence, and the state of mind standard regarding a violation of the duty of loyalty should be intent. In response to NAHEFFA's request for clarification regarding such standards, the MSRB believes it would be appropriate for the courts and other adjudicatory authorities to determine the “state-of-mind” elements when applying the standards of conduct of Proposed Rule G-42 to specific sets of facts and circumstances presented, drawing on existing jurisprudence regarding analogous duties of care and fiduciary obligations.
In response to ABA's comment, the MSRB again notes that determining which activities constitute municipal advisory activities requires a legal interpretation of the SEC Final Rule. Such authority is vested with the SEC rather than the MSRB.
Finally, the MSRB notes again that the standards of conduct in Proposed Rule G-42 would be minimum requirements, which the MSRB has developed to empower the client to a large extent to determine the scope of services and control the engagement with the municipal advisor, and as suggested by NABL, any municipal advisor and its client may agree to more stringent standards of conduct for their specific engagement.
In response to the Second Request for Comment, WM Financial challenged the requirement that a municipal advisor “undertake a reasonable investigation to determine that it is not basing any recommendation on materially inaccurate or incomplete information.” While WM Financial agreed that a municipal advisor should make a reasonable investigation in order to determine whether a recommendation is in a client's best interest, WM Financial believed that a municipal advisor should be able to rely on publicly-available documents as being true and accurate, and should be able to assume that any additional information provided to it by the municipal entity is also true and accurate. WM Financial believed that requiring the municipal advisor to verify the accuracy of the information it receives from a client imposes an inappropriate burden. As noted above, ICI similarly opposed the requirement in the context of 529 plans, for which the municipal advisor that is also acting as a plan sponsor would typically work with and rely upon state employees who are authorized to represent a state's plan and requested revisions to paragraph .01 of the Supplementary Material.
Proposed paragraph .01 of the Supplementary Material would provide, as a core general standard, that a municipal advisor must undertake a reasonable investigation to determine that it is not basing any recommendation on materially inaccurate or incomplete information. There is no exception for information that is provided to the advisor by the client. The MSRB believes that the provisions of proposed paragraph .01 of the Supplementary Material remain appropriate and, as discussed above, does not believe that advisors to 529 plans should be relieved from an obligation to inquire as to the accuracy of material that is relevant to a municipal advisor's recommendation provided by its client or other parties. The MSRB further believes this provision of proposed paragraph .01 of the Supplementary Material would provide an objective standard for when it is appropriate for a municipal advisor to rely on information provided by a client when making a recommendation to such client, including representatives of a 529 plan authorized to act on behalf of the plan. Finally, because proposed paragraph .01 would require municipal advisors to undertake only a “reasonable investigation” of the veracity of the information on which it is basing a recommendation, municipal advisors would not be required to go to the impractical lengths suggested by commenters. The MSRB believes this standard would be sufficient to allow municipal advisors to assess their risk exposure to any reliance on that information and determine what potential mitigating actions need to be taken.
Sanchez also commented that the MSRB should “consider whether the information for which `a municipal advisor must have a reasonable basis for' incorporated in [subparagraphs] (a) through (c) [of paragraph .01 of the Supplementary Material] is not already addressed in the standards of conduct required of municipal advisors by MSRB Rule G-17 and general antifraud rules related to municipal securities disclosure.” As such, he suggested deleting those provisions of paragraph .01 of the Supplementary Material to avoid unnecessarily duplicative regulatory requirements. The MSRB has decided to retain those provisions because it believes they would provide additional guidance regarding the proposed duty of care and would assist municipal advisors in satisfying that duty without unnecessarily duplicating the principles of MSRB Rule G-17 or other federal securities anti-fraud statutes.
Finally, SIFMA noted that, while the requirement for a municipal advisor to make a reasonable inquiry—regarding the facts that are relevant to a client's determination to pursue a particular course of action or that form the basis of any advice to the client—could be appropriate in the context of arranging a municipal securities issuance, it could be cost prohibitive in the case of ordinary brokerage and related advice, given the number of trades potentially involved, timing considerations and the general context of broker-related advice. Therefore, SIFMA did not believe that such a standard should be applied in addition to otherwise applicable suitability requirements that would attach to recommendations made in the context of brokerage/securities
In response to the First Request for Comment, ACEC and APTA indicated that they believed there are circumstances when the duty of loyalty could directly conflict with an engineer's professional and ethical responsibilities, and expressed concerns as to how such conflicts could affect engineering firms' business. Both ACEC and APTA specifically stated that, in the course of providing professional engineering services to a client, circumstances could arise in which the engineer would find himself or herself facing a conflict between breaching its fiduciary duty in its role as municipal advisor and violating the ethical obligations to which the engineer is subject under applicable state law and regulation, or one or more professional associations. According to ACEC, in such circumstances, it would be detrimental to the health, safety and welfare of the public to prioritize the fiduciary duty the engineer municipal advisor owed to its client. ACEC argued that paragraph .02 of the Supplementary Material, therefore, would not serve the public interest and requested that the MSRB address how this type of conflict could be managed.
The MSRB notes that SEC Rule 15Ba1-1(d)(2)(v) excludes engineers providing engineering advice from the definition of municipal advisor.
The MSRB received a number of comments regarding section (b) of Proposed Rule G-42 on required disclosures of material conflicts of interest by municipal advisors to their clients. Generally, commenters were supportive of, or did not express an objection to, requiring municipal advisors to provide written disclosure of material conflicts of interest. However, some commenters did express concerns about some of the facets of the disclosure requirements; those concerns are described below and followed by the MSRB's response.
Several commenters expressed concern regarding paragraph (b)(i)(F) of Proposed Rule G-42, which requires municipal advisors to disclose conflicts of interest arising from compensation arrangements that are contingent on the size or closing of any transaction as to which the municipal advisor is providing advice.
Commenting on the Initial Draft Rule, Lewis Young stated that contingent fee arrangements benefit clients, particularly smaller municipal entities, because they allow municipal entity clients to finance the costs of the municipal advisor with the proceeds of the issuance. In their view, characterizing a contingent fee arrangement as a conflict of interest requiring disclosure to the client amounted to advising a client that the municipal advisor may not be acting in the client's best interest. They added that they believe the disclosure requirement would serve no useful purpose and could confuse clients. Sutherland stated that the Initial Draft Rule's required disclosure of contingent fee arrangements was duplicative of SEC Form MA
Commenting on the Revised Draft Rule, Columbia Capital stated that the provision “creates the appearance that the MSRB takes the position that one fee modality is less preferable to all others.” Columbia Capital, Cooperman and Piper Jaffray commented that the proposed rule change should not single out one fee arrangement as being preferable to others. Columbia Capital, Cooperman and Piper Jaffray also contended that fee arrangements of any sort (hourly, fixed or non-contingent) create an adversarial relationship between the municipal advisor and its client. In Piper Jaffray's view, the potential conflicts of interest that are inherent in all fee arrangements are also “generally knowable” to both sides of a transaction and, therefore, the Revised Draft Rule's disclosure requirement would not be beneficial. Columbia Capital suggested deleting the provision.
WM Financial also expressed concerns regarding paragraph (b)(i)(F) of the Revised Draft Rule, but differed in its reasoning from Columbia Capital and Piper Jaffray. WM Financial disagreed with the premise that all fee structures create some conflict of interest. Rather, WM Financial stated that, because municipal advisors would be required to “act in the best interest of their clients . . . good advice will prevent a fee arrangement from creating a `conflict'.” In their view, a “conflict of interest does not exist when payment of fees is based on the success of services to be provided . . . .” Like Lewis Young, WM Financial stated that contingent fees serve a valuable function because they allow small municipal entity clients to finance the cost of the municipal advisor with the proceeds from the issuance and ensure that the cost of the municipal advisor is only incurred after the successful completion of the issuance. WM Financial also requested that paragraph (b)(i)(F) be deleted.
The MSRB has considered the arguments and alternatives advanced by commenters and determined that requiring the disclosure of conflicts of interest arising from fee arrangements contingent on the size or closing of the transaction as to which the municipal advisor is providing advice is an appropriate and necessary measure to alert municipal entity and obligated person clients to the potential conflict of interest inherent in such fee arrangements. While the MSRB recognizes, as some commenters
The MSRB received comments that called for the deletion of a provision set forth previously in the Revised Draft Rule as paragraph .08 of the Supplementary Material. Under the provision, if all or a portion of a document prepared by a municipal advisor or any of its affiliates were included in an official statement for an issue of municipal securities by or on behalf of a client of the municipal advisor, the municipal advisor would have been required to provide written disclosure to investors of any affiliation that would be a material conflict of interest under paragraph (b)(i)(B) of the Revised Draft Rule. The disclosure requirement also could have been satisfied if the relevant affiliate provided the written disclosure to investors.
SIFMA supported deleting the disclosure requirement, noting that “[m]unicipal advisors and their affiliates may have no contractual or other relationships (and in many cases have no form of privity) with investors, nor do they control the content of the Official Statement.” SIFMA stated that it is the obligation of the issuer “to make sure that its disclosure is materially accurate and complete” and the responsibility of broker-dealers to comply with their obligations under applicable law. SIFMA observed that the municipal advisor is already required to provide the issuer with the same conflict disclosure under paragraph (b)(i)(B), arguing that the MSRB should leave the decision of whether to include such information in material distributed to investors to the issuer.
ICI and NABL also commented in favor of deleting the requirement. ICI provided comments similar to SIFMA's comments in response to both the Initial and Revised Draft Rules, but focused on how the required disclosure to investors would impact municipal advisors advising 529 plans. ICI supported requiring municipal advisors to disclose conflicts of interest to the municipal advisor's client but questioned why such information would be relevant to a person investing in 529 plan securities. ICI stated that if “all material terms and conditions of the 529 plan offering already are disclosed in the offering document that is provided to investors and potential investors, this supplemental disclosure would not provide any additional protection to investors.” In response to the First Request for Comment, NABL contended that requiring these disclosures would run contrary to the intent of the Dodd-Frank Act, which is to protect issuers. NABL suggested, as an alternative, that issuers be allowed to choose whether to disclose the conflicts of interest to investors.
The MSRB agrees with the commenters and notes that the provision could put municipal advisors in the impractical position of being required to make conflict of interest disclosures directly to investors or include the content of such disclosures in an issuer's official statement, although the municipal advisor may not have the authority or the means to do so. Moreover, because the proposed rule change would already require the municipal advisor to disclose all material conflicts of interest to the issuer, the MSRB believes the issuer will be well positioned to make the determination of whether to include such information in the official statement or other investor disclosure documents, consistent with the issuer's duties under all applicable law. In light of the comments and after a re-evaluation of the purpose and feasibility of the disclosure provision in the supplementary material as described above, the MSRB has deleted the provision.
In response to the First Request for Comment, several commenters suggested differing approaches to the question of whether municipal advisors should be required to obtain some form of acknowledgment from their client of the conflicts of interest disclosures that municipal advisors are required to make under the proposed rule change.
In response to the First Request for Comment, NABL commented that the MSRB should follow the approach taken in the Model Rules of Conduct of the American Bar Association regarding the disclosure of conflicts of interest as stated in the Initial Draft Rule. NABL argued that municipal advisors should be required to obtain “informed consent, confirmed in writing” to each potentially waivable material conflict of interest. NABL stated that this standard is as appropriate for municipal advisors as it is for common law fiduciaries or attorneys. NABL suggested that the “informed consent” it advocated could be accomplished in several ways, including “a writing evidencing an engagement, including a letter of intent, after disclosure to the client sufficient to establish informed consent.” NABL contended that informed written consent from a municipal advisor's client is “a necessary corollary to the requirement that an advisor disclose and provide sufficient detail about the nature of all material conflicts of interest.” NABL also noted that informed consent confirmed in writing would be consistent with the requirements of the CFTC for commodity trading advisors. NAIPFA stated that it believed municipal advisors should be required to obtain an acknowledgment from their clients of the conflicts of interest that it has disclosed, saying that this would conform to the obligations of underwriters and other “professionals possessing fiduciary duties.” GFOA provided similar support for requiring an acknowledgment of the conflicts of interest disclosures from the municipal advisor's client but stated that, if such a requirement was added to the proposed rule change it would expect an explanation within the proposed rule change detailing how the acknowledgements of such conflicts relate to a municipal advisor's fiduciary duty.
In contrast to NABL, NAIPFA and GFOA, commenters including Cooperman, Lewis Young and Acacia commented that municipal advisors should not be required to obtain a written acknowledgment of disclosures
The proposed rule change would not require a municipal advisor to obtain written acknowledgement from its client of the disclosure of conflicts of interest. While the MSRB understands the concerns expressed by commenters, the MSRB believes that the proposed rule change sufficiently obligates municipal advisors to ensure that their clients receive proper notice of material conflicts of interest. Proposed paragraph .05 of the Supplementary Material, for instance, would require municipal advisors to provide information sufficiently detailed to inform a client of the nature, implications and potential consequences of each conflict, and include an explanation of how the municipal advisor addresses or intends to manage or mitigate each conflict. Such disclosure would allow a municipal advisor's client to make an informed decision as to whether such conflicts can be adequately managed or mitigated. Furthermore, a municipal advisor's duty of care would require an advisor to have a reasonable basis for believing that its client received the disclosure and understood the nature, implications and potential consequences of the conflicts of interest that the municipal advisor disclosed. Further, the MSRB believes that obtaining some form of written acknowledgement from municipal entities and obligated persons would prove to be a significant procedural burden to both municipal advisors and their clients that would likely not result in a substantiated benefit.
As discussed above, proposed paragraph .05 of the Supplementary Material to Proposed Rule G-42, on conflicts of interest, would require a municipal advisor to include an explanation of how the municipal advisor would address, or manage or mitigate, the material conflicts of interest that it has disclosed to its client. In response to the Second Request for Comment, Sanchez challenged the value and purpose of this requirement by opining that municipal securities brokers and dealers are not subjected to the burden of making such disclosures. Sanchez requested that the MSRB revise the proposed rule change to require such disclosures only if requested by the client.
The MSRB has considered Sanchez's comments and determined not to amend proposed paragraph .05 of the Supplementary Material because the MSRB believes that the provision would serve a beneficial and protective function for clients. The municipal advisor's explanation would allow its client to adequately assess the potential effects the conflicts of interest could have on an engagement with the municipal advisor and to determine whether the actions the municipal advisor proposes to take to mitigate the conflicts of interest are sufficient and will not overly impair the quality and neutrality of the services to be performed by the municipal advisor.
Under subsection (e)(ii) of Proposed Rule G-42, a municipal advisor would be precluded from serving its municipal entity client as underwriter for a transaction directly related to the same municipal securities transaction or municipal financial product as to which the municipal advisor is providing or has provided advice to the municipal entity.
In response to the Second Request for Comment, BDA commented that the proposed rule should explicitly allow a dealer/municipal advisor to serve as an underwriter for a conduit issuer and as a municipal advisor for the conduit borrower, even with respect to directly related matters.
Underwriting such a transaction would not be specifically prohibited by the ban on principal transactions in subsection (e)(ii) of Proposed Rule G-42, because it applies only in cases of municipal entity clients. A conduit borrower is typically not a municipal entity. Thus, depending on the specific facts and circumstances, this scenario could be permissible with appropriate disclosure and consent. Still, it is not clear that, even with disclosure and consent, such activity would be categorically consistent with all of the duties of a municipal advisor to an obligated person in all circumstances. Therefore, the MSRB has not amended the proposed rule as suggested by BDA.
Section (b) of Proposed Rule G-42 would include a non-exhaustive list of matters that would always constitute material conflicts of interest and that would be required to be disclosed by municipal advisors under the proposed rule change. Matters that must be disclosed as material conflicts of interest under section (b) include, among others: Any fee-splitting arrangements involving the municipal advisor and any provider of investments or services to the client; any payments made by the municipal advisor, directly or indirectly, to obtain or retain an engagement to perform municipal advisory activities for the client; any conflicts of interest arising from compensation for municipal advisory activities to be performed that is contingent on the size or closing of any transaction as to which the municipal advisor is providing advice; and any legal or disciplinary event that is material to the client's evaluation of the municipal advisor or the integrity of its management or advisory personnel.
In response to the First Request for Comment, Lewis Young stated that the proposed rule should only require disclosure when an actual conflict of interest exists because providing tailored explanations of potential or hypothetical situations would be “expensive, time consuming, and not very helpful.” The MSRB disagrees and believes that the likely benefits from these disclosures will outweigh the cost associated with providing them to a municipal advisor's clients because the proposed rule change limits the required disclosure to only material conflicts of interest, both actual and potential, of which a municipal advisor is aware of after a reasonable inquiry. The MSRB also believes that requiring a municipal advisor to disclose conflicts of interest, actual and potential, that the municipal advisor becomes aware of after reasonable inquiry and that could reasonably be anticipated to impair the municipal advisor's ability to provide advice in accordance with the standards of conduct in section (a) of the rule, is necessary to provide clients with the requisite information to make an
ICI suggested adding prefatory language to section (b) that would clarify that a municipal advisor would be required to disclose only conflicts of interest that are applicable to its relationship with the specific client. ICI stated that adding such language would harmonize section (b) with the approach taken in the Investment Advisers Act regarding the delivery of brochures,
First Southwest expressed concern regarding the requirement of subsection (b)(i) that municipal advisors must provide written notice when they have no material conflicts of interest to disclose to their clients. First Southwest stated that the requirement would increase administrative requirements and provide little, if any, benefit in the event a conflict of interest were later discovered. The MSRB disagrees and believes that an affirmative written statement by the municipal advisor that it has no known material conflicts of interest would remove potential ambiguities about the completeness of the conflicts disclosure.
Sutherland commented that the conflicts of interest required to be disclosed would be duplicative of information that could be found in SEC Forms MA and MA-I and, therefore, would be unnecessary. As an example, Sutherland stated that SEC Form MA requires the disclosure of affiliated business entities; compensation arrangements; and proprietary interests in municipal advisor client transactions.
In response to the Second Request for Comment, SIFMA requested clarification regarding the standard for determining the materiality of the conflicts of interest described in paragraphs (b)(i)(A) and (G), and when disclosure is required. Under the Revised Draft Rule, paragraphs (b)(i)(A) and (G) required municipal advisors to disclose “any . . . potential conflicts of interest . . . that might impair” a municipal advisor's advice or its ability to provide advice in accordance with section (a) of Proposed Rule G-42. The language in these paragraphs concerned certain commenters, such as SIFMA, because they believed that such a standard would include nearly all imaginable conflicts of interest and result in overly broad disclosure that could distract from the provision's purpose. Therefore, to clarify, the MSRB has amended these paragraphs to state that disclosure is required, in paragraph (A) for “any actual or potential conflicts of interest,” and, in paragraph (G), for “any other engagements or relationships.” The MSRB believes that this revised language would more clearly establish a limiting, objective standard for disclosing certain conflicts of interest that would be relevant to a municipal advisor's client.
Further, paragraphs (b)(i)(A) and (G), as proposed, are revised to limit the disclosure of conflicts required under paragraphs (b)(i)(A) and (G) to those that potentially impact the advisor's ability to provide “advice to or on behalf of the client in accordance with the standards of conduct of section (a) of this rule, as applicable.” Previously, under the Revised Draft Rule, paragraphs (b)(i)(A) and (G) required a municipal advisor to provide disclosure of conflicts of interest that “might impair its ability either to render unbiased and competent advice to” its clients. This revision was made after re-evaluation of the phrasing used in the paragraphs and consideration of comments received from Sanchez. Sanchez stated that the use of the phrase “unbiased and competent advice” in the Revised Draft Rule “. . . appear[s] to import the duty of loyalty and duty of care into the representations of obligated persons. . . .” The MSRB agrees that the use of the phrasing “unbiased and competent advice” does not encompass all of the duties municipal advisors owe their clients, nor would it sufficiently differentiate between the standards of conduct owed by municipal advisors to their municipal entity clients and obligated person clients. The MSRB believes that the revised standard for identifying material conflicts of interest under proposed paragraphs (b)(i)(A) and (G) will more clearly reflect the standards of conduct in proposed section (a) and appropriately differentiate between municipal entity and obligated person clients.
