Federal Register Vol. 81, No.107,

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to BLANIK LIMITED Models L-13 Blanik and L-13 AC Blanik gliders. That NPRM was published in the Federal Register on March 3, 2016 (81 FR 11134), and proposed to supersede AD 2000-20-11, Amendment 39-11922 (65 FR 60845; October 13, 2000).

The NPRM proposed to correct an unsafe condition for the specified products and was based on mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country. The MCAI states that:

A review of records since issuance of AD 2000-20-11 revealed that the FAA inadvertently did not address this MCAI for the EVEKCTOR, spol. s.r.o. Model L 13 SDM VIVAT gliders and the BLANIK LIMITED Model L-13 AC Blanik gliders. This AD supersedes AD 2000-20-11 to add the BLANIK LIMITED Model L-13 AC Blanik gliders to the applicability of the AD.

The FAA is addressing the EVEKTOR, spol. s.r.o. Model L 13 SDM VIVAT gliders in another AD action.

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (81 FR 11134, March 3, 2016) or on the determination of the cost to the public.

We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (81 FR 11134, March 3, 2016) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (81 FR 11134, March 3, 2016).

LET Aeronautical Works has issued LET Mandatory Bulletin No.: L13/085a, dated November 17, 1999. The service information describes procedures for testing the material strength of attachment fitting part number A 102 021 N and instructions for contacting the manufacturer for replacement information if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of the AD.

We estimate that this AD will affect 124 products of U.S. registry. We also estimate that it would take about 4 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of the AD on U.S. operators to be $42,160, or $340 per product.

In addition, we estimate that any necessary follow-on actions would take about 16 work-hours and require parts costing $500, for a cost of $1,860 per product. We have no way of determining the number of products that may need these actions.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-4231; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

I. Background

This final rule implements the requirements of section 872 for recipients and NASA staff to report information that will appear in the Federal Awardee Performance and Integrity Information System (FAPIIS). Pursuant to section 872, NASA will consider information contained within the system about a non-Federal entity before awarding a grant or cooperative agreement to that non-Federal entity. The rule also addresses how FAPIIS and other information may be used in assessing recipient integrity. The major elements of the rule are summarized as follows:

• NASA is to report information in FAPIIS about—

Any termination of an award due to a material failure to comply with the award terms and conditions;

Any administrative agreement with a non-Federal entity to resolve a suspension or debarment proceeding; and

Any finding that a non-Federal entity is not qualified to receive a given award, if the finding is based on criteria related to the non-Federal entity's integrity or prior performance under Federal awards and it is anticipated that the total Federal funding will exceed the simplified threshold during the period of performance.

• Recipients that have Federal contract, grant, and cooperative agreement awards with a cumulative total value greater than $10,000,000 must enter information in FAPIIS about certain civil, criminal, and administrative proceedings that reached final disposition within the most recent five year period and that were connected with the award or performance of a Federal award.

• Recipients that have been awarded a Federal contract, grant, and cooperative agreement with a cumulative total value greater than $10,000,000 are required to disclose semiannually the information about the criminal, civil, and administrative proceedings as described in section 872(c).

• Federal awarding agencies, prior to making an award to a non-Federal entity, must review FAPIIS to determine whether that non-Federal entity is qualified to receive the Federal award. In making the determination, NASA must take into consideration any information about the entity that is in FAPIIS.

• Notice of funding opportunities and Federal award terms and conditions to inform a non-Federal entity that it may submit comments in FAPIIS about any information that NASA had reported to the system about the non-Federal entity, for consideration by NASA in making future Federal awards to the non-Federal entity.

NASA published a proposed rule in Federal Register on Feb. 22, 2016, to revise 14 CFR part 1274 to implement Section 872 of the Duncan Hunter National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2009 (Pub. L. 110-417, codified as amended at 41 U.S.C. 2313, as it applies to cooperative agreements.

On February 22, 2016, NASA published a proposed rule in the Federal Register (81 FR 8671) and received a comment from one respondent. NASA reviewed the comment in the formation of the final rule and determined that the comment was not within the scope of the regulation. No revisions to the proposed rule were made as a result of the public comment received.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

The Paperwork Reduction Act (Pub. L. 104-13) does not apply because this final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 14 CFR Part 1274 Federal financial assistance.

Accordingly, 14 CFR part 1274 is amended as follows:

This final rule is part of the Administration's Export Control Reform (ECR) Initiative. The Initiative will enhance U.S. national and economic security, facilitate compliance with export controls, update the controls, and continue the process of reducing unnecessary regulatory burdens on U.S. exporters. As part of this effort, the Bureau of Industry and Security (BIS), in publishing this rule, makes revisions to the Export Administration Regulations (EAR) to include the definitions of “access information,” “technology,” “required,” “foreign person,” “proscribed person,” “published,” results of “fundamental research,” “export,” “reexport,” “release,” “transfer,” and “transfer (in-country)” to enhance clarity and consistency with terms also found in the International Traffic in Arms Regulations (ITAR), which is administered by the Department of State, Directorate of Defense Trade Controls (DDTC). This final rule also revises the Scope part of the EAR to update and clarify application of controls to electronically transmitted and stored technology and software. DDTC is concurrently publishing comparable amendments to the ITAR's definitions of “export,” “reexport,” “release,” and “retransfer” for the same reasons. Finally, this rule makes conforming changes to related provisions. DDTC anticipates publishing its comparable provisions pertaining to “technical data,” “directly related,” “public domain,” and the results of “fundamental research” in a separate proposed rule.

One aspect of the ECR Initiative includes amending the export control regulations to facilitate enhanced compliance while reducing unnecessary regulatory burdens. For similar national security, foreign policy, including human rights, reasons, the EAR and the ITAR each control, inter alia, the export, reexport, and in-country transfer by U.S. and foreign persons of commodities, products or articles, technology, technical data, software, and services to various destinations, end users, and end uses. The two sets of regulations have been issued pursuant to different statutes, have been administered by different agencies with missions that are distinct from one another in certain respects, and have covered different items (or articles). For those reasons, and because each set of regulations has evolved separately over decades without much coordination between the two agencies regarding their structure and content, they often use different words, or the same words differently, to accomplish similar regulatory objectives.

