Federal Register Vol. 81, No.10,

On April 25, 2014, the National Organic Program (NOP) published in the Federal Register a notice of availability with request for public comment on a draft guidance document addressing the permitted substances that may be used in post-harvest handling of organic products (79 FR 22886). The NOP selected the topic for the guidance document announced through this notice in response to questions raised by certifiers and organic operations. These stakeholders requested that the NOP clarify the requirements and limitations regarding the substances permitted in post-harvest handling. The NOP also discussed and received feedback on this topic at a training session for certifiers in Portland, Oregon, in February 2011. The draft NOP guidance can be viewed on the NOP Web site at http://www.ams.usda.gov/rules-regulations/organic. The 60-day comment period closed on June 24, 2014.

NOP received 10 comments on the draft guidance document. Based upon the comments received, the NOP revised and is publishing a final guidance document on Substances Used in Post-Harvest Handling of Organic Products (NOP 5023). The guidance document includes an appendix (NOP 5023-1) where the NOP provides a complete discussion of the comments received and the rationale behind any changes made to the guidance documents.

This final guidance clarifies the USDA organic regulations regarding substances used in post-harvest handling activities such as washing, packing and storage of organic products. There is no discrete section of the National List of Allowed and Prohibited Substances (National List) (7 CFRs 205.600 through 205.607) designated for substances used in these post-harvest handling activities. Instead, the substances allowed for use in post-harvest handling appear in different sections of the National List (e.g., section 205.601 for crop production, section 205.605 for processing), or are nonsynthetic substances, and are therefore not included on the National List for crop production. This has led to confusion about the point at which crop production for unprocessed commodities ends, when processing starts, and which substances may be used for post-harvest activities that may occur on farm or in a processing facility.

This final guidance provides information to all USDA-accredited certifying agents (certifiers) and certified and exempt organic operations about substances that may be used in post-harvest handling of organic products. More specifically, this final guidance clarifies: (1) What substances may be used for post-harvest handling; (2) the difference between “post-harvest handling of raw agricultural commodities” and “further processing”; and (3) the regulatory requirements for facility pest management. This guidance also defines post-harvest substances and post-harvest handling.

This final guidance is available from the NOP through “The Program Handbook: Guidance and Instructions for Accredited Certifying Agents (ACAs) and Certified Operations”. This Handbook provides those who own, manage, or certify organic operations with guidance and instructions that can assist them in complying with the USDA organic regulations. The current edition of the Program Handbook is available online at http://www.ams.usda.gov/rules-regulations/organic/handbook.

This final guidance document is being issued in accordance with the Office of Management and Budget (OMB) Bulletin on Agency Good Guidance Practices (GGPs) (January 25, 2007, 72 FR 3432-3440).

The purpose of GGPs is to ensure that program guidance documents are developed with adequate public participation, are readily available to the public, and are not applied as binding requirements. This final guidance represents NOP's current thinking on the topic. It does not create or confer any rights for, or on, any person and does not operate to bind the NOP or the public. Guidance documents are intended to provide a uniform method for operations to comply that can reduce the burden of developing their own methods and simplify audits and inspections. Alternative approaches that can demonstrate compliance with the Organic Foods Production Act (OFPA), as amended (7 U.S.C. 6501-6522), and its implementing regulations are also acceptable. As with any alternative compliance approach, NOP strongly encourages industry to discuss alternative approaches with NOP before implementing them to avoid unnecessary or wasteful expenditures of resources and to ensure the proposed alternative approach complies with the Act and its implementing regulations.

Persons with access to Internet may obtain the final guidance at the USDA Agricultural Marketing Service Web site at http://www.ams.usda.gov/rules-regulations/organic. Requests for hard copies of the draft guidance documents can be obtained by submitting a written request to the person listed in the ADDRESSES section of this Notice.

DHS is revising its regulations affecting: (1) Highly skilled workers in the nonimmigrant classifications for specialty occupation from Chile, Singapore (H-1B1), and Australia (E-3); (2) the immigrant classification for employment-based first preference (EB-1) outstanding professors and researchers; and (3) nonimmigrant workers in the Commonwealth of the Northern Mariana Islands (CNMI)-Only Transitional Worker (CW-1) classification.

Specifically, in this final rule, DHS is amending its regulations to include H-1B1 and principal E-3 classifications in the list of classes of foreign nationals authorized for employment incident to status with a specific employer, and to clarify that H-1B1 and principal E-3 nonimmigrants are allowed to work without having to separately apply to DHS for employment authorization.

DHS is also amending the regulations to provide H-1B1 and principal E-3 nonimmigrants with authorization for continued employment with the same employer if the employer has timely filed for an extension of the nonimmigrant's stay. DHS is providing this same authorization for continued employment for CW-1 nonimmigrants if a petitioner has timely filed a Petition for a CNMI-Only Nonimmigrant Transitional Worker, Form I-129CW, or successor form requesting an extension of stay.

In addition, DHS is updating the regulations describing the filing procedures for extensions of stay and change of status requests to include the principal E-3 and H-1B1 nonimmigrant classifications. These changes will harmonize and align the regulations for principal E-3, H-1B1, and CW-1 nonimmigrant classifications with the existing regulations for other, similarly situated nonimmigrant classifications.

Finally, DHS is expanding the current list of initial evidence for EB-1 outstanding professors and researchers to allow petitioners to submit evidence comparable to the other forms of evidence already listed in 8 CFR 204.5(i)(3)(i). This will harmonize the regulations for EB-1 outstanding professors and researchers with certain employment-based immigrant categories that already allow for submission of comparable evidence.

DHS is amending its regulations in several ways to improve the programs serving the principal E-3, H-1B1, and CW-1 nonimmigrant classifications and the EB-1 immigrant classification for outstanding professors and researchers. These changes will harmonize the regulations governing these classifications with regulations governing similar visa classifications and remove unnecessary hurdles that have placed principal E-3, H-1B1, CW-1 and certain EB-1 workers at a disadvantage when compared to similarly situated workers in other visa classifications. DHS believes this rule also best achieves our goal of addressing unwarranted disparities involving continued employment authorization among and within particular nonimmigrant classifications.

Sections 103(a) and 214(a)(1) of the Immigration and Nationality Act (INA), 8 U.S.C. 1103(a) and 8 U.S.C. 1184(a)(1), authorize the Secretary of Homeland Security (Secretary) to administer and enforce the immigration and nationality laws and to establish by regulation the time and conditions of admission of nonimmigrants. See also section 451 of the Homeland Security Act of 2002, Public Law 107-296, 116 Stat. 2135, (6 U.S.C. 271) (describing responsibilities with respect to immigration services and adjudications). Further, section 274A(h)(3)(B) of the INA, 8 U.S.C. 1324a(h)(3)(B), recognizes the Secretary's authority to extend employment authorization to individuals who are not citizens or nationals of the United States. Finally, title VII of the Consolidated Natural Resources Act of 2008 (CNRA) extends U.S. immigration laws to the CNMI and authorized the CW nonimmigrant classification. Public Law 110-229, 122 Stat. 754, 853 (2008) (revising 48 U.S.C. 1806).

On May 12, 2014, DHS published a proposed rule to amend regulations governing filing procedures and work authorization for principal E-3 and H-1B1 nonimmigrants (8 CFR 214.1(c)(1) and 8 CFR 248.3(a) with respect to filing procedures and 8 CFR 274a.12(b)(9) and 8 CFR 274a.12(b)(25) with respect to work authorization), continued work authorization for principal E-3, H-1B1, and CW nonimmigrants (8 CFR 274a.12(b)(20)), and evidentiary requirements for EB-1 outstanding professors and researchers (8 CFR 204.5(i)(3)(ii)). By proposing this rule, DHS intended to remove current regulatory obstacles that may cause unnecessary disruptions to petitioning employers' productivity. DHS also intended to remove obstacles for these workers to remain in or enter the United States and to treat them in the same way as others under similar classifications are treated. See Enhancing Opportunities for H-1B1, CW-1, and E-3 Nonimmigrants and EB-1 Immigrants, 79 FR 26870 (May 12, 2014). After careful consideration of public comments, DHS is adopting the proposed regulatory amendments without change.

This final rule will not impose any additional costs on employers, workers, or any governmental entity. Changing the employment authorization regulations for H-1B1 and principal E-3 nonimmigrants will make those regulations consistent with the regulations of other similarly situated nonimmigrant worker classifications, which will provide qualitative benefits. In this final rule, DHS also amends its regulations to authorize continued employment for up to 240 days for H-1B1, principal E-3, and CW-1 nonimmigrant workers whose status has expired, provided that the petitioner timely filed the requests for extensions of stay with U.S. Citizenship and Immigration Services (USCIS). Such amendment will minimize the potential for employment disruptions for U.S. employers of H-1B1, principal E-3, and CW-1 nonimmigrant workers. Finally, this final rule may assist U.S. employers that recruit EB-1 outstanding professors and researchers by expanding the range of evidence that they may provide to support their petitions. A summary of the costs and benefits of the changes made by this rule is presented in Table 1.

The Immigration Act of 1990 (IMMACT90), among other things, reorganized immigrant classifications and also created new employment-based immigrant classifications. See Public Law 101-649, 104 Stat. 4978. The new employment-based immigration provisions were intended to cultivate a more competitive economy by encouraging skilled individuals to immigrate to the United States to meet our economic needs.1 Those IMMACT90 provisions addressed the need of American businesses for highly skilled, specially trained personnel to fill increasingly sophisticated jobs for which domestic personnel could not be found. See Employment-Based Immigrants, 56 FR 30703 (July 5, 1991). Lawmakers estimated the need for highly skilled workers based on an increasing skills gap in the current and projected U.S. labor pools. Id.

American businesses continue to need highly skilled nonimmigrant and immigrant workers, and the U.S. legal immigration system can be improved by removing regulatory barriers to lawful employment of these workers through a system that reflects our diverse values and needs.2 Attracting and retaining highly skilled workers is critical to sustaining our Nation's global competitiveness. By attracting the best and brightest from around the world, the United States can harness their talents, skills, and ideas to help the U.S. economy grow.3 Governments seeking to make the most of highly skilled nonimmigrants and immigrants face the challenge of identifying, attracting, and retaining those with the best prospects for success.4

On May 12, 2014, DHS published a proposed rule in the Federal Register at 79 FR 26870, proposing to:

• Clarify that principal E-3 and H-1B1 nonimmigrants are authorized to work for the specific employer listed in their petition without requiring separate approval for work authorization from USCIS (8 CFR 274a.12(b)(25) and 8 CFR 274a.12(b)(9));

• Authorize continued employment authorization for CW-1, principal E-3, and H-1B1 nonimmigrants with pending, timely filed extension of stay requests (8 CFR 274a.12(b)(20));

• Update the regulations describing the filing procedures for extension of stay and change of status requests to include the principal E-3 and H-1B1 nonimmigrant classifications (8 CFR 214.1(c)(1) and 8 CFR 248.1(a)); and

• Allow a petitioner who wants to employ an EB-1 outstanding professor or researcher to submit evidence comparable to the evidence otherwise described in 8 CFR 204.5(i)(3)(i), which may demonstrate that the beneficiary is recognized internationally as an outstanding professor or researcher.

Consistent with the vision of attracting and retaining foreign workers, this final rule removes unnecessary obstacles for principal E-3 and H-1B1 highly skilled workers and CW-1 nonimmigrant workers to continue working in the United States, and for EB-1 outstanding professors and researchers to seek admission as immigrants. For example, under current regulations, H-1B1, CW-1, and principal E-3 nonimmigrants are not included in the regulations that authorize continued employment while a timely filed extension of stay request is pending. The regulations at 8 CFR 274a.12(b)(20) authorize foreign nationals in specific nonimmigrant classifications to continue employment with the same employer for a 240-day period beyond the authorized period specified on the Arrival-Departure Record, Form I-94, as long as a timely request for an extension of stay is filed. This means that these individuals can continue to work with the specific employer listed in their petition, even after their authorized stay expires, as long as their extension of stay request is still pending. Because Congress created the E-3, H-1B1, and CW-1 nonimmigrant classifications after 8 CFR 274a.12(b)(20) was effective, these nonimmigrant workers are not included in this provision and cannot continue to work with the same employer beyond the existing authorization while waiting for USCIS to adjudicate an extension of stay request. DHS is amending its regulations at 8 CFR 274a.12(b)(20) to give H-1B1, CW-1, and principal E-3 nonimmigrants the same treatment as other, similarly situated nonimmigrants, such as H-1B, E-1, and E-2 nonimmigrants.

Moreover, E-3 and H-1B1 nonimmigrants are not listed in the regulations describing the filing procedures for extension of stay and change of status requests. Although the form instructions for H-1B1 and principal E-3 extension of stay and change of status requests (Instructions for Petition for a Nonimmigrant Worker, Form I-129) were updated to include H-1B1 and principal E-3 nonimmigrants when these categories were first established, the regulations were not. In this final rule, DHS is amending the regulations to add H-1B1 and principal E-3 nonimmigrants to the list of nonimmigrants that may extend their stay or change their status in the United States.

In addition, current regulations do not designate H-1B1 nonimmigrants and principal E-3 as authorized to accept employment with a specific employer incident to status, although such nonimmigrants are so authorized by statute. See INA section 212(t)[1st], 8 U.S.C. 1182(t)[1st], (noting the statutory requirements an employer must fulfill to petition for an H-1B1 or E-3 nonimmigrant); see also INA sections 101(a)(15)(E)(iii), 8 U.S.C. 1101(a)(15)(E)(iii), 101(a)(15)(H)(1)(b)(1), 8 U.S.C. 1101(a)(15)(H)(1)(b)(1), and 214(g)(8)(C), 8 U.S.C. 1184(g)(8)(C) (requiring “intending employers” of certain H-1B1 nonimmigrants to file an attestation with the Secretary of Labor). The E-3 and H-1B1 nonimmigrant classifications were established by statute in 2005 and 2003, respectively. See REAL ID Act of 2005, Public Law 109-13, section 501, 119 Stat. 231; United States-Singapore Free Trade Agreement Implementation Act, Public Law 108-78, section 402, 117 Stat. 948 (2003); United States-Chile Free Trade Agreement Implementation Act, Public Law 108-77, sections 402-404, 117 Stat. 909 (2003). Since that time, the DHS employment authorization regulations at 8 CFR 274a.12 have not been updated to include principal E-3 and H-1B1 nonimmigrants as foreign nationals authorized to accept employment with a specific employer, incident to status, in the United States as designated by statute.

Finally, the language of the current EB-1 regulations for outstanding professors and researchers may not fully encompass other types of evidence that may be comparable, such as evidence that the professor or researcher has important patents or prestigious peer-reviewed funding grants. In this final rule, DHS is modifying the regulations describing permissible initial evidence for outstanding professors and researchers to allow a petitioner to submit evidence that is comparable to the currently accepted evidence listed in 8 CFR 204.5(i)(3)(i) to demonstrate that such beneficiaries are recognized internationally as outstanding in their academic areas. See INA section 203(b)(1)(B), 8 U.S.C. 1153(b)(1)(B). A petitioner may submit such evidence instead of, or in addition to, the currently accepted evidence described under 8 CFR 204.5(i)(3)(i), as long as the petitioner establishes that the evidence is comparable to those listed under 8 CFR 204.5(i)(3)(i)(A)-(F) and the standards in 8 CFR 204.5(i)(3)(i) do not readily apply. This change provides greater flexibility for outstanding professors and researchers because the petitioner will no longer be limited to the list of initial evidence. Finally, these changes will further the goal of removing unnecessary obstacles for these workers to seek admission to the United States as an immigrant.

In preparing this final rule, DHS considered all the public comments received and all other materials contained in the docket. This final rule adopts the regulatory amendments set forth in the proposed rule without substantive change. The rationale for the proposed rule and the reasoning provided in its background section remain valid with respect to these regulatory amendments. Section II.B above and this section each describe the changes that are the focus of this rulemaking. This final rule does not address a number of comments that DHS considered beyond the scope of this rulemaking because the comments requested changes to the regulations that DHS had not proposed and that commenters could not have reasonably anticipated that DHS would make. Such comments include suggestions for expanding premium processing services and for providing expedited processing for certain family-based petitions, travel while an application for an adjustment of status is pending, re-entry permits, translations, grace periods, specific comments in reference to another DHS rulemaking 5 , numerical per-country limits, obligations to hire U.S. citizens first, or questions on a variety of CNMI-specific topics (for example, changes to CW-1 validity periods, CW-1 reentry permits, the reduction of CW-1 nonimmigrant workers, changes to USCIS processing of petitions for CW-1 workers, and suggestions for waivers of occupational certifications). Although DHS has carefully reviewed each of these comments, DHS considers these comments to be out-of-scope for the reasons stated, and will not take further action on these comments in connection with this specific rulemaking proceeding. All comments and other docket material are available for viewing at the Federal Docket Management System (FDMS) at http://www.regulations.gov, docket number USCIS-2012-0005.

In response to the proposed rule, DHS received 38 comments during the 60-day public comment period. Commenters included individuals, employers, workers, attorneys, nonprofit organizations, and one business organization.

While opinions on the proposed rule varied, a clear majority of the commenters supported the proposed changes in the rule. Specifically, supporters of the proposed rule welcomed the proposed employment authorization changes for principal E-3, H-1B1, and CW-1 nonimmigrants; the proposed update to the regulations clarifying the application requirements for E-3 and H-1B1 nonimmigrants requesting changes of status or extensions of stay; and the comparable evidence provision for EB-1 outstanding professors and researchers. Several commenters supported the comparable evidence provision and suggested additional evidence for DHS to consider when evaluating eligibility for EB-1 outstanding professors and researchers. Overall, the commenters supported DHS's efforts to harmonize the regulations to benefit highly skilled workers and CW-1 nonimmigrant workers and to remove unnecessary hurdles that place such workers at a disadvantage when compared to similarly situated workers.

Some commenters stated general opposition to the proposed rule, but did not offer any specific alternatives or suggestions relating to the proposals outlined in this rulemaking. Another commenter stated that the changes proposed with respect to EB-1 outstanding professors and researchers would be insufficient, and proposed a “point based system” instead.

DHS has reviewed all of the public comments received in response to the proposed rule, and responds to the issues raised by the comments below. The DHS responses are organized by subject area.

Multiple commenters provided general support for all the proposed changes in rule. One supporter stated that the proposed regulatory amendments will benefit many nonimmigrants. Another supporter indicated that the proposed changes will add to the much-needed math, science, and technology pool of workers in the United States. One commenter noted the need for regulatory action in order to attract and retain workers, and supported the ongoing efforts to harmonize the rules that are applicable to similarly situated visa categories and bring them in line with actual agency practice. This same commenter added that the proposed changes will provide uniformity and predictability for U.S. employers and their employees and will enhance compliance at virtually no cost to DHS. Another commenter also underscored the importance of removing unnecessary regulatory barriers to improve the ability of U.S. higher education institutions to attract and retain talented and sought-after professionals. Some commenters supported the changes, but did not discuss perceived benefits. One commenter requested DHS to finalize the rule quickly.