In response to the Second Request for Comment, Sanchez also suggested a revision to clarify the last sentence of subsection (b)(i) of the Revised Draft Rule. Sanchez suggested deleting the term “written documentation” and using “written statement” instead to clarify for municipal advisors the action required to comply with subsection (b)(i). To remove any ambiguity, the MSRB has revised proposed subsection (b)(i) to clarify that, when appropriate, a municipal advisor must provide a “written statement” that the municipal advisor has no known material conflicts of interest.
Columbia Capital requested clarification regarding whether the disclosures required by the Revised Draft Rule may be made in more than one document. The required disclosures indeed may be provided to clients in more than one document, as long as the document and its delivery otherwise comply with the proposed rule. Because the language of the proposed rule is not to the contrary, the MSRB has not made any revisions in response to this comment.
FSR commented that use of the term “indirectly” in paragraph (b)(i)(B) in the Revised Draft Rule, which required disclosure of “any affiliate of the municipal advisor that provides any advice, service, or product to or on behalf of the client that is directly or
Several commenters addressed the draft requirements to disclose legal or disciplinary events. FSR commented that subsection (b)(ii) of the Revised Draft Rule would require a separate written disclosure of legal or disciplinary events that is redundant of the requirements of subsection (c)(iii) of the Revised Draft Rule. FSR requested that “these disclosure requirements be deemed satisfied if an advisor provides information about where clients may access electronically the advisor's most recent [SEC] Forms MA and MA-I, along with the date of the last material amendment to any legal or disciplinary event disclosure on such forms.” SIFMA, in response to the Second Request for Comment, similarly stated that requiring “[duplicative] disclosure of specific events that are already disclosed in [SEC] Forms MA and MA-I provides little, if any, benefit to municipal entities or obligated persons, while it imposes unnecessary additional burdens on municipal advisors.” SIFMA suggested that providing clients with the information regarding how to obtain electronic access to a municipal advisor's legal and disciplinary history on SEC Forms MA and MA-I should suffice. Sanchez stated, regarding the Revised Draft Rule, that “[t]his requirement appears to be overly burdensome . . . , [and] it should be sufficient for purposes of this rule that a municipal advisor be required to direct clients to their EDGAR filings by providing clients with sufficiently specific information to locate their EDGAR filings.”
The MSRB contemplated that municipal advisors would be able to satisfy their disclosure of legal and disciplinary events under sections (b) and (c) of the Revised Draft Rule with specific reference to the relevant portions of their most recent SEC Forms MA or MA-I filed with the Commission. Proposed Rule G-42(b)(ii) further clarifies this intention, and requires the municipal advisor to provide detailed information specifying where the client may electronically access such forms. The MSRB believes this approach will address the issue of duplicative disclosure of the disciplinary and other legal events contained in SEC Forms MA and MA-I. This revision also clarifies that municipal advisors may satisfy the disclosure requirements of subsections (b)(ii) and (c)(iii) in a similar fashion.
A municipal advisor could, conceivably, simultaneously satisfy the requirements of proposed subsections (b)(ii) and (c)(iii) in one document if it were provided to the client prior to or upon engaging in municipal advisory activities for the client. However, if combined written disclosure and relationship documentation were made after a municipal advisor engages in municipal advisory activities, the municipal advisor would only be in compliance with proposed subsection (c)(iii) and not subsection (b)(ii).
SIFMA also suggested that subsection (c)(iv) of the Revised Draft Rule should be removed. The subsection would require municipal advisors to document the date of the last material change, including any addition, to the legal or disciplinary event disclosures on any SEC Form MA or MA-I filed with the Commission. Specifically, SIFMA believed that requiring municipal advisors to update their written disclosures and documentation with each of their municipal advisory clients whenever a material change to a legal or disciplinary event was made to any SEC Forms MA or MA-I would be unjustified.
Proposed section (c) requires the documentation of the municipal advisory relationship to be promptly amended or supplemented to reflect any material changes or additions, and requires the amended documentation or supplement to be promptly delivered to the municipal entity or obligated person client. However, the MSRB does not believe the update requirement under proposed section (c) is overly burdensome because municipal advisors need only provide the date of the last material change, including any addition, to their legal or disciplinary event disclosure to their clients, as they would be permitted to reference their SEC Forms MA and MA-I for the details of such material changes. Additionally, the required documentation of the municipal advisory relationship could be satisfied through the use of more than one writing and updates or amendments to such documents could be additional, separate writings that either amend or supplement earlier writings. The MSRB believes these accommodations sufficiently address the concern that municipal advisors would be required to amend and redistribute a single writing every time a material change or addition needed to be included. Further, the MSRB believes that, by requiring municipal advisors to update the written documentation relating to legal or disciplinary event disclosures provided to municipal entities and obligated persons, proposed subsection (c)(iv) would help ensure that those clients have sufficient, accurate and current information to better inform their decisions to engage and/or continue engaging a municipal advisor. The MSRB notes that the requirements of proposed section (c) must be made in writing and delivered to the municipal advisor's client in accordance with the duty of care and, as applicable, the duty of loyalty.
Coastal, Kutak and Parsons objected to the Initial Draft Rule's requirement to disclose the legal and disciplinary events for all individuals at a municipal advisory firm for which the firm is required to submit an SEC Form MA-I. They suggested that municipal advisors should not be required to disclose to a client legal and disciplinary events that relate to an individual that is employed by the municipal advisor, if that individual is not a part of (or reasonably expected to be a part of) the advisor's team working for the client. Although there could be numerous municipal advisors with large numbers of employees, as Coastal indicated, the MSRB believes there is insufficient cause to narrow the requirement of this disclosure obligation. Specifically, the MSRB notes that, although all of a municipal advisor's employees might not be a part of the team working on a particular client matter, the number of employees with legal or disciplinary events that a municipal advisor employs and the nature of any past legal or disciplinary events related to those employees could be material to the client's evaluation of the municipal advisor or the integrity of its management or advisory personnel. In any event, since a municipal advisor could satisfy Proposed Rule G-42(b)(ii) and (c)(iii) by providing information specifying where the client can electronically access SEC Forms MA and MA-I, there would be little additional burden imposed on municipal advisors by leaving the scope of these requirements unchanged.
Several commenters discussed the matter of documenting the municipal advisory relationship and the type of writing that should be required to evidence the municipal advisory relationship between the municipal advisor and its client.
FLA DBF, correctly recognizing that the Revised Draft Rule's reference to a “writing” does not require a written contract, suggested that the proposed rule change should be amended to require municipal advisors to enter into written contracts with their municipal entity clients regarding their municipal advisory relationships. In contrast, GFOA, while also correctly recognizing that the Revised Draft Rule does not require a written contract, supported the absence of a contract requirement. GFOA noted that although entering into a bilateral contract is a GFOA best practice, “there may not always be a need for a specific contract.” GFOA agrees with the MSRB that the municipal advisory relationship should be stated in writing as it would allow the issuer to clearly delineate the scope of work it intends its municipal advisor to provide.
A number of other commenters, including ABA, BDA, ICI, Lewis Young, MSA, NAIPFA and SIFMA, however, construed section (c) of the proposed rule as requiring a written contract, leading them to raise various concerns about the proposed rule applying to existing contracts that might need to be revised. As a result, these commenters suggested the inclusion of various kinds of transitional rule provisions to address these issues. ABA and Lewis Young, for example, requested a transitional provision to permit advisors to honor their existing agreements with their clients until they expire. ICI recommended that the MSRB clarify that, if approved, Proposed Rule G-42 would only apply prospectively. SIFMA requested that the MSRB limit or eliminate the need for municipal advisors to re-document their municipal advisory relationships and apply the disclosure requirements of the proposed rule only to future agreements. MSA requested guidance on whether the obligations of section (c) of Proposed Rule G-42 could be satisfied by a contract (such as a Master Services or Professional Services Agreement) between the municipal advisor and its client.
The documentation requirement of section (c) of Proposed Rule G-42, as with the Revised Draft Rule, would not require the creation of new contractual relationships or the modification of existing contracts or agreements between municipal advisors and their clients. The purpose of the requirement is to help ensure that certain terms of each municipal advisory relationship would be reduced to writing and delivered to the municipal advisor's municipal entity or obligated person client. So long as the content of the documentation adheres to the requirements of the proposed rule (including the standards of conduct in section (a)), municipal advisors and their clients have some latitude in deciding the exact form the documentation and writing might take. If municipal advisors have already delivered documentation meeting some or all of the requirements of proposed section (c), then municipal advisors would be able to rely on such documents to satisfy some or all of their obligations under section (c). While certainly permitted, the proposed rule would not require municipal advisors to enter into written contracts with their municipal entity or obligated person clients and municipal advisors could satisfy the requirements of provision (c) by providing separate or supplemental documents to any preexisting contract, agreement or writing previously provided that might be in place between the municipal advisor and its client. The relevant part of proposed section (c) has been further revised to delete the phrase “enter into” (which could have connoted the formation of a contract) and reads as follows: “A municipal advisor must evidence each of its municipal advisory relationships by a writing or writings created and delivered to the municipal entity or obligated person client prior to, upon or promptly after the establishment of the municipal advisory relationship.” The MSRB believes that requiring the documentation to take the form of a bilateral contract would be unnecessary and could lead to some of the burdensome consequences identified by commenters. The amendments to the Revised Draft Rule should clarify that municipal advisors would not be required to alter or re-execute any existing contract and that, in the future, the documentation and disclosure requirements could be satisfied in writings that are either included in a contract or separate and independent of any contract entered into between the municipal advisor and its municipal entity or obligated person client.
In response to the First Request for Comment, BDA and GKB stated that they generally supported the documentation and disclosure requirements of section (c) of the Initial Draft Rule but believed, with respect to municipal financial products, that a “written agreement” (as they believed was required by section (c)) should only be required when municipal advisory activities are engaged in for compensation. Based on their comments, it appears that BDA and GKB understood section (c) to implicitly require the municipal advisor and its client to evidence their municipal advisory relationship with a bilateral contract. NAIPFA, in its response to the Initial Draft Rule, asked the related question: “Does this mean that the writing must be a two party agreement?” NAIPFA also suggested that the MSRB amend section (c) to allow municipal advisors to satisfy the requirements of the section through an engagement letter. As previously stated, section (c) would not require, or preclude the use of a bilateral contract or engagement letter to evidence the municipal advisory relationship. So long as the content adheres to the requirements of Proposed Rule G-42 (including the standards of conduct of section (a)), municipal advisors and their clients would have some latitude in deciding the exact form the documentation and writings might take.
NAIPFA expressed concerns regarding the amount of information that would be required to be included in the documentation required by section (c), stating that municipal advisors would be put at a “significant competitive disadvantage to their [underwriting] counterparts . . . [because] underwriters are not mandated to include any particular contract-related terms within their engagement letter, such as clauses relating to the termination of the relationship or their obligations relating to certain aspects of the transaction . . . .” The MSRB does not believe the proposed documentation requirement would result in the competitive disadvantages described by NAIPFA. First, underwriters are required to make similar disclosures to issuers of municipal securities under MSRB's fair dealing rule, Rule G-17, which includes certain disclosures regarding the underwriter's compensation. Second, to the extent any of the requirements of section (c) are included in a written agreement, contract, engagement letter or similar document already in possession of the client, such information would not need to be included in a separate writing delivered to the municipal advisor's client. Instead, municipal advisors would be
In response to the Initial Draft Rule, ICI suggested that section (c) be revised to specify that only material changes to the information provided in the documentation required by section (c) would trigger the updating requirement. The MSRB did not intend by section (c) to require the supplementation of immaterial information and section (c) of the proposed rule has been revised to provide this clarification.
Under the Initial Draft Rule, a municipal advisor would have been required to evidence each of its municipal advisory relationships by a writing entered into prior to, upon or promptly after the inception of the municipal advisory relationship. In response to the First Request for Comment, Northland commented that section (c) of the Initial Draft Rule should require that the documentation be in place prior to engaging in municipal advisory activities rather than being permitted to be created and provided subsequently (
On a separate but related matter, Northland stated that the use of the term “municipal advisory relationship” would likely lead to confusion between how Northland believes the term is used by municipal advisors and other industry participants and how the term had been defined for purposes of the Initial Draft Rule. Northland believed that it would be difficult for municipal advisors to parse apart and document “municipal advisory relationships” when some of those relationships are “historical and ongoing” and are rarely thought of as separate relationships. The MSRB believes that the definition provided in Proposed Rule G-42(f)(vi) would provide sufficient guidance to municipal advisors in this regard. That provision would state that a municipal advisory relationship is deemed to exist when a municipal advisor enters into an agreement to engage in municipal advisory activities for a municipal entity or obligated person and ends on, the earlier of, the date on which the municipal advisory relationship has terminated pursuant to the terms of the documentation of the municipal advisory relationship, or the date on which the municipal advisor withdraws from the municipal advisory relationship.
In response to the Second Request for Comment, Piper Jaffray, while generally supportive of the documentation requirement of section (c) of the Revised Draft Rule, expressed concern that it could require premature documentation of a municipal advisory relationship. Specifically, Piper Jaffray stated that section (c) could require documentation when the municipal advisor has not been selected by its client to be its municipal advisor and, instead, is, in fact, engaging in municipal advisory activities as a means to obtain the engagement with the client to perform municipal advisory activities. Section (c) of the Revised Draft Rule, however, explicitly stated that the documentation requirement would only be triggered “prior to, upon or promptly after the establishment of the
The MSRB has considered Piper Jaffray's recommendation to merge
The MSRB believes that additional clarification within the proposed rule change is not necessary because the phrase “indirect compensation” is widely used and understood in the municipal advisory and securities industry and is well established in securities statutes and jurisprudence. Providing a definition of “indirect compensation” within Proposed Rule G-42 might reduce clarity regarding the general understanding of the phrase and lead to unnecessary confusion in an instance where sufficient guidance is already available.
Regarding SIFMA's request pertaining to advice that is incidental to providing brokerage/securities services, the MSRB notes that the proposed rule change would apply to a scope of municipal advisory activities as defined in the SEC Final Rule. Whether certain activities constitute “advice” under the SEC Final Rule is a legal interpretation within the authority of the SEC, and not the MSRB, to make.
Section (d) of Proposed Rule G-42 would provide that if a municipal advisor makes a recommendation of a municipal securities transaction or municipal financial product to its client, the municipal advisor must determine, based on the information obtained through reasonable diligence, whether the transaction or product is suitable for the client. Section (d) also would contemplate that a municipal advisor could be asked to evaluate a recommendation made to its client by another party, such as a recommendation by an underwriter of a new financing structure or a new financial product. Section (d) would require municipal advisors to conduct a suitability analysis—when requested by the client and within the scope of the engagement—of the recommendations of these third parties, guided by the requirements and principles contained in relevant portions of the supplementary material (such as paragraphs .01, .08 and .09).
Commenters raised a number of issues with section (d) of Proposed Rule G-42 (sections (d) and (e) of the Initial Draft Rule) and the related paragraphs .01 (Duty of Care), .08 (Suitability) and .09 (Know Your Client) of the Supplementary Material to Proposed Rule G-42. Below is a summary of, and response to, these comments.
In response to the Second Request for Comment, NAIPFA and GFOA expressed their general support for the Revised Draft Rule's suitability standard of section (d) of Proposed Rule G-42. NAIPFA believed it appropriately reflects a municipal advisor's fiduciary duties to its municipal entity clients.
The MSRB believes it has provided sufficient guidance to municipal advisors about the principles and requirements that should inform, and be incorporated in, a municipal advisor's policies and procedures by identifying the matters in the proposed rule text (such as in subsections (d)(i)-(iii) and paragraphs .01, .08 and .09 of the Supplementary Material) that a municipal advisor must, as applicable, consider when forming its advice or recommendation. The MSRB recognizes the diversity of the population of municipal advisors and the municipal advisory activities in which they engage in and believes the primarily principles-based approach taken by the proposed rule change will accommodate that diversity. The MSRB also believes this approach will clearly establish the minimum requirements and principles, which financial regulators could then consistently apply in their examination of municipal advisors.
The MSRB believes that whether advice given or recommendations made by municipal advisors would need to be updated would depend on the facts and circumstances surrounding the advice and recommendation, including, but not limited to, the scope of the services that the municipal advisor agreed to provide its client. The MSRB believes that the reasonableness of a municipal advisor's recommendation or advice would be determined by considering the information relied upon by, and available to, the municipal advisor at the time the recommendation is made or advice is given to its client. However, over the course of an ongoing municipal advisory relationship, it is possible that a municipal advisor would, as part of its duty of care, need to apprise its client of changes to the suitability of the advice or recommendation it had previously given. In such cases, a municipal advisor's responsibilities would depend upon the facts and circumstances and the parameters of its municipal advisory relationship. The MSRB believes that the proposed rule change will provide municipal advisors with the requisite guidance to comply with its requirements.
Proposed Rule G-42 would require municipal advisors to review a third-party recommendation when such a review is within the scope of the engagement between it and its client or if such a review would be part of the reasonable diligence required to reasonably determine whether a recommendation or advice is suitable
The MSRB received other comments related to the Initial Draft Rule's requirement that municipal advisors must
The MSRB has considered, yet disagrees with, NAIPFA's position. The MSRB believes that municipal advisor clients, with the agreement of the municipal advisor, should be able to define the scope of their municipal advisory relationships and thus determine what services the municipal advisor will provide. Furthermore, requiring municipal advisors to review all third-party recommendations could result in a costly burden to municipal entities and obligated persons that do not expect to derive sufficient value from such review. However, the MSRB acknowledges that limiting the scope of the engagement between a municipal entity or obligated person and its independent registered municipal advisor could affect a third party's ability to qualify and make use of exemptions discussed in the SEC Final Rule, including the exemption mentioned by NAIPFA.
BDA, in response to the First Request for Comment, requested that the MSRB define the term “independent” for purposes of paragraph .03 of the Supplementary Material, action independent of or contrary to advice, to the Initial Draft Rule. Proposed paragraph .03 states that a municipal advisor would not be required to disengage from a municipal advisory relationship if its client were to elect a course of action that is “independent or contrary” to the advice provided by the municipal advisor. BDA asked if “independent” would mean that the municipal advisor's client is not relying on or considering the advice of the municipal advisor; that the client is not seeking advice from the municipal advisor; or, that the client is acting contrary to advice given by the municipal advisor.
Proposed paragraph .03 of the Supplementary Material was designed to address instances when a municipal advisor's client has decided either not to accept, rely on or consider the municipal advisor's advice or to take an approach or position that varies (completely or partially) from advice provided by the municipal advisor. In the event of such occurrences, paragraph .03 would allow a municipal advisor to continue in its advising capacity so long as doing so would not otherwise be precluded by MSRB rules or federal, state or other laws, as applicable.
Northland requested clarification regarding whether section (d) of the Initial Draft Rule would be applicable to all recommendations provided by the municipal advisor or only when a recommendation is related to entering into a municipal securities transaction or municipal financial product. NABL stated, in response to the First Request for Comment, that “suitability,” as a general matter, is a regulatory concept that could not be appropriately applied to municipal advisors in all instances. NABL suggested that a municipal advisor should be permitted to make a recommendation as to a limited aspect of the transaction, even if the municipal advisor does not agree that the transaction is suitable.