Many parties' export, reexport, and transfer transactions are regulated by both the Commerce Department's EAR and the State Department's ITAR, particularly now that regulatory jurisdiction over many types of military items has been transferred from the ITAR to the EAR. Using common terms and common definitions to regulate the same types of items or actions will facilitate enhanced compliance and reduce unnecessary regulatory burdens. Conversely, if different concerns between the two sets of export control regulations warrant different terms or different controls, the differences should be made clear for the same reason. Such clarity will benefit national security because it will be easier for exporters to comply with the regulations and for prosecutors to prosecute violations of the regulations. Such clarity will also enhance our economic security because it will reduce unnecessary regulatory burdens for exporters when attempting to determine the meaning of key words and phrases across similar sets of regulations. Finally, this rule and the rule DDTC is publishing concurrently address only a portion of the terms and phrases that warrant harmonization between the ITAR and the EAR. They are nonetheless a significant step toward accomplishing one of the ultimate objectives of the ECR initiative, which is the creation of a common export control list and common set of export control regulations.

On June 3, 2015, BIS published a proposed rule entitled “Revisions to Definitions in the Export Administration Regulations” (80 FR 31505) (hereafter “the June 3 proposed rule” or “the June 3 rule”). Simultaneously, the Department of State published a proposed rule entitled “International Traffic in Arms: Revisions to Definitions of Defense Services, Technical Data, and Public Domain; Definition of Product of Fundamental Research; Electronic Transmission and Storage of Technical Data; and Related Definitions” (80 FR 31525) (hereafter “the State June 3 rule”).

BIS welcomed comments on all aspects of the June 3 rule. Additionally, in the preamble to the June 3 rule, BIS specifically solicited public comment with questions on eight issues. Two of those questions pertained to the definition of fundamental research; one pertained to whether the questions and answers in Supplement No. 1 to part 734 had criteria that should be retained in part 734; two pertained to encryption standards in the definition of “Activities that are Not Exports, Reexports, or Transfers;” and one pertained to the effectiveness of the proposed definition of “peculiarly responsible.” Public comments on these questions are addressed in their corresponding sections below.

The two remaining questions were broadly applicable across the rule: Whether the proposed revisions created gaps, overlaps, or contradictions between the EAR and the ITAR or among various provisions within the EAR; and whether a 30-day delayed effective date was appropriate for the final rule.

Eleven commenters cited the difference between the EAR and ITAR standards for prepublication review of research as a significant gap between the two bodies of regulations that would create compliance difficulties. These commenters recommended that both final rules adopt the EAR standard. Further discussion of this issue may be found in the section of the preamble describing fundamental research, below.

Twenty-two commenters recommended a six-month delayed effective date from date of publication. Most of these commenters explicitly based the recommendation on the anticipated difficulty created by adoption of differing proposed EAR and ITAR standards for prepublication review of research. State is not publishing revisions to fundamental research at this time; therefore, the rationale for requesting a six-month delay is largely eliminated.

One commenter recommended at least a three-month delayed effective date to enable non-U.S. companies to understand and prepare for compliance with the revisions. BIS accepts this recommendation, and this final rule will be effective 90 days from the date of publication.

One commenter recommended issuing an interim final rule with a comment period of at least 60 days due to the breadth of the proposed changes. BIS does not accept this recommendation, because this final rule has a 90-day delayed effective date, which is a longer delay than generally applies to an interim final rule. The State rule published concurrently with this final rule also has a 90-day delayed effective date. Moreover, the State Department plans to publish a second proposed rule seeking comment on most of the terms at issue.

Objectives of this final rule include streamlining, clarifying, and updating regulatory text. BIS has attempted to focus the regulatory text on control criteria, limiting notes and examples to those necessary to adequately convey the criteria. Many public comments raised questions about how criteria would be applied in particular situations or suggested illustrative revisions. BIS considers these comments helpful to compliance with the EAR and is publishing them along with responses on the BIS Web site as Frequently Asked Questions (FAQs).

The June 3 rule proposed re-titling the section “Subject to the EAR” (from “Important EAR terms and principles”), retaining the definition and description of that term, and creating separate sections in part 734 to define “export,” “reexport,” “release,” and “transfer (in-country),” rather than retaining them in that section. The June 3 rule also proposed removing § 734.2(b)(7) regarding the listing of foreign territories and possessions in the Commerce Country Chart (Supplement No. 1 to part 738) because it duplicated existing § 738.3(b).

BIS received no comments on its proposed revisions to § 734.2. These revisions are adopted in this final rule.

Section 734.3(a) describes items (i.e., commodities, software, and technology) subject to the EAR. Paragraph (b) describes items that are not subject to the EAR. The June 3 rule proposed minor revisions to paragraph (b)(3), which describes software and technology that are not subject to the EAR, to describe more fully educational and patent information that are not subject to the EAR, and to add a note to make explicit that information that is not “technology” as defined in the EAR is per se not subject to the EAR. One commenter specifically offered support for inclusion of the note, and no commenters objected to it; BIS has adopted it in this final rule.

The June 3 rule proposed to move the statement in § 734.9 that educational information released by instruction in a catalog course or associated teaching laboratory of an academic institution is not subject to the EAR to § 734.3(b) and remove § 734.9. The June 3 rule also proposed to revise the description of such educational information as information and software that “[c]oncern general scientific, mathematical, or engineering principles commonly taught in schools, and released by instruction in a catalog course or associated teaching laboratory of an academic institution” to better match the existing ITAR description. The proposed revisions were not intended to change the scope of educational information that is not subject to the EAR.