One commenter expressed general opposition to this rulemaking, but did not cite any specific provision or offer any specific alternatives or suggestions relating to the proposals outlined in this rulemaking. Another commenter opposed having temporary worker programs, in general, but did not offer any specific alternatives that would fall within the scope of this rule. DHS has not changed the final rule in response to these comments.

Three commenters supported the proposal to add the H-1B1 and principal E-3 classifications to the list of nonimmigrants authorized to work incident to status with a specific employer. They stated that the proposed change reflects the current practice, which allows work authorization based on approval of the [nonimmigrant] classification, but does not require a separate application for employment authorization. Therefore, the proposed change will produce consistency between current practice and regulatory language.

One commenter recommended that DHS amend the regulations to list B-1 nonimmigrant household employees in 8 CFR 274a.12(b) as authorized for employment with a specific employer incident to status. The commenter also recommended that DHS amend 8 CFR 274a.12(a) to include spouses of L-1, E-1, and E-2 nonimmigrants in the categories of individuals who are authorized for employment incident to status. DHS has determined that expansion of employment authorization beyond the classifications identified in the proposed rule is not appropriate at this time, and it has therefore not included such an expansion in this final rule. DHS did not provide notice to the public or invite public comment on proposals to make changes to current employment authorization policies and procedures affecting these classes of nonimmigrants. For these reasons, DHS is not including the recommended expansion of 8 CFR 274a.12(a) or 8 CFR 274a.12(b) for these particular nonimmigrants in this final rule.

DHS appreciates commenters' support for the proposal to add the H-1B1 and principal E-3 classifications to the list of nonimmigrants authorized to work incident to status with a specific employer. The INA describes the employment of E-3 and H-1B1 nonimmigrants with a specific, petitioning employer as the very basis for their presence in the United States. See INA section 101(a)(15)(E)(iii), 8 U.S.C. 1101(a)(15)(E)(iii); INA section 101(a)(15)(H)(i)(b1), 8 U.S.C. 1101(a)(15)(H)(i)(b1). Similarly situated nonimmigrants, such as H-1B nonimmigrants, are classified in the regulations as employment authorized incident to status with a specific employer. See, e.g., 8 CFR 274a.12(b)(9). However, after statutory enactment of the E-3 and H-1B1 nonimmigrant categories, the provisions in 8 CFR 274a.12(b) were not updated to include principal E-3 and H-1B1 nonimmigrants. Therefore, in this final rule, DHS will update its regulations and adopt, without change, the proposed provision adding principal E-3 and H-1B1 nonimmigrants to the list of nonimmigrants authorized to work for the specific employer listed in their petition. Specifically, DHS is adding a new provision at 8 CFR 274a.12(b)(25) to include principal E-3 nonimmigrants in the list of foreign nationals who are employment authorized incident to status with a specific employer. DHS is also amending 8 CFR 274a.12(b)(9) to include the H-1B1 nonimmigrant classification as employment authorized incident to status with a specific employer.

DHS received multiple comments regarding the provision authorizing the continued employment of principal E-3 and H-1B1 nonimmigrants. Most of these comments supported the provision to authorize the continued employment for E-3 and H-1B1 nonimmigrants with timely filed, pending extension of stay requests. One commenter explained that while employers file extension requests several months prior to the expiration of the workers' nonimmigrant status, unexpected processing delays can prevent the extension requests from being approved before such status expires. In turn, the nonimmigrant employees must stop working, causing serious disruptions to both the employers and their nonimmigrant workers. The commenters further stated that the current lack of continued work authorization results in lost wages to employees and loss in productivity to employers. The commenters noted that the continued employment authorization period, which may last up to 240 days, will protect against such interruptions by ensuring that U.S. employers who employ individuals in the E-3 and H-1B1 nonimmigrant classifications experience as little disruption as possible in the employment of their workers. These commenters therefore welcomed the proposed continued employment authorization because it will minimize disruption to employers and thereby promote economic growth. These commenters also supported the continued employment authorization proposal because it would harmonize the regulations applicable to E-3 and H-1B1 nonimmigrants with regulations applicable to similarly situated nonimmigrants. For example, one of these commenters noted that this change would allow colleges and universities to treat their similarly situated employees in a fair and consistent manner. One of these commenters also stated that the proposed change would substantially aid in attracting and retaining these workers.

Additionally, one commenter supported the proposed E-3 continued work authorization because comparable eligibility for continued work authorization for H-1B nonimmigrants has been extremely helpful in allowing the commenter's current tenure-track H-1B faculty, researchers, and staff to continue employment while USCIS is processing H-1B extension requests, and would permit similarly situated E-3 employees the same benefit. DHS appreciates the support from the public for this proposed provision. The potential gap in work authorization from unanticipated processing delays can burden both employers and employees alike. DHS also believes it is important to provide employers of H-1B1 and E-3 nonimmigrants the benefits that accrue from the predictability that currently is available to employers of nonimmigrants in similar employment-based nonimmigrant classifications, who file timely requests for extensions of stay with the same employers. Therefore, DHS has determined that it will adopt this provision without change, thereby automatically extending employment authorization to principal E-3 and H-1B1 nonimmigrants with timely filed, pending extension of stay requests.

One commenter recommended expanding the 240-day rule to cover Q-1 nonimmigrants. The commenter stated that, as with other nonimmigrant classifications, government error can delay approval, leading to serious business disruptions to the employer and adverse consequences to the workers through no fault of their own.

DHS has determined that expansion of continued employment authorization beyond the classifications identified in the proposed rule is not appropriate at this time, and it has therefore not included such an expansion in this final rule. This suggestion is outside the scope of this rulemaking, which did not make any proposals or invite public comment with respect to Q-1 nonimmigrants. Therefore, in this final rule, DHS will update its regulations at 8 CFR 274a.12(b)(20) and adopt, without change, the proposed provision to authorize continued employment authorization for principal E-3 and H-1B1 nonimmigrants with pending, timely filed extension of stay requests.

Six commenters supported the provision for automatic employment authorization for CW-1 nonimmigrant workers with timely filed, pending extension of stay requests. One commenter explained that while employers file extension requests several months prior to the expiration of the workers' nonimmigrant status, unexpected processing delays can prevent the extension requests from being timely approved and cause serious disruptions to employers and nonimmigrants. Another commenter remarked that current adjudication delays for CW-1 nonimmigrant workers are burdensome on the beneficiaries and on the local economy, and therefore urged DHS to adopt the proposed continued work authorization provision for CW-1 nonimmigrant workers. Commenters commonly stated that the potential lack of work authorization due to a processing delay results in serious disruption to both an employer's business and to the employee's life. The commenters noted that the 240-day continued employment authorization would protect against such interruptions by ensuring that U.S. employers of CW-1 nonimmigrants experience minimal disruption in the continued employment of their workers. One commenter stated that this proposed change would alleviate fear among employers and workers of interruptions in employment resulting from a lack of continued work authorization. Finally, one commenter stated that the proposed change would provide equity for CW-1 nonimmigrants by ensuring that they are afforded the same treatment as other similarly situated individuals.

DHS appreciates the support from the public for this proposed provision. The disruption of employment can create a burden for both employers and employees. As a matter of equity, it is also important to ensure that CW-1 nonimmigrants who are waiting for USCIS to adjudicate their extension of stay requests with the same employer also benefit from the continued employment authorization available to other CW-1 nonimmigrants who change employers or an employee under the previous CNMI immigration system. Current regulations for the continued employment of CW-1 nonimmigrant workers are also inconsistent. Specifically, the regulations currently only provide continued work authorization for CW-1 nonimmigrant workers seeking to change to a new employer, including a change in employer resulting from early termination, and not to CW-1 nonimmigrants seeking an extension of stay with the same employer. 8 CFR 214.2(w)(7). This disparity may serve as an incentive for CW-1 nonimmigrant workers to change employers just to maintain continued employment authorization, which will inconvenience the CW-1 nonimmigrant worker's current employer who might lose the worker to another employer.

One commenter strongly supported this proposed change and noted that various employers previously sought to have a continuing work authorization provision included in the initial CW regulations without success. The commenter stated that the DHS response to this request then was that such provision was not authorized by the CNRA.6

DHS notes that the interim rule amending 8 CFR 214.2(w) to create the CW classification published on October 27, 2009, and provided a 30-day comment period.7 On December 9, 2009, DHS published a notice in the Federal Register reopening and extending the public comment period for an additional 30 days.8 The commenter did not indicate whether the commenter submitted the suggestion for the continued employment authorization provision in response to either of those comment periods. However, DHS did receive post-publication correspondence requesting continued employment authorization for workers with pending extensions.9 DHS responded to these post publication correspondence by stating that CW-1 nonimmigrants do not have continuing employment authorization while an extension of stay petition is pending. In that correspondence, DHS noted that it was not in the position to provide such authorization without a change to the applicable regulations.10 Although DHS believes that its implementing CW regulations are consistent with congressional intent, it subsequently proposed improvements to the regulations to permit continued employment authorization during an extension of stay request through this notice and rulemaking, pursuant to its authority under the INA and the CNRA to implement such regulations.11

One of the commenters also supported the proposed change because it will help both employers and employees in the CNMI by providing employers with more time to file extension requests and by allowing employees to remain in lawful work-authorized status while awaiting the adjudication of the extension requests filed on their behalf. DHS appreciates the support for the continued work authorization provision for CW-1 nonimmigrants. The regulatory changes aim to provide both the employer and employee with continued employment when an employer files a timely request for an extension of stay for the CW-1 nonimmigrant worker. However, this new provision does not change the filing requirements or allot more time for employers to file extension requests. Under 8 CFR 214.2 (w)(12)(ii), an employer may file up to 6 months before it actually needs the employee's services, and this rulemaking does not change this filing requirement. Instead, this rulemaking provides a mechanism that automatically extends employment authorization, for a period of up to 240 days, while the employer's timely filed, extension of stay request remains pending.

One commenter proposed allowing an employee who transfers to another employer to continue to work pending the adjudication of the new petition with the prospective employer. DHS's proposed rule did not suggest continued work authorization for CW-1 nonimmigrant workers seeking a change of employment because DHS regulations already allow continued work authorization for changes of employment so long as certain requirements are met. As described above, under 8 CFR 214.2(w)(7), a CW-1 nonimmigrant worker may work for a prospective new employer after the prospective employer files a non-frivolous Petition for a CNMI-Only Nonimmigrant Transitional Worker, Form I-129CW, for new employment. The employer must file the petition for new employment to classify the alien as a CW-1 nonimmigrant, before the CW-1 nonimmigrant worker's authorized period of stay expires. The CW-1 nonimmigrant worker must not have worked without authorization in the United States since being admitted. If the petitioner and CW-1 nonimmigrant worker meet these conditions, then employment authorization will continue until DHS adjudicates the new petition.

One commenter proposed allowing a terminated employee to continue to work without interruption, subject to certain conditions. DHS's proposed rule did not suggest continued work authorization for terminated CW-1 nonimmigrant workers because USCIS regulations already allow for continued work authorization for terminated CW-1 nonimmigrant workers under certain circumstances. Under 8 CFR 214.2(w)(7)(v), a terminated CW-1 nonimmigrant worker who has not otherwise violated the terms and conditions of his or her status may work for a prospective new employer after the prospective employer files a non-frivolous Petition for a CNMI-Only Nonimmigrant Transitional Worker, Form I-129CW, for new employment. However, the new employer must file the Petition for a Nonimmigrant Worker, Form I-129CW, within a 30-day period after the date of termination. Employment authorization then continues until DHS adjudicates the new petition.

While the commenters supported the continued employment authorization for CW-1 nonimmigrant workers, they also offered specific suggestions regarding various aspects of the CW-1 transitional worker program. One commenter remarked that the continued work authorization provision merely provides a temporary solution to meet the needs of the local investors, and that a permanent immigration status is necessary. The commenter encouraged the immediate passage of U.S. Senate bill S. 744 as a permanent solution to this CNMI foreign worker situation. Another commenter suggested that foreign workers in the CNMI should be provided with a “better” immigration status. The rulemaking focused on continued employment authorization for certain CW-1s with timely filed extension of stay requests. The CW program as a whole was not a subject of this rulemaking. These comments are outside the scope of this rulemaking.

DHS has determined that it will adopt this provision without change, thereby automatically extending employment authorization to CW-1 nonimmigrants who have timely filed, pending extension of stay requests for the same employer. Specifically, DHS will add the CW-1 nonimmigrant classification to the list of employment-authorized nonimmigrant classifications, at 8 CFR 274a.12(b)(20), that receive an automatic extension of employment authorization of up to 240 days while the employer's timely filed extension of stay requests remain pending. This will ensure that the CW nonimmigrants are permitted continued employment authorization based on both pending change of employers requests and pending extension of stay requests.

DHS only received one comment on the proposal to add principal E-3 and H-1B1 nonimmigrants to the list of nonimmigrant classifications that must file a petition with USCIS to request an extension of stay or change of status. The commenter stated that the proposed changes, if adopted, will go far to enable initial and uninterrupted continued employment of H-1B1 and E-3 nonimmigrants. The commenter added that the changes create equity for these nonimmigrant categories as compared to other similar nonimmigrant categories for specialty workers. For reasons previously stated, DHS will adopt this provision without change. Specifically, DHS will amend 8 CFR 214.1(c)(1) and 8 CFR 248.3(a) to add the E-3 and H-1B1 nonimmigrant classifications to the list of nonimmigrant classifications that must file a petition with USCIS to request an extension of stay or change of status. This updates the regulations so they conform to the filing procedures described in the form instructions.

DHS received a number of comments on the proposal to expand the current list of initial evidence for EB-1 outstanding professors and researchers to allow petitioners to submit evidence comparable to the other forms of evidence already listed in 8 CFR 204.5(i)(3)(i).

Most of the commenters on the EB-1 comparable evidence provision supported it, for a variety of reasons. They cited the perceived positive effects on the United States, the need for harmonization of the regulations, and the need to submit evidence to allow beneficiaries to fully document their accomplishments. DHS notes that the same commenters remarked on more than one aspect of the comparable evidence provision.

Specifically, commenters remarked that the change would positively affect the United States in a variety of ways. Two commenters noted that the comparable evidence provision would expand the number of individuals eligible for this classification and would benefit the United States as a whole. Some commenters noted that the comparable evidence provision will improve the ability of U.S. employers, especially higher education employers, to attract, recruit, and retain talented foreign professors, researchers, and scholars. One of these commenters added that this regulatory change will improve the capability to recruit and retain talented individuals which conduct the research that allows U.S. businesses to develop and sell products. This improved capability to recruit these individuals will help the U.S. economy's growth. Another commenter added that refining the EB-1 outstanding professors and researchers evidentiary list would benefit the United States by boosting research, innovation, and development.

DHS appreciates the commenters' support for the comparable evidence provision based on the perceived positive effects on United States' competitiveness and the Nation's economy. DHS agrees with the commenters that the proposed comparable evidence provision may also help U.S. employers recruit EB-1 outstanding professors and researchers.

A number of commenters supported expansion of the current list of evidentiary criteria for EB-1 outstanding professors and researchers to allow the submission of comparable evidence because it would harmonize the EB-1 outstanding professor and researcher regulations with those of other comparable employment-based immigrant classifications, eliminating unwarranted disparities with respect to these policies. Commenters emphasized that the proposed comparable evidence provision in turn would bring the criteria for proving eligibility for the outstanding professors and researchers classification in line with those that have long been permitted for other preference categories such as EB-1 aliens of extraordinary ability and EB-2 aliens of exceptional ability. These commenters stated that the proposed change is a logical extension of the existing regulatory provision listing the evidentiary criteria for EB-1 outstanding professors and researchers, especially since the similarly situated EB-1 extraordinary ability classification, which requires satisfaction of a higher evidentiary threshold, allows for consideration of comparable evidence.12

DHS appreciates commenters' support for the comparable evidence provision based on the harmonization of the comparable regulations. DHS agrees that by allowing for the submission of comparable evidence, DHS will bring the evidentiary standards of the EB-1 outstanding professor and researcher category in line with those currently available to individuals qualifying under both the EB-1 extraordinary ability and EB-2 exceptional ability categories. This change in turn will provide equity for EB-1 outstanding professors and researchers with other similarly situated individuals. This change better enables petitioners to hire outstanding professors and researchers by providing a set of standards that are flexible enough to comprehensively encompass all evidence that may demonstrate their satisfaction of the statutory standard. DHS notes that although it is expanding the types of evidence that a petitioner may submit to establish eligibility, this rulemaking does not change the petitioner's burden to establish eligibility under the preponderance of the evidence standard of proof.

A number of commenters supported expanding the criteria for EB-1 outstanding professors and researchers because doing so would remove evidentiary limitations and allow employers to present full documentation of an employee's qualifications. One of these commenters added that the language in the proposed rule was well drafted and broad enough to include all evidence that may prove outstanding achievement. Under current regulation, petitioners need to fit evidence into specific evidentiary categories. For example, petitioners have submitted funding grants as documentation of major awards under 8 CFR 204.5(i)(3)(i)(A). In other instances, petitioners may have omitted relevant evidence that could have helped to demonstrate the beneficiary is recognized internationally as outstanding, such as high salary and affiliation with prestigious institutions, because they did not believe it would fit into any of the regulatory evidentiary category. Commenters noted that the proposed change adds necessary flexibility; for instance, this change will now potentially allow for the submission of important patents, grant funding and other such achievements that may not neatly fall into the previously existing evidentiary categories. Two of these commenters also commended DHS for recognizing that the types of evidence relevant to the determination of eligibility for this classification have changed greatly since these evidentiary criteria were first created, and will continue to evolve over time due to the changing needs of American businesses.

One of the commenters that supported the comparable evidence provision also expressed concern regarding how USCIS considers comparable evidence. The commenter reported that recent decisions in other employment-based categories suggest that adjudicators allow comparable evidence only when none of the listed criteria apply. The commenter added that comparable evidence should be presumed acceptable, regardless of whether any of the otherwise enumerated criteria apply, as long as the evidence is relevant to the merits of the case. This commenter urged DHS to clarify this approach here, as well as with certain employment-based classifications where comparable evidence is currently in use.

DHS appreciates the commenter's concern regarding adjudicative trends in how USCIS considers comparable evidence. DHS regulations provide that petitions in the EB-1 extraordinary ability and EB-2 exceptional ability classifications must establish that one or more permissible standards are not readily applicable to the beneficiary's occupation in order to rely on the comparable evidence provision respective to those standards. See 8 CFR 204.5(h)(4), (k)(3)(iii). Accordingly, if any single evidentiary standard is inapplicable to the beneficiary's occupation, the petitioner may submit alternative, but comparable, evidence even though other standards may be applicable to the beneficiary's occupation.