Section (d) of Proposed Rule G-42 would provide that a municipal advisor must not recommend that its client enter into any municipal securities transaction or municipal financial product unless the municipal advisor has determined, based on the information obtained through the reasonable diligence of the municipal advisor, whether the transaction or product is suitable for the client. A municipal advisor could provide advice regarding an aspect of a municipal securities transaction or municipal financial product that the municipal advisor believes to be unsuitable for its client so long as the municipal advisor adhered to the duty of care, duty of loyalty, and all other laws, as applicable, and either did not recommend the unsuitable transaction
The MSRB believes that the proposed rule change sufficiently articulates that municipal advisors and their clients would have the discretion to define the parameters of their municipal advisory relationship and, thus, decide between them what municipal advisory activities would be performed by the municipal advisor for its client, including what matters for which a municipal advisor would be providing advice. As such, regarding the scenario proffered by Lewis Young, a municipal advisor that has not been engaged to provide advice about a municipal securities transaction or municipal financial product that was previously selected by its client would not be under an implicit obligation to provide the client with the suitability analysis described in proposed section (d) and the supplementary material. The municipal advisor would remain subject to (among other provisions of the proposed rule change) a duty of care, duty of loyalty (as applicable) and relevant supplementary material such as paragraphs .04 (Limitations on the Scope of the Engagement) and .09 (Know Your Client). Further, the MSRB believes that the documentation required by proposed Rule G-8(h)(iv) is an appropriately tailored recordkeeping requirement that will assist regulatory examiners in assessing the compliance of municipal advisors with the proposed rule change. Also, the MSRB believes the recordkeeping requirements will not be overly burdensome because municipal advisors would only be required to maintain documents created by the municipal advisor that were
Depending on the facts and circumstance of a particular scenario, such as described by NY State Bar, a municipal advisor could have a multitude of different obligations regarding its recommendation of an investment fund to a client. While the proposed rule change would allow municipal advisors and their clients to negotiate the municipal advisory activities to be performed, the standards of conduct articulated in section (a) and the relevant paragraphs of the supplementary material would not be subject to alteration. Therefore, a municipal advisor that has agreed to provide a recommendation regarding the investment in an investment fund would be required to exercise a duty of care that could, in turn, require the municipal advisor to conduct a suitability analysis that might, depending on the relevant facts and circumstance of a particular instance, require the municipal advisor to conduct a suitability analysis of the investment choices made by the manager of the investment funds. By establishing the applicable standards of conduct for municipal advisors, and providing additional guidance regarding those standards in the supplementary material to Proposed Rule G-42, the MSRB believes that municipal advisors will be able to make a determination regarding what actions they must undertake when making recommendations to clients.
In order to accommodate the diversity of the municipal securities and municipal advisory marketplace, the MSRB has taken a primarily principles-based approach regarding the required suitability analysis so that municipal entities and obligated persons would receive appropriately tailored and relevant advice and recommendations from their municipal advisors. For this reason, the MSRB does not intend to provide the specific metrics requested by MSA and instead will rely upon the principles and requirements provided by the proposed rule change.
A number of commenters voiced apprehension regarding what they believed to be the high standard set for providing recommendations to their clients or reviewing the recommendation of a third party. Specifically, commenters expressed concern with the portion of paragraph .01 (which would be applicable to recommendations contemplated under section (d)) that would require a municipal advisor to “undertake a reasonable investigation to determine that it is not basing any recommendation on materially inaccurate or incomplete information.” Most commenters stated that a municipal advisor should be able to rely on the accuracy and veracity of the information provided by a client and not be required to validate such information.
Sutherland asked, in response to the First Request for Comment, in the context of 529 plans, what the Initial Draft Rule would require a municipal advisor to do in order to satisfy the proposed obligation to undertake a reasonable investigation to determine that it is not basing any recommendation on materially inaccurate or incomplete information. Sutherland also asked whether a municipal advisor must obtain a representation from the issuer that the information it provides does not contain any material misstatements or omissions.
In response to the Second Request for Comment, ICI stated that municipal advisors to 529 plans should not be required to verify the veracity or completeness of the information provided to them by persons who are authorized by the municipal entity client to act on behalf of a state's 529 plan.
NABL commented that a municipal advisor should be free to recommend a transaction based on facts given to it by its client, without exercising any diligence to check the facts, if consistent with the scope of the engagement with
The duty of care is a core principle underlying many of the obligations of the proposed rule and is included, among other reasons, to ensure municipal entities and obligated persons are shielded from the potential negative consequences that could result from not receiving well-informed advice and expertly-executed services from their municipal advisors. The MSRB believes that requiring municipal advisors to conduct a reasonable investigation about the accuracy and completeness of the information, including information pertaining to a 529 plan, on which they will be basing their advice is necessary to ensure that clients will be able to make an informed decision based on facts and choose a prudent course of action. As stated in section (d), the municipal advisor would only need to exercise reasonable diligence, thus obviating the need for a municipal advisor to go to impractical lengths to determine the accuracy and completeness of the information on which it will be basing its advice and/or recommendation. The MSRB believes that obtaining a representation from the municipal advisor's client that the information it has provided, with no or insufficient diligence conducted by the municipal advisor, would not satisfy either section (d) or paragraph .01 of the Supplementary Material of Proposed Rule G-42 because such a representation would not sufficiently preclude the potential for the risks associated with providing advice or recommendations without a reasonable inquiry into the accuracy and completeness of the information upon which such advice or recommendations are based. While alone, such a representation would not satisfy the requirements of the proposed rule change, a municipal advisor would be free to seek and obtain such a representation as a prudent part of its process for conducting a reasonable investigation of the veracity and completeness of the information on which it is basing its recommendation.
Several commenters raised concerns about how section (d) and the related supplementary material that address suitability analysis would generally apply to municipal advisors advising 529 plans.
ICI stated, in response to the Second Request for Comment, that the suitability standard set forth in paragraph .08 of the Supplementary Material should recognize what ICI believes to be differences between advice rendered in connection with municipal securities, generally, and that rendered in connection with 529 plans. Sutherland voiced concerns in its response to the First Request for Comment and stated that the suitability factors listed in paragraph .08 and section (d) are not workable with regard to 529 plans. ICI believed that some of the factors for determining suitability included in paragraph .08 would be “largely irrelevant in the context of rendering advice to a 529 plan” and the MSRB should modify the Revised Draft Rule to explicitly state that such factors would not apply to advice relating to 529 plans. In the absence of exempting 529 plans from needing to consider such factors, ICI asked the MSRB to clarify how it intends the listed factors to apply to 529 plans.
In consideration of these comments, the MSRB has modified proposed paragraph .08 (formerly paragraph .09) of the Supplementary Material to allow municipal advisors to base a suitability determination only on the listed factors that are applicable to the particular type of client being advised. The MSRB, accordingly, has inserted the phrase “as applicable to the particular type of client” as a qualifier to the list of factors in paragraph .08 that must be considered in a suitability analysis. The modifications proposed should address the commenters' concerns such as how factors such as “financial capacity to withstand changes in market conditions” would apply given that 529 plans are not dependent on external sources of revenue or funding to satisfy claims of investors. However, the listed factors in paragraph .08, consistent with the regulation of recommendations in other securities law contexts, are focused on the client and not the product involved.
In response to the Second Request for Comment, Piper Jaffray requested additional clarification on what a municipal advisor would need to do, and what documents would need to be created, to comply with the Revised Draft Rule's suitability requirements. Specifically, Piper Jaffray asked what the proposed rule change would require with regards to decisions that Piper Jaffray refers to as “smaller decisions” (
The proposed rule change would require, pursuant to the duty of care, a municipal advisor to have a reasonable basis for any advice it provides to or on behalf of its client. Also, municipal advisors would be required to conduct a suitability analysis of recommendations of municipal securities transactions and municipal financial products that would comport with the requirements of proposed paragraph .08 of the Supplementary Material. Whether or not a suitability analysis would be required would depend, as previously discussed in Item II.A., on the facts and circumstances surrounding the communication made by the municipal advisor and whether the communication was a recommendation of a municipal securities transaction or municipal financial product. Advice as to the “smaller decisions” asked about by Piper Jaffray might, or might not, depending on the facts and circumstances of a particular instance, rise to the level of being a recommendation that would require a suitability analysis under the proposed rule change, even though such advice may relate to a municipal securities transaction or municipal financial product and therefore trigger other provisions of the proposed rule, because the advice might not reasonably be viewed as a “call to action” that would constitute a recommendation of a municipal securities transaction or municipal financial product. Note that even in the case of advice short of a recommendation, a subsequent communication that does constitute a recommendation requiring a suitability analysis might, depending on the particular facts and circumstances, require analysis at that time of a subject that was addressed in previous advice.
With regard to the recordkeeping requirements that would be required when providing a recommendation of a municipal securities transaction or municipal financial product, proposed MSRB Rule G-8(h)(iv) would require specifically that municipal advisors keep a copy of any document created by a municipal advisor that was material to its review of a recommendation by another party or that memorializes the
In response to the First Request for Comment, BDA and Piper Jaffray stated that the factors to be considered by municipal advisors when determining whether a municipal securities transaction or municipal financial product is suitable for its municipal entity or obligated person client discussed in paragraph .08 (Suitability) of the Supplementary Material overlooks the effect that “policy and political considerations” could have on a suitability determination. Piper Jaffray requested that the MSRB clarify whether the determination of suitability should “incorporate the policy directives and decisions of the issuer at the time the issue is undertaken.” BDA requested that the MSRB clarify that, if a municipal advisor's client states its objective, the municipal advisor, in making its recommendation, does not need to assess the appropriateness of the client's stated objective but could “generally accept the [objective].”
Section (a) and paragraph .01 of the Supplementary Material to Proposed Rule G-42 would require that municipal advisors exercise due care in performing their municipal advisory activities with respect to all of their clients. This duty would require, among other things, municipal advisors to provide their clients with informed advice. The MSRB believes that informed advice regarding the suitability of a municipal securities transaction or municipal financial product is the result of a municipal advisor making a reasonable inquiry into certain relevant information about the municipal advisor's client. For this reason, the MSRB has included in proposed paragraph .08 the requirement that a municipal advisor base its determination of suitability on any material information known by the municipal advisor after reasonable inquiry. Furthermore, proposed paragraph .09 of the Supplementary Material would obligate a municipal advisor to know and retain the essential facts concerning its client to allow the municipal advisor to effectively service the client. The MSRB believes that policy considerations could be materially relevant information under all of the particular facts and circumstances that municipal advisors may consider when determining the suitability of a municipal securities transaction or municipal financial product. A stated objective of the client as BDA posits could be made most clear by reducing it to writing and including it in the relationship documentation on the scope of the engagement.
Several commenters, including BDA, MSA, Northland and Lewis Young, commented on records and documentation requirements of the proposed rule change that would be applicable to municipal advisors.
In response to the First Request for Comment, BDA requested clarification regarding what books and records a municipal advisor would need to maintain to evidence evaluations or recommendations made by the municipal advisor. BDA commented that some evaluations or recommendations could be delivered orally to a client and that requiring a municipal advisor to memorialize each recommendation or evaluation in writing could prove impractical and/or costly. MSA asked, in response to the First Request for Comment, whether the information regarding recommendations and evaluations of which a municipal advisor is required to “inform” its client could be “transmitted to the client orally or will each alternative require empirical evidence demonstrating the material risks, potential benefits, structure and characteristics?” If oral transmission is acceptable, MSA then asked whether it would need to be documented by both parties. Also in response to the First Request for Comment, Northland expressed concerns regarding the Initial Draft Rule's requirement to discuss matters with the client, because it believed there is an implicit need to document these discussions therefore necessitating the use of written communications. However, Northland argued that written communications could result in a conflicting record that shows what the municipal advisor recommended as possibly in opposition to the course of action ultimately taken by its client. Northland was concerned that these potential conflicts could result in some exposure to liability in the event the justification of the decided upon course of action is challenged. Lewis Young contended that requiring municipal advisors, in section (d) of the Initial Draft Rule, to inform their clients of the risks and benefits of a particular structure or product when the client has already decided on a course of action (prior to engaging or seeking the advice of the municipal advisor) would yield little, if any, benefit. Lewis Young suggested only requiring the municipal advisor to inform its client of the matters discussed in section (d) when the client is considering, or presented with a recommendation of, a financial product, transaction or mechanism that is “novel to the client.”
Proposed Rule G-8(h)(iv) would require a municipal advisor to maintain a copy of any document it created that was material to its review of a recommendation by another party or that memorializes the basis for any determination as to suitability. Section (d) of Proposed Rule G-42 would require a municipal advisor to inform its clients of the municipal advisor's evaluation of the material risks, potential benefits, structure, and other characteristics of the recommended municipal securities transaction or municipal financial product; the basis upon which the municipal advisor reasonably believes that the recommended municipal securities transaction or municipal financial product is, or is not, suitable for the client; and whether the municipal advisor has investigated or considered other reasonably feasible alternatives to the recommended municipal securities transaction or municipal financial product that might also or alternatively serve the client's objectives. The MSRB notes that municipal advisors, under Proposed Rule G-42, would be required to “inform” their clients of such matters, rather than “discuss,” as previously required under the Initial Draft Rule. Under Proposed Rule G-42, a municipal advisor would be allowed to choose the appropriate method in which to communicate its evaluation of the material risks and benefits attendant to the recommendation. The method selected and used by the municipal advisor must, however, comport with the duty of care and duty of loyalty (as applicable) that is owed to its client and should, therefore, result in the municipal advisor's client receiving timely, full and fair notification of the matters provided for in proposed subsections (d)(i)-(iii) and that adhere to the guidance provided in proposed paragraph .08 of the Supplementary Material.
In response to the First Request for Comment, First Southwest expressed general support for a suitability standard for recommendations by municipal advisors but stated that certain clients of municipal advisors are capable of independently evaluating recommendations of municipal advisors and these clients should be exempt from the suitability standard in a manner similar to the “sophisticated municipal market professional” under MSRB Rule G-48. Lamont voiced a similar concern stating that many of its “large sophisticated” issuer clients do not want, or need, a review of the transaction they have already decided to undertake. Lamont commented that these types of clients are “sufficiently capable of weighing the risks in a transaction and making their own decision about whether to proceed.”
In response to the Second Request for Comment, SMA stated that when a municipal securities transaction or municipal financial product has been decided upon by a municipal advisor's client and: (a) Is related to a project or event determined by the governing body of the municipal entity or its citizens to be in its interest and consistent with its goals; (b) is permitted by state statute as determined by municipal or bond counsel; and (c) involves a transaction or product which the municipality has employed in the past, then it seems suitability has been determined and the advisor ought to be able to rely on these facts and the closing documents as establishing a reasonable basis for suitability. Southern MA suggested that a municipal advisor should not be put in the position of substituting its judgment as to the suitability of a municipal securities transaction or municipal financial product for that of the municipal policy makers, citizens or state lawmakers.
The MSRB has determined that the requirements of section (d), and the related paragraphs of the supplementary material, should be applicable regardless of the municipal advisor's perception of the sophistication of its client or the client's perception of its own degree of sophistication. The proposed rule change is aimed at protecting municipal entities, obligated persons and the public interest and, as a result, the MSRB believes that exemptions such as those described by these commenters would frustrate that objective. However, in designing Proposed Rule G-42, the MSRB did incorporate many of the concepts that commenters believed were indicia of the sophistication of an issuer into the factors to be considered when determining the suitability of a recommendation. Under those factors, the considerations proffered by SMA could be relevant to, and therefore be part of, a municipal advisor's suitability analysis depending on all of the particular circumstances, though they might not alone be sufficient to support a suitability determination under the proposed rule change.
Several commenters provided input on Proposed Rule G-42(e)(i), which sets forth certain activities in which municipal advisors would be prohibited from engaging.
In response to the First Request for Comment, NAIPFA and GFOA expressed general support for the specified prohibitions, NAIPFA stated that the section includes prohibitions that are “important measures that are needed to eliminate certain practices that often carry unmanageable conflicts of interest inconsistent with Municipal Advisor fiduciary duties,” and the prohibitions are appropriately tailored and would not impose undue regulatory burdens. Other commenters noted their general support for the prohibitions, but suggested some revisions or limitations, which are discussed in the section below.
Cooperman commented that the MSRB should determine, after a monitoring period since the passage of the Dodd-Frank Act, what, if any, abuses or inappropriate conduct remain that would require the regulation set forth in the proposed rule change. Alternatively, Cooperman suggested that the MSRB consider, at least initially, “limiting the [proposed rule] to an enumeration of prohibited forms of conduct and practices” rather than imposing extensive compliance, supervision and other requirements. In response to the Second Request for Comment, Lewis Young commented that the specified prohibitions subsections (e)(i) and (ii) (on the ban of certain principal transactions) are unnecessary because the matters addressed in those sections are adequately attended to in section (a) and should be intrinsic to a reputable municipal advisor's business practices. As such, Lewis Young recommended that these prohibitions be set forth in the supplementary material in order not to detract from the focus of the proposed rule. In response to such comments, the MSRB notes that, in many respects, Proposed Rule G-42 adopts a principles-based approach, enumerating prohibited forms of conduct and practice. However, regarding certain arrangements that the MSRB has identified as particularly prone to conflict with, or risk of breach of, the fiduciary duty and duty of care, the MSRB believes that the proposed rule change appropriately incorporates more specific requirements and prohibitions.
In response to the First Request for Comment, SIFMA, Lewis Young and MSA commented that the provision that would prohibit receiving compensation that is excessive in relation to the municipal advisory activities actually performed (now Proposed Rule G-42(e)(i)(A)), did not include a sufficiently clear standard for how excessive compensation would be determined and failed to provide adequate amount of guidance to facilitate compliance. SIFMA expressed concern that without a clear standard or more guidance, such determinations would be made in hindsight, presumably by financial regulatory examiners, and to the detriment of municipal advisors. Lewis Young called the prohibition unworkable, expressed concern that it would require advisors to document all of their work and requested that the paragraph be deleted. SIFMA and Lewis Young also commented that municipal advisor compensation is subject to market forces, and therefore its reasonableness should be determined by a negotiation between the client and the municipal advisor. PRAG stated that the proposed rule change fails to contemplate instances where transaction fees are included in a municipal advisor's compensation to compensate the municipal advisor for services that it has provided but that were unrelated to the issuance of municipal securities. SIFMA and Lewis Young asked whether the practice of including fees for services a municipal advisor provided, if not related to the issuance of municipal securities, would be permitted under the proposed rule change. Columbia Capital commented that the MSRB should strike the phrase “whether the fee is contingent upon the closing of the municipal securities transaction or municipal financial product,” in paragraph .10 of the Supplementary Material of Proposed Rule G-42, and add, as an additional factor to be considered when determining whether compensation is excessive, a comparison of the municipal advisor's compensation to other professionals providing services on the transaction in question.
After carefully considering the comments submitted in response to the First Request for Comment, the MSRB incorporated guidance regarding excessive compensation in paragraph .10 of the Supplementary Material of the Revised Draft Rule and solicited further comment. Paragraph .10 of Proposed Rule G-42 sets forth various factors that municipal advisors should consider when determining the reasonableness of their compensation. These factors include: The municipal advisor's expertise, the complexity of the municipal securities transaction or the financial product, whether the fee is contingent upon the closing of the transaction or financial product, the length of time spent on the engagement and whether the advisor is paying any other costs related to the transaction or financial product. Furthermore, Proposed Rule G-42 would prohibit receiving compensation that is excessive in relation to the municipal advisory activities actually performed. Depending on the facts and circumstances of a particular municipal advisory relationship, either or both of these provisions could apply to a scenario like that posited by PRAG. The proposed rule change, however, would not prescribe the source of funds that could be used to pay the municipal advisor for its services. Finally, the phrase regarding contingent fees is not deleted from paragraph .10 of the Supplementary Material as the MSRB believes it is a relevant factor and appropriately included in a non-exhaustive list of other relevant factors.