Twenty-seven commenters stated that, in spite of BIS's declared intent to leave the scope of this provision unchanged, the proposed revision in fact narrowed the scope of educational information that is not subject to the EAR. With the adoption of the terms in the comparable ITAR provision, such as “general” and “commonly,” commenters said that the revision could be read to make courses with advanced or novel content subject to the EAR and suggested either changing “and released by instruction” to “or released by instruction” or reverting to the existing wording. BIS agrees that the revision could be read to narrow the scope of the exclusion, and because this narrowing was not intended, reverts to the existing wording in this final rule.

BIS received no comments on the placement of the educational information provision in the list of information that is per se not subject to the EAR rather than in a separate section. BIS adopts the proposed placement in this final rule.

This final rule adopts two additional revisions that were not in § 734.3(b)(3) in the June 3 proposed rule. This final rule adds paragraphs (b)(3)(v) and (vi), two additional exclusions from the EAR: Items that are non-proprietary system descriptions or are telemetry data. These two exclusions appeared in the June 3 proposed rule as exclusions from the definition of technology. For discussion of public comments on these exclusions and BIS's response to those comments, see the section on “Technology” below.

The June 3 rule proposed no changes to the notes to paragraphs (b)(2) and (b)(3) of § 734.3 that a printed book or other printed material setting forth encryption source code is not itself subject to the EAR, but that encryption source code in electronic form or media remains subject to the EAR. It also proposed no changes to the note that publicly available encryption object code software classified under Export Control Classification Number (ECCN) 5D002 is not subject to the EAR when the corresponding source code meets the criteria specified in § 740.13(e) of the EAR.

BIS received no comments on these notes, and this final rule makes no changes to them.

Section 734.7 sets forth that technology and software is “published” and thus not subject to the EAR when it becomes generally accessible to the interested public in any form, including through publication, availability at libraries, patents, distribution or presentation at open gatherings, and public dissemination (i.e., unlimited distribution) in any form (e.g., not necessarily in published form), including posting on the Internet on sites available to the public.

The June 3 rule proposed a definition of “published” that retained the same scope, but with a simpler structure. The proposed § 734.7(a) read: “Except as set forth in paragraph (b), “technology” or “software” is “published” and is thus not “technology” or “software” subject to the EAR when it is not classified national security information and has been made available to the public without restrictions upon its further dissemination,” followed by a list of examples of published information. The proposed definition was substantially the same as the wording of definitions adopted by the multilateral export control regimes of which the United States is a member: The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (herein “Wassenaar Arrangement” or “Wassenaar”), the Nuclear Suppliers Group, the Missile Technology Control Regime, and the Australia Group. The phrase “classified national security information” refers to information that has been classified in accordance with Executive Order 13526, 75 FR 707; 3 CFR 2010 Comp., p. 298. The relevant restrictions do not include copyright protections or generic property rights in the underlying physical medium.

This final rule adopts the definition of “published” from the June 3 proposed rule, with the exception of adding certain information, intended to be published, released to “researchers conducting fundamental research” (see discussion below of “Fundamental Research”). BIS received a number of comments on the definition of “published.” Two commenters found helpful the addressing of Internet posting and the clarification that submission of manuscripts to journal editors constitutes “published.” Commenters requested that BIS define “unclassified” and clarify whether university libraries are “open to the public.” “Unclassified information” refers to information that has not been classified in accordance with Executive Order 13526, 75 FR 707; 3 CFR 2010 Comp., p. 298. University libraries are open to the public. BIS does not implement these requests in this final rule because answering them does not require a change to the regulations. BIS is, however, addressing the questions in FAQs posted on BIS's Web site. One commenter stated that, as proposed, the definition of “published” “suggests that releasing (publishing) technology that is unclassified but subject to the EAR makes that technology no longer subject to the EAR.” One commenter described allowing publication by Internet posting as a “loophole” because the site may be obscure and the duration of posting is not specified. Another commenter warned of “the risk of intentional abuse.” Nonetheless, BIS confirms that technology or software that is “published” as provided in § 734.7 is not subject to the EAR.

A commenter noted that the definition “does not appear to address the case of information posted by someone other than the rightful owner.” BIS agrees with this statement, but notes that such cases are addressed by other laws and regulations.

BIS received thirty comments opposing a provision in the definition of “public domain” in the State June 3 rule to which there is no corresponding provision in the definition of “published.” BIS is making no changes to the EAR in response to these comments because they are outside the scope of this rule. They address concerns with the ITAR, not the EAR.

As adopted in this final rule, section 734.7(b) keeps certain published encryption software subject to the EAR, a restriction that the June 3 rule proposed moving from § 734.7(c) without revision.

The June 3 rule proposed revising § 734.8, which excludes most information resulting from fundamental research from the scope of the EAR, but it was not intended to change the scope of the current § 734.8.

In the June 3 proposed rule, BIS specifically solicited comments on whether the alternative definition of fundamental research suggested in the preamble should be adopted. BIS also specifically solicited comments on whether the alternative definition of applied research suggested in the preamble should be adopted, or whether basic and applied research definitions are needed given that they are subsumed by fundamental research.

Issued in 1985, National Security Decision Directive (NSDD)-189 established a definition of “fundamental research” that has been incorporated into numerous regulations, internal compliance regimes, and guidance documents. The June 3 proposed rule contained a definition of “fundamental research” that was identical to that in NSDD-189. However, in the preamble to that rule, BIS provided a simpler definition that was consistent with NSDD-189, but not identical. Specifically, the alternative definition read: “ ‘Fundamental research’ means non-proprietary research in science and engineering, the results of which ordinarily are published and shared broadly within the scientific community.” BIS believed that the scope of this wording was the same as that of the wording in NSDD-189 and sought comment on whether the final rule should adopt the simpler wording. Unlike the simpler alternative definition, the proposed definition of “fundamental research” included references to “basic” and “applied” research and proposed definitions of those terms, as well as a possible alternative definition of applied research.