For EB-1 outstanding professors and researchers, DHS confirms that a petitioner will be able to submit comparable evidence instead of, or in addition to, evidence targeted at the standards currently listed in 8 CFR 204.5(i)(3)(i) to demonstrate that the beneficiary is internationally recognized as outstanding if the currently listed standards do not readily apply. The intent of this provision is to allow petitioners, in cases where evidence of the beneficiary's achievements do not fit neatly into the enumerated list, to submit alternate, but qualitatively comparable, evidence. Under this provision, a petitioner may submit evidence falling within the standards listed under 8 CFR 204.5(i)(3)(i), and may also use the comparable evidence provision to submit additional types of comparable evidence that is not listed, or that may not be fully encompassed, in 8 CFR 204.5(i)(3)(i). DHS notes that a petitioner's characterization of existing standards as “not readily applying” to the submitted evidence will be considered in the totality of the circumstances, but USCIS ultimately will determine which standard is satisfied, if any, by any form of submitted evidence.

As noted in the proposed rule, limiting submission of comparable evidence for outstanding professors and researchers only to instances in which the standards do not readily apply “to the alien's occupation” would not adequately serve the goal of this regulatory change because unlike the standards for EB-1 aliens of extraordinary ability and EB-2 aliens of exceptional ability, the standards for EB-1 outstanding professors and researchers are tailored to only these two occupations.13 Thus, a petitioner for an outstanding professor or researcher does not need to establish that a particular standard is not readily applicable “to the beneficiary's occupation” before they can rely on comparable evidence. A petitioner for an outstanding professor or researcher instead needs to establish that the evidentiary standards listed in 8 CFR 204.5(i)(3)(i) do not readily apply to the evidence that the petitioner proposes to submit before the petitioner can rely on the comparable evidence provision.

After establishing that the evidentiary standards listed in 8 CFR 204.5(i)(3)(i) does not readily apply to the evidence he or she is submitting, the petitioner may then submit alternative, but qualitatively comparable evidence for those standards. The existing evidentiary standards listed in 8 CFR 204.5(i)(3)(i) serve as a roadmap for determining, among other things, the quantity and types of evidence that should be submitted in order for such evidence to be considered “comparable.”

Given the overwhelming support and strong justification for the comparable evidence provision as proposed, DHS will adopt it and amend 8 CFR 204.5(i)(3) to include a comparable evidence provision.

Two commenters opposed the comparable evidence provision for outstanding professors and researchers. One commenter indicated that they opposed it because it will expand the number of eligible foreign nationals competing for high-tech jobs. The commenter stated that many engineers, computer professionals and scientists are unemployed or under-employed and asserted that the proposed change would lead to two negative effects on U.S. workers: (1) The change will depress the wages of U.S. citizens; and (2) it will increase a sense of job instability and in turn deter workers from speaking up for fear of retaliation.

While the commenter did not submit data to support the wage and instability concerns, DHS takes these comments seriously. DHS appreciates this viewpoint and has carefully considered the potential for any negative effects on the labor market as a result of this rulemaking. Congress imposed a numerical limitation for the number of EB-1 visas available annually. The annual cap on EB-1 visas generally is set by statute at 40,000, plus any visas left over from the fourth and fifth employment based preference categories (special immigrants and immigrant investors) described in section 203(b)(4) and (5) of the INA, 8 U.S.C. 1153(b)(4) and (5). In FY 14, USCIS received 3,549 petitions for EB-1 outstanding professors and researchers. DHS notes that this provision does not expand the visa numerical limitation beyond that set forth by Congress. Rather, DHS is simply expanding the list of evidentiary standards so that those who may be meritorious of classification under INA 203(b)(1)(B) can more readily demonstrate their eligibility, consistent with similar classifications. This provision provides greater flexibility for petitioners on what evidence they may submit to show that the beneficiary is recognized internationally as outstanding in the academic field specified in the petition. It does not change any of the remaining petitioning requirements (such as the job offer) or expand the types of individuals who can qualify for the EB-1 classification beyond those individuals authorized under the statute. Instead, this change better enables petitioners to hire outstanding professors and researchers by providing a set of standards that are flexible enough to encompass any evidence that may demonstrate that they are recognized internationally as outstanding.

Another commenter expressed concern regarding existing fraud and abuse in the H-1B and EB-1 programs, stating that the government should first focus on ways to prevent such abuse “before passing any law to ease the process” for these individuals. The commenter did not provide any data on the nature or extent of such fraud and abuse, and did not otherwise identify a connection between the proposed rule's provisions and past instances of fraud and abuse. DHS takes concerns regarding fraud and abuse very seriously and has measures in place to detect and combat fraud. Strict consequences are already in place for immigration-related fraud and criminal activities, including inadmissibility to the United States, mandatory detention, ineligibility for naturalization, and removability. See, e.g. , INA sections 101(f), 212(a)(2) & (a)(6), 236(c), 237(a)(1)(G) & (a)(2), 318; 8 U.S.C. 1101(f), 1182(a)(2) & (a)(6),1226(c), 1227(a)(1)(G) & (a)(2), 1429.

Additionally, the USCIS Fraud Detection and National Security Directorate (FDNS) currently combats fraud and abuse, including in the H-1B and EB-1 programs, by developing and maintaining efficient and effective anti-fraud and screening programs, leading information sharing and collaboration activities, and supporting law enforcement and intelligence communities. FDNS's primary mission is to determine whether individuals or organizations filing for immigration benefits pose a threat to national security, public safety, or the integrity of the nation's legal immigration system. FDNS's objective is to enhance USCIS's effectiveness and efficiency in detecting and removing known and suspected fraud from the application process, thus promoting the efficient processing of legitimate applications and petitions. FDNS officers resolve background check information and other concerns that surface during the processing of immigration benefit applications and petitions. Resolution often requires communication with law enforcement or intelligence agencies to make sure that the information is relevant to the applicant or petitioner at hand and, if so, whether the information would have an impact on eligibility for the benefit. FDNS officers also perform checks of USCIS databases and public information, as well as other administrative inquiries, to verify information provided on, and in support of, applications and petitions. FDNS uses the Fraud Detection and National Security Data System (FDNS-DS) to identify fraud and track potential patterns.

USCIS has formed a partnership with U.S. Immigration and Customs Enforcement (ICE), in which FDNS pursues administrative inquiries into most application and petition fraud, while ICE conducts criminal investigations into major fraud conspiracies. Individuals with information regarding fraud and abuse in the immigration benefits system are encouraged to contact FDNS at [email protected] or by mail at 111 Massachusetts Ave. NW., Ste. 7002, Mail Stop 2280, Washington, DC 20529-2280. DHS believes that these collective measures provide adequate safeguards to ensure that fraud and abuse does not occur, and that this rulemaking is unlikely to result in a significant additional risk of fraud and abuse, because there is a lack of a connection between the proposed rule's provisions and past instances of fraud and abuse. Accordingly, DHS has not made any changes in response to these comments.

Six commenters suggested additional categories of evidence that DHS should consider accepting as comparable evidence or initial evidence. One commenter suggested that DHS accept the number of years of experience working in a research field and an offer of employment by a research organization or institute of higher education as comparable evidence to the various criteria See 8 CFR 204.5(i)(3). The commenter noted that certain researchers face hurdles in publishing groundbreaking results and are therefore unable to obtain the scholarly authorship, recognition, or requisite awards to meet this criterion. The commenter suggested that permitting this evidence would help these researchers meet the eligibility requirements for this classification.

One commenter suggested that DHS give priority to U.S. doctoral degree holders applying as outstanding researchers or professors who already have a tenure-track faculty position. The commenter explained that these individuals teach and conduct research in narrowly focused fields and are therefore not heavily cited. As a result, they are not usually eligible for EB-1 positions because they cannot meet the existing criterion involving “published material in professional publications written by others” about the professor or researcher's work. See 8 CFR 204.5(i)(3)(i)(C). The commenter stated that allowing more evidence to fit the criterion will help individuals in this type of scenario.

In general, three commenters suggested that DHS consider a U.S. earned doctoral degree as evidence to qualify for the EB-1 classification. Their comments varied in detail and scope. One commenter stated that DHS should grant the EB-1 classification to individuals who obtained their doctoral degrees from U.S. schools. This commenter did not provide any details or context to clarify this suggestion. Another commenter suggested that DHS should allow individuals with U.S. doctoral degrees in science, technology, engineering and mathematics (STEM) with a related job [offer] to qualify for the EB-1 category. DHS is unable to determine whether these commenters suggested an automatic grant of the classification based on a U.S. earned doctoral degree or if the commenter suggested that the classification be limited only to U.S. earned doctoral degree holders.

One of these commenters suggested that DHS expand the list of initial evidence to include a STEM doctoral degree issued by a U.S. accredited university, and that DHS could publish a list of U.S. accredited universities to make the criteria more transparent. The commenter explained that a petitioner could satisfy the proposed criteria by submitting an “attested copy” 14 of the STEM degree certificate and an unopened transcript from the university, to mirror the current criteria set forth for EB-2 petitions. The commenter added that this suggestion would provide a pathway for U.S. trained doctoral degree holders to stay in the United States, allowing the United States to retain technical excellence and continue its leadership in technology. The commenter also suggested that DHS could set parameters for eligibility criteria based on salary, and that a petitioner could satisfy this requirement by submitting occupational employment statistics from the Bureau of Labor Statistics (BLS). The commenter suggested that eligible EB-1 workers should have wages that are greater than the 75th percentile of the BLS wage figures for their occupation, such that beneficiaries making greater than $100,000 a year would satisfy the criteria, a requirement the commenter believes would mirror the current criteria set forth for EB-1, Aliens of Extraordinary Ability.15 The commenter believes this suggestion would alleviate any concerns regarding financial exploitation of the immigrant worker and the protection of domestic workers' wage rights.

DHS carefully considered the commenters' suggestions for initial and additional evidence for the EB-1 outstanding professors and researchers classification. DHS believes that the evidence suggested in the comments above regarding minimum number of years of experience and minimum education requirements generally would not be beneficial in an analysis of whether an individual is internationally recognized as outstanding in his or her academic field. The purpose of the proposed comparable evidence provision is to allow petitioners to present evidence that, although not on the enumerated list, may still serve to demonstrate that the professor or researcher is internationally recognized as outstanding. DHS appreciates that to achieve this goal, the standards listed in 8 CFR 204.5(i)(3)(i) need to have some measure of flexibility so they may continue to evolve over time in response to U.S. business needs and/or the changing nature of certain work environments or practices. It is not clear, however, whether the commenters' suggestions regarding minimum number of years of experience, minimum education requirements, and salary requirements are intended to limit or expand the current evidentiary criteria for EB-1 outstanding professors or researchers. If they were intended to limit the criteria, then the commenters' suggestions would have the effect of narrowing the eligibility criteria by requiring very specific evidence that is possessed by a specific subset of the potential population of outstanding professors and researchers. In direct contrast, the intended purpose of the comparable evidence provision is to provide flexibility for this population. If the commenter's suggestions, however, were intended to expand the type of evidence that may be considered, that suggestion is consistent with the purpose of the comparable evidence provision as it provides needed flexibility to establish eligibility. Therefore, DHS declines to adopt these suggestions as amendments to the standards listed in 8 CFR 204.5(i)(3)(i) in favor of a broad comparable evidence provision.16

One commenter expressed concern that adding the proposed comparable evidence provision will not improve the probability that an outstanding professor and researcher will qualify for the classification. The commenter explained that adjudicators analyze this classification under a two-part analysis, and therefore meeting the criteria is not enough to prove eligibility. Instead, the commenter suggested that DHS impose a point- based system as an alternative, transparent method for evaluating whether these individuals are eligible for the classification. The commenter added that this would eliminate any subjectivity in the process and allow a researcher or petitioner to predict whether he or she meets or does not meet the criteria.

DHS disagrees with the commenter's assertion that the proposed comparable evidence provision will not benefit petitioners and these specific foreign workers. The stated purpose of the proposed comparable evidence provision is to allow petitioners to submit additional types of evidence and to fully document the beneficiary's international recognition as an outstanding professor or researcher in order to demonstrate eligibility for the requested classification. However, this proposal does not change the eligibility standard for this classification. The petitioner must still demonstrate, by a preponderance of the evidence, that the beneficiary is recognized internationally as outstanding in the specific academic area.

The commenter correctly asserted that adjudicators analyze this classification using a two-part approach. The USCIS policy memo, Evaluation of Evidentiary Criteria in Certain I-140 Petitions, provides instructions to adjudicators regarding application of a two-step analysis for purposes of adjudicating extraordinary ability, outstanding professor and researcher, and exceptional ability Form I-140 petitions.17 The commenter stated that given this two-step analysis, a beneficiary may satisfy at least two of the outstanding professor and researcher regulatory standards but fail to prove eligibility. DHS believes that whether or not a beneficiary ultimately may prove eligibility by providing evidence satisfying at least two of the listed regulatory criteria is not a material question in considering whether to add this comparable evidence provision. Instead, by allowing submission and consideration of comparable evidence, which does not exist under current regulation, this rule promises to offer petitioners a more meaningful opportunity to establish a beneficiary's eligibility. Thus, although DHS recognizes that satisfaction of the newly added provision will not guarantee approval for the classification, if petitioners submit evidence that indeed is comparable and points to international recognition for being outstanding in the field, that evidence may improve the probability that the petition will be approved under the existing framework.

DHS appreciates the suggestion for an alternative framework for analysis of the EB-1 outstanding professors and researchers classification, but DHS declines to adopt the suggested point-based system as it would require a much broader reshaping of the current immigration system. This suggestion would require a wholesale rulemaking for all the other classifications, which is beyond the scope of this rulemaking.

DHS declines to adopt the suggestions for initial evidence, additional evidence, and an alternative framework. As previously noted, DHS is tailoring this regulation to provide EB-1 outstanding professors and researchers with a comparable evidence provision that mirrors the other employment-based immigrant categories that already allow for submission of comparable evidence.

One commenter requested clarification as to whether the changes proposed in this rule would affect processing times for family immigration. The commenter did not state which aspects of the proposed changes he or she believes could impact family immigration processing times. While there is always a possibility that changes to one USCIS business process may trigger unanticipated downstream effects on other USCIS business processes, DHS does not anticipate that changes made by this rule will have a direct impact on family based immigration processing times.

Another commenter supported DHS's replacement of the more narrow term “employer” with the more general term “petitioner” in reference to who may file a request to change or extend status under 8 CFR 214.1(c)(1) and 248.3(a). The commenter explained that the term “employer” does not adequately describe the array of individuals and entities that may file petitions under 8 CFR 214.2 and the term “petitioner” is a much more accurate descriptor. DHS agrees that the term “petitioner” is a more accurate depiction of the individual who may file in a variety of scenarios. Additionally, this change will generally eliminate inconsistency between the change of status and extension of stay provisions and the classification-specific provisions in 8 CFR 214.2. This change will eliminate any confusion that the current inconsistency between these provisions may have caused. DHS will adopt this provision without change.

Executive Orders 12866 and 13563 direct agencies to assess the 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 rule has not been designated 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 (OMB).

This analysis updates the estimated costs and benefits discussed in the proposed rule. This final rule will not impose any additional compliance costs on employers, individuals, or government entities, and will not require additional funding for the Federal Government. However, DHS notes that there could be additional familiarization costs as employers read the final rule in the Federal Register to understand the benefits that this rule will provide. Also, USCIS may spend a de minimis amount of time updating training materials, but USCIS does not expect to hire additional personnel as a result of this rule. The final rule will make certain changes to the regulations governing the E-3, H-1B1, and CW-1 nonimmigrant worker classifications. Specifically, DHS will amend the regulation to allow principal E-3, H-1B1, and CW-1 nonimmigrant workers up to 240 days of continued work authorization beyond the expiration date noted on their Arrival Departure Record, Form I-94, provided that their extension of stay request is timely filed. Employers or petitioners are already required to submit an extension of stay for such nonimmigrant classifications in order to extend their status beyond the expiration date noted on their Arrival Departure Record, Form I-94. Permitting continued employment while the extension of stay request is pending with USCIS places principal E-3, H-1B1, and CW-1 nonimmigrant workers on par with other, similarly situated nonimmigrants. The provisions will not result in any additional compliance costs, burdens, or procedures for the U.S. employer or the workers.

Additionally, DHS will allow petitioners of EB-1 outstanding professors and researchers to submit comparable evidence, instead of or in addition to the evidence listed in 8 CFR 204.5(i)(3)(i), to demonstrate that the professor or researcher is recognized internationally as outstanding in his or her academic field. Allowing comparable evidence for EB-1 outstanding professors and researchers will match the evidentiary requirements with those of similarly situated employment-based immigrant classifications.

DHS notes that the above-referenced changes are part of DHS's Retrospective Review Plan for Existing Regulations under Executive Order 13563.18 During the development of DHS's Retrospective Review Plan for Existing Regulations in 2011, DHS received one comment in response to the 2011 publication.19 DHS received more comments again in response to the 2014 publication. These public comments requested specific changes to the DHS regulations that govern continued work authorization for principal E-3 and H-1B1 nonimmigrants when an extension of status petition is timely filed, and requested that DHS expand the types of evidence allowable in support of immigrant petitions for outstanding researchers or professors. This rule responds to these comments according to the retrospective review principles of Executive Order 13563.

The costs and benefits of the final rule are summarized in Table 2.

A summary of the classification types affected by this final rule is shown in Table 3.

Under current regulations, if employers of E-3 or H-1B1 nonimmigrants want to ensure continued employment authorization throughout the period that the extension request is pending, they generally must file a petition requesting the extension of the individual employee's stay well before the initial authorized period of stay expires. The Petition for a Nonimmigrant Worker, Form I-129, is used to request extensions of stay for these nonimmigrant workers. Currently, the petitioner may file a request for extension of stay as early as 6 months before the authorized period of stay expires. As of December 31, 2014, the average processing time for USCIS to adjudicate these extension requests is 2 months.21 However, if the principal E-3 or H-1B1 nonimmigrant worker's authorized period of stay expires before USCIS grants the extension request, the worker cannot continue to work while his or her extension request remains pending.

In this rule, DHS amends its regulations to permit principal E-3 and H-1B1 nonimmigrants to continue their employment with the same employer for up to 240 days after their authorized period of stay expires (as specified on their Arrival-Departure Record, Form I-94) while requests for extension of stay on their behalf are pending. To obtain authorization to continue employment for up to 240 days, employers or petitioners must timely file the Petition for Nonimmigrant Worker, Form I-129. Since employers are already required to file the Petition for Nonimmigrant Worker, Form I-129, in order to request an extension of stay on behalf of the nonimmigrant worker, there are no additional filing requirements or costs for employers or petitioners to comply with in this final rule. DHS notes there are minimal familiarization costs to employers associated with reading the rule in the Federal Register to understand the benefits of the rule. The benefits of the final rule will be to provide equity for principal E-3 and H-1B1 nonimmigrants relative to other employment-based nonimmigrants listed in 8 CFR 274a.12.(b)(20). Additionally, this provision may allow employers of principal E-3 and H-1B1 nonimmigrant workers to avoid the cost of lost productivity that results from interruptions of work while an extension of stay request is pending.