In response to the First Request for Comment, Wulff Hansen commented that the prohibition on the delivery of inaccurate invoices (now Proposed Rule G-42(e)(i)(B)) should be modified to clarify that it would apply only to any overstatements of fees, expenses or activities, and not to any fee discounting by a municipal advisor. SIFMA commented that the prohibition should stand but should be modified to add materiality and knowledge qualifiers (
The MSRB believes that the proposed rule change clearly implies that offering a payment discount from the services actually performed is a permissible activity because a municipal advisor would be able to accurately describe such a discount on its invoice. In response to the SIFMA comment, the MSRB notes that the scope of inaccuracy targeted by the proposed provision is limited to the significant subjects of the services performed and personnel who performed those services, and the MSRB believes any inaccuracy in an invoice on those subjects should be proscribed. In addition, the MSRB believes that the addition to the proposed provision of the state-of-mind elements that SIFMA suggested would not sufficiently protect municipal entity and obligated person clients.
The Initial Draft Rule included a prohibition on making or participating in any fee-splitting arrangement with underwriters, and any undisclosed fee-splitting arrangement with providers of investments or services to a municipal entity or obligated person client (now Proposed Rule G-42(e)(i)(D)). In response to the First Request for Comment, GFOA supported the fee-splitting prohibition in the Initial Draft Rule, noting that it “appears to be an inherent conflict, and should be avoided.” NAIPFA supported the prohibition, but asked the MSRB to provide a definition of “fee-splitting arrangements,” under which independent contractors and subcontractors would fall outside of the prohibition. Lewis Young and Winters LLC stated that fee-splitting arrangements should be disclosed but not prohibited. SIFMA commented that fee-splitting arrangements with affiliates, if fully and fairly disclosed, should be permissible. SIFMA stated that there could be legitimate reasons for such arrangements, including fee structures requested by clients of an affiliate, and, with such disclosure, the parties should be free to engage in the fee arrangement believed to be most economical and efficient under the circumstances. NABL commented that the provision appears to apply to transactions even when the advice provided is exempted or excluded from that which would cause one to be a “municipal advisor” under the SEC Final Rule. Based on this assumption, NABL argued that the prohibition should apply only when a municipal advisor is giving “non-exempt” advice as part of the same transaction, not when it is giving advice that is exempt under the SEC Final Rule.
Several commenters provided examples of fee-splitting arrangements that they believed should not be prohibited. Cooperman stated that a municipal advisor should not be prohibited from outsourcing certain parts of its municipal advisory activities to independent contractors and subcontractors, including those that may have advisors on their staffs, when payment to those third parties is not dependent upon successful conclusion of the financing or payment to the municipal advisor of its fee. In addition, Cooperman stated the fee-splitting prohibition should not prevent two advisor firms from contracting with an issuer to perform services for a predetermined fee that is disclosed to the issuer. Lewis Young, who favored disclosure of fee-splitting in lieu of a complete prohibition, wrote that municipal advisors should be permitted to enter into a fee-splitting arrangement with a structuring agent that provides specific quantitative services on a transaction. Winters LLC asserted that a municipal entity or obligated person should be able to have its municipal advisor or other professionals (including underwriters, if after the underwriting period) receive compensation from investment providers or other service providers for providing oversight and performing other services so long as there is full and fair written disclosure of the fee-splitting or sharing arrangements. Lamont stated that allowing an investment provider to pay fees related to the solicitation of the investment by the municipal advisor, and that are within the permitted limits of the Internal Revenue Service rules, should be acceptable as long as the payments are disclosed to the issuer and each investment provider on the bid list. Wulff Hansen asked whether it would be permissible under the provision for a municipal advisor to arrange for a routine purchase of services on behalf of the advised client in a transaction with an entity in which the advisor has an interest (
The MSRB agrees with Piper Jaffray's comment and amended the provision in the Revised Draft Rule (now Proposed Rule G-42(e)(i)(D)) to prohibit a municipal advisor from making or participating in any fee-splitting arrangement with underwriters on any municipal securities transaction as to which it has provided or is providing advice.
The MSRB believes that the proposed rule change would help prevent violations of fiduciary duties and the duty of care by clearly identifying and prohibiting specific fee-splitting
In response to the First Request for Comment, NABL commented that the Initial Draft Rule G-42 should not prohibit or require the disclosure of payments made to obtain or retain municipal advisory business, if those activities are engaged in by persons exempted from registration as a municipal advisor under SEC Rule 15Ba1-1.
In light of the comments received, the MSRB modified the provision (now Proposed Rule G-42(e)(i)(E)(1)) so that it would not specifically prohibit municipal advisors from making payments to an affiliate
The modification also would align the paragraph with Section 15B(e)(9) of the Exchange Act,
BDA and Piper Jaffray suggested adding two prohibitions to Proposed Rule G-42. In response to the First and Second Requests for Comment, Piper Jaffray suggested adding a specified prohibition that would prohibit a municipal advisor from taking into account whether it competes with other firms when the advisor makes a recommendation to its client (
The MSRB has not incorporated the prohibitions suggested by BDA and Piper Jaffray. To the extent the described conduct constitutes a material misrepresentation, the MSRB believes it is already appropriately addressed by Proposed Rule G-42 and existing MSRB Rule G-17, under which municipal advisors, in the conduct of their municipal advisory activities, must not engage in any deceptive, dishonest or unfair practice with any person.
The MSRB received extensive comments on the proposed provision to prohibit a municipal advisor (and its affiliates) from engaging in certain principal transactions (as defined in the proposed rule) with a municipal entity client of the municipal advisor (“prohibition on principal transactions” or “ban”). Specifically, Proposed Rule G-42(e)(ii) generally would prohibit a municipal advisor to a municipal entity client, and any affiliate of such municipal advisor, from engaging in a principal transaction directly related to the same municipal securities transaction or municipal financial product as to which the municipal advisor is providing, or has provided, advice.
In response to the First Request for Comment, many commenters raised concerns regarding: (1) The application of the ban to obligated person clients of municipal advisors; (2) the scope of the ban; (3) the meaning of “principal transaction” and “principal capacity;” (4) the ban's application to transactions by affiliates of municipal advisors; (5) the absence of an exception to the ban for an advisor or its affiliate based upon full and fair disclosure and the written consent of a client; and (6) the relationship between the ban and Rule G-23. In response to the Second Request for Comment, most of the comments focused on: (1) The scope of principal transactions that would be considered “directly related” to the advised transaction and come within the ban; (2) the ban's application to transactions by affiliates of municipal advisors; and (3) the relationship between the ban and Rule G-23.
In the Initial Draft Rule, the ban prohibited a municipal advisor and its affiliates from engaging in principal transactions with municipal entity and obligated person clients. The ban in Proposed Rule G-42(e)(ii) no longer would apply to principal transactions with obligated person clients. As a result, the comments urging that the ban not apply to obligated persons are not incorporated in this discussion, except to note that such comments were considered and the MSRB modified the proposed ban such that it would not apply to principal transactions with such persons.
In Initial Draft Rule G-42, the prohibition on principal transactions was significantly broader than the ban as modified in the Revised Draft Rule and as further narrowed in this proposed rule change. In the Initial Draft Rule, a municipal advisor (and its affiliates) generally were prohibited from engaging in any transaction in a principal capacity to which an obligated person client or a municipal entity client of the municipal advisor would be the counterparty. In response to the First Request for Comment, many commenters
A municipal advisor to a municipal entity client, and any affiliate of such municipal advisor, is prohibited from engaging in a principal transaction directly related to the
BDA suggested the following alternative:
A municipal advisor, and any affiliate of such municipal advisor, is prohibited from engaging in a principal transaction with a municipal entity client if the structure, timing or terms of such principal transaction was [sic] established on the advice of the municipal advisor in connection with a municipal advisory relationship with such municipal entity client.
After carefully considering the comments, the prohibition on principal transactions was significantly narrowed and clarified, as set forth in Revised Draft Rule G-42(e)(ii). The MSRB limited the ban to “a principal transaction
In response to the Second Request for Comment, some commenters supported the changes to the proposed rule text. Several other commenters continued to raise concerns regarding what they believed to be the overly broad scope of the ban. Conversely, one commenter stated that the ban in Revised Draft Rule G-42(e)(ii) had become too narrow. GFOA approved of the modification narrowing the proposed ban to “a principal transaction directly related to the same municipal securities transaction or municipal financial product as to which the municipal advisor is providing advice,” and Wells Fargo noted that the modification mitigated the impact of the proposed ban. ABA also welcomed the revision, but suggested additional changes. In addition, BDA, NY State Bar, Piper Jaffray and SIFMA suggested that the ban be modified further to narrow or clarify the scope of the ban. ABA recommended that the provision require the advice provided by the municipal advisor be provided pursuant to a municipal advisory relationship; NY State Bar recommended that the prohibition not apply where the municipal advisor does not make a recommendation to the municipal advisory client to enter into a transaction with the advisor or its affiliate; and SIFMA recommended that the provision ban only those principal transactions that are directly related to the advice the municipal advisor is providing, not merely the same municipal securities transaction or municipal financial product in connection with which the advice is provided.
A municipal advisor to a municipal entity client, and any affiliate of such municipal advisor, is prohibited from engaging in a principal transaction directly related to the same municipal securities transaction or municipal financial product as to which the municipal advisor is providing advice
SIFMA recommended the provision be modified to read:
A municipal advisor to a municipal entity client, and any affiliate of such municipal advisor, is prohibited from knowingly engaging in a [prohibited] principal transaction.
BDA recommended the provision be modified to delete the “directly related to” standard and substitute: “if the structure, timing or terms of such principal transaction was established on the advice of the municipal advisor in connection with a municipal advisory relationship with such municipal entity client.”
The principal transactions ban is incorporated in the proposed rule change as Proposed Rule G-42(e)(ii). The MSRB has determined not to narrow, broaden or otherwise modify the standard—“directly related to the same municipal securities transaction or municipal financial product as to which the municipal advisor is providing advice”—in response to the comments received. The MSRB believes that the various alternative rule texts proposed by commenters would not be more effective or efficient means for achieving the stated objective of Proposed Rule G-42(e)(ii), which is to eliminate a category of particularly acute conflicts of interest that would arise in the fiduciary relationship between a municipal advisor and its municipal entity client. The alternatives offered by various commenters are similar in that they would seek to limit the scope of prohibited transactions to those pertaining to the advice rendered by the municipal advisor. If adopted, such a change could leave transactions that have a high risk of self-dealing insufficiently addressed. For example, a municipal advisor that provided advice to a municipal entity regarding the timing and structure of a new issuance arguably would not be prohibited from acting as principal in entering into an interest rate swap for the same issuance so long as the advisor refrained from advising on the swap. In addition, in response to the comments that the standard would continue to raise questions whether a transaction was prohibited under Proposed Rule G-42(e)(ii) and the suggestion that the MSRB further amend the provision to clarify the provision, the MSRB does not believe it would be feasible or desirable, given the principled nature of the provision, to specify in advance its application in all circumstances. As noted above, the proposed principal transactions ban is revised to clarify that the prohibition applies both to principal transactions that occur while the municipal advisor is providing advice with respect to a directly related municipal securities transaction or municipal financial product, and after the municipal advisor has provided such advice.
In response to the First Request for Comment, certain commenters, including GFOA, NAIPFA, SIFMA and Wulff Hansen, commented that the MSRB should provide additional guidance regarding the meaning of various terms (
In response to comments, the Revised Draft Rule G-42(f)(i) added, for purposes of the Revised Draft Rule, a defined term, “engaging in a principal transaction” to mean: “when acting as principal for one's own account, selling to or purchasing from the municipal entity client any security or entering into any derivative, guaranteed investment contract, or other similar financial product with the municipal entity client.”
In response to the Second Request for Comment, ABA and GFOA expressed support for the proposed defined term. Another commenter, Sanchez, asked the MSRB to include a non-exhaustive list of specific common roles (such as underwriter) in addition to the general description. NY State Bar recommended two significant changes intended to narrow the scope of the prohibition and the definition of principal transaction: (1) The “somewhat open-ended” phrase “other similar financial product” should be amended to refer exclusively to municipal financial products, as defined in the Exchange Act; and (2) the definition of “engaging in a principal transaction” should be amended to make clear that the term does not include any of the banking activities as to which a bank may provide advice without being registered as a municipal advisor pursuant to the exemption in the SEC Rule 15Ba1-1(d)(3)(iii),
In response to comments filed regarding the Second Request for Comment, including Lewis Young's, the proposed rule would provide additional guidance regarding the term, “other similar financial products.” Proposed Supplemental Material paragraph .11 would provide that, as used in Proposed Rule G-42(f)(i), “other similar financial products,” “includes a bank loan, but only if it is in an aggregate principal amount of $1,000,000 or more and it is economically equivalent to the purchase of one or more municipal securities.” The MSRB notes that the term “other similar financial products” is not limited to refer exclusively to municipal financial products, as defined in the Exchange Act, in that a fiduciary's obligation to its client—not to engage in principal transactions in which the fiduciary's financial interests and concerns conflict with those of the client—is not so limited. For the same reason, the MSRB has determined not to limit the scope of banned transactions, which are covered based generally on conflicts principles, to the category of transactions as to which advising triggers a registration requirement as a municipal advisor.
In the First Request for Comment, the MSRB specifically sought comments on whether a ban on principal transactions by municipal advisors was the appropriate regulatory approach, or whether a municipal advisor should be permitted to engage in certain types of principal transactions with its client, with full and fair disclosure and written client consent, and, if so, what types of principal transactions should be allowed.
In response to the First Request for Comment, several commenters, including ABA, First Southwest, Frost, GKB, Kutak, JP Morgan, NABL and SIFMA, expressed concerns regarding what they viewed as the overly broad prohibition on principal transactions between municipal advisors and their clients. Several commenters, including the ABA, Cape Cod Savings, Frost, NABL, SIFMA and Zion, stated that the prohibition could do a disservice to municipal entities by unnecessarily and
Also, multiple commenters, including ABA, Kutak, NABL and SIFMA (in response to the First Request for Comment) and FSR and Zion (in response to the Second Request for Comment), noted that under Section 206(3) of the Investment Advisers Act and other regulatory regimes, certain principal transactions are permitted based upon full and fair disclosure and client consent.
SIFMA also referred to the regulation of swap dealers and security-based swap dealers that also serve as advisors to Special Entities (which includes municipal entities) under the CEA.
In contrast, commenters Lewis Young and NAIPFA supported the proposed ban on principal transactions and did not recommend creating exceptions or narrowing its scope. Lewis Young commented that the ban was appropriate, stating that a party cannot be both a fiduciary and a principal party in a buyer/seller relationship if the sale is an asset, financial product or something other than services that are compatible with the fiduciary role.
The MSRB carefully considered the comments received that urged the MSRB to include one or more exceptions to the prohibition on principal transactions. After considering the fiduciary duty of the municipal advisor in its relationship to a municipal entity client and the possibilities for self-dealing, the MSRB believes that the proposed prohibition on principal transactions is sufficiently targeted and should be retained. In addition, the MSRB believes that exceptions to the prohibition based on disclosure and client consent, even if limited to sophisticated municipal entities, would not sufficiently protect municipal entity clients from potential self-dealing-related abuses. The prohibition has been narrowed to ban only those transactions that (1) are “directly related” to the same municipal securities transaction or municipal financial product as to which the municipal advisor is providing or has provided advice and (2) are purchases or sales of a security or involve entering into a derivative, guaranteed investment contract, or other similar financial product with the municipal entity client (as discussed,
In response to the First Request for Comment, a number of commenters commented on the ban's coverage of principal transactions by affiliates of a municipal advisor, including ABA, Frost, JP Morgan, Parsons, Piper Jaffray, SIFMA, Wells Fargo and Zion.
The ABA, SIFMA and other commenters commented generally that other fiduciary regimes do not prohibit all affiliates of a fiduciary from engaging in principal transactions with the party owed the fiduciary duty. Wells Fargo also sought to limit the coverage of the ban, commenting that the ban should not apply to certain affiliates. In Wells Fargo's view, affiliates of large financial institutions often offer substantially different services, operate with distinct governance structures and employ information barriers, and, in such instances, if a non-municipal advisor affiliate is not connected to the municipal advisor relationship, the risk of a conflict of interest in a principal transaction between a municipal advisor client and the non-municipal advisor affiliate is significantly diminished. Wells Fargo suggested that the MSRB not apply the ban to affiliates or, at a minimum, limit the ban to principal transactions of affiliates that are directly related to the municipal advisory relationship that the municipal advisor affiliate has with the client. ABA, NABL, SIFMA, Wells Fargo, Zion and other commenters generally expressed concerns related to regulating conduct of affiliates of municipal advisors, specifically the imposition of compliance burdens on the affiliates and possible unintended consequences to clients if certain products and services offered by affiliates of the municipal advisor were no longer available to clients. ABA and NABL commented that the MSRB does not have apparent authority to regulate the conduct of affiliates of municipal advisors that are not brokers, dealers or municipal securities dealers, and thus, any ban should be narrowly-tailored and addressed to the municipal advisor's right to advise, rather than its affiliates' rights to engage in unrelated transactions.
In response to the Second Request for Comment, ABA, FSR, SIFMA and Wells
Commenters, such as SIFMA and Wells Fargo, also questioned the value of extending the prohibition to affiliates of a municipal advisor, stating that, in scenarios where the affiliate has no knowledge of the municipal advisory relationship, or where the municipal advisor has no knowledge of an affiliate's contemplated principal transaction, the parties would not be likely to engage in self-dealing or profit from the affiliation.
SIFMA suggested that the MSRB include the emphasized modifier in subsection (e)(ii) as follows: “A municipal advisor to a municipal entity client, and any affiliate of such municipal advisor, is prohibited from
After considering the fiduciary duty of the municipal advisor in its relationship to a municipal entity client and the risk of self-dealing, the MSRB believes that the proposed prohibition on principal transactions, including its application to affiliates, is sufficiently targeted. In the MSRB's view, the proposed prohibition should be retained without exceptions, including one based on disclosure and consent, for the reasons set forth above, given the acute nature of the conflicts of interest presented and the risks of self-dealing by affiliates in transactions that are “directly related” to the same municipal securities transaction or municipal financial product as to which the affiliated municipal advisor is providing or has provided advice. Significantly, the prohibition is limited to certain types of transactions (
In the First Request for Comment, the ban prohibiting municipal advisors (and their affiliates) from engaging in principal transactions with the municipal advisor's clients included the exception: “Except for an activity that is expressly permitted under [MSRB] Rule G-23” (“Rule G-23 exception”). The Rule G-23 exception was included to address the interrelationship between the proposed specific prohibition on principal transactions in Initial Draft Rule G-42 and principal transactions that are permitted by underwriters under Rule G-23.
Commenters sought clarity regarding the relationship between Rule G-23 and the prohibition on principal transactions in the Initial Draft Rule. In response to the First Request for Comment, commenters asked whether the prohibition on principal transactions was in conflict with principal transactions discussed in Rule G-23, under which a municipal advisor could acquire, as a principal, all or any portion of an issuance of municipal securities for which the municipal advisor had provided advice, as long as the municipal advisor complied with Rule G-23. BDA and GKB noted that, although the provision in the proposed ban referenced an exception for activities that are expressly permitted under Rule G-23, it was unclear what principal transactions would be permitted. Lamont commented that MSRB rules applicable to municipal advisors should not conflict with MSRB rules applicable to dealers regarding principal transactions, observing that, in its view, a fiduciary duty to the issuer will require additional steps to ensure that the pricing has been at least as favorable as having a third party in the transaction.