Comments on alternative definitions of fundamental research were mixed. Thirteen commenters generally favored a simpler definition, in some cases offering their own revised versions of the alternative from the preamble to the June 3 proposed rule. Seven commenters recommended retaining the NSDD-189 wording. Many commenters favored one definition but expressed willingness to accept another. Comments on alternative definitions of basic and applied research were similarly mixed, including instances of the same commenter offering support for more than one option. There was greater unanimity on the term “non-proprietary:” twenty commenters objected to it, most finding it vague. Commenters suggested the variation, research “for which the researchers have not accepted restrictions for proprietary or national security reasons.”

BIS agrees with the majority of commenters that the shorter definition of fundamental research is clearer and covers the same scope. Given the wide spectrum of definitions and applications of basic and applied research in different bodies of regulations, BIS determined that the definition should address the core concept, i.e., that the research is to be published and shared broadly without restriction. Having sub-definitions of basic and applied research in the definition of fundamental research does not change this core concept and would, moreover, merely add more words and layers of interpretation that would not change the outcome of an analysis. Adopting the shorter definition drops references to basic and applied research. BIS accepted the comments regarding the term “non-proprietary” and adopted a clearer variation that has the same scope as that intended by the June 3 proposed rule.

In addition to research in science and engineering, BIS included the term “mathematics” to broaden the definition in response to a comment by a BIS technical advisory committee. In this final rule, BIS adopts the following definition of fundamental research: “ “Fundamental research” means research in science, engineering, or mathematics, the results of which ordinarily are published and shared broadly within the research community, and for which the researchers have not accepted restrictions for proprietary or national security reasons.”

The June 3 proposed rule revised § 734.8 to use the term “technology” in place of the term “information.” Thirty-two commenters objected that “technology” was too limiting and recommended including either “software” or “source code” in addition to “technology” to describe information arising during or resulting from fundamental research. Many commenters pointed to the text of § 734.3(b)(3) (not subject to the EAR), which referred to certain “technology and software” not subject to the EAR, proposed to be revised to “information and software” in the June 3 rule, as support for this recommendation. The commenters further argued that “findings resulting from fundamental research may be written in natural-language or computer language.” BIS accepts these comments and has adopted “technology” and “software” throughout § 734.8 in this final rule.

Two commenters recommended that BIS make commodities that result from fundamental research not subject to the EAR. BIS does not accept this recommendation because the policy foundations for the exclusion from the EAR of fundamental research apply only to technology and software, not commodities.

The June 3 proposed rule contained the following note: “Note 1 to paragraph (a): The inputs used to conduct fundamental research, such as information, equipment, or software, are not `technology that arises during or results from fundamental research' except to the extent that such inputs are technology that arose during or resulted from earlier fundamental research.” Six commenters stated that the proposed note arbitrarily narrows the conduct of fundamental research under NSDD-189. Two additional commenters seemed to find the text unclear regarding the nature of the inputs.

The note regarding inputs was intended to distill varying provisions found in the EAR but proposed to be revised by the June 3 rule that ultimately made the same point: Information that is not intended to be published is not fundamental research. For example, existing § 734.8(b)(2) states, “Prepublication review by a sponsor of university research solely to insure that the publication would not inadvertently divulge proprietary information that the sponsor has furnished to the researchers does not change the status of the research as fundamental research. However, release of information from a corporate sponsor to university researchers where the research results are subject to prepublication review, is subject to the EAR.” Existing section 734.8(b)(4) states, “The initial transfer of information from an industry sponsor to university researchers is subject to the EAR where the parties have agreed that the sponsor may withhold from publication some or all of the information so provided.”

To clarify this distinction, BIS has adopted a simpler note in this final rule. Paragraph (a) establishes that the intention to publish is what makes research not subject to the EAR; the following Note 1 to paragraph (a) states: “This paragraph does not apply to technology or software subject to the EAR that is released to conduct fundamental research.” To support this concept, this final rule adds the following phrase to § 734.7(a)(5) (emphasis added): “Submission of a written composition, manuscript, presentation, computer-readable dataset, imagery, algorithm, formula, or some other representation of knowledge with the intention that such information will be made publicly available if accepted for publication or presentation: (i) To domestic or foreign co-authors, editors, or reviewers of journals, magazines, newspapers, or trade publications; (ii) To researchers conducting fundamental research, or (iii) To organizers of open conferences or other open gatherings.”

The June 3 proposed rule listed three types of prepublication review in § 734.8 that could be performed on the results of fundamental research. Three commenters supported the clear statement that certain prepublication review does not render research subject to the EAR. One commenter recommended removing the criterion that the research be published without delay, pointing out that “[p]ublication can be (and very often is) delayed for any number of reasons having nothing to do with the content or sensitivity of research results” and that this provision would have the unintended effect of limiting or even eliminating the researchers' ability to use the fundamental research provisions. BIS accepts this latter comment and does not adopt the phrase “or delay.” The key point is that the researcher is able to publish without restriction.

One commenter suggested that Note 2 to paragraph (b) proposed in the June 3 rule be replaced with a similar note from the State June 3 rule (§ 120.49(b) of the ITAR) regarding research voluntarily subjected to U.S. government review. BIS agrees with commenters that the ITAR text is clearer. So, this final rule adopts that ITAR text in Note 2 to paragraph (b). Seven commenters recommended that BIS also adopt the text of Note 3 from the State June 3 rule's text of § 120.49(b) of the ITAR regarding U.S. government-imposed access and dissemination controls. BIS agrees. With adoption of Note 3 to paragraph (b), paragraph (a) of § 734.11, Specific National Security Controls, is no longer necessary. BIS includes the examples from paragraph (b) of § 734.11, which commenters deemed helpful, in new Note 3 to paragraph (b) of § 734.8 in this final rule. Thus, this rule removes § 734.11 in its entirety.

One commenter stated that the only permissible method of restricting government-funded research was to classify it. BIS does not accept this comment because it is incorrect. Indeed, BIS has the authority under the EAR to control unclassified technology that warrants control for national security, foreign policy, or other reasons. For example, government-funded research that does not meet the criteria of § 734.8, such as prepublication review, remains subject to the EAR regardless of whether it is classified information.