Table 4 shows that USCIS received a total of 5,294 extension of stay requests for H-1B1 and principal E-3 nonimmigrant workers in the FYs from 2010 through 2014 (an average of 1,059 requests per year). USCIS approved 4,026 extensions of stay requests in the same period (an average of 805 per year). Extension of stay requests received and petition approvals are not meant for direct comparison because USCIS may receive a petition in one year but make a decision on it in another year.

USCIS does not have an estimate of either: (a) the number of cases where principal E-3 and H-1B1 nonimmigrants are unable to continue employment with their employer because their employer's timely petition for an extension of stay was not adjudicated before their authorized period of stay expired, or (b) how long principal E-3 and H-1B1 nonimmigrants were unable to work when their employer's timely petition for an extension of stay was not adjudicated before their authorized period of stay expired.22 Because of this data limitation, we are unable to quantify the total aggregate estimated benefits of this provision of the rule. The rule, however, will benefit U.S. employers to the extent that this rule allows U.S. employers to avoid interruptions in productivity that could result if the timely extension of stay is not adjudicated before the authorized period of stay expires, as noted on the nonimmigrant worker's Arrival Departure Record, Form I-94. Unfortunately, DHS did not receive statistics or data from impacted stakeholders that permit us to quantitatively estimate the benefits of this rule.

In addition, DHS is amending the regulations to codify current practices. Specifically, DHS is amending 8 CFR 274a.12(b) to clarify in the regulations that the principal E-3 and H-1B1 nonimmigrant classifications are employment authorized incident to status with a specific employer. DHS is also amending 8 CFR 214.1(c)(1) and 8 CFR 248.3(a) to add the principal E-3 and H-1B1 nonimmigrant classifications to the list of nonimmigrant classifications that must file a petition with USCIS to make an extension of stay or change of status request. Again, both of these regulatory clarifications are consistent with current practice.

This provision of the final rule will apply to the CW-1 classification, which is issued solely to nonimmigrant workers in the CNMI. The CW-1 nonimmigrant visa classification was created to allow certain workers who are otherwise ineligible for any other nonimmigrant visa classification under the INA to work in the CNMI during the transition period to the U.S. Federal immigration system. This transition period was set to end on December 31, 2014. On June 3, 2014, the U.S. Secretary of Labor exercised statutory responsibility and authority by extending the CW transitional worker program for an additional 5 years, through December 31, 2019.23

CW-1 nonimmigrant workers may be initially admitted to the CNMI for a period of 1 year, and USCIS may grant extensions in 1-year increments until the end of the transition period. The CW-1 nonimmigrant visa classification is valid only in the CNMI and does not require any certification from the DOL.

DHS has determined that current regulations contain an inconsistency. While current regulations provide continued work authorization for CW-1 nonimmigrant workers while petitions for a change of employers are pending and for certain beneficiaries of initial CW transitional worker petitions filed on or before November 27, 2011, continued work authorization is not currently provided for CW-1 nonimmigrant workers requesting extensions of stay with the same employer. This inconsistency in the regulations may create an incentive for CW-1 nonimmigrant workers to change employers, as they would have the advantage of uninterrupted work authorization.

DHS is revising the regulations to allow for equitable treatment of CW-1 nonimmigrant workers who remain with the same employer by extending continued employment authorization for up to 240 days while a timely filed, pending request for an extension of stay with the same employer is being adjudicated. As with the similar proposal in this rule regarding H-1B1 and principal E-3 nonimmigrants, current employers of CW-1 nonimmigrant workers may also avoid productivity losses that could occur if a CW-1 nonimmigrant worker cannot continue employment while the timely filed extension request is pending.

The CW-1 nonimmigrant classification is temporary. DHS has established numerical limitations on the number of CW-1 nonimmigrant classifications that may be granted (see Table 5). The numerical limitations apply to both initial petitions and extension of stay requests, including change of employer petitions, in a given FY. DHS has set the numerical limitation for CW-1 nonimmigrant workers at 12,999 for FY 2016.24

DHS set the numerical limit of CW-1 nonimmigrant workers at 14,000 for FY 2014 and petitioning employers filed initial petitions for 1,133 beneficiaries; extension of stay requests from the same employer for 8,952 beneficiaries; and extension of stay requests from new employers for an additional 1,298 beneficiaries.25 The population affected by this provision of the final rule will be those CW-1 nonimmigrant workers whose subsequent extensions of stay requests are filed by the same employer. Accordingly, if this proposal were in place in FY 2014, all of the 8,952 CW-1 nonimmigrant workers with extension of stay requests with the same employer would have received the continued 240-day employment authorization, if necessary, generally putting these workers on par with CW-1 nonimmigrant workers with extension of stay requests for new employers.

This provision will not impose any additional costs on any petitioning employer or for CW-1 nonimmigrant workers. The benefits of this final rule will be that DHS will treat CW-1 nonimmigrant workers whose extension of stay request is timely filed by the same employer similar relative to other CW-1 nonimmigrant workers whose request is timely filed by a new employer. Additionally, this provision will mitigate any potential distortion in the labor market for employers of CW-1 nonimmigrant workers created by the differing provisions for retained workers versus provisions for workers changing employers and prevent a potential loss of productivity for current employers. Under current law, these benefits would be limited in duration, as the transition period in which CW-1 nonimmigrant worker classifications are issued is now scheduled to end on December 31, 2019. Unfortunately, USCIS does not have data to permit a quantitative estimation of the benefits 26 of this provision. Additionally, DHS did not receive data or additional information from impacted stakeholders that would permit DHS to quantitatively estimate the benefits of this rule as it relates to CW-1 nonimmigrant workers in the CNMI. DHS believes, however, that the inconsistent treatment of employment authorization for CW-1 nonimmigrant workers could have created hardships to the CNMI labor force.27

For the EB-1 outstanding professor and researcher immigrant classification, under current regulations, a petitioner must submit initial evidence to demonstrate that the beneficiary is recognized internationally as outstanding in his or her specific academic field. The type of evidence that is required is outlined in 8 CFR 204.5(i)(3).

To demonstrate that the EB-1 professor or researcher is recognized internationally as outstanding in his or her academic field, DHS, through this rulemaking, is allowing petitioners to substitute comparable evidence (examples might include award of important patents and prestigious, peer-reviewed funding or grants) for the evidence listed in 8 CFR 204.5(i)(3)(i)(A)—(F). See 8 CFR 204.5(i)(3)(ii). The other requirements remain unchanged. DHS made this change in response to stakeholder concerns that the current evidentiary list is dated and may not allow the beneficiary to present the full documentation of their achievements.28

By allowing for comparable evidence, DHS will harmonize the evidentiary requirements of the EB-1 outstanding professor and researcher category with those currently available to the EB-1 extraordinary ability category as well as the EB-2 category for a person of exceptional ability.

This provision of the final rule will not create additional costs for any petitioning employer or for the EB-1 outstanding professor and researcher classification. The benefits of this provision are qualitative, as it will treat EB-1 outstanding professors and researchers the same as certain other individuals who seek similar employment-based immigrant status under 8 CFR 204.5. Because of the expanded types of evidence that could be used to support an EB-1 petition for outstanding professors and researchers, qualified U.S. employers may find it easier to recruit EB-1 outstanding professors and researchers due to this provision. Recruitment may provide EB-1 outstanding professors or researchers with additional opportunities to contribute to his or her employer and field, furthering his or her international recognition.

As shown in Table 6, over the past 10 FY(s), USCIS approved an average of 93.23 percent of EB-1 petitions for outstanding professors and researchers under the current evidentiary standards. USCIS does not have data to indicate which, if any, of the 2,379 petitions that were not approved from FY 2005 through FY 2014 would have been approved under the proposed evidentiary standards. Furthermore, we are not able to estimate whether the proposed evidentiary standards would alter the demand for EB-1 outstanding professors and researchers by U.S. employers. Because of this data limitation, the further quantification of this benefit is not possible.

DHS welcomed public comments from impacted stakeholders, such as employers or prospective employers of an EB-1 outstanding professor or researcher, providing information or data that would enable DHS to calculate the resulting benefits of this provision. DHS did not receive any data on this request that would allow DHS to calculate quantitative benefits of this regulatory change. As indicated earlier in the preamble, DHS did receive comments suggesting that this change will benefit both U.S. employers that are petitioning for outstanding professors and researchers, and the individuals seeking immigration status under this classification.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121 (March 29, 1996), requires Federal agencies to consider the potential impact of regulations on small entities while they are developing the rules. 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. This final rule revises regulations to allow for additional flexibilities; harmonizes the conditions of employment of principal E-3, H-1B1, and CW-1 nonimmigrant workers with other, similarly situated nonimmigrant categories; and harmonizes the allowance of comparable evidence for EB-1 outstanding professors and researchers with evidentiary requirements of other similar employment-based immigrant categories. As discussed previously, DHS does not anticipate that the additional provisions will result in additional compliance costs for impacted U.S. employers, including any small entities, other than the minimal costs associated with reading and becoming familiar with benefits offered by the rule.

As discussed extensively in the regulatory assessment for Executive Orders 12866 and 13563 and elsewhere throughout the preamble, this final rule does not impose any additional compliance costs on U.S. employers. U.S. employers must continue filing extension of stay requests with DHS to extend the period of authorized stay of E-3, H-1B1, and CW-1 nonimmigrant employees, as is currently required. This final rule, however, will allow for a continued period of authorized employment for the nonimmigrant worker who is the beneficiary of this petition, provided that the petition is timely filed. This will provide increased flexibilities for the U.S. petitioning employers without imposing any additional costs or compliance procedures.

Based on the foregoing, DHS certifies that this rule will not have a significant economic impact on a substantial number of small entities.

This final rule will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any 1 year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This final rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

This rule will not have substantial direct effects on the States, on the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

Under the Paperwork Reduction Act (PRA) of 1995, Public Law 104-13, agencies are required to submit to the Office of Management and Budget (OMB), for review and approval, any reporting requirements inherent in a rule. See 44 U.S.C. 3506.

The information collection requirement contained in this rule, Immigrant Petition for Alien Worker, Form I-140, has been previously approved for use by OMB under the PRA. The OMB control number for the information collection is 1615-0015.

This final rule requires a revision to the Immigrant Petition for Alien Worker, Form I-140, instructions to expand the current list of evidentiary standards to include comparable evidence so that U.S. employers petitioning for an EB-1 outstanding professor or researcher may be aware that they may submit additional or alternative documentation demonstrating the beneficiary's achievements if the evidence otherwise described in 8 CFR 204.5(i)(3)(i) does not readily apply. Specifically, DHS is adding a new paragraph “b” under the “Initial Evidence” section of the form instructions, to specify that employers filing for an outstanding professor or researcher may submit comparable evidence to establish the foreign national's eligibility if the listed standards under 8 CFR 204.5(i)(3)(i) do not readily apply. DHS is also providing minor clarifying language updates to the form instructions to maintain parity among USCIS forms. DHS has submitted the revised information collection request (ICR) to OMB for review, and OMB has conducted a preliminary review under 5 CFR 1320.11.

DHS has considered the public comments received in response to EB-1 provision in the proposed rule, Enhancing Opportunities for H-1B1, CW-1, and E-3 Nonimmigrants and EB-1 Immigrants, published in the Federal Register at 79 FR 26870 on May 12, 2014. DHS's responses to these comments appear under Part III.F of this final rule.

DHS did not receive comments related to the Immigrant Petition for Alien Workers, Form I-140, revisions. As a result, DHS will not submit any further changes to the information collection.

USCIS has submitted the supporting statement to OMB as part of its request for approval of this revised information collection instrument. There is no change in the estimated annual burden hours initially reported in the proposed rule. Based on a technical and procedural update required in the ICRs for all USCIS forms, USCIS has newly accounted for estimates for existing out-of-pocket costs that respondents may incur to obtain tax, financial, or business records, and/or other evidentiary documentation depending on the specific employment-based immigrant visa classifications requested on the Immigrant Petition for Alien Worker, Form I-140. This change in the ICR is a technical and procedural update and is not a result of any change related to this final rule.

Accordingly, chapter I of title 8 of the Code of Federal Regulations is amended as follows:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. 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 amends Class D airspace at Denver, CO.

This document amends FAA Order 7400.9Z, Airspace Designations and Reporting Points, dated August 6, 2015, and effective September 15, 2015. FAA Order 7400.9Z is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.9Z lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 modifies the legal description of the Class D airspace at Denver, CO, by updating the name and associated city designation of the airport to coincide with the FAA's aeronautical database. Jefferson County Airport is renamed Rocky Mountain Metropolitan Airport and the city designation is corrected from Broomfield, CO, to Denver, CO. This does not affect the boundaries or operating requirements of the airspace.

Class D airspace designations are published in paragraph 5000 of FAA Order 7400.9Z dated August 6, 2015, and effective September 15, 2015, which is incorporated by reference in 14 CFR part 71.1. The Class D airspace designations listed in this document will be published subsequently in the Order.

This is an administrative change amending the airport name and city location to be in concert with the FAAs aeronautical database, and does not affect the boundaries, or operating requirements of the airspace, therefore, notice and public procedure under 5 U.S.C. 553(b) are unnecessary.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. 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 only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

Background

On May 18, 2004, the United States and Australia (the “Parties”) signed the United States-Australia Free Trade Agreement (“AFTA” or “Agreement”). On August 3, 2004, the President signed into law the United States-Australian Free Trade Agreement Implementation Act (the “Act”), Public Law 108-286, 118 Stat. 919 (19 U.S.C. 3805 note), which approved and made statutory changes to implement the AFTA. On December 20, 2004, the President signed Proclamation 7857 to implement the AFTA. The Proclamation, which was published in the Federal Register on December 23, 2004 (69 FR 77133), modified the Harmonized Tariff Schedule of the United States (“HTSUS”) as set forth in Annexes I and II of Publication 3722 of the U.S. International Trade Commission.

On February 10, 2015, CBP published CBP Dec. 15-03 in the Federal Register (80 FR 7303) setting forth interim amendments to implement the preferential tariff treatment and other customs-related provisions of the AFTA and the Act. The majority of the AFTA implementing regulations set forth in CBP Dec. 15-03 and adopted, with one change, as final in this document have been included within new Subpart L of Part 10 of the CBP regulations (19 CFR part 10). In those cases in which AFTA implementation is more appropriate in the context of an existing regulatory provision, however, the AFTA regulatory text has been incorporated into an existing part within the CBP regulations. CBP Dec. 15-03 also sets forth a number of cross-references and other consequential changes to existing regulatory provisions to clarify the relationship between those existing provisions and the new AFTA implementing regulations. Please refer to that document for further background information.

Although the interim regulatory amendments were promulgated without prior public notice and comment procedures and took effect on February 10, 2015, CBP Dec. 15-03 provided for the submission of public comments which would be considered before adoption of the interim regulations as a final rule. The prescribed public comment closed on April 13, 2015. CBP received one comment on CBP Dec. 15-03.

One response was received to the solicitation of comments on the interim rule set forth in CBP Dec. 15-03. The comment is discussed below.

One commenter questioned whether the AFTA requires that Australian exporters be consulted before the interim regulations take effect.

The changes proposed in the interim regulations took effect on the date of publication of the interim regulations. As indicated above, CBP Dec. 15-03 provided for the submission of public comments which would be considered before adoption of the interim regulations as a final rule. All interested parties, including Australian exporters, were given the opportunity to submit public comments. No such public comments were received from or submitted by any party in response to CBP Dec. 15-03 that objected to the changes in the interim rules being included in a final rule.

This document clarifies 19 CFR 10.725(c) by removing the parenthetical cross reference to §§ 10.746 and 10.747 and, instead, stating that the importer's actions must be “pursuant to” those CBP regulations.

After further review of the matter, including consideration of the above-mentioned comment submitted in response to CBP's solicitation of public comment, CBP has determined to adopt as final, with a clarification, the interim rule published in the Federal Register (80 FR 7303) on February 10, 2015.

This document is not a regulation subject to the provisions of Executive Order 12866 of September 30, 1993 (58 FR 51735, October 1993), because it pertains to a foreign affairs function of the United States and implements an international agreement, as described above, and therefore is specifically exempted by section 3(d)(2) of Executive Order 12866.

CBP Dec. 15-03 was issued as an interim rule rather than a notice of proposed rulemaking because CBP had determined that the interim regulations involve a foreign affairs function of the United States pursuant to section 553(a)(1) of the Administrative Procedure Act (APA). As no notice of proposed rulemaking was required, the provisions of the Regulatory Flexibility Act, as amended (5 U.S.C. 601 et seq.), do not apply. Accordingly, this final rule is not subject to the regulatory analysis requirements or other requirements of 5 U.S.C. 603 and 604.

The collections of information contained in these regulations have previously been reviewed and approved by the Office of Management and Budget (OMB) in accordance with the requirements of the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1651-0117, which covers many of the free trade agreement requirements that CBP administers, and 1651-0076, which covers general recordkeeping requirements. The collections of information in these regulations are in §§ 10.723, 10.724, and 10.727 of title 19 of the Code of Federal Regulations (19 CFR 10.723, 10.724, and 10.727). This information is required in connection with general recordkeeping requirements (§ 10.727), as well as claims for preferential tariff treatment under the AFTA and the Act and will be used by CBP to determine eligibility for tariff preference under the AFTA and the Act. The likely respondents are business organizations including importers, exporters and manufacturers.

The estimated total annual reporting burden associated with the collection of information in this final rule is 4,000 hours. Under the Paperwork Reduction Act, an agency may not conduct or sponsor and a person is not required to respond to a collection of information, unless it displays a valid OMB control number.

This document is being issued in accordance with § 0.1(a)(1) of the CBP regulations (19 CFR 0.1(a)(1)) pertaining to the authority of the Secretary of the Treasury (or his/her delegate) to approve regulations related to certain CBP revenue functions.

For the reasons stated above, the interim rule amending Parts 10, 24, 162, 163, and 178 of the CBP regulations (19 CFR parts 10, 24, 162, 163, and 178), which was published at 80 FR 7303 on February 10, 2015, is adopted as a final rule with the following change:

Background

Pursuant to the provisions of the 1970 United Nations Educational, Scientific and Cultural Organization (UNESCO) Convention, implemented by the Convention on Cultural Property Implementation Act (Pub. L. 97-446, 19 U.S.C. 2601 et seq.), the United States entered into a bilateral agreement with Italy on January 19, 2001, concerning the imposition of import restrictions on archeological material originating in Italy and representing the pre-Classical, Classical, and Imperial Roman periods. On January 23, 2001, the former U.S. Customs Service (now U.S. Customs and Border Protection (CBP)) published T.D. 01-06 in the Federal Register (66 FR 7399), which amended 19 CFR 12.104g(a) to indicate the imposition of these restrictions and included a list designating the types of archaeological material covered by the restrictions.