After careful consideration of the comments, the MSRB developed the Revised Draft Rule to clarify the relationship between the proposed ban on principal transactions and those principal transactions currently permitted under Rule G-23. Specifically, paragraph .07 to the Supplementary Material of the Revised Draft Rule described the Rule G-23 exception to the ban, providing that subsection (e)(ii) would not apply to an acquisition as principal, either alone or as a participant in a syndicate or other similar account formed for the purpose of purchasing, directly or indirectly, from an issuer all or any portion of an issuance of municipal securities, provided that the municipal advisor complied with the requirements of Rule G-23. Thus, the Rule G-23 exception was more clearly described using the particular terminology in Rule G-23, rather than solely cross-referencing Rule G-23.
Several of the comments received in response to the Second Request for Comment continued to seek clarification regarding the Rule G-23 exception, desiring to avoid confusion regarding any express and direct conflict between the ban and Rule G-23. GFOA sought additional amendments to paragraph .07 of the Supplementary Material, seeking to “ensure that no component of a final Rule on G-42 removes the authority of issuers to decide for themselves how they utilize a [municipal advisor] or underwriter on a transaction so long as compliance with MSRB Rule G-23, MSRB Rule G-42 and the SEC's Municipal Advisor Rule are maintained.” In BDA's view, the Revised Draft Rule language did not clarify the provision compared with the prior language regarding when a municipal advisor could act as a principal on the same transaction for which it is providing advice.
Sanchez appeared to interpret the provision to mean that a transaction permitted by Rule G-23 would be deemed in all cases to be lawful vis-a-vis other requirements under proposed Rule G-42 (such as the duty of loyalty) and under other laws (such as the statutory fiduciary duty). Columbia Capital commented that the sentence regarding the Rule G-23 exception in paragraph .07 of the Supplementary Material should be deleted because it “contemplates a situation where an MA could serve as a principal in a transaction for which it provides MA services, creating a conflict” with the proposed prohibition on principal transactions. Finally, ABA commented that the clarification regarding the conflict between Rule G-23 and draft Rule G-42(e)(ii) is unnecessary, or, if the clarification is retained, the phrase, “provided that the municipal advisor complies with all of the provisions of Rule G-23,” should be deleted and the phrase, “provided that such a transaction is not prohibited by the provisions of Rule G-23,” should be incorporated.
The MSRB notes that the purpose of the sentence regarding the Rule G-23 exception in paragraph .07 of the Supplementary Material is to avoid a potential inconsistency in the MSRB's
In addition, the specific prohibition in subsection (e)(ii) . . . shall not apply to an acquisition as principal, either alone or as a participant in a syndicate or other similar account formed for the purpose of purchasing, directly or indirectly, from an issuer all or any portion of an issuance of municipal securities
The MSRB cautions that this provision is quite limited, providing an exception only to the specific prohibition in subsection G-42(e)(ii); and it would not mean, for example, that a transaction not prohibited by Rule G-23 is deemed in all cases to be lawful vis-a-vis all other requirements under Proposed Rule G-42 (such as the duty of loyalty) and under other laws (such as the statutory fiduciary duty).
In response to the Second Request for Comment, several commenters expressed concerns and suggested changes to the inadvertent advice exclusion in paragraph .06 of the Supplementary Material to the Revised Draft Rule. First, NAIPFA believed the paragraph impermissibly creates an additional exemption from the Commission's definition of the term “municipal advisor” and is inconsistent with Rule G-23, allowing broker-dealers to provide advice to municipal entities and obligated persons as municipal advisors without becoming subject to corresponding fiduciary responsibilities and ultimately allowing such municipal advisors to serve as underwriters of the securities being issued. Similarly, WM Financial believed paragraph .06 negated Rule G-23 and effectively allowed broker-dealers to serve as municipal advisors and then switch to serving as underwriters, undermining the definition of “municipal advisor” and the exemptions thereto provided by the SEC. Contrary to NAIPFA and WM Financial, Sanchez stated that “it appears reasonably clear at the moment that Supplementary Material .06 is only intended to provide relief from subsections (b) and (c) of Proposed Rule G-42;” however, he believed it would be useful for the MSRB to also include an affirmative statement that even inadvertent advice is subject to all other rules and requirements applicable to municipal advisory activities and financial advisory relationships entered into by broker-dealers under Rule G-23, Commission rules, and the fiduciary duty set forth in the Exchange Act.
NAIPFA and WM Financial misinterpreted the safe harbor provided by paragraph .06 as broadly relieving a municipal advisor of other regulatory requirements. To address such confusion, the MSRB has revised paragraph .06 of the Supplementary Material to include a clarifying statement that the relief the paragraph provides “has no effect on the applicability of any provisions” of Proposed Rule G-42, other than sections (b) and (c) (relating to documentation of the municipal advisory relationship and the disclosure of conflicts of interest, respectively) or any other legal requirements applicable to municipal advisory activities, which would include, but are not limited to, SEC rules and Rule G-23.
Second, SIFMA suggested that the MSRB broaden the limited safe harbor provided by paragraph .06 to relieve municipal advisors that inadvertently engage in municipal advisory activities from compliance with section (d) and subsection (e)(ii) of the Revised Draft Rule. Section (d) would require a suitability analysis of recommendations made by the municipal advisor or by a third party while subsection (e)(ii) would prohibit principal transactions directly related to the same municipal securities transaction or municipal financial product as to which the municipal advisor is providing or has provided advice. The MSRB believes that, despite inadvertently engaging in municipal securities activities, a municipal advisor should not be relieved of complying with the suitability analysis requirement to the extent the municipal advisor made or reviewed a recommendation as contemplated by Proposed Rule G-42(d). Further, the MSRB does not believe, as SIFMA suggested, that firms would be less likely to perform the disclaimer process under paragraph .06 because doing so would not permit them to engage in a principal transaction prohibited under Proposed Rule G-42(e)(ii). Specifically, use of the exemption under paragraph .06 would only relieve a municipal advisor of compliance with the requirements of Proposed Rule G-42(b) and (c), and the prohibition on principal transactions would apply to the municipal advisor regardless. Therefore, the MSRB has not revised paragraph .06 in response to these comments.
Third, NAIPFA highlighted the importance of prompt use of the safe harbor provided by paragraph .06, suggesting that the proposed rule require utilization within ten days of discovery of the inadvertent advice. The MSRB has not prescribed a strict time frame for when the documentation must be provided by the municipal advisor beyond the general “promptly” standard, as doing so would create an arbitrary bright line that would be of limited benefit to municipal advisors or their clients. In response to the comment and to ensure that municipal advisors seeking to obtain the relief provided under paragraph .06 do so in a timely manner after having discovered that they inadvertently provided advice, the MSRB modified paragraph .06 to require municipal advisors to provide the documentation it prescribes “as promptly as possible
Fourth, SIFMA noted that there are circumstances in which a registered municipal advisor could be engaged in municipal advisory activities for some clients, but inadvertently provide advice to another client, and, therefore, could not state that it “has ceased engaging in municipal advisory activities” to comply with paragraph .06. In response to the comment, the MSRB has revised the disclaimer required by subparagraph (a) of paragraph .06 of the Supplementary Material to state that, effective immediately, the municipal advisor has ceased engaging in municipal advisory activities “
Fifth, NAIPFA highlighted the importance of the identification of the
Finally, SIFMA suggested that the MSRB should carve out an exception for all advice that is incidental to brokerage/securities execution services. In the MSRB's view, SIFMA's request, as noted above, is a request that the MSRB interpret the SEC Final Rule and the definition of “municipal advisor,” therein. The authority to interpret the Commission's rule lies with the Commission and the request should be directed to the Commission. As such, the MSRB declines to revise paragraph .06 of the Supplementary Material in this manner.
Subsection (f)(vi) would define “municipal advisory relationship” for purposes of Proposed Rule G-42 and states that a municipal advisory relationship will “be deemed to exist when a municipal advisor enters into an agreement to engage in municipal advisory activities for a municipal entity or obligated person.” In response to the Second Request for Comment, Columbia Capital objected to the deletion of “engages” from the definition of “municipal advisory relationship” in subsection (f)(vi) of the Revised Draft Rule. Specifically, Columbia Capital stated that, “[i]f a person provides `advice' he/she should trigger the [municipal advisor] duties at the time of providing that advice and should be considered [a municipal advisor] unless that person qualifies for an exemption or exclusion at the time such advice is provided.” Under the proposed rule change, the municipal advisory relationship would begin at the time a municipal advisor enters into an agreement to engage in municipal advisory activities, which then triggers the documentation requirements of Proposed Rule G-42(c).
The MSRB believes Columbia Capital's concern is moot because the other duties required by Proposed Rule G-42, including, but not limited to, providing written disclosures to clients, would be triggered when a municipal advisor engages in municipal advisory activities. The MSRB also notes that engaging in municipal advisory activities would subject a firm to municipal advisor registration requirements and any other legal requirements applicable to municipal advisory activities. Accordingly, the MSRB has not revised subsection (f)(vi) of the Revised Draft Rule, as incorporated into the proposed rule, in response to this comment.
Several commenters stated that the cost of complying with the proposed rule would be “burdensome” or “significant.” In some cases, commenters identified alternative approaches that they considered to be less costly. No commenter provided specific cost information or data that would support an improved estimate of the costs of compliance.
FSR and SIFMA both stated that the requirement on municipal advisors to provide disclosure of all material conflicts of interest including any of its affiliates that provides any advice, service, or product directly or indirectly related to performing municipal advisory activities would be burdensome, particularly for municipal advisors that are part of large financial conglomerates. Sanchez commented that a “written statement” would be less burdensome than “written documentation” when municipal advisors conclude that material conflicts of interest exist. FSR, SIFMA, and Sanchez commented that the detailed disclosure of disciplinary events material to the client's evaluation of the municipal advisor could be accomplished at a lower cost by allowing municipal advisors to reference the documentation provided to the SEC on Forms MA and MA-I. Columbia Capital requested that the MSRB consider allowing municipal advisors to use more than one document to meet the requirement for documentation of the municipal advisory relationship.
The MSRB agrees that municipal entities and obligated persons can be made aware of relevant conflicts of interest at a lower cost by revising some of the requirements. To that end, the MSRB amended Proposed Rule G-42(b)(i)(A) to narrow the scope of potential conflicts that would need to be disclosed from those that “might” impair the advisor's ability to provide advice to those that “could reasonably be anticipated to impair” the advisor's ability and Proposed Rule G-42(b)(i)(B) to remove the requirement to disclose potential conflicts that might arise from advice, service, or products provided by affiliates and
Lewis Young urged the MSRB to adopt a transitional period to permit advisors to honor their existing financial advisory agreements. They stated that many financial advisory agreements are longer-term arrangements and that advisors should be provided with a reasonable opportunity to conform existing arrangements to the requirements of the proposed rule when they are renewed or after a reasonable phase-in period after the rule is finalized. Zion also urges the MSRB to include a transitional provision to permit advisors to honor existing contracts, including many that are multi-year contracts. Zion notes the significant time, effort, and expense that would be involved to supplement or amend existing contracts with additional content and disclosure required by the proposed rule. Zion states that under particular state and/or local procurement laws, the alterations to existing agreements may reopen the request for proposal process for issuers to hire municipal advisors, requiring additional (and significant) time, effort, and expense.
The MSRB believes that the required disclosure can generally be accomplished without formal amendments and, therefore, that the costs imposed will be less significant than generally anticipated.
MSRB did not receive any comments specific to the Dodd-Frank Act requirement that MSRB rules not impose a regulatory burden on small municipal advisors that is not necessary or appropriate in the public interest and for the protection of investors, municipal entities, and obligated persons provided that there is robust protection of investors against fraud.
Nonetheless, the MSRB has been sensitive to the potential impact of the requirements contained in Proposed Rule G-42. To that end, the MSRB has made efforts to minimize costs, particularly those that might be expected to disproportionately impact smaller firms. In addition to the amendments discussed above that will reduce compliance costs, the MSRB has made changes to proposals included in prior Requests for Comment such as clarifying the obligations owed by municipal advisors to obligated persons, narrowing the circumstances under which disclosures related to the municipal advisory relationship and compensation arrangements need to be made, and removing disclosure requirements related to professional liability insurance.
The MSRB acknowledges that there will be costs associated with complying with this proposed rule and that some municipal advisors, including smaller firms, may exit the market as a result. However, the MSRB believes the costs and burdens are limited to those necessary to meet the objectives of the rule, consistent with its statutory basis.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549.
For the Commission, pursuant to delegated authority.
Rural Business-Cooperative Service and Rural Utilities Service, USDA.
Final rule; request for comment.
The Rural Business-Cooperative Service (Agency) is publishing this final rule for the Value-Added Producer Grant (VAPG) program. This final rule modifies the interim rule for VAPG based on comments received on the interim rule, which was published on February 23, 2011, on the Agricultural Act of 2014 (2014 Farm Bill), and on a listening session, held on April 25, 2014, on the VAPG provisions in the 2014 Farm Bill.
Under the final rule, grants will be made to help eligible producers of agricultural commodities enter into or expand value-added activities including the development of feasibility studies, business plans, and marketing strategies. The program also provides working capital for expenses such as implementing an existing viable marketing strategy.
The program provides a priority for funding for applicants that are Beginning Farmers and Ranchers, Veteran Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, operators of Small- and Medium-sized Family Farms and Ranches, Farmer and Rancher Cooperatives and applicants that propose a Mid-Tier Value Chain project. Additional priority points will be given to Agricultural Producer Groups, Farmer or Rancher Cooperatives, and Majority-Controlled Producer-Based Business Ventures whose projects “best contribute” to creating or increasing marketing opportunities for Beginning Farmers and Ranchers, Veteran Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, and operators of Small- and Medium-sized Family Farms and Ranches. Further, it creates two reserved funds, each of which will include 10 percent of program funds each year, for applications that support opportunities for Beginning and Socially-Disadvantaged Farmers and Ranchers and for proposed projects that develop mid-tier value marketing chains.
You may submit comments on this final rule by any of the following methods:
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All written comments will be available for public inspection during regular work hours at the 300 7th Street SW., 7th Floor address listed above.
USDA, Rural Development, Rural Business-Cooperative Service, Room 4008, South Agriculture Building, Stop 3253, 1400 Independence Avenue SW., Washington, DC 20250-3253, Telephone: (202) 690-1376, Email
This action is needed in order to implement the final rule for the Value-Added Producer Grant (VAPG) program. This final rule modifies the interim rule for VAPG based on comments received on the interim rule, which was published on February 23, 2011 (76 FR 10122), on the Agricultural Act of 2014 (2014 Farm Bill), and on a listening session, held on April 25, 2014, on the VAPG provisions in the 2014 Farm Bill. This action addresses these modifications, as well as a number of program clarifications, including but not limited to, allowing seafood producers to be able to apply under the locally-produced value-added agricultural product methodology and eligibility for tribal entities. Finally, this action gives the State Director discretion to award priority points in the event that the VAPG program is State-allocated in accordance with 7 CFR 1940.593.
1. Program. Section 6203 of Agricultural Act of 2014, Public Law 113-79 provides priority for funding applicants that are Veteran Farmers and Ranchers. It further provides additional priority points for Agricultural Producer Groups, Farmer or Rancher Cooperatives, and Majority-Controlled Producer-Based Business Ventures whose projects “best contribute” to creating or increasing marketing opportunities for Beginning Farmers and Ranchers, Veteran Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, and operators of Small- and Medium-sized Family Farms and Ranches.
2. Applications. Applicants must meet all program eligibility and evaluation requirements to be considered for funding. To be eligible to compete for reserved funding and/or receive priority points in the scoring process, applicants must include additional information in their grant application for their respective priority or reservation category (Beginning Farmers and Ranchers, Veteran Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, operators of Small- and Medium-sized Family Farms and Ranches, Farmer and Rancher Cooperatives, Mid-Tier Value Chain projects, and projects that `best contribute' to new or expanded marketing opportunities for Beginning Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, or operators of Small-and Medium-sized Family Farms and Ranches) in accordance with the VAPG program regulation and any additional guidance provided in the annual solicitation for the program.
3. Scoring applications. The Agency will score applications based upon the VAPG program regulation and any additional guidance provided in the annual solicitation for the program. Priority points will be awarded based on the applicant's qualification as one of the identified priority categories. Additional priority points will be awarded to Agricultural Producer Groups, Farmer or Rancher Cooperatives, and Majority-Controlled Producer-Based Business Ventures who can demonstrate, based on their current and projected composition of owners/membership, how their project “best contributes” to creating or increasing marketing opportunities for Beginning Farmers and Ranchers, Veteran Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, and operators of Small- and Medium-sized Family Farms and Ranches. Any reserve funds not
The Agency estimates the cost to complete an application to be approximately $2,405, with changes resulting from this action estimated to amount to $70. The Agency has identified potential offsetting benefits to prospective program participants and the Agency that are associated with this action. The primary benefit of this action is improving the availability of funds to help agricultural producer applicants in general, and priority category applicants in particular, to expand their customer base for the products or commodities that they produce.
This final rule has been reviewed under Executive Order (EO) 12866 and has been determined not significant by the Office of Management and Budget (OMB).
Title II of the Unfunded Mandates Reform Act 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, Rural Development generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires Rural Development to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule.
This final rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.
This final rule has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” Rural Development has determined that this action does not constitute a major Federal action significantly affecting the quality of the human environment, and in accordance with NEPA of 1969, 42 U.S.C. 4321
This final rule has been reviewed under EO 12988, Civil Justice Reform. In accordance with this rule: (1) All State and local laws and regulations that are in conflict with this rule will be preempted; (2) no retroactive effect will be given to this rule; and (3) administrative proceedings in accordance with the regulations of the Department of Agriculture's National Appeals Division (7 CFR part 11) must be exhausted before bringing suit in court challenging action taken under this rule unless those regulations specifically allow bringing suit at an earlier time.
It has been determined, under EO 13132, Federalism, that this final rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in the rule will not have a substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various government levels.
The Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the Agency certifies that the rule will not have an economically significant impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.
Under section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), the Agency certifies, that this action, while mostly affecting small entities, will not have a significant economic impact on a substantial number of these small entities for the reasons discussed below. This regulation only affects agricultural producers that choose to participate in the program. The Agency estimates that approximately 75 percent of the agricultural producers (operators of Family Farms and beginning and Socially-Disadvantaged applicants) that utilize the program are considered small entities, as defined by the Regulatory Flexibility Act. Therefore, the Agency has determined that this final rule will have an impact on a substantial number of small entities.
However, the economic impact of this final rule on small entities will not be significant. Many of the changes being implemented in the rule are in response to efforts to make the program more accessible to applicants in general and to smaller applicants in particular, as well as to clarify and simplify program requirements. In addition, a number of changes are in response to comments and concerns voiced by applicants and other stakeholders during listening sessions and public comment periods for the proposed and interim rules. The most significant changes in the rule that affects small producers are the addition of Veteran Farmer or Rancher applicants as a priority category and the additional priority points available for Agricultural Producer Groups, Farmer or Rancher Cooperatives, and Majority-Controlled Producer-Based Business Ventures whose projects meet the “best contribute” provision from the 2014 Farm Bill. These changes do not have a significant economic impact on small entities because the cost to applicants as estimated by the Agency in the Paperwork Reduction Act (PRA) burden package is approximately $70 per applicant impacted by the changes. Of these applicants, those addressing the “best contributes” priority are expected to be comprised of larger entities. This is based on determining which of the estimated costs in the PRA burden package would be incurred by the applicants impacted by the incorporation of the 2014 Farm Bill provisions and the percentage of those considered “small entities.
The regulatory impact analysis conducted for this final rule meets the requirements for EO 13211, which states that an agency undertaking regulatory actions related to energy supply, distribution, or use is to prepare a Statement of Energy Effects. This analysis finds that this rule will not have any adverse impacts on energy supply, distribution, or use.