The June 3 rule proposed streamlining the fundamental research provisions, in § 734.8. Instead of organizing the provisions primarily by locus (specifically by the type of organization in which the research takes place: Universities; federal agencies or Federally Funded Research and Development Centers; or business entities), the June 3 rule proposed consolidating different provisions that involved the same criteria with respect to prepublication review and removing any reference to locus unless it made a difference to the jurisdictional status of the research.

Five commenters expressed support for the applicability of the concept of fundamental research regardless of locus, and this final rule retains the consolidated structure originally proposed.

Although not objecting to the consolidation, eleven commenters requested that BIS retain the § 734.8(b) statement that there is a presumption that university-based research is fundamental research. Although this presumption continues to exist, BIS does not adopt the specific statement in this final rule. Such a presumption has no effect on the jurisdictional status of technology. If it meets the criteria for fundamental research, it is not subject to the EAR; if it does not meet the criteria, it is subject. However, BIS is noting in its FAQs on its Web site that, although university-based research is presumed to be fundamental research, as with all rebuttable presumptions, it is rebutted if the research is not within the scope of technology and software that arises during, or results from fundamental research as described in § 734.8.

Eleven commenters requested that BIS retain the § 734.8(b)(2) through (6) criteria for universities. BIS is not doing so because these criteria have been incorporated into this final rule more concisely. To address the comment, BIS has revised its FAQs to describe how these criteria are within the scope of the revised definition.

The June 3 rule proposed revising § 734.10, “Patent applications,” only for clarity and did not change the scope of control. For the sake of structural consistency with the ITAR's treatment of information in patents, paragraph (a) was added to state that a patent or an open (published) patent application available from or at any patent office is per se not subject to EAR. The former footnote to the § 734.10 was removed because it would be redundant of the proposed text.

BIS received one comment on the proposed revisions to § 734.10. Introductory text to the section reads: “ “Technology” is not “subject to the EAR” if it is contained in:”. The commenter suggested adding the phrase “any of the following” to this text. BIS agrees and is making the addition to this final rule.

The June 3 rule proposed minor conforming edits to § 734.11, describing specific national security controls. The proposed revisions were not intended to change the scope of the section. As discussed above with respect to fundamental research, BIS has adopted the substance of former § 734.11, Specific National Security Controls, in new Note 3 to paragraph (b) of § 734.8 in this final rule. This final rule removes and reserves § 734.11.

The June 3 proposed rule included a new § 734.13 to define “Export.” Section 734.13(a) had six paragraphs, with paragraphs (a)(4) and (5) reserved, because the corresponding paragraphs in the ITAR contained provisions that were not relevant to the EAR. One commenter noted that paragraph (a) had a typo and should refer to § 734.18, not § 734.17. BIS does not agree—the reference is to the subset of exports of encryption source code and object code software—but does accept the recommendation to add a reference to § 734.18 (Activities that are not exports, reexports, or transfers) in this final rule.

Proposed paragraph (a)(1) of the definition of “export” used the EAR terms “actual shipment or transmission out of the United States,” combined with the existing ITAR “sending or taking an item outside the United States in any manner.”

One commenter recommended that BIS add “release” after “actual shipment.” BIS does not adopt this recommendation, because release is a separate concept and thus a separately defined term. BIS makes no revisions to this paragraph (a)(1) in this final rule.

Proposed paragraph (a)(2), specifying the concept of transfer or release of technology to a foreign national in the United States, or “deemed export,” retains the treatment of software source code as technology for deemed export purposes from § 734.2(b)(2)(ii). In this final rule, including in this paragraph (a)(2), BIS has substituted the term “foreign person” for “foreign national.” “Foreign person” has the same scope as “foreign national;” it mirrors the ITAR term. One commenter found the term “otherwise transferring” confusing, but this final rule retains it to distinguish releases as a subset of transfers.

Proposed paragraph (a)(3) included in the definition of “export” the transfer by a person in the United States of registration, control, or ownership (i) of a spacecraft subject to the EAR that is not eligible for export under License Exception STA (i.e., spacecraft that provide space-based logistics, assembly or servicing of any spacecraft) to a person in or a national of any other country, or (ii) of any other spacecraft subject to the EAR to a person in or a national of a Country Group D:5 country.

One commenter requested BIS to confirm whether the definition would carve out from the definitions of “export” and “reexport” the mere transfer of ownership to an entity outside of a Country Group D:5 country (e.g., as part of an on orbit transfer of ownership to an entity outside a D:5 country) of satellites subject to the EAR that are eligible for License Exception STA. BIS confirms this understanding of the definition and is adding an FAQ regarding the point to the BIS Web site.

Proposed paragraph (a)(6) defined as an export the release or other transfer of the means of access to encrypted data. This paragraph was not adopted in this final rule (see the section discussing transfer of access information in § 734.19 below). Without a paragraph (a)(6), reserved paragraphs (a)(4) and (a)(5) that appeared in the June 3 rule are unnecessary and, therefore, do not appear in this final rule.

As adopted in this final rule, proposed paragraph (b) of § 734.13 is unchanged from the June 3 rule, except for the substitution of the term “foreign person” for “foreign national.” This paragraph retains BIS's deemed export rule as set forth in § 734.2(b). It also codifies a long-standing BIS policy that when technology or source code is released to a foreign national, the export is “deemed” to occur to that person's most recent country of citizenship or permanent residency. See, e.g., 71 FR 30840 (May 31, 2006).