Import restrictions listed in 19 CFR 12.104g(a) are “effective for no more than five years beginning on the date on which the agreement enters into force with respect to the United States. This period can be extended for additional periods not to exceed five years if it is determined that the factors which justified the initial agreement still pertain and no cause for suspension of the agreement exists” (19 CFR 12.104g(a)).

Since the initial notice was published on January 23, 2001, the import restrictions were extended twice. First, on January 19, 2006, CBP published CBP Dec. 06-01 in the Federal Register (71 FR 3000) which amended 19 CFR 12.104g(a) to reflect the extension for an additional period of five years. Subsequently, on January 19, 2011, CBP published CBP Dec. 11-03 in the Federal Register (76 FR 3012) to extend the import restriction for an additional five-year period to January 19, 2016. CBP Dec. 11-03 also reflects an amendment to the Designated List to include the subcategory “Coins of Italian Types” as part of the category entitled “Metal,” pursuant to 19 U.S.C. 2604.

On December 23, 2014, the Department of State received a request by the Government of the Republic of Italy to extend the Agreement. Subsequently, the Department of State proposed to extend the Agreement. After considering the views and recommendations of the Cultural Property Advisory Committee, the Assistant Secretary for Educational and Cultural Affairs, United States Department of State, determined that the cultural heritage of Italy continues to be in jeopardy from pillage of archaeological material representing the pre-Classical, Classical, and Imperial Roman periods and made the necessary determinations to extend the import restrictions for an additional five years. Diplomatic notes have been exchanged, reflecting the extension of those restrictions for an additional five-year period. Accordingly, CBP is amending 19 CFR 12.104g(a) to reflect this extension of the import restrictions.

The Designated List of Pre-Classical, Classical and Imperial Roman Period Archaeological Material from Italy covered by these import restrictions is set forth in CBP Dec. 11-03. The Designated List and accompanying image database may also be found at the following Internet Web site address: http://eca.state.gov/cultural-heritage-center/cultural-property-protection/bilateral-agreements/italy.

The restrictions on the importation of these archaeological materials from the Republic of Italy are to continue in effect for an additional five years. Importation of such material continues to be restricted unless the conditions set forth in 19 U.S.C. 2606 and 19 CFR 12.104c are met.

This amendment involves a foreign affairs function of the United States and is, therefore, being made without notice or public procedure (5 U.S.C. 553(a)(1)). In addition, CBP has determined that such notice or public procedure would be impracticable and contrary to the public interest because the action being taken is essential to avoid interruption of the application of the existing import restrictions (5 U.S.C. 553(b)(B)). For the same reasons, a delayed effective date is not required under 5 U.S.C. 553(d)(3).

Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do not apply.

It has been determined that this rule is not a significant regulatory action under Executive Order 12866.

This regulation is being issued in accordance with 19 CFR 0.1(a)(1).

For the reasons set forth above, part 12 of Title 19 of the Code of Federal Regulations (19 CFR part 12), is amended as set forth below:

The final regulations (TD 9745) that are the subject of this correction are under section 36B of the Internal Revenue Code.

As published, the final regulations (TD 9745) contains an error that may prove to be misleading and is in need of clarification.

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendment:

PBGC's regulation on Benefits Payable in Terminated Single-Employer Plans (29 CFR part 4022) prescribes actuarial assumptions—including interest assumptions—for paying plan benefits under terminating single-employer plans covered by title IV of the Employee Retirement Income Security Act of 1974. The interest assumptions in the regulation are also published on PBGC's Web site (http://www.pbgc.gov).

PBGC uses the interest assumptions in Appendix B to Part 4022 to determine whether a benefit is payable as a lump sum and to determine the amount to pay. Appendix C to Part 4022 contains interest assumptions for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using PBGC's historical methodology. Currently, the rates in Appendices B and C of the benefit payment regulation are the same.

The interest assumptions are intended to reflect current conditions in the financial and annuity markets. Assumptions under the benefit payments regulation are updated monthly. This final rule updates the benefit payments interest assumptions for February 2016.1

The February 2016 interest assumptions under the benefit payments regulation will be 1.25 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for January 2016, these interest assumptions are unchanged.

PBGC has determined that notice and public comment on this amendment are impracticable and contrary to the public interest. This finding is based on the need to determine and issue new interest assumptions promptly so that the assumptions can reflect current market conditions as accurately as possible.

Because of the need to provide immediate guidance for the payment of benefits under plans with valuation dates during February 2016, PBGC finds that good cause exists for making the assumptions set forth in this amendment effective less than 30 days after publication.

PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866.

Because no general notice of proposed rulemaking is required for this amendment, the Regulatory Flexibility Act of 1980 does not apply. See 5 U.S.C. 601(2).

In consideration of the foregoing, 29 CFR part 4022 is amended as follows:

Washington Department of Transportation has requested a temporary deviation from the operating schedule for the Montlake Bridge across the Lake Washington Ship Canal, at mile 5.2, at Seattle, WA. The deviation is necessary to accommodate work crews conducting timely bridge deck repairs.

The Montlake Bridge in the closed position provides 30 feet of vertical clearance throughout the navigation channel, and 46 feet of vertical clearance throughout the center 60 feet of the bridge; vertical clearance references to the Mean Water Level of Lake Washington. When half the span is open with a single leaf, 46 feet of vertical clearance will be reduced throughout the center to 30 feet of the bridge.

To facilitate this event, the north half of the bridge span, or single leaf, will open with at least a one hour advance notice provided to the bridge operator from 6 a.m. to 6 p.m. on February 27, 2016. From 6 p.m. on February 27, 2016 to 5 a.m. on February 28, 2016, the Montlake Bridge span will remain in the closed-to-navigation position, or full closure. Then, from 5 a.m. to 6 p.m. on February 28, 2016, the north half of the bridge span will open with at least a one hour advance notice to the bridge operator. The normal operating schedule for the Montlake Bridge operates in accordance with 33 CFR 117.1051(e).

The deviation period is from 6 a.m. on February 27, 2016 to 6 p.m. on February 27, 2016 (north single leaf opening if a one hour notice is given); from 6 p.m. on February 27, 2016 to 5 a.m. on February 28, 2016 (remain in the closed-to-navigation position); from 5 a.m. on February 28, 2016 to 6 p.m. on February 28, 2016 (north single leaf opening if a one hour notice is given).

Waterway usage on the Lake Washington Ship Canal ranges from commercial tug and barge to small pleasure craft. Vessels able to pass through the bridge in the closed-to-navigation position may do so at any time. The bridge will be able to open for emergency vessels in route to a call when an hour notice is given to the bridge operator, and a single leaf opening will be provided. The Lake Washington Ship Canal has no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge 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 designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

Throughout this document “we,” “us,” or “our” refer to EPA. This section provides additional information by addressing the following:

EPA is taking direct final action to approve the Operating Permits Program revision submitted by the state of Missouri for 10 CSR 10-6.110, “Reporting Emission Data, Emission Fees, and Process Information,” on March 16, 2015. Section (3)(A) revised the emission fees section, which is approved under the Operating Permits Program only, and updates the emissions fee for permitted sources as set by Missouri Statute from $40 to $48 per ton of air pollution emitted annually, effective January 1, 2016, as set by Missouri statute.

The state submission has met the public notice requirements for SIP submissions in accordance with 40 CFR 51.102. The submission also satisfied the completeness criteria of 40 CFR part 51, appendix V. In addition, the revision meets the substantive SIP requirements of the Clean Air Act (CAA), including section 110 and implementing regulations.

We are publishing this direct final rule without a prior proposed rule because we view this as a noncontroversial action and anticipate no adverse comment. However, in the “Proposed Rules” section of this Federal Register, we are publishing a separate document that will serve as the proposed rule to this Operating Permits Fee revision if adverse comments are received on this direct final rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. For further information about commenting on this rule, see the ADDRESSES section of this document. If EPA receives adverse comment, we will publish a timely withdrawal in the Federal Register informing the public that this direct final rule will not take effect. We will address all public comments in any subsequent final rule based on the proposed rule.

In this action, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the Missouri amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act 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 Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• 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 et seq.);

• 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).

The action is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

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 March 15, 2016. 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 may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

For the reasons stated in the preamble, the EPA amends 40 CFR parts 52 and 70 as set forth below:

Table of Contents I. Background II. Notice of Proposed Rulemaking III. Overview of Final Rule IV. Statutory Authority V. Section-by-Section Discussion of Comments and Regulatory Provisions Part 262—Accountability Provisions—General Section 262.1 What penalties apply to States? Section 262.2 When do the TANF penalty provisions apply? Section 262.3 How will we determine if a State is subject to a penalty? Part 264—Other accountability provisions: Subpart A—What specific rules apply for other program penalties? Section 264.0 What definitions apply to this part? Section 264.60 What policies and practices must a State implement to prevent assistance from being used in electronic benefit transfer transaction in locations prohibited by the Social Security Act? Section 264.61 What happens if a State fails to report or demonstrate it has implemented and maintained the policies and practices required in § 264.60 of this subpart? Part 265—Data Collection and Reporting Requirements Section 265.9—What information must the State file annually? VI. Paperwork Reduction Act VII. Regulatory Flexibility Act VIII. Regulatory Impact Analysis IX. Unfunded Mandates Reform Act of 1995 X. Congressional Review XI. Executive Order 13132 XII. Treasury and General Government Appropriations Act of 1999 I. Background

Authorized by title IV-A of the Social Security Act, TANF is a block grant that provides states, territories, and tribes federal funds to design and operate a program to accomplish the purposes of TANF. The purposes are to: (1) Assist needy families so that children can be cared for in their own homes or in the homes of relatives; (2) reduce the dependency of needy parents by promoting job preparation, work, and marriage; (3) prevent out-of-wedlock pregnancies; and (4) encourage the formation and maintenance of two-parent families. In addition to federal TANF block grant funds, each state must spend a certain minimum amount of non-federal funds to help eligible families in ways that further a TANF purpose. This is referred to as maintenance-of-effort (MOE).

In general, federal TANF and state MOE funds may be expended on benefits and services targeted to needy families, and activities that aim to prevent and reduce out-of-wedlock pregnancies or encourage the formation and maintenance of two-parent families, as well as administrative expenses. In particular, federal TANF and state MOE funds may be expended on “assistance,” defined at 45 CFR 260.31(a)(1) as including cash payments, vouchers, and other forms of benefits designed to meet a family's ongoing basic needs (i.e., food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses). Assistance also includes supportive services such as transportation and child care provided to families who are not employed (see 45 CFR 260.31(a)(3)). TANF funds also can be used for a wide range of benefits and services that do not fall within the definition of assistance; such expenditures are considered “non-assistance.” This rule pertains only to assistance expenditures.

Based on the most recent information provided to us by states, there are currently four means that states use to provide assistance payments to eligible low-income families with children: Paper checks, Electronic Funds Transfers (EFT), Electronic Benefit Transfer (EBT) cards, and Electronic Payment Cards (EPC). Most states have replaced paper checks with one or more of the other three delivery methods in order to provide benefits in a timelier manner, reduce theft and fraud, and eliminate the need for recipients to pay check-cashing fees. Some states automatically transfer assistance payments directly into a recipient's own private bank account through EFT. However, this option is not available if a recipient does not have access to or qualify for a checking account. Most states load the amount of assistance on EBT cards or EPCs, both of which allow recipients to use a debit-like card to access their benefits through automated teller machines (ATMs) and point-of-sale (POS) devices. EPCs differ from government EBT cards in that they are network-branded (e.g., Visa or MasterCard) prepaid cards that recipients may use virtually anywhere the brand's logo is displayed. EBT cards may be used in fewer locations, as retailers and ATMs must be authorized to accept EBT cards.

Among its provisions, the Middle Class Tax Relief and Job Creation Act of 2012, Public Law (Pub. L.) 112-96, requires states to maintain policies and practices to prevent TANF assistance from being used in any EBT transaction (as defined at 42 U.S.C. 608(a)(12)(B)(iii)) in any liquor store; any casino, gambling casino, or gambling establishment; or any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment.

The legislation at Section 4004(b) also imposes a new reporting requirement as well as a new penalty. Each state is required to report annually to the Department of Health and Human Services (HHS) on its implementation of policies and practices related to restricting recipients from using their TANF assistance in EBT transactions at the prohibited locations. HHS will reduce a state's block grant by not more than five percent of the state family assistance grant in fiscal year (FY) 2014 and annually thereafter if the state fails to comply with this reporting requirement or if, based on the information that the state reports, HHS finds that the state has not implemented and maintained the required policies and practices. The statute provides the Secretary of HHS the authority to reduce the amount of the penalty based on the degree of noncompliance of the state.

Finally, states are required under Section 4004(c) of Public Law 112-96 to include in their state TANF plans a statement outlining how they intend to implement policies and procedures to prevent access to assistance through EFTs at casinos, liquor stores, and establishments providing adult-oriented entertainment. The state plan also must include an explanation of how the state will ensure that (1) recipients of the assistance have adequate access to their cash assistance, and (2) recipients of assistance have access to using or withdrawing assistance with minimal fees or charges, including an opportunity to access assistance with no fee or charges; are provided information on applicable fees and surcharges that apply to electronic fund transactions involving the assistance; and that such information is made publicly available. This rule does not regulate the state plan provisions at Section 4004(c) of Public Law 112-96, but it incorporates the statutory state plan language under the Middle Class Job Creation and Tax Relief Act of 2012. Following publication of the final rule, HHS plans to issue additional guidance regarding the adequate access provision.

HHS published a notice of proposed rulemaking (NPRM) (79 FR 7127) on February 6, 2014, to regulate the TANF provisions in Section 4004(a) and (b) of Public Law 112-96. The proposed rule added new penalties for failure to report or adequately demonstrate implementation of the requirements outlined in Public Law 112-96, defined terms relevant to the new requirements, specified when the penalty takes effect, and identified how HHS will determine whether a state warrants a penalty. It also provided details regarding what types of policies and practices HHS would accept as complying with the statutory requirements. In addition to general comments, the NPRM sought input from commenters regarding two specific issues: TANF assistance deposited directly in recipients' bank accounts and accessed with a personal debit card, and internet transactions.

HHS received a total of 28 comments, including comments from six states, seven membership and research/advocacy organizations, and three EBT industry organizations. The remaining commenters were members of the public. We include a detailed summary of comments as well as HHS's responses to comments in Section V of this final rule. Public comments on the proposed rule are available for review on www.regulations.gov.

The final rule amends the TANF program regulations in the following three ways: (1) It adds a requirement to implement policies and practices to prevent TANF assistance from being used in any electronic benefit transfer transaction in any: liquor store; any casino, gambling casino or gaming establishment; and any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment, (2) it adds a requirement to report on policies and practices in an annual report, and (3) it adds a penalty for failure to report on implementation and maintenance of these policies and practices. In response to comments on the proposed rule, we have made changes in the final rule where appropriate to address policy and other concerns raised by commenters, as well as to incorporate suggested clarifications and improvements. In this section, we provide an overview of the final rule and generally describe major changes in response to comments. A more detailed summary of comments in each area and reason for changes is included in the section-by-section discussion of comments later in this final rule.

(1) When incorporating the requirement at 45 CFR 264.60 to implement policies and practices to prevent TANF assistance from being used in any electronic benefit transfer transaction in any liquor store; any casino, gambling casino or gaming establishment; and any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment, we mirror the statutory language at Section 4004(a) of Public Law 112-96. The preambles to the NPRM and the final rule provide details on the types of policies and practices HHS would accept as complying with the statutory requirements, and identify those that do not. In doing so, we identify that different approaches may be acceptable depending on the method of delivery (EBT, EPC, or direct deposit). We also correct an error we made in the NPRM suggesting that bank identification number (BIN) blocking was a potential approach to preventing TANF assistance from being used in POS terminals in the specified locations. Finally, we reiterate that states have a responsibility to develop appropriate policies for preventing TANF cash assistance administered by state programs from being used at any of the three types of businesses, including those located on tribal land. In general, we have provided flexibility in meeting the statutory and regulatory requirements so that states may develop cost-effective implementation strategies that fit within the existing structures of state operations.

We also have added the relevant accompanying definitions to the TANF regulations at 45 CFR 264.0. Regarding the definitions of the three types of establishments, we have made some changes to those we proposed in the NPRM. For example, we are striking from our definition of “retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment,” the language, “such an establishment that prohibits the entrance of minors under the age specified by state law.” Commenters noted that local ordinances, rather than state law, apply to such establishments, and can vary considerably from jurisdiction to jurisdiction. Since we are no longer expanding upon the statutory definition, we have deleted the definition of “retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment” from § 264.0. Rather, we encourage states to exercise the flexibility provided by the statute to build on the required restrictions with respect to these establishments, consistent with state and local policies. Furthermore, in response to comments suggesting we quantify the term “primarily” in the definitions for “casino, gambling casino, or gaming establishment” and “liquor store,” we will defer to states' reasonable interpretation of the law. Additionally, we interpret Congress's use of “liquor” to refer to alcoholic beverages broadly, rather than a narrow definition that excludes alcoholic beverages such as beer and wine.

We are clarifying that the broad definition of “electronic benefit transfer transaction” includes transactions using or accessing TANF funds in private bank accounts because those funds may be accessed by a TANF recipient in a manner that the statutory definition specifies, i.e., through use of a credit or debit card, ATM, point-of-sale terminal, or an online system for the withdrawal of funds or the processing of a payment. We subsequently discuss, see the discussion of § 264.60, examples of policies and practices that HHS considers acceptable with regard to personal accounts and debit cards. We reiterate that the language used demonstrates that Congress intended to apply the requirements in Public Law 112-96 to EPCs. At the same time, we agree with all commenters that Congress did not intend to apply the requirements to internet transactions, pointing to language in the statute such as “establishment,” “store,” “located in a place,” and “transactions in.”

(2) In order to add the requirement to report on relevant policies and practices to the TANF regulations, we are amending 45 CFR parts 262, 264, and 265. The regulations at 45 CFR 262.3 and 264.61 tie the reporting requirement to the penalty specified at 45 CFR 262.1(a)(16). We reiterate that we are requiring an annual EBT report in order to determine whether states have maintained the required policies and practices in each fiscal year following FY 2014. One commenter suggested that the statute does not provide authority for annual reporting, maintaining that the statute obligates HHS to impose a penalty only if a state fails to submit one required report; that state would be subject to a penalty for FY 2014 (for its failure to report by February 22, 2014) and each fiscal year until it submits a report. We disagree with this interpretation and do not believe that it comports with the statute.