This program is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. Intergovernmental consultation will occur for the assistance to producers of agricultural commodities in accordance with the process and procedures outlined in 7 CFR part 3015, subpart V. Note that not all States have chosen to participate in the intergovernmental review process. A list of participating States is available at the following Web site:
This rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires Rural Development to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
In response to the 2008 Farm Bill USDA participated in a series of formal Tribal consultation sessions to gain input by elected Tribal officials, or their designees, concerning the impact of the Interim rule on Tribal governments, Tribal producers and Tribal members. These sessions were intended to establish a baseline of consultation for future actions and informed USDA's policy development within the VAPG program.
As a result of these consultations, USDA developed and issued guidance on the eligibility of Tribes and Tribal entities, incorporated this guidance into application materials, and provided updated guidance to USDA field staff, Tribes and the general public on required documentation.
As the 2014 Farm Bill contained no additional requirements that had Tribal implications or substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes or on the distribution of power and responsibilities between the Federal Government and Indian tribes, USDA has determined that no further Tribal consultation is necessary. However, USDA will continue to work directly with Tribes and Tribal applicants to improve access to this program. The policies contained in this rule do not have Tribal implications that preempt Tribal law. For further information on USDA Rural Development's Tribal consultation efforts, please contact the Agency's Native American Coordinator at
VAPG is listed in the Catalog of Federal Domestic Assistance under Number 10.352.
In accordance with the Paperwork Reduction Act, the paperwork burden associated with this Notice has been approved by the Office of Management and Budget (OMB) under the currently approved OMB Control Number 0570-0039. The Agency has determined that changes contained in this regulatory action do not substantially change current data collection.
The Agency is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
On February 23, 2011 (76 FR 10090-10122), the Agency published an interim rule for the VAPG program. The interim rule addressed comments that the Agency received on the VAPG proposed rule, which was published in the
On February 7, 2014, the Agricultural Act of 2014 (referred to herein as the 2014 Farm Bill) was signed into law. Among its many provisions were two that affected the VAPG program. Section 6203 of the 2014 Farm Bill authorized the Secretary of Agriculture to give priority to:
• Veteran Farmers and Ranchers and
• Agricultural Producer Groups, Farmer or Rancher Cooperatives, and Majority-Controlled Producer-Based Business Ventures whose projects best contribute to creating or increasing marketing opportunities for operators of Small- and Medium-sized Farms and Ranches that are structured as Family Farms, Beginning Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, and Veteran Farmers and Ranchers.
The Agency held a listening session on April 25, 2014, to receive input from interested stakeholders on how to best implement these two provisions. There were a total of two participants who provided comments and suggestions.
All of the comments received on the interim rule and during the listening session are summarized in Section III of this final rule. Most of the interim rule's provisions have been carried forward into the final rule, although there have been some additional changes. A summary of major changes to the interim rule are summarized below in Section II.
This section presents the major changes to the VAPG final rule. Most of the changes were the result of the Agency's consideration of public comments on the interim rule, during the listening session (see Section III below for specifics on comments received), and on its own experience with the program in order to improve the implementation and administration. The Agency is also making changes to the rule due to statutory changes resulting from the enactment of the 2014 Farm Bill (see Section IV below).
1. The following definitions have been added:
• “Harvester” is defined to clarify that Harvesters must be able to document their legal right to access and harvest the Agricultural Commodity that is the subject of the value-added project. It further conveys that individuals or entities that merely glean, gather, or
• “Steering committee”—as a subset of the Independent Producer definition—is defined to clarify that Steering Committees must be comprised wholly of Independent Producers. This clarification is necessary because there was confusion among potential applicants about the required structure for this applicant type.
• “Veteran farmer or rancher” was added to conform to the 2014 Farm Bill definition that refers to 7 U.S.C. 2279(e).
2. The definitions of “financial feasibility” and “branding” have been removed because the terms are no longer included in the regulation.
3. The following definitions have been revised:
• “Agricultural food product” was revised to include seafood products customarily sold or consumed live, to remedy the inadvertent exclusion of producers of these products from applying under the Locally-Produced Value-Added Agricultural Product methodology.
• “Agricultural producer” was revised in response to public comments, to clarify that individuals and entities that may have ownership and/or financial control without being engaged in the day-to-day labor and management will not be eligible for a value-added producer grant. Agricultural Producer was also revised to clarify that the eligibility of Tribes and Tribal entities, due to their unique structures, will be determined by the Agency without regard to day-to-day labor, management, and field operation and right to harvest status.
• “Agricultural producer group” was revised to clarify that this type of applicant must be a non-profit, to alleviate on-going confusion about the structure of this applicant type and to conform to long-used examples.
• “Beginning farmer or rancher” was revised to clarify the required composition for reserved fund applicants (100 percent of owner members must be beginning farmers or ranchers) and priority point applicants (more than 50 percent must be beginning farmers or ranchers).
• “Family farm” was revised to remove the reference to the FSA definition of family farm.
• “Farm- or Ranch-based renewable energy” was revised to clarify how generated energy must be utilized to meet the requirement to demonstrate expanded customer base and increased revenue returned to producers.
• “Feasibility study” was revised to limit the definition to a description of the document, rather than the means by which the document is developed by eliminating reference to qualified consultant.
• “Independent producer” was revised to clarify that a “majority” of raw commodity owned by the applicant is defined as more than 50 percent. The definition was also revised to clarify that Steering Committees must apply as an Independent Producer and that a program-eligible legal entity must be established by the Steering Committee prior to Agency approval of the grant agreement. Further, it clarifies that Harvesters must apply as an Independent Producer and the eligibility requirements for Harvesters with regards to priority points and reserved funding. Independent Producer was also revised to clarify the eligibility of Tribes and Tribal entities, with regard to raw commodity ownership.
• “Marketing plan” was revised to eliminate an unnecessary reference to Qualified Consultant.
• “Medium-sized farm or ranch” was revised to conform to the Economic Research Service's more commonly used gross sales threshold of $1,000,000 for operators of medium-sized farms or ranches.
• “Mid-tier value chain” was revised in response to public comments to include consumers as participants of an eligible project.
• “Planning grant” was revised to limit the definition to a description of this type of grant, rather than the means by which it is developed, by eliminating reference to qualified consultant.
• “Product segregation” was revised to “physical segregation” to be consistent with the statutory language within the value-added agricultural product. In addition, an example of a physical segregated product was provided.
• “Small-sized farm or ranch” was revised to conform to the Economic Research Service's more commonly used gross sales threshold of $500,000 for operators of small-sized farms or ranches.
• “Socially-disadvantaged farmer or rancher” was revised to clarify eligibility requirements for individuals and entities in regards to priority points and reserved funding as per the statute.
• “Value-added agricultural product” was revised to clarify that the agricultural commodity (raw commodity) must be produced in the United States (including the Republic of Palau, the Federated States of Micronesia, the Republic of the Marshall Islands, or American Samoa).
The language of this section was modified to indicate that working capital awards are generally excluded from the documentation requirements in 7 CFR part 1940, subpart G.
1. Type of applicant. Since information regarding the eligibility of Tribes and Tribal entities had previously been provided only in Agency guidance through an Administrative Notice, the Agency added language indicating that Tribes and Tribal entities may be eligible for the program if they meet all requirements. In addition, the availability of additional guidance from the Agency is noted.
2. Citizenship. Language providing an exemption to the requirement that applicants be comprised of at least 50 percent U.S. citizens or legally-admitted permanent residents was deleted to ensure that awards are not made to non-U.S. citizens or entities.
3. Multiple applications. Since information regarding the limitation on application submissions by affiliated entities was previously included only in the annual solicitation, the Agency added language more specifically defining “affiliated” entities and the limitations on submission of multiple applications.
1. Purpose eligibility. While the Interim Rule indicates that applications containing ineligible costs totaling more than 10 percent of Total Project Costs will be deemed ineligible, it does not discuss the status of applications containing less than 10 percent ineligible costs. Therefore, the Agency is clarifying that applications containing ineligible expenses totaling less than 10 percent of Total Project Costs must have those expenses removed from the project budget or replaced with eligible expenses if selected for an award.
2. Working Capital. While the Interim Rule provides requirements for working capital grants, it does not include the requirement of specific quantification of the amount of commodity necessary for the project. This information instead was included in an Agency-developed application template. The Agency, therefore, is adding in this final rule the requirement that applicants quantify and document within their applications, the amount of commodity required for the project, as well as the amount they
1. A separate section was created for Reserved fund eligibility to delineate between it and Priority point eligibility, and for ease in navigating the requirements.
2. Clarification regarding the eligibility of Independent Producer Harvesters was included.
1. A separate section was created for Priority point eligibility to delineate between it and Reserved fund eligibility, and for ease in navigating the requirements.
2. Priority point eligibility status of Harvesters was included.
3. Documentation requirements for Veteran Farmers and Ranchers was included.
4. The gross sales dollar threshold was changed to conform to the Economic Research Service's more commonly used definition.
5. Priority point eligibility was changed to include a new Farm Bill requirement providing points to Agricultural Producer Groups, Farmer or Rancher Cooperatives, and Majority-Controlled Producer-Based Business Ventures whose projects best contribute to creating or increasing marketing opportunities for operators of Small- and Medium-sized Farms and Ranches that are structure as Family Farms, Beginning Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, and Veteran Farmers and Ranchers.
6. Administrator Priority Categories was amended to give State Director discretion to award priority points in the event that the VAPG program is State-allocated in accordance with 7 CFR 1940.593.
1. Use of funds for agricultural production expenses. Based on applications received and inquiries from applicants, current language on the prohibition of use of grant or matching funds for expenses related to the production of the raw commodity does not include enough specific information to fully inform prospective applicants. Therefore, the Agency is adding language to clarify that production planning, purchase of production inputs, and delivery of raw commodity is explicitly prohibited.
2. Use of funds to pay for applicant-supplied raw commodity. While the Interim Rule is clear that applicants may use grant funds to purchase raw commodity (49 percent or less of the total necessary) from third-parties, it does not contain specific language prohibiting the use of grant funds to purchase commodity from the applicant itself. It is the long-held position of the Agency that applicants cannot use grant funds to purchase raw commodities from themselves. Thus, the Agency is adding language to indicate that applicants or applicant entities cannot use grant funds to purchase raw commodity from themselves, from applicant-owned or affiliated entities, or from member producers.
3. Use of funds to pay salaries for applicant or applicant family member was deleted from this section as it only applied to use of grant funds. This section refers to ineligible uses of both grant AND matching funds. The prohibition on use of grant funds for this purpose and an explanation of the allowability of use of applicant or family member time as an in-kind matching contribution is detailed in § 4284.925 and in § 4284.931.
1. System for Awards Management (SAM) Registration. This registration requirement became mandatory after publication of the Interim Rule and the Agency has only included it in the annual solicitation. Therefore, language is being added to clarify that all applicants must be registered in SAM.
2. Use of Grant and Matching Funds. The Interim Rule indicates that grant funds and matching funds are subject to the same use restrictions. However, there are two exceptions in § 4284.925(a) and (b). For both planning and working capital grants, grant funds cannot be used to pay applicants or family members for their time spent on the project. But, appropriately-valued applicant or family member time up to a maximum of 25 percent of Total Project Costs can be used as an in-kind matching contribution. Similarly, for working capital grants, grant funds cannot be used to pay the applicant or affiliated parties for raw commodity to be used in project. However, the raw commodity can be used as in-kind match. Therefore the Agency has revised this section to reflect this change.
3. Performance Evaluation Criteria. Required Performance evaluation criteria were modified to respond to program metrics requirements in Section 6209 of the 2014 Farm Bill and also to ensure that data collected for program outcome and evaluation purposes is consistent, robust, and relevant to both the stated program purposes and ongoing evaluation efforts. Corresponding changes were made to § 4284.960 (Monitoring and reporting program performance) to specify that performance reports would include required data related to achieving programmatic objectives and a comparison of accomplishments with the objectives stated in the application. At a minimum, this would include information on: (i) Expansion of customer base as a result of the project; (ii) Increased revenue returned to the producer as a result of the project; (iii) Jobs created or saved as a result of the project; and (iv) Evidence of receipt of matching funds, if included or provided for in the project. The Agency also may request any additional project and/or performance data for the project for which grant funds have been received, for example, information that would promote greater understanding of the determinants of success of individual projects, inform program administration and evaluation, or that would enable the use of data for program administration or evaluation purposes.
Until such time as the Agency determines that additional data may be necessary to further inform program performance, the Agency will continue to utilize the data associated with the current Office of Management and Budget approved information collection requirements for the program. If and when the Agency determines that additional data is necessary, it will submit a new information collection package to OMB for review and approval prior to publication in the
Submission requirements provide information on completeness of applications, but do not explicitly state that because the program is a nationally-competitive program, no revisions or additional information will be accepted after the application deadline. Therefore, the Agency is clarifying that no revisions or additional information will be accepted after the application deadline.
The priority point criterion (Criterion 5) was reconfigured to accommodate awarding of points to projects that “best contribute” to the creation of or increase
The Interim Rule was published in the
Comments on the Interim Rule were received from 11 commenters, and comments on the VAPG provisions in the 2014 Farm Bill were received from 2 commenters. Combined, these commenters provided approximately 14 similar comments. Commenters included industry and trade associations and individuals. As a result of some of the comments, the Agency made changes in the rule. The Agency sincerely appreciates the time and effort of all commenters.
Responses to the comments on the interim rule and those received during the listening session are discussed below. Comments are grouped by category and rule section.
As part of the review, the commenter strongly encourages the Agency to explore the experiences of sister agencies at USDA that also operate review panels. The program would be improved by insertion of a section in the rule on review panels, provided that it is not as specific and rigid as to not allow positive program evolution over time.
The commenters claimed that this change could “open the floodgates” to non-farm passive investors and landlords to reap the benefits of a program clearly intended to raise incomes for producers. The commenters urge USDA to amend the definition of “agricultural producer” to read as follows:
“Agricultural producer”. An individual or entity directly engaged in the production of an agricultural commodity, or that has the legal right to harvest an agricultural commodity, that is the subject of the value-added project. Agricultural producers may “directly engage” through substantially participating in the labor, management, and field operations.”
One of the commenters stated that a citation for a very lengthy statutory definition (4 pages) is provided in the Interim Rule as part of this VAPG program definition for “beginning farmer or rancher,” even though the majority of the requirements in the statutory definition apply only to FSA loan programs and do not appear applicable to RD grant programs.
The commenter recommended that the Agency drop the statutory citation in the Interim Rule and simply specify the eligibility requirements that are applicable to beginning farmers and ranchers. The other commenter stated that the “beginning farmer or rancher” definition, as well as the related language in § 4284.922(c)(1)(i), must be fixed to make its meaning clear and precise. According to the commenter, the definition in the Interim Rule is extremely convoluted, could be difficult
The Agency acknowledges, however, that there are situations where making such determinations with regards to renewable energy are not necessarily clear. To help understand the application of this definition with regard to determining project eligibility, consider the following scenarios.
Scenario 1. A farmer installs an anaerobic digester to use cow manure to produce electricity and sells that electricity to the local utility. The electricity generated by the digester qualifies as renewable energy. The local utility represents an increase in the customer base and the farmer sees a direct increase in revenues from the sale of the electricity to the utility. Thus, this project qualifies as a value-added project eligible for consideration for a grant.
Scenario 2. Same scenario as Scenario 1, except that, instead of selling the electricity to the local utility, the farmer uses it to generate heat and power for a hydroponics facility on the farm from which a value-added product is produced. In this second example, the renewable energy project also qualifies. By producing the value-added product, the farmer is expanding his customers to those customers buying the value-added product. The farmer is seeing an increase in his revenue either directly as the result of sales of the new value-added product or indirectly as a reduction in operating costs of the farm. Thus, this project also qualifies as a value-added project eligible for consideration for a grant.
Scenario 3. Same scenario as Scenario 1, except under Scenario 3 the farmer uses all of the electricity generated by the anaerobic digester to replace electricity purchased from the local utility to help power current farm operations. While the farmer sees an indirect increase in revenues through a reduction in operating costs (as in Scenario 2), there is no increase in the customer base for the farmer. Therefore, both conditions are not met and the project would not be eligible for a VAPG grant.
The Agency revised the subject definition in order to clarify how the definition is to be applied.
One of the commenters stated that another viable option with respect to the feasibility study, marketing plan, and planning grant definitions is to simply describe the study, plan or grant, without reference to the qualified consultant as has been done in the case of “business plan.” The commenter further stated that they would support either option.
Two of the commenters stated that clarifications may be in order to ensure that third-party entities used to build, manage and operate anaerobic digesters are considered to be “harvesters of an agricultural commodity” (
The third commenter stated that the Interim Rule lacks sufficient detail to demonstrate “what and who” qualifies as a “harvester.” Because the definition is limited to an Independent Producer Agricultural Producer who has the “legal right to harvest an agricultural commodity,” it raises a potential, yet unintended, conflict with the primary program purpose that all Independent Producers “currently own and produce the agricultural commodity to which value will be added.”
This commenter recommended that the Agency clarify “what and who” qualifies in the “harvester” category, and specifically state whether or not a simple collection or gathering of any agricultural commodity suffices. According to the commenter, simple collection of an agricultural commodity by a non-agricultural producer would not meet the stated intention of the program. The commenter provided the following examples: (1) A logger who has the legal right to harvest logs from a land owner would be eligible, but a non-logger wanting to simply collect unwanted slash from the landing of a land-owner or logger would not be eligible, and (2) a non-agricultural producer business simply wanting to collect dairy manure from various farming operations to convert it to renewable energy would not be eligible. The commenter stated that, for these reasons, the Interim Rule needs to clarify these eligibility distinctions.
The Agency disagrees, however, with the two commenters that the third-party entities collecting animal manure for use in anaerobic digesters, as described by the two commenters, are eligible for the program. The Agency agrees with the examples provided by the third commenter as to which “Harvesters” would or would not be eligible to participate in the VAPG program.
For the purposes of the VAPG program, the Agency has determined that entities and individuals, such as those described by the commenter, that merely glean, gather or collect residual commodities that result from an initial harvesting or production of a primary agricultural commodity are not considered “Harvesters” and are not eligible for this program. For example, see the 2014 NOFA for the program (78 FR 70261, November 25, 2013). In the added definition, the Agency has clarified that the entity's (or individual's) harvest must be a “primary” agricultural commodity in order to be eligible; a harvester cannot merely glean, gather, or collect residual commodities. So for example, a logger who has a legal right to access and harvest logs from the forest that are then converted into boards would be an eligible applicant, as would a fisherman that has the legal right to access and harvest fish from the ocean or river that are then processed.
However, if the harvester is proposing a mid-tier value chain project, then the harvester would be eligible for priority points and for competing for mid-tier value chain reserve funding. The Agency has revised the rule to clarify who is eligible for priority points (see § 4284.924) and who is eligible for reserved funding (see § 4284.923).
One of the commenters agreed that, though branding is an essential part of developing a new product, it should not be the sole focus of a VAPG project. Even a complete marketing plan (of which branding is just one part) is only a fraction of what's needed for any good VAPG project—one which helps farmers develop new value-added products.
The commenter recommended that the Final Rule stress § 4284.922(a)(1) in stating that projects that are primarily branding projects do not meet the criteria of VAPG. The commenter suggested that one way this could be done is to include relevant language from the past NOSAs. The 2009 NOFA under the section titled “Other Eligibility Requirements” and from the Proposed Rule, under § 4284.922(c): “Applications that propose only branding, packaging, or other similar means of product differentiation are not eligible in any category. However, applications may propose branding, packaging, or other product differentiation activities as a component of a value-added strategy for products otherwise eligible in one of the above categories.”