Four commenters raised deemed export issues, particularly with respect to the difficulty of determining the “permanent residency” status of a person in a foreign country. Two of these commenters recommended changing “permanent residency” to “legal residency” or establishing criteria in the EAR. One of these commenters suggested making deemed exports a separate definition. BIS finds that these comments have merit; however, the issues they raise are too wide-ranging and complex to be resolved in this final rule. Addressing these issues would constitute a novel proposal that is outside the scope of the proposed rule, requiring an opportunity for comment before BIS makes a decision as to whether to adopt it. Where practical, BIS will state existing policy in FAQs. For those issues not addressed by existing policy, BIS will develop proposed revisions and seek public comment.

Proposed paragraph (c) stated that items that will transit through a country or countries or will be transshipped in a country or countries to a new country, or are intended for reexport to the new country are deemed to be destined to the new country. (Proposed paragraph (c) text was taken without change from § 734.2(b)(6).)

One commenter requested that BIS clarify “new country.” BIS accepts this comment, and adopts the term “destination” in this final rule. BIS also drops the term “transshipped,” because the intended meaning of this paragraph is captured by “transit.” One commenter recommended that BIS specify that paragraph (c) applies to items “subject to the EAR.” BIS does not believe the phrase is necessary.

Two commenters requested that BIS clarify the status of services under the EAR. Unlike the ITAR, the EAR do not control services as such except as described in § 744.6(a)(2) (“Restrictions on certain activities of U.S. persons”) and § 736.2(b)(10) (“General Prohibition 10”). Section 744.6(a)(2) imposes licensing requirements on the performance by U.S. persons of any contract, service, or employment regarding various activities pertaining to missiles, biological weapons, and chemical weapons in various countries. General Prohibition 10 prohibits, inter alia, servicing an item subject to the EAR if a violation has occurred, is about to occur, or is intended to occur in connection with the item. Except for these provisions, the EAR regulates the export, reexport, and transfer (in-country) of commodities, technology, and software, regardless of whether such activities are in connection with a service. This means that, except with respect to activities described in these two provisions, services do not need to be analyzed separately for purposes of determining requirements under the EAR. Moreover, the ITAR does not impose controls on services unless they are “directly related” to a “defense article,” i.e., an article, software, or technical data described on the ITAR's U.S. Munitions List at 22 CFR 121.1. In response to the commenters, BIS has added this explanation to its FAQs. A core goal of the ECR initiative was to make the distinctions in the ITAR and the EAR regarding the scope of controls over services as such clear. Thus, after the publication of the FAQs, if commenters believe that provisions of the ITAR or the EAR, statements by government officials, or any other government actions contradict this point regarding the narrow scope of controls over services pertaining to items subject to the EAR, they are encouraged to contact BIS to begin the process of resolving the issue.

The June 3 rule proposed moving the definition of “reexport” to new § 734.14. In general, the provisions of the proposed definition of “reexport” paralleled those of the proposed definition of export discussed above, except that reexports occur outside of the United States. Public comments on the definition of “reexport” and BIS responses also mirror those discussed above for “export.”

One commenter recommended that BIS specify “subject to the EAR” in paragraphs (a)(1), (a)(2), and (a)(4) of “reexport.” BIS accepts this recommendation, except for paragraph (a)(4). Paragraph (a)(4) in the June 3 rule proposed to define as a reexport the release or other transfer of the means of access to encrypted data outside of the United States to a foreign national. This paragraph was not adopted in this final rule (see the section discussing transfer of access information in § 734.19 below).

One commenter requested that BIS confirm that sending an item back to the United States is not a reexport. BIS confirms that sending items to the United States is not a “reexport.” Moreover, unlike the ITAR, the EAR have no provisions controlling or otherwise pertaining to the act of importing items into the United States. BIS will confirm these points in an FAQ.

The June 3 proposed rule included a definition of “release” in a new § 734.15. The proposed text provided that inspection (including other types of inspection in addition to visual, such as aural or tactile) must actually reveal technology or source code subject to the EAR to constitute a “release.” Thus, for example, merely seeing an item briefly is not necessarily sufficient to constitute a release of the technology required, for example, to develop or produce it. A foreign person's having theoretical or potential access to technology or software is similarly not a “release” because such access, by definition, does not reveal technology or software. A release would occur when the technology or software is revealed to the foreign person. The June 3 rule also proposed adding “written” to “oral exchanges” in paragraph (a)(2) as a means of release. No commenters objected to the clarification, and it remains unchanged. This final rule adds “source code” as well as “technology” to paragraph (a)(2) for consistency with paragraph (a)(1) and the definitions of deemed export and reexport; its omission from the June 3 rule was inadvertent.

The proposed text also clarified, in paragraph (a)(3), that the application of “technology” and “software” is a “release” in situations where U.S. persons abroad use personal knowledge or technical experience acquired in the United States in a manner that reveals technology or software to foreign nationals. As indicated by various BIS training materials and statements of BIS officials publicly and in response to specific questions, this clarification makes explicit a long-standing BIS interpretation of the EAR. The June 3 rule's proposed definition did not use the existing phrase “visual inspection by foreign nationals of U.S.-origin equipment and facilities” because such inspections do not per se release “technology.” For example, merely seeing equipment does not necessarily mean that the seer is able to glean any technology from it and, in any event, not all visible information pertaining to equipment is necessarily “technology” subject to the EAR.

Four commenters stated that this redefinition of “release” was helpful.

Three comments expressed concern that paragraph (a)(1) is not sufficiently explicit in clarifying that visual inspection must “actually” or “substantively” reveal technology in order to be defined as a “release,” or that “actual access” rather than “theoretical access” is caught. BIS believes that the intent is clear and that the text only would be complicated by additional modifications. One commenter requested that BIS simplify the provision in which application of personal knowledge constitutes a release. Upon further consideration, BIS determined that the control criteria in that provision are already covered by the provisions governing inspection and oral or written exchanges. Therefore, BIS does not adopt this paragraph (a)(3) in this final rule. BIS has, however, created FAQs that include the points and examples contained in the foregoing description of the changes to the definition of “release.”