In response to suggestions for ways to ease the reporting burden, we have incorporated this reporting requirement in the Annual Report on TANF and MOE Programs under 45 CFR 265.9(b)(10), rather than requiring the submission of a separate EBT report. Accordingly, we are amending the regulation at 45 CFR 265.9(b).

We continue to require that the reports address specific areas that will allow us to determine whether states have implemented policies and practices that comply with the statutory requirements. The NPRM identified these areas as follows: Identifying locations; methods to prevent use of TANF assistance via EBT transactions in restricted locations; monitoring; and enforcement of compliance. With this final rule, we are providing clearer descriptions of the type of information we are requesting. For example, we have amended the request for information on “monitoring,” to “ongoing monitoring to ensure policies are being carried out as intended,” and instead of “enforcement of compliance,” this component should read “responding to findings of non-compliance or program ineffectiveness.” This way, we do not imply that specific practices, such as monitoring of transaction reports, are required. At the same time, we would like reports to describe how states will review and evaluate the policies and practices implemented, and correct for non-compliance and ineffectiveness. In sum, in 45 CFR 265.9(b)(10), the four areas we are requiring states to address in their reports are: (1) Procedures for preventing the use of TANF assistance via electronic benefit transfer transactions in any liquor store; any casino, gambling casino, or gaming establishment; and any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment; (2) how the state identifies the locations specified in the statute; (3) procedures for ongoing monitoring to ensure policies are being carried out as intended; and (4) how the state responds to findings of non-compliance or program ineffectiveness. Finally, we have reduced the burden hour estimate described in the Paperwork Reduction Act section of this final rule, as initial reports have been submitted and subsequent reports should not be as time-consuming.

(3) We are amending 45 CFR 262.1 and 264.61 to add the penalty for failure to report or demonstrate implementation and maintenance of these policies and practices. At 45 CFR 262.62, we specify that this penalty will be imposed for FY 2014 and each succeeding fiscal year in which a state fails to submit a report that demonstrates it has implemented and maintained the relevant policies and practices. Even though one commenter suggested that this approach exceeds our statutory authority, we maintain that the statute allows HHS to impose a penalty in “each succeeding fiscal year in which the State does not demonstrate that such State has implemented and maintained such policies and practices.” Furthermore, in response to commenters' recommendations, we have added language to the regulation related to reducing the penalty based on the degree of noncompliance. We also clarify in the regulations that states are not held responsible for individuals' fraudulent activities, as provided by the statute.

This final rule is being issued under the authority granted to the Secretary of Health and Human Services (HHS) by the Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96), Section 408 of the Social Security Act (42 U.S.C. 608), Section 409 of the Social Security Act (42 U.S.C. 609), and Section 1102 of the Social Security Act (42 U.S.C. 1302), which authorizes the Secretary to make and publish such rules and regulations, not inconsistent with the Act, as may be necessary to the efficient administration of functions under the Act.

The statute at 42 U.S.C. 617 limits the authority of the federal government to regulate state conduct or enforce the TANF provisions of the Social Security Act, except as expressly provided. We have interpreted this provision to allow us to regulate where Congress has charged HHS with enforcing certain TANF provisions by assessing penalties. Because the legislation includes a TANF penalty, HHS has the authority to regulate in this instance.

The final rule in part 262 adds new penalties for failure to report or adequately implement the new requirements outlined in Public Law 112-96, specifies when a penalty takes effect, and identifies the reporting form that HHS will use to determine whether a state warrants a penalty.

Sec. 4004(b) of Public Law 112-96 at Sec. 409(a)(16) of the Social Security Act (the Act) creates a new TANF penalty. As provided in the statute, the penalty will be imposed if a state fails to report to HHS its implementation of the policies and practices to prevent assistance provided under the state program funded under this part from being used in any electronic benefit transfer transaction in: (i) Any liquor store; (ii) any casino, gambling casino, or gaming establishment; or (iii) any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment. Furthermore, HHS may impose a penalty if it determines, based on the information provided in a state report, that the state has not demonstrated that it has implemented and maintained such policies and practices. This penalty may be imposed for FY 2014 and each succeeding fiscal year in which a state does not demonstrate that it has implemented and maintained such policies and practices. If HHS determines that the state should be subject to a penalty, it will reduce the state family assistance grant in the succeeding fiscal year by five percent, or a lesser amount based on the degree of noncompliance. States should note that the regulations at 45 CFR 262.4 through 262.7, concerning the processes for appealing a penalty, presenting a reasonable cause justification, and submitting a corrective compliance plan, apply to the new penalty added to 45 CFR 262.1.

Accordingly, this final rule adds paragraph (i) to § 262.1(a)(16) to provide that a penalty of not more than five percent of the adjusted State Family Assistance Grant (SFAG) will be applied for failure to report annually as part of the Annual Report on TANF and MOE Programs under 45 CFR 265.9(b)(10), on the state's implementation of policies and practices related to these prohibited EBT transactions. The final rule also adds paragraph (a)(16)(ii) to provide that a penalty likewise will be applied for FY 2014 and each succeeding fiscal year if the state does not demonstrate that it has implemented and maintained such policies and practices. Note that if a state fails to submit a report for a fiscal year and, when it ultimately submits a report, also fails to demonstrate its implementation of policies and practices, the combined penalty will not exceed five percent of its adjusted SFAG. Conforming changes have been made at § 262.1(c)(2) to add reference to the penalties in paragraphs (a)(16)(i) and (ii).

Comment: A few commenters remarked on the penalty calculation, suggesting that the rule mirror the statute's allowance for the Secretary to reduce penalties based on the degree of noncompliance and clarify that states are not responsible for fraudulent activity by any individual receiving TANF assistance in an attempt to circumvent the policies and practices required by section 608(a)(12). Further, commenters were concerned that the proposed rule does not adequately explain how the “degree of noncompliance” will be determined or how it would be translated into the penalty amount.

Response: While we included language related to reducing the penalty based on the degree of noncompliance and clarifying that states are not held responsible for individuals' fraudulent activities in the preamble of the NPRM, we agree that this language should also be added to the regulation. We have added language in §§ 262.1(a)(16) and 264.61 to address the statutory provisions. At the same time, we note that while states are not held responsible for an individual's fraudulent activities, reoccurring fraudulent activity could be an indication of deficiencies in a state's policies and practices and should be addressed.

When determining “degree of noncompliance” with respect to reports submitted after the deadline, the Secretary may take into account factors such as the length of time a report was late and any extenuating circumstances that may have caused late reporting. When determining “degree of noncompliance” with respect to inadequate policies and practices, the Secretary may consider the steps taken to develop policies to comply with the requirements (even if not fully implemented), whether there are procedures related to identifying some or all of the types of locations specified in the statute, whether procedures take into account transactions at both ATMs and POS terminals, and whether the state provides information for some or all of the components required in the annual report (described later in this preamble).

Comment: One individual commented that imposing a penalty will be counterproductive because financial sanctions may inhibit a state's ability to implement EBT policies and practices, suggesting we increase the compliant states' block grants, provided that they consult and provide technical assistance to non-compliant states.

Response: The statute requires a penalty for failure to meet the requirements of the statute; however, before we impose a financial penalty, states may request reasonable cause or submit a corrective compliance plan in response to a penalty, as provided at sections 409(b) and (c) of the Social Security Act. We do not have the authority to increase compliant states' block grants.

The final rule amends § 262.2 to add new paragraph (e) indicating that the penalty for failure to report on how the state is implementing and maintaining policies and practices to prevent assistance from being used in electronic benefit transfer transactions in specified locations will be imposed for FY 2014 and each succeeding fiscal year in which the state does not demonstrate it has implemented and maintained the policies and practices in accordance with 45 CFR 264.60.

Comment: One state commented that the statute does not require an annual reporting requirement. Rather, the commenter argued the statute required HHS to impose a penalty on an annual basis on states that had not submitted a report by February 22, 2014, and each subsequent year it had still not submitted a report. In other words, if a state submitted its initial report that describes the policies it implemented and how it will maintain them, it had met the requirements of the law and can no longer be subject to a penalty. On the other hand, a state that did not submit the initial report by February 22, 2014, would be subject to a penalty for FY 2014, as well as each fiscal year until it submits a report.

Response: We do not agree with this interpretation and do not believe that the statutory requirements, particularly the requirement that states demonstrate that they are implementing and maintaining the relevant policies and practices, can be met through a one-time report. The statute provides that HHS shall impose a penalty in “each succeeding fiscal year in which the State does not demonstrate that such State has implemented and maintained such policies and practices.” Through these reports, we must assess whether states are implementing and maintaining EBT policies and practices to determine whether or not we should impose a penalty.

This final rule amends § 262.3 by adding a new paragraph (g) to specify that in order to determine if a state is subject to a penalty under 45 CFR 262(a)(16)(i) and (ii), HHS will use the submission of the initial report that was due by February 22, 2014, and beginning in FY 2015, the Annual Report on TANF and MOE Programs under 45 CFR 265.9(b)(10). We are amending the Annual Report on TANF and MOE Programs under 45 CFR 265.9(b) in order to include reporting for electronic benefit transfer transaction policies and practices. The Annual Report on TANF and MOE Programs at 45 CFR 265.9(b) is due at the same time as the fourth quarter TANF data report, within 45 days following the end of the fourth quarter. Note that this reporting requirement is distinct from the provisions of Public Law 112-96 related to additional state plan requirements (see Sec. 4004(c)).

Comment: We received a number of comments raising concerns about a separate annual electronic benefit transfer transaction report requirement. They argued this requirement places an undue reporting burden on states and contradicts the intent of the statute. One commenter believed that because the statute requires states to describe their EBT policies and practices in the state plan, they will already be providing consistent reports on implementation, and should not be required to submit an additional report. A number of states recommended we use the state plan or the Annual Report on TANF and MOE programs as the reporting mechanism.

Response: We agree that the Annual Report is an effective reporting mechanism and will ease the reporting burden on states. As described below, with this final rule, we are amending § 265.9(b) of the TANF regulations to add to the annual report a section for states to describe their policies and practices related to electronic benefit transfer transactions.

The final part 264 explains in further detail what HHS expects of states when implementing the new requirements of Public Law 112-96 by specifying the policies and practices required, providing relevant definitions, and addressing consequences if a state fails to meet the requirement.

In order to clarify the types of locations where states are required to prohibit the use of TANF assistance via electronic benefit transfer transactions and to ensure that the policies and practices are applied consistently between states, we are amending § 264.0(b) to define the terms included in Section 4004 of Public Law 112-96. The following is a discussion of the definitions of the terms in alphabetical order.

Casino, Gambling Casino, or Gaming Establishment: As we mentioned in the NPRM, the statute provides exclusions to the phrase “casino, gambling casino, or gaming establishment,” but does not provide a further definition. One such exclusion refers to establishments that offer casino, gambling, or gaming activities incidental to the principal purpose of the business. With this exclusion in mind, we proposed to interpret the statutory reference to “casino, gambling casino, or gaming establishment” to mean an establishment with a primary purpose of accommodating the wagering of money. Based on the statutory definition provided, this does not include a grocery store which also offers, or is located within the same building or complex as a, casino, gambling, or gaming activities, or any other establishments where such activities are incidental to the principal purpose of the business. We are not making any changes to this proposed definition in this final rule.

Comment: Generally, commenters agreed with our definition, but also provided suggestions to address specific concerns. For example, one state and one advocacy organization stated the definition does not address co-joined businesses such as a hotel, grocery store, or restaurant connected to or within the casino. In order to clarify the definition and ensure that it could not be interpreted broadly, one commenter recommended that we add language that prohibits the entrance of minors under the age specified by state law, similar to that in the proposed definition of “Retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment.”

Response: We disagree that language that related to prohibiting the entrance of minors under the age specified by state law is necessary, and we do not believe it solves the problem the commenters identified. The law addresses co-joined businesses by excluding from the definition a grocery store which also offers, or is located within the same building or complex as a casino, gambling, or gaming activities. We defer to a state's reasonable interpretation of the statute, to determine what other types of establishments that the statute excludes from the definition of “casino, gambling casino, or gaming establishment,” including co-joined businesses.

Comment: One state is concerned with the phrase, “an establishment with a primary purpose of accommodating the wagering of money.” The regulatory definition does not quantify what “primarily” means. Because this is one area where regulations could provide consistency between states, it recommends establishing criteria states can apply in making this determination.

Response: We defer to states' reasonable interpretations on this part of the definition. States may have different approaches of determining whether a business satisfies this standard, and we do not find it necessary to draw a line, or to impose uniformity here, while we provide flexibility in other areas.

Electronic Benefit Transfer Transactions: The final rule will incorporate the statutory definition of “electronic benefit transfer transaction,” which is “the use of a credit or debit card service at an automated teller machine, point-of-sales terminal, or access to an online system for the withdrawal of funds or the processing of a payment for merchandise or service.”

Comment: Our NPRM noted the broad nature of this language and that questions had been raised about whether it includes TANF assistance deposited directly by a state into a recipient's bank account (i.e., via EFT) and accessed with a personal debit card. We requested comments related to whether states and banks have, or reasonably could have, the capacity to apply the EBT transaction restrictions to assistance funds deposited in private bank accounts and to monitor whether recipients use such funds in a prohibited manner. We received many comments responding to this request, all of which were in agreement that the requirements should not be applied to personal debit cards, supporting their recommendations with information pertaining to the following: (1) Infeasibility, (2) negative consequences that would result from applying the requirements to personal debit cards, and (3) Congressional intent.

Although one commenter acknowledged that it may be theoretically possible for a deposit account to consist of a sub-account for TANF funds and a subaccount for all other funds, all agreed that implementing such a requirement would be practically infeasible. If implemented, the banks would face requirements to identify customers who receive cash benefits, determine the dollars in a checking or savings account that are “TANF” dollars versus wages or other income from the state, such as child support. Requiring the entire United States banking system to develop the appropriate capabilities (TANF funds recipients could have deposit accounts at any of the nearly 7,000 banks and thousands more credit unions in the U.S.) would result in an extraordinary burden and high costs. While one commenter stated that the banks would need to develop the ability to monitor where funds are used, as there is no current mechanism for a state to monitor the use of such funds, another stated that current bank infrastructure could not support identification of individual retailers. Commenters emphasized that the capacity and infrastructure to apply the requirements to personal bank accounts/debit cards simply do not exist at this point, and the costs that would need to be devoted to this effort would not outweigh the benefit.

A few commenters maintained that because states could not actually implement procedures in order to comply with this requirement, they would have to discontinue the option of direct deposit. One commenter maintained that even if states provided the option of direct deposit, the difficulties with applying the statutory requirement to TANF assistance in personal bank accounts would provide disincentives for banks to work with TANF customers. Commenters argued these would be unfortunate consequences of this legislation because there are many benefits of being “banked” (e.g., the ability to avoid unnecessary fees for accessing benefits and paying bills, promoting savings and financial management, permitting TANF recipients to build a credit history, etc.). Commenters emphasized that diminishing the ability of TANF recipients to establish and maintain bank accounts conflicts with the broader TANF goals of promoting work and self-sufficiency, and that HHS should be encouraging states to provide benefits through direct deposit, not discouraging it.

Finally, a number of commenters maintained that Congress did not intend to include transactions with personal debit cards within the definition of “electronic benefit transfer transaction” in Public Law 112-96, and that only accounts established by a government agency were intended to fall within Congress's definition of EBT systems.

Ultimately, all commenters recommended that the restrictions not extend to TANF funds deposited into private bank accounts. One advocacy group recommended that if, in the future, there is sufficient evidence that TANF assistance recipients' use of bank accounts to purchase prohibited goods and services threatens the integrity of the TANF program, any new expansion of the current restrictions should be added only within the context of a full TANF reauthorization.

Response: HHS considered all of the comments received. The broad statutory definition of “electronic benefit transfer transaction,” applies to TANF funds deposited in private bank accounts because the funds can be accessed using a credit or debit card, ATM, point-of-sale terminal, or an online system for the withdrawal of funds or the processing of a payment. However, HHS recognizes that TANF recipients may have private bank accounts that include TANF funds as well as income from other sources, including earnings from employment, refundable tax credits for working families, and child support. Because there is currently no feasible way to distinguish TANF funds from other sources in a private bank account, states are responsible for implementing policies and practices that apply to transactions using or accessing TANF funds directly deposited in private bank accounts, only in cases where TANF is the sole source of funds in those accounts. Further, given the current state of technology, we have concluded that there is no feasible enforcement mechanism for funds in private bank accounts, and therefore the state may meet the requirements of this regulation by providing notice to recipients that they cannot access TANF funds from private bank accounts at a prohibited location.

Comment: One state maintained that the definition of “electronic benefit transfer transaction” should not include EPCs, which the state described as “non-government issued, payee owned, pre-paid debit card loaded via `electronic funds transfer.'” The commenter maintained that only accounts established by a government agency were intended to fall within Congress's definition of EBT systems.

Response: HHS disagrees with the state's reading of the statute, given the definition of “electronic benefit transfer transaction” is so broad, as discussed above.

Comment: We received many comments regarding whether or not internet transactions should be included in the definition of “electronic benefits transfer transaction.” All commenters agreed that the regulations should not extend to internet transactions, particularly at this time. A few commenters noted that language in the statute, such as “establishment,” “store,” “located in a place,” and “transaction in,” suggests that the intent of Congress was to prevent TANF benefits from being used at certain physical locations. One commenter stated that the term “online system” in the definition of “electronic benefit transfer transaction” is vague because one may interpret it as payments made in near real time, such as the use of debit cards for purchases at a merchant location, or as the purchase of goods and services over the internet. The commenter argued most consumers understand “online system” to include purchases of goods and services via the internet, but suggests that we clarify this in the regulation. Another commenter argued that Congress intended to create an enforceable approach by limiting transactions to physical locations. While this comment did not object on principal to regulating internet transactions, it, along with responses from other commentators, explained that the logistics of applying this restriction to internet transactions would be unfeasible. Some comments suggested that the restrictions should apply if and when states can feasibly monitor such transactions and/or when data shows that online TANF assistance spending on prohibited goods and services becomes a major problem.

Response: We agree the terms “establishment,” “store,” “located in a place,” and “transaction in” point to Congress's intent to apply the requirements only to physical locations and not internet transactions. Therefore, the regulations do not apply to web-based transactions. If the technology allows, a state has the flexibility to restrict internet transactions with EBT cards, but federal law does not require it.

Liquor Store: The final rule will incorporate the statutory definition of “liquor store,” which is “any retail establishment which sells exclusively or primarily intoxicating liquor. Such term does not include a grocery store which sells both intoxicating liquor and groceries including staple foods (within the meaning of section 3(r) of the Food and Nutrition Act of 2008 (7 U.S.C. 2012(r))).”