One of the commenters stated that, by eliminating this section, the Agency gives the impression that it is endorsing projects that are 100 percent for branding. This is in direct contradiction to the requirement under § 4284.222(a)(1) that the project must focus on adding value to a product in one of five defined ways. The commenter stated that, by permitting all grant funds to be used for branding, the Agency would be opening the floodgates to becoming a program to support the advertising and branding budgets as if it were a domestic equivalent of the Market Access Program.
The other commenter stated that this new provision seems to open a loophole for any old products that need a new advertising campaign.
In support, the commenter pointed out that § 4284.922(c)(1)(i) says “For applicant entities with multiple owners, all owners must be eligible beginning farmers or ranchers” while (d)(1) says “For entities with multiple owners or members, 51 percent of owners or members must be eligible beginning farmers or ranchers.” This is contradictory and requires a simple clarification of terms to distinguish between eligible farms and eligible entities under the beginning farmer priority and set-aside.
The commenter applauded the Agency for this decision and believes it is a step in the right direction. The commenter urged the Agency to do a detailed assessment of the 25 percent cap, including a survey of applicants after the next grant round to get detailed reactions to the 25 percent cap. If the assessment, including the survey, reveals the 25 percent cap is a barrier to the program meeting its objectives, including participation by the statutory priority groups, they would then urge the Agency to raise the cap.
The 2014 Farm Bill added Veteran Farmers and Ranchers as an additional priority group. The Agency is including this group in the Final Rule as a priority group and is implementing provisions consistent with the provisions identified in the March 24, 2014 notice published in the
The Agency also received the comments concerning scoring associated with priority groups as presented below.
A second commenter stated that they had recommended that the Agency increase the percentage of total proposal evaluation ranking points for projects that foster the program's statutory priority for small and medium-sized family farms and beginning and Socially-Disadvantaged farmers, from 15 to 25 out of a total of 100 points. They further stated that the Interim Rule, however, moves in the exactly the opposite direction, decreasing those ranking points from 15 to 10 points.
The commenter stated that it strains the meaning of the word “priority” to assign it a ten percent factor. Ten percent might be appropriate in a “bonus” situation in which the factor might be considered a minor distinguishing item, but it certainly does not come close to being a priority factor.
The commenter stated that they are deeply concerned that, if this decision is not reversed, non-priority applicants will push aside priority applicants and one of the intended goals of the program will not be realized. The commenter strongly urged the Agency to issue a Final Rule that provides a real priority to the statutory priority classes. The commenter recommended that 25 percent of the total point value be assigned to statutory priorities, with review panels then assessing which projects best foster the priority for small and mid-sized family farms and beginning and Socially-Disadvantaged farmers and ranchers and providing evaluative ranking points accordingly.
Commenters indicated that there are good reasons to assign ranking points to projects that are located in rural areas, even if the markets they serve are both rural and urban. A key purpose of the program is to raise farm income and improve the economy in farming communities. This purpose can be legitimately advanced by providing some amount of ranking points to projects located in rural areas. Furthermore, when compared to urban agricultural producers, rural farmers and ranchers face heightened challenges in accessing markets for their products. The commenter recommended reinstating 10 points for rural projects, thus demonstrating a continued commitment to rural economic development.
A third commenter also opposed removing the priority points for rural projects, which is important, according to the commenter, to meeting the goals of the VAPG program.
The 2014 Farm Bill includes a provision that requires the Agency to give priority to Agricultural Producer Groups, Farmer or Rancher Cooperatives, and Majority-Controlled Producer-Based Business Ventures whose projects (including farmer or rancher cooperative projects) best contribute to creating or increasing marketing opportunities for operators of Small- and Medium-size Farms and Ranches that are structured as Family Farms, Beginning Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, and Veteran Farmers and Ranchers. The Agency received comments from stakeholders on this provision during the April 25th listening session. In addition, the Agency received comments on very similar language the Agency included in the preamble to the Interim Rule. The following summarizes the comments on this provision and then presents the Agency's response as to how this provision is implemented in the Final Rule.
The 2014 Farm Bill required the Agency to make changes to the VAPG program in two areas regarding priority:
• Priority to Veteran Farmers and Ranchers
• Priority to Agricultural Producer Groups, Farmer or Rancher Cooperatives, and Majority-Controlled Producer-Based Business Ventures for projects that `best contribute' to new or expanded marketing opportunities for Beginning Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, or operators of Small- and Medium-sized Family Farms and Ranches) The following paragraphs discuss how the Agency is implementing these priorities in the Final Rule.
The 2014 Farm Bill added a new priority for Veteran Farmers and Ranchers. The definition of a Veteran Farmer or Rancher, as provided by the 2014 Farm Bill, is a farmer or rancher who has served in the Armed Forces, as defined in section 101(10) of title 38 United States Code, and who either has not operated a farm or ranch or has operated a farm or ranch for not more than 10 years.
To qualify for priority points for projects that contribute to increasing opportunities for Veteran Farmers and Ranchers, applicants must submit form DD-214, Report of Separation from the U.S. Military and meet the requirements for Beginning Farmers or Ranchers at 7 CFR 4284.922(d) and in the application guides, as well as all other program requirements.
The 2014 Farm Bill added a new priority for Agricultural Producer Groups, Farmer and Rancher Cooperatives, and Majority-Controlled Producer-Based Business Ventures (applicant group) whose projects “best contribute to creating or increasing marketing opportunities” for operators
The Agency is implementing this priority by awarding up to 5 additional points based on documentation of the composition of the applicant's existing membership and anticipated expansion of membership as a way to assess creating or increasing marketing opportunities for the four priority groups. The Agency will use the following three criteria to award up to five points for this new priority.
1. If the existing membership of the applicant group is comprised of either more than 75 percent of any one of the four priority groups or more than 75 percent of any combination of the four priority groups, the application is eligible for two points.
2. If the existing membership of the applicant group is comprised of two or more of the priority groups, the application is eligible to receive one point. One point is awarded regardless of whether a group's membership is comprised of two, three, or all of the four priority groups.
3. If the proposed project in the applicant group's application will increase the number of priority groups that comprise the applicant group's membership by one or more priority group, the application is eligible to receive two points. However, if an applicant group's membership is already comprised of all four priority groups, such an applicant would not be eligible for points under this criterion because there is no opportunity to increase the number of priority groups. Note also that this criterion does not consider either the percentage of the existing membership that is comprised of the four priority groups or the number of priority groups currently comprising the applicant group's membership.
Agricultural commodities, Grant programs, Housing and community development, Rural areas, Rural development, Value-added activities.
For the reasons set forth in the preamble, under the authority at 5 U.S.C. 301 and 7 U.S.C. 1989, chapter XLII of title 7 of the Code of Federal Regulations (CFR) is amended as follows:
5 U.S.C. 301 and 7 U.S.C. 1989.
Subpart F also issued under 7 U.S.C 1932(e). Subpart G also issued under 7 U.S.C 1926(a)(11). Subpart J also issued under 7 U.S.C. 1632(a). Subpart K also issued under 7 U.S.C. 1621 note.
This subpart implements the Value-Added Agricultural Product Market Development grant program (Value-Added Producer Grants (VAPG)) administered by the Rural Business-Cooperative Service whereby grants are made to enable viable Agricultural Producers (those who are prepared to progress to the next business level of planning for, or engaging in, Value-Added Agricultural Production) to develop businesses that produce and market Value-Added Agricultural Products and to create marketing opportunities for such businesses. The provisions of this subpart constitute the entire provisions applicable to this Program; the provisions of subpart A of this part do not apply to this subpart.
The following definitions apply to this subpart:
(2) The Agency shall determine the Agricultural producer status of Tribes and Tribal entities without regard to day-to-day labor, management, and field operation and right to harvest status.
(i) An individual Independent Producer (other than a Harvester) that has operated a Farm or Ranch for no more than 10 years or
(ii) An eligible Applicant entity, other than a Harvester, that has an Applicant ownership or membership of more than 50 percent farmers or ranchers each of whom have operated a Farm or Ranch for no more than 10 years.
(2) For the purposes of determining eligibility to receive funding reserved for Beginning Farmers and Ranchers under § 4284.923, a Beginning Farmer or Rancher is either:
(i) An individual Independent Producer (other than a Harvester) that has operated a Farm or Ranch for no more than 10 years or
(ii) An eligible Applicant entity, other than a Harvester, that has an Applicant ownership or membership comprised entirely of (
(2) A Steering Committee must apply as an Independent Producer and form a program-eligible legal entity prior to execution of the grant agreement by the Agency. The Steering Committee and entity subsequently formed must meet all other program eligibility requirements.
(3) A Harvester must apply as an Independent Producer because harvester operations do not meet the definition requirements for a Farm or Ranch. Harvester applicants are therefore not eligible to receive Reserved Funds and/or Priority Points for a Beginning Farmer or Rancher, Socially-Disadvantaged Farmer or Rancher, operator of a Small- or Medium-sized farm or ranch that is structured as a Family Farm, or a Farmer or Rancher Cooperative, but may request Reserved Funds and/or Priority Points for qualified Mid-Tier Value Chain projects.
(4) The Agency shall determine the Independent Producer status of Tribes or Tribal entities without regard to ownership of the commodity to which value will be added so long as the tribal member participant, tribal entity and/or Tribe own and control at least 50 percent of the raw commodity necessary for the project, per the definition of Independent Producer in § 4284.902.
(1) The locality or region in which the final product is marketed, so that the total distance that the product is transported is less than 400 miles from the origin of the product; or
(2) The State in which the product is produced.
(1) Targets and strengthens the profitability and competitiveness of Small- and Medium-sized Farms or Ranches that are structured as a Family Farm; and
(2) Obtains agreement from an eligible Agricultural Producer Group, Farmer or Rancher Cooperative, or Majority-Controlled Producer-Based Business Venture that is engaged in the value chain on a marketing strategy.
(3) For Mid-tier Value Chain projects, the Agency recognizes that, in a supply chain network, a variety of raw Agricultural Commodity and Value-Added Agricultural Product ownership and transfer arrangements may be necessary. Consequently, Applicant ownership of the raw Agricultural Commodity and Value-Added Agricultural Product from raw through value-added stages is not necessarily required, as long as the Mid-tier Value Chain application can demonstrate an increase in customer base and an increase in revenue returns to the Applicant producers supplying the majority of the raw Agricultural Commodity for the project.
(1) For the purposes of determining eligibility to receive priority points under § 4284.924, if there are multiple farmer or rancher owners of the Applicant organization, more than 50 percent of the ownership must be held by members of a Socially-Disadvantaged Group.
(2) For the purposes of determining eligibility to received funding reserved for Socially-Disadvantaged Farmers and Ranchers under § 4284.923, if there are multiple farmer or rancher owners of the Applicant organization, all farmer and rancher owners (
(1) The Agricultural Commodity must meet one of the following five value-added methodologies:
(i) Has undergone a Change in Physical State;
(ii) Was Produced in a Manner that Enhances the Value of the Agricultural Commodity;
(iii) Is Physically Segregated in a manner that results in the enhancement of the value of the Agricultural Commodity;
(iv) Is a source of Farm- or Ranch-based Renewable Energy, including E-85 fuel; or
(v) Is aggregated and marketed as a Locally-Produced Agricultural Food Product.
(2) As a result of the Change in Physical State or the manner in which the Agricultural Commodity was produced, marketed, or segregated:
(i) The customer base for the Agricultural Commodity is expanded and
(ii) A greater portion of the revenue derived from the marketing, processing, or physical segregation of the Agricultural Commodity is available to the producer of the commodity.
(1) For the purposes of determining eligibility to receive priority points under § 4284.924, a Veteran Farmer or Rancher is either:
(i) An individual Independent Producer (other than a Harvester) that has either never operated a Farm or Ranch or has operated a Farm or Ranch for no more than 10 years or
(ii) An eligible Applicant entity, other than a Harvester, that has an Applicant ownership or membership of more than 50 percent Veteran Farmers or Ranchers each of whom have either never operated a Farm or Ranch or operated a Farm or Ranch for no more than 10 years.
(2) [Reserved]
A person may seek a review of an Agency decision under this subpart from the appropriate Agency official that oversees the program in question or appeal to the National Appeals Division in accordance with 7 CFR part 11.
Except as specified in paragraphs (a) and (b) of this section, the Administrator may make exceptions to any requirement or provision of this subpart, if such exception is necessary to implement the intent of the authorizing statute in a time of national emergency or in accordance with a Presidentially-declared disaster, or, on a case-by-case basis, when such an exception is in the best financial interests of the Federal Government and is otherwise not in conflict with applicable laws.
(a)
(b)
(a)
Disabilities Act, the Equal Credit Opportunity Act, Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, the Age Discrimination Act of 1975, and 7 CFR part 1901, subpart E.
(b)
(c)
(d)
If there are conflicts between this subpart and State or local laws or regulatory commission regulations, the provisions of this subpart will control.
All grants awarded under this subpart are subject to the environmental requirements in subpart G of 7 CFR part 1940. Applications for both Planning and Working Capital grants are generally excluded from the environmental review process by 7 CFR 1940.333.
(a)
(b)
(c)
Copies of all forms, regulations, instructions, and other materials related to the program referenced in this subpart may be obtained through the Agency's Web site and at any Rural Development office.
In implementing this subpart, the Agency will issue public notifications addressing funding and programmatic changes, as specified in paragraphs (a) and (b) of this section, respectively. The methods that the Agency will use in making these notifications is specified in paragraph (c) of this section, and the timing of these notifications is specified in paragraph (d) of this section.
(a)
(1) The funding level, the minimum and maximum grant amounts, and any additional funding information as determined by the Agency; and
(2) The contents of simplified applications, as provided for in § 4284.932.
(b)
(1) Priority categories to be used for awarding Administrator or State Director points, which may include any of the following:
(i) Unserved or underserved areas.
(ii) Geographic diversity.
(iii) Emergency conditions.
(iv) Priority mission area plans, goals, and objectives.
(2) Additional reports that are generally applicable across projects within a program associated with the monitoring of and reporting on project performance.
(3) Any application filing instructions specified in § 4284.933.
(c)
(d)
(1) The Agency will make the information specified in paragraph (a) of this section available each Fiscal Year.
(2) The Agency will make the information specified in paragraph (b)(1) of this section available at least 60 days prior to the application deadline, as applicable.
(3) The Agency will make the information specified in paragraphs (b)(2) through (4) of this section available on an as needed basis.
To be eligible for a grant under this subpart, an Applicant must demonstrate that they meet the requirements specified in paragraphs (a) through (d) of this section, as applicable, and are subject to the limitations specified in paragraphs (e) and (f) of this section.
(a)
(1) An Independent Producer;
(2) An Agricultural Producer Group;
(3) A Farmer or Rancher Cooperative; or
(4) A Majority-Controlled Producer-Based Business Venture.
(b)
(c)
(i) Are citizens or nationals of the United States (U.S.), the Republic of Palau, the Federated States of Micronesia, the Republic of the Marshall Islands, or American Samoa; or
(ii) Reside in the U.S. after legal admittance for permanent residence.
(2) Entities other than individuals must certify that they are more than 50 percent owned by individuals who are either citizens as identified under paragraph (c)(1)(i) of this section or legally admitted permanent residents residing in the U.S.
(d)
(e)
(f)
(a) Consistent with the Departmental Regulations, an Applicant is ineligible if the Applicant is debarred or suspended or is otherwise excluded from, or ineligible for participation in, Federal assistance programs under Executive Order 12549, “Debarment and Suspension.”
(b) An Applicant will be considered ineligible for a grant due to an outstanding judgment obtained by the U.S. in a Federal Court (other than U.S. Tax Court), is delinquent on the payment of Federal income taxes, or is delinquent on Federal debt.
To be eligible for a VAPG grant, the application must demonstrate that the project meets the requirements specified in paragraphs (a) through (c) of this section, as applicable.
(a)
(b)
(2) The Matching Funds required for the project budget must be eligible and without a real or apparent Conflict of Interest, available during the project period, and source verified in the application.
(3) The proposed project must be limited to eligible planning or working capital activities as defined at § 4284.925, as applicable, with eligible tasks directly related to the processing and/or marketing of the subject Value-Added Agricultural Product, to be demonstrated in the required work plan and budget as described at § 4284.922(b)(5).
(4) Applications that propose ineligible expenses in excess of 10 percent of Total Project Costs will be deemed ineligible to compete for funds. Applicants who submit applications containing ineligible expenses totaling less than 10 percent of Total Project Costs must remove those expenses from the project budget or replace with eligible expenses, if selected for an award.
(5) The project work plan and budget must demonstrate eligible sources and uses of funds and must:
(i) Present a detailed narrative description of the eligible activities and tasks related to the processing and/or marketing of the Value-Added Agricultural Product along with a detailed breakdown of all estimated costs allocated to those activities and tasks;
(ii) Identify the key personnel that will be responsible for overseeing and/or conducting the activities or tasks and provide reasonable and specific timeframes for completion of the activities and tasks;
(iii) Identify the sources and uses of grant and Matching Funds for all activities and tasks specified in the budget; and indicate that Matching Funds will be spent at a rate equal to or in advance of grant funds; and
(iv) Present a project budget period that commences within the start date range specified in the annual solicitation, concludes not later than 36 months after the proposed start date, and is scaled to the complexity of the project.
(6) Except as noted in paragraphs (b)(6)(i) and (ii) of this section, working capital applications must include a Feasibility Study and Business Plan completed specifically for the proposed value-added project by a Qualified Consultant. The Agency must concur in the acceptability or adequacy of the Feasibility Study and Business Plan for eligibility purposes.
(i) An Independent Producer Applicant seeking a Working Capital Grant of $50,000 or more, who can demonstrate that they are proposing market expansion for an existing Value-Added Agricultural Product(s) that they currently own and produce from at least 50 percent of their own Agricultural Commodity and that they have produced and marketed for at least 2 years at time of application submission, may submit a Business Plan or Marketing Plan for the value-added project in lieu of a Feasibility Study. The Applicant must still adequately document increased customer base and increased revenues returning to the Applicant producers as a result of the project in their application, and meet all other eligibility requirements. Further, the waiver of the independent Feasibility Study does not change the proposal evaluation or scoring elements that pertain to issues that might be supported by an independent Feasibility Study, so Applicants are encouraged to well-document their project plans and expectations for success in their proposals.
(ii) All four Applicant types that submit a Simplified Application for Working Capital Grant funds of less than $50,000 are not required to provide an independent Feasibility Study or Business Plan for the Project/Venture, but must provide adequate documentation to demonstrate the expected increases in customer base and revenues resulting from the project that will benefit the producer Applicants
(7) All applicants applying for Working Capital Grant funds must document the quantity of the raw Agricultural Commodity that will be used for the Value-Added Agricultural Product, expressed in an appropriate unit of measure (pounds, tons, bushels, etc.) to demonstrate the scale of the applicant's project. This quantification must include an estimated total quantity of the Agricultural Commodity needed for the project, the quantity that will be provided (produced and owned) by the Agricultural Producers of the applicant organization, and the quantity that will be purchased or donated from third-party sources.
(8) All Applicants requesting Working Capital grant funds must either be currently marketing each Value-added Agricultural Product that is the subject of the grant application, or be ready to implement the working capital activities in accord with the budget and work plan timeline proposed.
The Applicant must meet the requirements specified in this section, as applicable, if the Applicant chooses to compete for reserved funds. A Harvester is not eligible to compete for reserved funds under paragraph (a) of this section, but is eligible to compete for reserved funds under paragraph (b) of this section. In accordance with application deadlines, all eligible, but unfunded reserved funds applications will be eligible to compete for general funds in that same Fiscal Year, as funding levels permit.
(a) If the Applicant is applying for Beginning Farmer or Rancher or Socially-Disadvantaged Farmer or Rancher reserved funds, the Applicant must provide the following documentation to demonstrate that the applicant meets all of the requirements for the applicable definition found in § 4284.902.