One commenter recommended that paragraph (a)(6) in the June 3 rule's proposed definition of “export,” which addressed transfer of decryption keys or other such information, be moved to the definition of “release.” Related to the revisions regarding transfer of access information, and consistent with this commenter's recommendation, this final rule adopts in § 734.15(b) a provision stating that the act of causing the “release” of “technology” or “software,” through use of “access information” or otherwise, to onesself or another person requires an authorization to the same extent an authorization would be required to export or reexport such “technology” or “software” to that person.

The purpose of this provision is to make it clear that the person who uses, for example, a password to access a technology database, or who hacks into the database, to transfer technology to himself or someone else is the one who caused the release of technology rather than the person who first placed the technology in the database through a technology export or an act described in new § 734.18(a)(5). This provision codifies that basic concept that the unwitting victim of, for example, a database hack is not the one responsible for the theft of technology—the hacker is the one responsible because it is that person who caused the release through the use of a password or other access information. This provision is merely an application with respect to intangibles of a concept that is basic to tangible items—the export of an item is not the cause of a third person's later reexport of the same item. Placing technology into a database is not the cause of a third person's later transfer of the technology through the use of access information. The third person's use of the access information is the cause of the release to himself or others.

Although the person who originally placed the technology into the database did not cause its release to the third person who used access information to later cause the technology to be released, the person who originally placed the technology into the database nonetheless would have liability in connection with the third party technology exfiltration if, for example, it conspired with the exfiltrator (see § 764.2(d)) or placed the technology into the database with “knowledge” that the exfiltrator would later violate the EAR by causing its release without a required license (see § 764.2(e)). Similarly, liability would arise from a violation of new section 734.19, which, as discussed below, states that providing a password or other access information to someone with “knowledge” that the provision would result in the release of technology or software to the third person is tantamount to releasing the technology or software itself to the third person. BIS has created FAQs describing all the points in the foregoing examples.

Finally, and in contrast to section 734.19, new section 734.15(b) does not contain a “knowledge” element. Thus, a “release” of “technology” or “software” occurs when access information is used to transfer the “technology” or “software”—resulting in liability if the release was not undertaken pursuant to a required authorization and regardless of whether the one using the access information knew it would be transferring controlled “technology” or “software” when it did so.

The June 3 rule proposed removing the definition of “transfer (in-country)” from § 772.1 and adding the following revised definition to new § 734.16: “a transfer (in-country) is a change in end use or end user of an item within the same foreign country.” This revision was intended to eliminate any potential ambiguity regarding whether a change in end use or end user within a foreign country is a “transfer (in-country).” “Transfer (in-country)” parallels the term “retransfer” in the ITAR.

Four commenters said that this revision expands controls, and that such changes were beyond exporters' knowledge or control. While BIS acknowledges that “end use” was not explicitly included in the former definition of “transfer (in-country),” a change in end use is nonetheless a material change. When BIS and the other agencies review an application's description of a proposed end use and approve the license based on that end use, BIS is approving the transaction for the end use described, not all other end uses in the same country. Other end uses may or may not be acceptable, but a change in end use from that which the U.S. Government reviewed would be material in that there is the possibility that another end use may not have been approved. BIS further notes that, depending on the facts of the transaction, the foreign party may be responsible for obtaining authorization for the subsequent disposition of the item subject to the EAR. If a violation occurs, BIS will assess responsibility based on whether the parties involved violated any of the provisions of section 764.2 (“violations”).

To assist the commenters and others who have questions about BIS's policy regarding when a license or other authorization is required for in-country transfers, BIS has made the following the standard first condition on its licenses: “Items subject to the EAR and within the scope of this license may not be reexported or transferred (in-country) unless such reexport or in-country transfer is (i) authorized by this license, or another license or other approval issued by the U.S. Government; (ii) authorized by a license exception or other authorization under the Export Administration Regulations (EAR); or (iii) to a destination, end user, and end use that would be “NLR” (No License Required) under the EAR.”

The June 3 proposed rule included a new § 734.17, export of encryption source code and object code software, that retained the text of § 734.2(b)(9) with only minor conforming and clarifying edits. Its relocation to a new, separate section, following similar definitions improves its accessibility to exporters.

BIS received no comments on its proposed minor revisions to § 734.2(b)(9) or its creation of § 734.17. These revisions are adopted in this final rule.

The June 3 proposed rule solicited public comment on two questions regarding the proposed definition of “Activities that are not exports, reexports, or transfers.” First, with respect to end-to-end encryption, BIS asked whether the illustrative standard proposed in the EAR rulemaking also should be adopted in the ITAR rulemaking; whether the safe harbor standard proposed in the ITAR rulemaking also should be adopted in the EAR rulemaking; or whether the two bodies of regulations should have different standards. Second, BIS asked whether encryption standards adequately address data storage and transmission issues with respect to export controls.

As proposed, § 734.18 gathered existing EAR exclusions from exports, reexports, and transfers into one place, and included a new exemption for encrypted technical data and software. A number of changes and adjustments are made in this final rule to the proposed text in response to comments received from the public.

Paragraph (a)(1) in the June 3 proposed rule stated that by statute, launching a spacecraft, launch vehicle, payload, or other item into space is not an export. See 51 U.S.C. 50919(f). BIS received no comments on this paragraph and adopts it in this final rule.

Paragraph (a)(2) in the June 3 proposed rule was based on text in former § 734.2(b)(2)(ii) of the EAR, and provided that release in the United States of technology or software to U.S. nationals, permanent residents, or protected individuals would not be an export. In this final rule, the term “release” has been replaced in § 734.18(a)(2) with “transmitting or otherwise transferring,” and the previous reference to U.S. persons, permanent residents, and protected individuals has been eliminated in favor of a reference to a person “who is not a foreign person” for reasons of clarity and brevity. The EAR contain three definitions of “U.S. person,” only one of which is applicable to this section. Additionally, the ITAR use the term “foreign person,” and a comment from a BIS technical advisory committee recommended adopting the term in the EAR. “Foreign person” accordingly is defined in a new entry in § 772.1.