Comment: Five commenters commented on the definition of “liquor store,” with most supporting the approach of mirroring the definition in the statute. We also received a few recommendations for clarifying the definition. For example, one state highlighted the fact that the regulatory definition does not quantify what “primarily” means, and that this is one area where regulations could provide consistency between states by establishing certain criteria states can apply in making this determination.

Response: Regarding the recommendation to quantify what “primarily” means, just as in the definition of “casino, gambling casino, or gaming establishment,” we defer to states' reasonable interpretations on this part of the definition. States may have different ways of determining whether a business satisfies this standard, and we do not find it necessary to draw a line, or to impose uniformity here, while we provide flexibility in other areas.

Comment: A few commenters pointed out that “liquor” has a very specific definition that sets it apart from other types of alcoholic beverages such as beer and wine. The commenters maintained that since the term “liquor” is used instead of “alcohol,” places that sell beer and wine only do not fall under this definition. They recommended that states should be given the flexibility to implement the definition in a way that best suits their state and local laws and population.

Response: We disagree and continue to interpret Congress's use of “liquor” to refer to alcohol broadly, including beer and wine, so that the term “liquor store” is inclusive of locations that serve primarily alcoholic beverages.

Retail Establishment which Provides Adult-Oriented Entertainment in which Performers Disrobe or Perform in an Unclothed State for Entertainment: In the NPRM we proposed to clarify the intended locations to which restrictions apply, by adding “such an establishment that prohibits the entrance of minors under the age specified by state law” to the statutory definition. However, after considering the comments received and for the reasons discussed in the response below, we have decided against adding this language to the statutory definition. Since we are no longer expanding upon the statutory definition, we are not including this term in the list of definitions at 45 CFR 264.0 of the final regulation.

Comment: Seven commenters commented on the proposed definition of “retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment.” Only one commenter believed that it accurately described the types of locations where Congress intended to restrict access, and provided states with sufficient clarity to implement these provisions. All other commenters expressed concern about the statement we proposed to add to the statutory definition. They believed the proposed regulation expands the scope of prohibited establishments as it might be read to include book stores or establishments that serve liquor by the drink, and maintained that the statutory wording is clear and should be retained. Some comments also noted that not all states have a state law establishing entrance restrictions based on age with respect to places that provide entertainment where performers disrobe or perform in an unclothed state. In many states, local ordinances rather than state law apply to such establishments, and can vary considerably from jurisdiction to jurisdiction.

Response: While we disagree that the addition of “such an establishment that prohibits the entrance of minors under the age specified by state law” expands the scope of prohibited establishments, we understand it can be problematic given the variation among states regarding whether state laws or local ordinances apply to these types of establishments. We are therefore removing this language and encourage states to exercise the flexibility provided by the statute to build on the required restrictions, with respect to any of these types of establishments, consistent with state and local policies. The term “retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment” itself is descriptive and specific, so we have decided it is not necessary to add a definition at § 264.0.

Comment: One commenter noted that we interpreted the statutory definition as applying beyond live entertainment, specifically to theaters and cinemas where state law prohibits entrance to minors under the age specified by state law. This commenter recommended that the restriction be limited to establishments that provide live entertainment.

Response: We disagree that the statute applies only to establishments that provide live adult entertainment. We see no reason to exclude stores and theaters that exclusively or primarily sell or feature adult-oriented videos and movies.

This final rule adds § 264.60 under subpart A, which requires states to implement policies and practices to prevent assistance (defined at § 260.31(a)) provided with federal TANF or state TANF MOE funds from being used in any electronic benefit transfer transaction in any: (a) Liquor store; (b) casino, gambling casino or gaming establishment; or (c) retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment. The NPRM often used the phrase “policies and procedures” in the discussion of this section. The final rule revises the language, instead referring to “policies and practices,” in order to mirror the statutory language. As we proposed in the NPRM, HHS will accept any reasonable approaches that further these goals and comply with the statutory and regulatory requirements. States' policies and practices must prohibit the use of TANF funds at the specified locations, while ensuring reasonable access to cash assistance, as directed by Congress.

Comment: We received several comments from states supporting our statements in the NPRM that states would have “flexibility in determining appropriate policies and practices” and that we would accept “any reasonable approaches” states use to implement the transaction restrictions. For example, one commenter commented that we should not use our authority within this law to restrict state flexibility without a compelling reason, and that we should make reasonable choices that help promote employment and economic self-sufficiency (to the extent that the ambiguity in the statutory language allows). Additionally, a few commenters argued that as technology evolves rapidly, regulations should allow room for approaches that have not been developed at this time. On the other hand, a few commenters stated that we should “provide more of a standard so that there is more consistency in the calculation and then the implementation of the penalties.” One advised that an over-arching framework for implementing the restrictions in the law should be shaped by the goals of TANF, and that we should avoid overly-broad interpretations of the law that would undercut rather than further the Congressional intent to bolster public confidence in TANF's program integrity. Another suggested that the proposed rule needs to be more stringent.

Response: We believe that, given the various types of systems states use to deliver TANF assistance, it is important to provide states flexibility to implement policy and practices that comply with these statutory and regulatory requirements. Our intention is to inform states of their options while ensuring they fulfill the provisions of the law. These options include: Requiring that third-party processor agreements include language related to the TANF prohibitions; requiring retailers to meet certain eligibility criteria in order to accept EBT cards or EPCs; reviewing and revising state licensing requirements for casinos, liquor stores, and adult entertainment venues to include conditions for license issuance related to restricting TANF benefit use; amending or creating new educational materials for cardholders and retailers; pre-screening retailers prior to authorizing them to accept EBT cards; engaging EBT vendors to determine possible procedures for identifying electronic benefit transfer transactions with TANF assistance at prohibited locations; requiring cardholders to agree in writing not to use TANF assistance at prohibited locations as a condition of receipt; engaging relevant business owners, for example through the appropriate state licensing agencies, and instructing retailers to refuse EBT cards or EPCs at their locations; requiring that relevant business owners or ATM owners post a notification that EBT cards or EPCs may not be used for purchases or cash withdrawal at prohibited locations. While states may impose sanctions, assign a protective payee, or impose a conciliation process for individuals found in violation, the statute does not require that states do so.

In their initial reports, a few states described procedures that involve informing recipients and/or owners of the restricted businesses of the rules (e.g., via letter, flyer, or brochure; posting information on TANF and regulatory agencies' Web sites; displaying posters that detail the EBT restrictions in relevant establishments or local welfare offices), without taking additional actions that aim to ensure the relevant parties are complying with the policy. Absent final rules, ACF accepted such approaches as complying with the statutory requirements. However, with the publication of this final rule, we clarify that notification approaches are only sufficient in situations where further action is not feasible, such as in the case of TANF funds accessed from private bank accounts or TANF funds used in other states. Where possible, we expect states to implement procedures that enforce policies, and take corrective actions when instances of non-compliance or ineffectiveness are identified.

Comment: One state pointed out that § 264.60 leaves out the key words “as necessary” following the phrase, “states are required to implement policies and practices.” Another state suggested replacing the word “use” with “access” in the proposed § 264.60 heading and elsewhere in the narrative to carry a clearer meaning.

Response: We agree that the words “as necessary” should be added to the regulation in order to be consistent with the statute. Regarding the proposed language change from “use” to “access,” the statute itself refers to “use in electronic benefit transfer transaction.” We think the best approach is to track the statutory language as much as possible. Therefore, we maintain the current text.

Comment: A few commenters expressed concern with approaches that focus on penalizing individuals rather than preventing transactions in the first place, as they do not further public support for the program and place too much of the burden for compliance on recipients. Yet another commenter stated that we should not encourage states to have vendors post public signs because they unfairly stigmatize and shame public benefits recipients. These commenters suggested that we indicate to states that if a non-systemic approach to preventing TANF EBT use at prohibited locations (e.g., centralized electronic blocking of prohibited transactions) is not reasonably effective, then compliance actions will require a more systemic approach to prevention. They also argued that we should stress that prevention rather than severity of penalties furthers the goal of the legislation.

Response: We appreciate this suggestion, and while we encourage comprehensive policies and practices that involve more than one method of preventing TANF EBT use at prohibited locations (e.g., notices to merchants coupled with monitoring of transaction records), we do not prescribe one specific approach or set of approaches. The intent of the law is to prevent transactions in the designated locations, and there is good reason to believe that prevention cannot be achieved by placing the entire burden on the individual. At the same time, given the broad discretion that states have under TANF, we do not believe that there is a basis for us to require any specific approach so long as a state's approach is reasonable.

We do encourage states to periodically evaluate the effectiveness of their policies and practices, and adapt or revise them as necessary. In doing so, they maintain the flexibility afforded by the regulation to implement either systemic or non-systemic approaches. We have suggested a number of options for how states may structure policies. We require states to describe how they plan to correct for non-compliance and ineffectiveness in the annual report.

Comment: Two commenters stated that bank identification number (BIN) blocking at the point of sale cannot be done systematically as of now, though they do point out it is possible at ATMs. One of these commenters also suggested that we require that a TANF agency or its EBT vendor notify relevant merchants that they must contact the third party processor (that routes electronic transactions through the commercial debit and credit networks) with which they have a processing agreement and request that the third party processor disable or remove EBT access from their (the relevant merchant's) account. Further, the commenter suggested that we require merchants to have their processors send the merchant category code in the authorization message when an EBT card is swiped at the point of sale, and the TANF agency or its EBT vendor could then make a decision to approve or decline the transaction based on the merchant category code. Yet another commenter suggested that it would be easiest for states to require that all existing ATMs be reprogrammed and merchants would then have to apply to determine if they could be authorized to use EBT funds.

Response: We apologize for our error in stating that a state may systematically prevent transactions via BIN blocking at the point of sale. Additionally, we appreciate these commenters' suggestions for ways states may comply with the statute, but note that, as we explained above, we do not prescribe any one approach for states to implement. Again, states may develop approaches that are cost effective and fit within the existing structure of state operations, yet at the same time meet the requirements of the law.

Comment: One state recommended that we identify and address the differences between EBT and EPC when discussing the options for complying with the requirements, in particular with respect to the four components of reports. Specifically, HHS should acknowledge that EPC and EBT cards are subject to different federal laws and regulations, as well as industry and network standards depending on the type of card, then discuss options and any unique limitations or issues for policies and procedures related to each type of card within each component.

Response: We understand the unique challenges associated with EPCs, and we have been mindful of limitations as we have reviewed state reports. For example, we are aware that banking and privacy laws prevent states from receiving transaction information that would allow them to track the places where individuals redeem their benefits (with very limited exceptions). The Privacy Act of 1974 (at 5 U.S.C. 552a) protects individuals' information maintained by federal agencies and the federal Right to Financial Privacy Act (at 12 U.S.C. 3401) protects personal and financial information of bank customers from disclosure to governmental agencies by banks and their agents. We are mindful of the limitations and will take them into consideration as we review state reports. States that use EPCs described in their initial reports policies and practices including: Blocking certain merchant category classification codes so as to prohibit the usage of the cards in businesses meeting the definition within the law; conducting outreach to businesses to educate impacted vendors and retailors on the prohibition; ensuring recipients are aware of the prohibition by informing applicants and re-applicants through notification; and assigning a protective payee to cases where it comes to the attention of the county eligibility worker or the TANF program administrator that an adult member of the household has demonstrated inappropriate use of funds. Regarding monitoring procedures, in its initial EBT transaction report submitted by the February 22, 2014 deadline, one state described a process for sending an electronic file to IRS approximately once a month for all new and current recipients in order to identify any gambling winnings claimed on tax returns; this information is used as a lead to determine possible fraud. Another state's EBT transaction report explained that the state TANF program receives a monthly Program Market Segment Report from the financial institution that issues the state's EPCs. The Program Market Segment Report displays merchant category codes, the cardholder count that completed a transaction at each type of business, the number of transactions completed, the percent of the total transactions by merchant category code, and the transaction amount by merchant category code. This information allows the state to monitor card and transaction activity.

Comment: One state commented that states that have commingled funds in EBT accounts, such as child support funds, should not be required to restrict access to non-TANF programs. One state suggested that regulations should allow flexibility in this area and allow states to define policies and practices that restrict TANF but allow access for the other cash program benefits comingled with the TANF funds in the EBT accounts.

Response: We agree that states have flexibility to define policies and practices that restrict TANF but allow access to the other cash program benefits that may be on a benefit card. We emphasize that the statutory restriction here solely applies to TANF assistance, not to child support funds or to other family benefits or resources other than TANF assistance.

Comment: A few commenters expressed concern that certain terms in the NPRM indicated we would not support state flexibility, namely “consistently applied,” “required to block,” and “adequately implement.” The commenters suggested that using such terms may lead states to feel compelled to adopt specific suggestions. A few commenters requested that we not include a specific list of four required reporting components (which are identifying locations; methods to prevent use of TANF assistance via EBT transactions in restricted locations; monitoring; and enforcement of compliance) in regulations, as doing so limits flexibility.

Response: It was not our intention to limit state flexibility or be overly prescriptive, but rather to ensure that we receive complete reports describing the procedures states have chosen to implement to comply with the statutory requirements. We maintain that for states to demonstrate that they are implementing the required policies and practices, their implementation strategies must address all four components identified. At the same time, states have flexibility within each category with respect to the specific policies and practices they choose to implement. For further information on this topic, see the discussion related to § 265.9 below, which explains our actions in relation to this issue. As stated there, we are revising the text of the four components, but not eliminating the requirement.

Comment: We received a few comments responding to suggestions presented in the NPRM for how states can identify locations specified in the law. In particular, one state seems to believe that we proposed requiring states to maintain a list of the establishments subject to the restrictions, and for state TANF agencies to provide a separate and additional notification to impacted merchants. The state recommended that we allow states to comply with the requirements of Public Law 112-96 by requiring the appropriate state licensing agency to notify the entities that license businesses that are subject to the prohibitions, through broader public notice of the requirements for such locations to restrict access, by conducting periodic targeted reviews of EBT transactions, by following up on suspect locations, and by establishing appropriate penalties for the venues violating the restrictions. Additionally, one commenter warned against relying on internet searches, and suggested that states attempt to work through national associations of these businesses and their state affiliates.

Response: We did not intend to imply that we are requiring a particular method for identifying locations subject to the requirements. Similarly, we do not require states to maintain a list of affected businesses. We want states to describe their processes for how they identify locations subject to these requirements in their reports. However, because the method or combination of methods states use for identifying locations depends on the policies and practices they implement, states should have flexibility in deciding how best to do so. For example, if a state's policy involves monitoring transaction reports, “identifying locations” could mean developing criteria for being able to recognize on the transaction reports that a transaction occurred at one of the three types of locations (e.g., what words or data elements do reviewers look for?). A state that blocks access at certain locations should describe its procedures for determining which locations should be blocked. Other ways states may identify locations subject to the TANF statutory requirements include working with entities that license businesses or national associations of these businesses and their state affiliates, using merchant category codes, or having states apply for an authorization to accept a state's benefit card based on the percentage of their gross revenue that is derived from the sale of alcoholic beverages, legalized games of chance, sexually oriented materials, coin-operated amusement machines, etc.

Comment: We received one comment in relation to preventing access to TANF cash assistance by state programs at any type of business specified in the law that is located on tribal land. This commenter believed we inappropriately overstepped tribal authority because we “extended” the requirements to tribal programs.

Response: We reiterate that we are not extending the requirements to tribal TANF programs. We agree that Congress did not apply these requirements to TANF assistance administered by a tribal TANF program. However, states do have a responsibility to develop appropriate policies for preventing TANF cash assistance administered by state programs from being used at any of the three types of businesses, including those located on tribal land, to the extent practicable. As we stated in the NPRM, we encourage states to work with tribes to try to prevent state TANF assistance from being used at the prohibited locations on sovereign tribal land. We would consider it sufficient for states to provide notice to recipients that the prohibition of use extends to tribal lands.

Comment: We received two comments related to whether a state should be responsible for restricting use of its TANF assistance in another state. Both maintained that it would be too challenging and costly for states to attempt to block transactions in businesses located in other states and recommended that we not require states to restrict transactions at locations outside their borders. At the same time, Illinois pointed out that this would not prevent states from reviewing and following up on cardholders' out-of-state spending of TANF benefits in the three restricted types of businesses.

Response: We did not include a discussion of this issue in the preamble of the NPRM, and think it is important to provide clarity in the final rule. States are responsible for restricting transactions using state-provided assistance at prohibited locations whether or not the transaction occurs within the state. We recognize the infeasibility of restricting transactions in other states; and, therefore, the agency would consider providing a notice to recipients to be sufficient implementation of a policy or practice with respect to out-of-state transactions.

Comment: We received a few comments regarding access and fees, raising concerns about protections for those living in isolated areas and noted that the regulations do not provide any exceptions or guidelines about how states may ensure access to cash assistance. Further, they highlighted that the statute's requirement to ensure access to cash assistance and minimal fees may benefit recipients, as the yearly amount of surcharges associated with cash assistance withdrawals is extraordinarily high. To minimize fees, they suggested that states allow a certain number of free withdrawals per month or eliminate withdrawal surcharges. One commenter suggested that the regulations should require states to allow TANF recipients to choose between benefits via direct deposit or an EBT card. It also suggested that the regulations should specify the ways in which states may implement guaranteed, surcharge free transactions (e.g., free ATM balance inquiries and surcharge subsidies), and HHS should provide technical assistance to states about promising practices for guaranteeing access.

Response: We believe it is critical that states take steps to ensure access to cash assistance and minimize, or eliminate, fees for families who are working toward self-sufficiency. We strongly encourage states to develop strategies to ensure adequate access to benefits, such as guaranteeing a minimum number of free cash withdrawals per month or providing new options for cash assistance withdrawal in isolated areas. We will continue to work with states on an individual basis regarding these strategies.

Finally, we want to reiterate that while one of the new state plan requirements at Sec. 4004(c) of Public Law 112-96 conveys a clear emphasis that states ensure adequate access to cash assistance for recipients, this language does not provide states the option to avoid imposing a restriction at an ATM or POS terminal located in any of the three types of specified businesses in order to ensure adequate access. Rather, it conveys a responsibility for states to take corrective actions to increase locations where TANF recipients may access their cash assistance if they find that there are an insufficient number of access points in a geographic area.

We are adding a § 264.61 to address the penalty associated with the new requirements. Under paragraph (a), HHS will impose a penalty of not more than five percent of a state's adjusted SFAG for failure to submit annually a report demonstrating the state's implementation of policies and practices to prevent EBT use in the locations specified in Public Law 112-96. Under paragraph (b), HHS will impose a penalty of not more than five percent of a state's adjusted SFAG each fiscal year succeeding FY 2014 in which the state does not demonstrate it has implemented and maintained the required policies and practices. Note that we have revised the phrasing we used in the NPRM for the title of this section in order to clarify that the penalty will be imposed for a state's failure to demonstrate in the report its implementation and maintenance of policies and practices, rather than a failure to implement and maintain the policies and practices.