(1) For beginning farmers and ranchers (including veterans), documentation must include a description from each of the individual owner(s) of the applicant farm or ranch organization, addressing the qualifying elements in the beginning farmer or rancher definition, including the length and nature of their individual owner/operator experience at any farm in the previous 10 years, along with one IRS income tax form from the previous 10 years showing that each of the individual owner(s) did not file farm income; or a detailed letter from a certified public accountant or attorney certifying that each owner meets the reserved funds beginning farmer or rancher eligibility requirements. For applicant entities with multiple owners, all owners must be eligible beginning farmers or ranchers.
(2) For Socially-Disadvantaged farmers and ranchers, documentation must include a description of the applicant's farm or ranch ownership structure and demographic profile that indicates the owner(s)' membership in a Socially-Disadvantaged group that has been subjected to racial, ethnic or gender prejudice; including identifying the total number of owners of the applicant organization; along with a self-certification statement from the individual owner(s) evidencing their membership in a Socially-Disadvantaged group. All farmer and rancher owners must be members of a Socially-Disadvantaged group.
(b) If the Applicant is applying for Mid-Tier Value Chain reserved funds, the Applicant must be one of the four VAPG Applicant types. The application must:
(1) Provide documentation demonstrating that the project meets the definition of Mid-Tier Value Chain;
(2) Demonstrate that the project proposes development of a Local or Regional Supply Network of an interconnected group of entities (including nonprofit organizations, as appropriate) through which agricultural commodities and Value-Added Agricultural Products move from production through consumption in a local or regional area of the United States, including a description of the network, its component members, either by name or by class, and its purpose;
(3) Describe at least two alliances, linkages, or partnerships within the value chain that link Independent Producers with businesses, cooperatives, or consumers that market value-added agricultural commodities or Value-Added Agricultural Products in a manner that benefits Small- or Medium-sized Farms and Ranches that are structured as a Family Farm, including the names of the parties and the nature of their collaboration;
(4) Demonstrate how the project, due to the manner in which the Value-Added Agricultural Product is marketed, will increase the profitability and competitiveness of at least two, eligible, Small- or Medium-sized Farms or Ranches that are structured as a Family Farm, including documentation to confirm that the participating Small- or Medium-sized Farms or Ranches are structured as a Family Farm and meet these program definitions. A description of the two farms or ranches confirming they meet the Family Farm requirements, and IRS income tax forms or appropriate certifications evidencing eligible farm income is sufficient.
(5) Document that the eligible Agricultural Producer Group/Farmer or Rancher Cooperative/Majority-Controlled Producer-Based Business Venture Applicant organization has obtained at least one agreement with another member of the supply network that is engaged in the value chain on a marketing strategy; or that the eligible Independent Producer Applicant has obtained at least one agreement from an eligible Agricultural Producer Group/Farmer or Rancher Cooperative/Majority-Controlled Producer-Based Business Venture engaged in the value-chain on a marketing strategy;
(i) For Planning Grants, agreements may include letters of commitment or intent to partner on marketing, distribution or processing; and should include the names of the parties with a description of the nature of their collaboration. For Working Capital grants, demonstration of the actual existence of the executed agreements is required.
(ii) Independent Producer Applicants must provide documentation to confirm that the non-applicant Agricultural Producer Group/Farmer or Rancher Cooperative/majority-controlled partnering entity meets program eligibility definitions, except that, in this context, the partnering entity does not need to supply any of the raw Agricultural Commodity for the project;
(6) Demonstrate that the members of the Applicant organization that are benefiting from the proposed project currently own and produce more than 50 percent of the raw Agricultural Commodity that will be used for the Value-Added Agricultural Product that is the subject of the proposal; and
(7) Demonstrate that the project will result in an increase in customer base and an increase in revenue returns to the Applicant producers supplying the majority of the raw Agricultural Commodity for the project.
Applicants that demonstrate eligibility may apply for priority points if their applications: Propose projects
(a) Applicants seeking priority points as Beginning Farmers or Ranchers or as Socially Disadvantaged Farmers or Ranchers must provide the documentation specified in § 4284.923(a)(1) or (2), as applicable.
(b) Applicants seeking priority points as Veteran Farmers or Ranchers must provide the documentation specified in § 4284.923(a)(1) or (2), as applicable, and must submit form DD-214, “Report of Separation from the U.S. Military,” or subsequent form.
(c) Applicants seeking priority points as Operators of Small- or Medium-sized Farms or Ranches that are structured as a Family Farm must:
(1) Be structured as a Family Farm;
(2) Meet all requirements in the associated definitions; and
(3) Provide the following documentation:
(i) A description from the individual owner(s) of the Applicant organization addressing each qualifying element in the definitions, including identification of the average annual gross sales of agricultural commodities from the farm or ranch in the previous three years, not to exceed $500,000 for operators of small-sized farms or ranches or $1,000,000 for operators of medium-sized farms or ranches;
(ii) The names and identification of the blood or marriage relationships of all Applicant/owners of the farm; and
(iii) A statement that the Applicant/owners are primarily responsible for the daily physical labor and management of the farm with hired help merely supplementing the family labor.
(d) Applicants seeking priority points for Mid-Tier Value Chain proposals must be one of the four eligible Applicant types and provide the documentation specified in § 4284.923(b)(1) through (7), demonstrating that the project meets the Mid-Tier Value Chain definition.
(e) Applicants seeking priority points for a Farmer or Rancher Cooperative must:
(1) Demonstrate that it is a business owned and controlled by Independent Producers that is legally incorporated as a Cooperative; or that it is a business owned and controlled by Independent Producers that is not legally incorporated as a Cooperative, but is identified by the State in which it operates as a cooperatively operated business;
(2) Identify, by name or class, and confirm that the Independent Producers on whose behalf the value-added work will be done meet the definition requirements for an Independent Producer, including that each member is an individual Agricultural Producer, or an entity that is solely owned and controlled by Agricultural Producers, that substantially participates in the production of the majority of the Agricultural Commodity to which value will be added; and
(3) Provide evidence of “good standing” as a cooperatively operated business in the State of incorporation or operations, as applicable.
(f) Applicants applying as Agricultural Producer Groups, Farmer and Rancher Cooperatives, or Majority-Controlled Producer-Based Business Ventures (group Applicants) may request additional priority points for projects that “best contribute to creating or increasing marketing opportunities” for operators of Small- and Medium-sized Farms and Ranches that are structured as Family Farms, Beginning Farmers and Ranchers, Socially-Disadvantaged Farmers and Ranchers, and Veteran Farmers and Ranchers. The annual solicitation and Agency application package will provide instructions and documentation requirements for group Applicants to apply for these additional priority points.
In general, grant and cost-share Matching Funds have the same use restrictions and must be used to fund only the costs for eligible purposes as defined in paragraphs (a) and (b) of this section.
(a) Planning Grant funds may be used to pay for a Qualified Consultant to conduct and develop a Feasibility Study, Business Plan, and/or Marketing Plan associated with the processing and/or marketing of a Value-added Agricultural Product.
(1) Planning Grant funds may not be used to compensate Applicants or family members for participation in Feasibility Studies.
(2) In-kind contribution of Matching Funds to cover Applicant or family member participation in planning activities is allowed so long as the value of such contribution does not exceed a maximum of 25 percent of the Total Project Costs and an adequate explanation of the basis for the valuation, referencing comparable market values, salary and wage data, expertise or experience of the contributor, per unit costs, industry norms, etc., is provided. Final valuation for Applicant or family member in-kind contributions is at the discretion of the Agency. Planning funds may not be used to evaluate the agricultural production of the commodity itself, other than to determine the project's input costs related to the feasibility of processing and marketing the Value-Added Agricultural Product.
(b) Working capital funds may be used to pay the project's operational costs directly related to the processing and/or marketing of the Value-Added Agricultural Product.
(1) Examples of eligible working capital expenses include designing or purchasing a financial accounting system for the project, paying salaries of employees without ownership or Immediate Family interest to process and/or market and deliver the Value-Added Agricultural Product to consumers, paying for raw commodity inventory (less than 50 percent of the amount required for the project) from an unaffiliated third party, necessary to produce the Value-Added Agricultural Product, and paying for a marketing campaign for the Value-Added Agricultural Product.
(2) In-kind contributions may include appropriately valued inventory of raw commodity to be used in the project. In-kind contributions of Matching Funds may also include contributions of time spent on eligible tasks by Applicants or Applicant family members so long as the value of such contribution does not exceed a maximum of 25 percent of the Total Project Costs and an adequate explanation of the basis for the valuation, referencing comparable market values, salary and wage data, expertise or experience of the contributor, per unit costs, industry norms, etc. is provided. Final valuation for Applicant or family member in-kind contributions is at the discretion of the Agency.
Federal procurement standards prohibit transactions that involve a real or apparent Conflict of Interest for owners, employees, officers, agents, or their Immediate Family members having a personal, professional, financial or other interest in the outcome of the project; including organizational conflicts, and conflicts that restrict open and free competition for unrestrained trade. In addition, the use of funds is
(a) Support costs for services or goods going to or coming from a person or entity with a real or apparent Conflict of Interest, except as specifically noted for limited in-kind Matching Funds in § 4284.925(a) and (b);
(b) Pay costs for scenarios with noncompetitive trade practices;
(c) Plan, repair, rehabilitate, acquire, or construct a building or facility (including a processing facility);
(d) Purchase, lease purchase, or install fixed equipment, including processing equipment;
(e) Purchase or repair vehicles, including boats;
(f) Pay for the preparation of the grant application;
(g) Pay expenses not directly related to the funded project for the processing and marketing of the Value-Added Agricultural Product;
(h) Fund research and development;
(i) Fund political or lobbying activities;
(j) Fund any activities prohibited by 2 CFR parts 200 through 400, and 48 CFR subpart 31.2;
(k) Fund architectural or engineering design work;
(l) Fund expenses related to the production of any Agricultural Commodity or product, including, but not limited to production planning, purchase of seed or rootstock or other production inputs, labor for cultivation or harvesting crops, and delivery of raw commodity to a processing facility;
(m) Conduct activities on behalf of anyone other than a specifically identified Independent Producer or group of Independent Producers, as identified by name or class. The Agency considers conducting industry-level feasibility studies or business plans, that are also known as feasibility study templates or guides or business plan templates or guides, to be ineligible because the assistance is not provided to a specific group of Independent Producers;
(n) Pay for goods or services from a person or entity that employs the owner or an Immediate Family member;
(o) Duplicate current services or replace or substitute support previously provided;
(p) Pay any costs of the project incurred prior to the date of grant approval, including legal or other expenses needed to incorporate or organize a business;
(q) Pay any judgment or debt owed to the United States;
(r) Purchase land;
(s) Pay for costs associated with illegal activities; or
(t) Purchase the Agricultural Commodity to which value will be added (raw commodity) from the applicant entity; applicant-owned or related entity, or members of the applicant entity.
(a) Grant funds may be used to pay up to 50 percent of the Total Project Costs, subject to the limitations established for maximum total grant amount.
(b) The maximum total grant amount provided to a grantee in any one year shall not exceed the amount announced in an annual notice issued pursuant to § 4284.915, but in no event may the total amount of grant funds provided to a grant recipient exceed $500,000.
(c) A grant shall have a term that does not exceed 3 years, and a project start date within 90 days of the date of award, unless otherwise specified in a notice pursuant to § 4284.915. Grant project periods should be scaled to the complexity of the objectives for the project. The Agency may extend the term of the grant period, not to exceed the 3-year maximum.
(d) The aggregate amount of awards to Majority-Controlled Producer-Based Business Ventures may not exceed 10 percent of the total funds obligated under this subpart during any Fiscal Year.
(e) Not more than 5 percent of funds appropriated each year may be used to fund the Agricultural Marketing Resource Center, to support electronic capabilities to provide information regarding research, business, legal, financial, or logistical assistance to Independent Producers and processors.
(f) Each Fiscal Year, the following amounts of reserved funds will be made available:
(1) 10 percent of total program funding to fund projects that benefit Beginning Farmers or Ranchers or Socially-Disadvantaged Farmers or Ranchers; and
(2) 10 percent of total program funding to fund projects that propose development of Mid-tier Value Chains.
(3) Funds not obligated by June 30 of each Fiscal Year shall be available to the Secretary to make grants under this subpart to eligible applicants in the general funds competition.
The Agency encourages Applicants to contact their State Office well in advance of the application submission deadline, to ask questions and to discuss Applicant and Project eligibility potential. At its option, the Agency may establish a preliminary review deadline in accordance with § 4284.915, so that it may informally assess the eligibility of the application and its completeness. The result of the preliminary review is not binding on the Agency.
All Applicants are required to submit a complete application package that is comprised of all of the elements in this section.
(a)
(1) “Application for Federal Assistance.”
(2) “Budget Information-Non-Construction Programs.”
(3) “Assurances—Non-Construction Programs.”
(4) All Applicants (including individuals and sole proprietorships) are required to have a DUNS number and maintain registration with the System for Award Management (SAM).
(b)
(1)
(i) Applicant eligibility requirements in §§ 4284.920 and 4284.921 are met;
(ii) Project eligibility requirements in § 4284.922 are met;
(iii) Eligible use of grant and Matching Funds requirements in §§ 4284.925 and 4284.926 are met; and
(iv) Funding limitation requirements in § 4284.927 are met.
(2)
(i)
(A) The number of jobs anticipated to be created or saved as a direct result of the project.
(B) The current baseline number of customers.
(C) The estimated expansion of customer base as a direct result of the project.
(D) The current baseline of revenue.
(E) The estimated increase in revenue as a direct result of the project.
(F) Applicants for both Working Capital and Planning Grants are invited to suggest additional benchmarks for evaluation that are specific to proposed project activities or outcomes and the corresponding timeframes for accomplishing them; these should be informed by the program objectives, stated above, related to new markets, expansion of customer base, and revenues returning to producer Applicants; as well as to the practical and/or logistical activities and tasks to be accomplished during the project period.
(ii)
(3)
(i) Cost-share Matching Funds will be spent in advance of grant funding, such that for every dollar of grant funds disbursed, not less than an equal amount of Matching Funds will have been expended prior to submitting the request for reimbursement; and
(ii) If Matching Funds are proposed in an amount exceeding the grant amount, those Matching Funds must be spent at a proportional rate equal to the match-to-grant ratio identified in the proposed budget.
(4)
(i) Except as provided at § 4284.925(a) and (b), Matching Funds are subject to the same use restrictions as grant funds, and must be spent on eligible project expenses during the grant funding period.
(ii) Matching Funds must be from eligible sources without a real or apparent Conflict of Interest.
(iii) Matching Funds must be at least equal to the amount of grant funds requested, and combined grant and Matching Funds must equal 100 percent of the Total Project Costs.
(iv) Unless provided by other authorizing legislation, other Federal grant funds cannot be used as Matching Funds.
(v) Matching Funds must be provided in the form of confirmed Applicant cash, loan, or line of credit; or provided in the form of a confirmed Applicant or family member in-kind contribution that meets the requirements and limitations specified in § 4284.925(a) and (b); or provided in the form of confirmed third-party cash or eligible third-party in-kind contribution; or non-federal grant sources (unless otherwise provided by law).
(vi) Examples of ineligible Matching Funds include funds used for an ineligible purpose, contributions donated outside the proposed grant funding period, applicant and third-party in-kind contributions that are over-valued, or are without substantive documentation for an independent reviewer to confirm a valuation, conducting activities on behalf of anyone other than a specific Independent Producer or group of Independent Producers, expected program income at time of application, or instances where a real or apparent Conflict of Interest exists, except as detailed in § 4284.925(a) and (b).
(5)
(6)
Applicants requesting less than $50,000 will be allowed to submit a simplified application, the contents of which will be announced in an annual solicitation issued pursuant to § 4284.915. Applicants requesting Working Capital Grants of less than $50,000 are not required to provide Feasibility Studies or Business Plans, but must provide information demonstrating increases in customer base and revenue returns to the producers supplying the majority of the Agricultural Commodity as a result of the project. See § 4284.922(b)(6)(ii).
Unless otherwise specified in a notification issued under § 4284.915, the requirements specified in paragraphs (a) through (e) of this section apply to all applications.
(a)
(b)
(c)
(d)
(e)
(a)
(b)
(c)
(d)
During the period between the submission of an application and the execution of award documents, the Applicant must notify the Agency in writing if the project is no longer viable or the Applicant no longer is requesting financial assistance for the project. When the Applicant notifies the Agency, the selection will be rescinded or the application withdrawn.
(a)
(b)
(1)
(2)
(3)
(4)
(5)
(i)
(ii)
(6)
(a)
(b)
(c)
(a)
(b)
(c)
(1) “Request for Obligation of Funds;”
(2) “Certification Regarding Debarment, Suspension, and Other Responsibility Matters-Primary Covered Transaction;”
(3) “Certification Regarding Drug-Free Workplace Requirements;”
(4) “Assurance Agreement (under Title VI, Civil Rights Act of 1964);”
(5) “ACH Vendor/Miscellaneous Payment Enrollment Form;” or
(6) “Disclosure of Lobbying Activities.”
(d)
The requirements specified in this section shall apply to grants made under this subpart.
(a) Grantees must complete the project per the terms and conditions specified in the approved work plan and budget, and in the grant agreement and letter of conditions. Grantees will expend funds only for eligible purposes and will be monitored by Agency staff for compliance. Grantees must maintain a financial management system, and property and procurement standards in accordance with Departmental Regulations.
(b) Grantees must submit narrative and financial performance reports, as prescribed by the Agency in the grant agreement, that include required data elements related to achieving programmatic objectives and a comparison of accomplishments with the objectives stated in the application. At a minimum, these include comparisons of anticipated activies and outcomes and timeframes for achieving:
(1) Expansion of customer base as a result of the project;
(2) Increased revenue returned to the producer as a result of the project;
(3) Jobs created or saved as a result of the project;
(4) Evidence of receipt of matching funds, if included or provided for in project.
(i) Semi-annual performance reports shall be submitted within 45 days following March 31 and September 30 each Fiscal Year. A final performance report shall be submitted to the Agency within 90 days of project completion. Failure to submit a performance report within the specified timeframes may result in the Agency withholding grant funds.
(ii) Additional reports shall be submitted as specified in the grant agreement or Letter of Conditions, or as otherwise provided in a notification issued under § 4284.915.
(iii) Copies of supporting documentation and/or project deliverables for completed tasks must be provided to the Agency in a timely manner in accord with the development or completion of materials and in conjunction with the budget and project timeline. Examples include, but are not limited to, a Feasibility Study, Marketing Plan, Business Plan, success story, distribution network study, or best practice.
(iv) The Agency may request any additional project and/or performance data for the project for which grant funds have been received, including but not limited to:
(A) Information that will enable evaluation of the economic impact of program awards, such as:
(
(
(B) Information that would promote greater understanding of the key determinants of the success of individual projects or inform program administration and evaluation, such as:
(
(
(
(C) Information that would inform or enable the aggregation of data for program administration or evaluation purposes.
(v) The Agency may terminate or suspend the grant for lack of adequate or timely progress, reporting, or documentation, or for failure to comply with Agency requirements.
All grants awarded under this subpart shall be serviced in accordance with 7 CFR part 1951, subparts E and O, and the Departmental Regulations with the exception that delegation of the post-award servicing of the program does not require the prior approval of the Administrator.
At the discretion of the Agency and on a case-by-case basis, an obligation of funds established for an Applicant may be transferred to a different (substituted) Applicant provided:
(a) The substituted Applicant:
(1) Is eligible;
(2) Has a close and genuine relationship with the original Applicant; and
(3) Has the authority to receive the assistance approved for the original Applicant; and
(b) The project continues to meet all product, purpose, and reserved funds eligibility requirements so that the need, purpose(s), and scope of the project for which the Agency funds will be used remain substantially unchanged.
| 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 |