In order to meet this requirement, states' reports must fully explain the policies and practices that are being implemented and maintained. Note that if a state submits a late report and once submitted, also fails to demonstrate its implementation of policies and practices, the combined penalty will not exceed five percent of its adjusted SFAG. Any deficiencies that arise with respect to a state's reporting of its EBT policies and practices in the Annual Report (i.e., for failure to submit a complete or timely report) will not trigger a separate penalty under 45 CFR 262.1(a)(3) or 265.8.

All penalties will be imposed in accordance with 45 CFR part 262, which provides states with procedures for appealing a penalty, and submitting a reasonable cause justification or corrective compliance plan.

Furthermore, Sec. 409(a)(16)(C) of the Act, as amended by Sec. 4004(b) of Public Law 112-96 provides HHS the discretion to reduce the penalty amount based on the degree of noncompliance of the state. Sec. 409(a)(16)(C) of the Act, as amended by Sec. 4004(b) of Public Law 112-96, also specifies that “Fraudulent activity by any individual in an attempt to circumvent the policies and practices required by Sec. 408(a)(12) shall not trigger a state penalty under subparagraph (A);” as such, HHS will not base any penalty on such information. We have added paragraphs (c) and (d) in this section of the regulation, incorporating these two provisions of the statute.

Please see discussion after 45 CFR 262.1 for comments and responses related to these penalty provisions.

In response to comments expressing concern over the burden of having a separate annual report due on February 22 of each fiscal year, we are amending § 265.9, by adding paragraph (b)(10) to state that in accordance with §§ 264.60 and 264.61, a report of policies and practices to prevent assistance (defined at § 260.31(a)) provided with federal TANF or state TANF MOE funds from being used in any electronic benefit transfer transaction in any liquor store; any casino, gambling casino, or gaming establishment; and any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment. In an effort to receive reports that demonstrate whether states have implemented and maintained the required policies and practices, we are revising the Annual Report on TANF and MOE Programs under 45 CFR 265.9(b). In doing so, we will require states to complete four sections, specifying: (1) Procedures for preventing the use of TANF assistance via electronic benefit transfer transactions in any liquor store; any casino, gambling casino, or gaming establishment; and any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment; (2) how the state identifies the locations specified in the statute; (3) procedures for ongoing monitoring to ensure policies are being carried out as intended; and (4) how the state plans to respond to findings of non-compliance or program ineffectiveness. We believe that for states to demonstrate that they are implementing the required policies and practices, their implementation strategies must address all four components identified. At the same time, states have flexibility within each category with respect to the specific policies and practices they choose to implement.

Comment: We received several comments responding to the expectation that states establish and report annually on policies and practices in four specific areas identified in the NPRM, namely: (1) Identifying locations; (2) preventing the use of TANF assistance via EBT transactions; (3) monitoring; and (4) enforcement of compliance. While two commenters agreed with our proposed framework and believed it would support the integrity of the program, other commenters argued that following this requirement would be labor intensive, cost prohibitive, and contrary to the philosophy of state flexibility in a block grant program. Some argued that states should have the flexibility to develop policies and practices best suited to them, which might not match the four stated areas. One state argued that requiring that reports address these four areas exceeded statutory authority and suggested that the four specific areas serve as suggestions for state policy rather than requirements. This commenter further suggested that we could require states to report on all four specified components, but allow states to determine whether to establish policies in these areas or not. If a state chose not to, it would assert that in the report. One commenter characterized these four specific components as requirements beyond those in the statute, and that they should not be made mandatory.

Response: We disagree with the suggestion that requiring this reporting exceeds statutory authority, as the statute provides us the authority to reduce a state's block grant if the “Secretary determines, based on the information provided in State reports, that any State has not implemented and maintained such policies and practices.” We are requiring the four areas in the reports, but are changing the descriptions of the third and fourth to be clearer about what these terms mean. Instead of “monitoring,” the third component should read “ongoing monitoring to ensure policies are being carried out as intended;” and instead of “enforcement of compliance,” the fourth component should read “plans to respond to findings of non-compliance and/or program ineffectiveness.” This way, we do not imply that specific practices, such as monitoring of transaction reports, are required. At the same time, reports must describe how states will review and evaluate the policies and practices implemented, and correct any particular aspects that are not leading to the intended results.

Comment: Two commenters argued that states should be required to publish their annual reports online, in order to make this information publicly available. Commenters also argued that we should encourage information sharing among states by establishing venues for the exchange of information about program costs and successes.

Response: We are not requiring states to publish their annual TANF and MOE reports online, but encourage states to do so. States also have many existing means to share information with each other, and we support states continuing to do so. ACF's Office of Family Assistance will explore the feasibility of posting these reports on their Web site.

This rule establishes new information collection requirements in §§ 262.3(g) and 265.9(b)(10) of the TANF regulations. This collection is subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). We did not receive any public comments on the specific burden hour estimate identified in the proposed rule. The information collection requirements, as described below, are identical to those contained in the proposed rule (OMB control number 0970-0437). However, now that the initial reporting due February 22, 2014, has passed, we have reduced the burden hour estimate by half. We also note that we will incorporate this reporting requirement into the Annual Report on TANF and MOE Programs under 45 CFR 265.9(b), and will obtain OMB approval for a standard form before the next information collection is due. The annual report is due at the same time as the fourth quarter TANF data report, or within 45 days following the end of the fourth quarter.

As required by the Paperwork Reduction Act of 1995, codified at 44 U.S.C. 3507, ACF will submit a copy of these sections to the Office of Management and Budget (OMB) for review and they will not be effective until they have been approved and assigned a clearance number.

We estimate the costs of implementing these requirements will be approximately $54,000 annually. We calculated this estimate by multiplying 1,080 hours by $50 (average cost per hour).

The Secretary certifies under 5 U.S.C. 605(b), as enacted by the Regulatory Flexibility Act (Pub. L. 96-354), that this final regulation will not result in a significant impact on a substantial number of small entities. We note that any impact on businesses emanates from statutory mandate and the policies that states adopt in implementing the statutory requirement.

In order to address potential concerns of the types of establishments specified in the statute, as well as state EBT vendors, HHS has drafted the regulation in a manner that minimizes the impact on businesses, including small businesses, by providing states flexibility when implementing policies and practices that comply with the new requirements. In particular, states have the flexibility to implement approaches that do not place significant burden or impose large costs on their EBT vendors, small businesses, or any particular party. Therefore, any costs resulting from policies under which states require action by small entities, including small businesses, are the result of choices states make when implementing the statutory requirements.

The direct primary impact of this final regulation is on state governments. State governments are not considered small entities under the Act.

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, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule meets the criteria for a significant regulatory action under E.O. 12866 and has been reviewed by OMB. For the reasons set forth below, ACF does not believe the impact of this regulatory action would be economically significant and that the annual cost would fall below the $100 million threshold.

Costs. We received a few comments regarding the costs associated with the implementation of the regulation. Individual commentators raised general concerns about the regulation's cost/benefit ratio and the impact on TANF spending. A few commenters expressed concern that states will reallocate TANF money from direct services to resources for implementing this regulation.

Commenters also noted that the regulation's benefits do not outweigh its costs, as implementation costs are so large and the percentage of TANF cash assistance recipients using EBT cards on prohibited transactions is so small. One of these commenters noted that some states have considered ending EBT programs and reinstating paper checks to exempt themselves from the regulatory requirements. They suggested increasing state flexibility in implementing the regulation by removing the four components that states must include in their implementation report listed in the proposed provision at 45 CFR 262.3(g).

We understand that this regulation will impose new costs on states. In response to this issue, we have provided flexibility in meeting the regulatory requirements so that states may develop cost-effective implementation strategies that fit within the existing structure of state operations. In general, the costs associated with implementation, and the parties that bear these costs, largely depend on the policies and practices a state chooses to in enact order to comply with the statutory requirements.

Nevertheless, regardless of the approach a state may take when implementing policies in order to comply with the statute and regulations, there will be, at a minimum, administrative costs for the state agency responsible for administering the TANF benefits. We recognize that states will spend funds on the following types of costs to implement the changes in order to complete the annual progress report to ACF:

This is a summary of the Commission's Report and Order in PS Docket No. 13-229, FCC 15-103, released on August 10, 2015 and Clarification Order in PS Docket No. 13-229, FCC 15-165, released on December 11, 2015. These documents are available for download at http://fjallfoss.fcc.gov/edocs_public/. The complete text of these documents are also available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

In 2013, the Commission's Notice of Proposed Rulemaking (NPRM) sought comment on whether to make additional spectrum available to support mobile repeater capability. The Commission declined to seek comment on VRS operations on nine channels in the 170-172 MHz band, but proposed to allow mobile repeater use on six telemetry channels in the 173 MHz band. In addition, the Commission sought comment on whether other spectrum bands or frequencies could also be used for public safety mobile repeater operations; whether to allow Industrial/Business use of mobile repeater stations on these channels; whether to impose bandwidth restrictions on these frequencies; whether frequency coordination could protect telemetry users from interference; whether to allow wide-area mobile repeater operations on these frequencies; and whether to allow VRS units to exceed the 2 watt power limit that applies to these channels.

In the Report and Order the Commission decides to allow all users of these channels—including telemetry licensees—to operate using 11.25 kHz bandwidth. In addition, we will make these six telemetry channels co-primary with adjacent channel land mobile operations and remove the restrictions on omni-directional antennas, fixed station power limits and antenna heights for telemetry stations. The Commission also decides that the only way to accommodate both telemetry and VRS on these frequencies is through frequency coordination to both ensure geographic separation as well as minimizing the risk of commingling voice and data operations. However, since no party provided the Commission with a specific coordination protocol, it directs the coordinator community to develop a consensus protocol for VRS coordination. The Commission also decides to only allow area-wide or state-wide authorizations on a secondary basis. The Commission imposes loading requirements for licensees seeking to license mobile repeaters on these frequencies. The Commission allows VRS to operate with 5 watts ERP but declines to increase the 2-watt power limit for telemetry and remote control use. As a result of our decision to allow the licensing of VRS units on these frequencies, we dismiss as moot several requests for waiver filed during the pendency of this rulemaking. On December 11, 2015, the Commission released a Clarification Order to ensure that the Commission's rules aligned with the text of the August Report and Order.

The Final Regulatory Flexibility Analysis required by section 604 of the Regulatory Flexibility Act, 5 U.S.C. 604, is included in Appendix B of the Report and Order.

This document contains new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new information collection requirements contained in this proceeding. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees.

The actions taken in the Report and Order in PS Docket No. 13-229 have been analyzed with respect to the Paperwork Reduction Act of 1995, Pub. L. 104-13, and found to impose new or modified recordkeeping requirements or burdens on the public.

The Commission will send a copy of this Report and Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated into the NPRM of this proceeding. The Commission sought written public comment on the IRFA. The RFA requires that an agency prepare a regulatory flexibility analysis for notice-and-comment rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). The present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

In the Report and Order, we amend the Commission's rules we amend the Commission's Rules to allow the licensing and operation of vehicular repeater systems (VRS) and other mobile repeaters on six remote control and telemetry channels in the VHF band. The rule changes adopted are intended to promote flexible and efficient use of these channels. In order to achieve these objectives, we:

• Allow the use of mobile repeaters on the following six telemetry channels: 173.2375, 173.2625, 173.2875, 173.3125, 173.3375, and 173.3625 MHz.

• Allow the use of bandwidths up to 11.25 kHz on these channels.

• Require frequency coordination for applications seeking primary status on these frequencies.

• Limit applicants to a license a maximum of three channels on a primary basis

There were no comments filed that specifically addressed the rules and policies proposed in the IRFA.

The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

Public Safety Radio Licensees. As a general matter, Public Safety Radio Licensees include police, fire, local government, forestry conservation, highway maintenance, and emergency medical services. For the purpose of determining whether a Public Safety Radio Licensee is a small business as defined by the SBA, we use the broad census category, Wireless Telecommunications Carriers (except Satellite). This definition provides that a small entity is any such entity employing no more than 1,500 persons. For this category, census data for 2007 show that there were 11,163 establishments that operated for the entire year. Of this total, 10,791 establishments had employment of 999 or fewer employees and 372 had employment of 1000 employees or more. The Commission does not require Public Safety Radio Licensees to disclose information about number of employees, so the Commission does not have information that could be used to determine how many Public Safety Radio licensees constitute small entities under this definition. Nonetheless, the Commission estimates that the majority of Public Safety Radio Licensees are small entities.

Private Land Mobile Radio Licensees. The Private land mobile radio (PLMR) systems serve an essential role in a vast range of industrial, business, land transportation, and public safety activities. These radios are used by companies of all sizes operating in all U.S. business categories. Because of the vast array of PLMR users, the Commission has not developed a small business size standard specifically applicable to PLMR users. The SBA rules, however, contain a definition for Wireless Telecommunications Carriers (except Satellite) which encompasses business entities engaged in radiotelephone communications employing no more than 1,500 persons. According to the Commission's records, there are a total of 3,374 licenses in the frequencies range 173.225 MHz to 173.375 MHz, which is the range affected by this NPRM. Despite the lack of specific information, however, the Commission believes that a substantial number of PLMR licensees may be small entities.

Frequency Coordinators. Neither the Commission nor the SBA has developed a small business size standard specifically applicable to spectrum frequency coordinators. There are nine frequency coordinators certified by the Commission to coordinate frequencies allocated for public safety use. The Commission has not developed a small business size standard specifically applicable to frequency coordinators. The SBA rules, however, contain a definition for Wireless Telecommunications Carriers (except Satellite) which encompasses business entities engaged in radiotelephone communications employing no more than 1,500 persons. Under this category and size standard, we estimate that a majority of frequency coordinators can be considered small.

This Report and Order adopts a rule that will entail reporting, recordkeeping, and/or third-party consultation. Specifically, the Report and Order requires applicants for mobile repeater authorizations receive frequency coordination prior to filing a license application with the Commission. While the preparation of an application does not require the hiring of professionals, frequency coordinators do charge a fee for their services. Therefore, licensees will incur a one-time burden each time an application is filed with the Commission. The estimated burden and cost levels are described in more detail in the supporting statement for OMB 3060-1198, ICR Ref. No. 201404-30.

The RFA requires an agency to describe any significant alternatives that it has considered in reaching its approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

The Report and Order adopts changes to the rules covering operation on six telemetry channels in the 173 MHz band. In formulating rule changes in the Report and Order, we strived to promote efficient use of spectrum.

The Report and Order requires applicants obtain frequency coordination prior to filing a license application with the Commission. Given the Commission's previous reliance on frequency coordination as a mechanism to minimize the occurrence of harmful interference, we did not consider other alternatives to frequency coordination. In addition, we note that there are no methods by which to reduce the burden of frequency coordination on smaller entities. The Report and Order concludes that the benefits of frequency coordination outweigh any potential economic burden associated with frequency coordination.

None.

The Commission will send a copy of the Report and Order, including the FRFA, in a report to be sent to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. In addition, the Commission will send a copy of the Report and Order, including this FRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

Accordingly, it is ordered that, pursuant to sections 1, 4(i), 303, 316, 332 and 337 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 303, 316, 332 and 337, the Report and Order is hereby adopted.

It is further ordered that the amendments of the Commission's rules as set forth in Appendix B of the Report and Order are adopted, effective February 16, 2016, except for those rules and requirements in Section 90.175 containing new or modified information collection requirements that require approval by the Office of Management and Budget under the Paperwork Reduction Act of 1995, which will become effective after such approval, on the effective date specified in a notice that the Commission publishes in the Federal Register announcing such approval and effective date.

It is further ordered that, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), and Section 1.925(b)(3) of the Commission's rules, 47 CFR 1.925(b)(3), the Request for Waiver filed by the Washington Metropolitan Area Transit Authority on June 18, 2013, is dismissed as moot.

It is further ordered that, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), and Section 1.925(b)(3) of the Commission's rules, 47 CFR 1.925(b)(3), the Modification Application and associated Request for Waiver filed by Trinity County, California on January 31, 2014 are dismissed.

It is further ordered that, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), and Section 1.925(b)(3) of the Commission's rules, 47 CFR 1.925(b)(3), the Application and associated Request for Waiver filed by Williams County Sheriff's Department on December 26, 2013, are dismissed.

It is further ordered that, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), and Section 1.925(b)(3) of the Commission's rules, 47 CFR 1.925(b)(3), the Application and associated Request for Waiver filed by Panhandle Regional Planning Commission on August 5, 2013, are dismissed.

It is further ordered that the Commission shall send a copy of the Report and Order in a report to be sent to Congress and the General Accounting Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 90 as follows:

The United States is a member of the Inter-American Tropical Tuna Commission (IATTC), which was established under the Convention for the Establishment of an Inter-American Tropical Tuna Commission (Convention) signed in 1949. The Convention is an international agreement that, among other matters, serves as a framework for international conservation and management of highly migratory species of fish in the IATTC Convention Area.

Fishing for tuna in the EPO is managed, in part, under the Tuna Conventions Act of 1950 (Act), as amended. Under the Act, NMFS must publish regulations to carry out recommendations of the IATTC. Regulations governing fishing by U.S. vessels in accordance with the Act appear at 50 CFR part 300, subpart C, and these regulations implement IATTC recommendations for the conservation and management of highly migratory fish resources in the EPO.

In 2014, the IATTC adopted Resolution C-14-06 (Measures for the Conservation and Management of Pacific Bluefin Tuna in the Eastern Pacific Ocean, 2015-2016), which establishes catch and trip limits of Pacific bluefin tuna applicable to U.S. commercial fishing vessels in 2015 and 2016. NMFS implemented this resolution by notice-and-comment rulemaking under the Act (80 FR 38986, July 8, 2015, and codified at 50 CFR 300.25). According to the regulations at 50 CFR 300.25(h)(2)(i), if 175 mt or less are caught in 2015, as determined by NMFS, then the 2016 catch limit is 425 mt.

NMFS, through landings data and other available information, has determined that U.S. commercial vessels in the EPO have caught less than 175 mt of PBF in 2015; preliminary estimates indicate total landings to be approximately 96 mt. In accordance with 50 CFR 300.25(h), this Federal Register notice announces that a 425 mt catch limit for Pacific bluefin tuna applies to U.S. commercial fishing vessels in the EPO through the end of the 2016 calendar year.

As a reminder, in accordance with 50 CFR 300.25(h), a trip limit of 25 mt per vessel applies. When NMFS anticipates that the total catch for the U.S. fleet has reached 375 mt, NMFS will impose a 2 mt trip limit until 425 mt have been caught and the fishery is closed.