The change creates a structure parallel to that which is being adopted in the State rule published concurrently with this final rule, and to make clear that transmission from one U.S. person in the United States to another, regardless of the means or route of the transmission, does not constitute an export. Along the same lines, paragraph (a)(3) is added to clarify that the transmission between or among U.S. persons within the same foreign country similarly does not constitute an export, reexport, or transfer. The State June 3 rule received comments recommending these revisions, and this final rule adopts them in the EAR to stay parallel with the ITAR text.

Proposed paragraph (a)(3) in the June 3 rule contained text from § 734.2(b)(8) stating that shipments between or among the states or possessions of the United States are not “exports” or “reexports.” The words “moving” and “transferring” were inserted next to “shipment” in order to avoid suggesting that the only way movement between or among the states or possessions would not be a controlled event was if they were “shipped.” BIS received no comments on this paragraph and adopts it in this final rule, renumbered as paragraph (a)(4).

Paragraph (a)(5)—numbered (a)(4) in the June 3 proposed rule—provides that technology and software that is encrypted in accordance with certain specified criteria are not exports, reexports, or transfers even when they leave one country for another. In the June 3 proposed rule, this paragraph specifically excluded from this carve-out technology and software stored in countries in Country Group D:5 and Russia, for foreign policy reasons. In response to comments pointing out that Internet traffic in transit across D:5 countries and Russia may be technically “stored” temporarily on servers located in these countries without the knowledge of the sender, BIS has added text in (a)(5) specifying that the carve-out continues to apply to technology not authorized under the EAR for storage in these countries or intended for storage in these countries. Encrypted data may not be stored in these countries unless an appropriate authorization is available or has been approved. BIS has also added a note clarifying that data in-transit via the Internet is not deemed to be stored. For a more complete understanding of § 734.18(a)(5), see the discussion above of § 734.15(b).

BIS received many comments on the proposed definition of “end-to-end encryption,” the presence of which is a condition of the export control carve-out for technology and software. Commenters observed that encryption and decryption services may be provided within defined security boundaries by organizational rather than personal systems or servers. BIS agrees that in such cases, the security objectives of the “end-to-end” requirement in terms of eliminating access by third parties can still be met by expanding the definition of “end-to-end” to include transmissions between security boundaries.

This approach has the added advantages of providing more flexibility and allowing the execution of shared services, such as virus scanning, that can enhance security. However, BIS has also specified that the “security boundary” must be in-country—that is, such boundaries cannot be defined as including infrastructure resources encompassing multiple countries. A consequence of this requirement is that data eligible for the carve-out must by definition be encrypted before crossing any national boundary and must remain encrypted at all times while being transmitted from one security boundary to another. This principle applies to transmissions within a cloud service infrastructure, where a transmission from one node or cloud infrastructure element to another could qualify for the carve-out provided that it was appropriately encrypted before any data crossed a national border.

The June 3 proposed rule's definition of end-to-end encryption included a clause that specified that data not be decrypted at any point between the initiation of the transmission by the originator and its receipt by the intended recipient. The purpose of this requirement was to prevent unauthorized access to data in clear text by parties other than the originator (or the originator's company or organization) and the recipient, such as external service providers.

Commenters pointed out that in many circumstances, companies and organizations encrypt and decrypt multiple times in the course of transmission between originator and recipient for technical reasons (for example, to initially establish communications with a VPN server and subsequently to transmit among servers) without release to any third party. As a result, the point-to-point requirement in the original proposal would impose an unnecessary and potentially disruptive burden on many encryption applications, in which data in clear text are never actually shared.

To address this problem and more precisely describe BIS's original intent with the provision, BIS eliminated the statement in the end-to-end definition specifying that exempted data must be encrypted by the originating party without decryption except by the intended recipient. This final rule adopts instead a requirement that the means of decryption may not be provided to any third party, thus permitting decryption and re-encryption within the security boundary of either the originator or recipient, provided that no third party (i.e., a party outside the security boundary) has the ability to access the data in clear text, and that no decryption takes place outside of the security boundaries of the originator and the recipient.

The June 3 proposed rule's paragraph (4)(iii), which this final rule adopts in paragraph (5)(iii), described encryption standards that would qualify for the exemption. In the BIS proposed rule, use of encryption modules certified under the Federal Information Processing Standards Publication 140-2 (FIPS 140-2), supplemented by appropriate software implementation, cryptographic key management and other procedures or controls that are in accordance with guidance provided in current U.S. National Institute for Standards and Technology publications, would qualify as sufficient security.

A number of commenters questioned the designation of the FIPS 140-2 as an example of effective cryptography and thus a qualification for the control carve-out, preferring instead no reference to a standard, or a reference to any “commercially reasonable” standard.

BIS rejects these suggestions. FIPS 140-2 is a well-understood cryptographic standard used for Federal Government procurement in the United States and Canada, as well as for many other uses, both in the U.S. and abroad. Citation of this standard provides a useful reference point for what the U.S. Federal Government considers effective encryption.

The text adopted in this final rule allows for use of “equally or more effective cryptographic means,” meaning that alternative approaches are allowable provided that they work as well as or better than FIPS 140-2. In such cases, the exporter is responsible for ensuring that the alternative approaches work as well as or better than FIPS 140-2, regardless of common commercial practices.

In the June 3 proposed rule, paragraph (c) confirmed that the mere ability to access “technology” or “software” while it is encrypted in a manner that satisfies the requirements in the section does not constitute the “release” or export of such “technology” or “software.” This responds to a common industry question on the issue. This final rule adopts the proposed text with only a minor revision to correct a cross-reference.

New § 734.18(a)(5)(iii) excludes transfers of information encrypted to a particular standard as not being exports, reexports, or transfers and, thus, not subject to the EAR. Logically, providing keys or other information that would allow access to encrypted data exported, reexported, or released under this provision should be subject to controls much as the export, reexport, or transfer of the data itself. In the June 3 proposed rule, this concept was specifically addressed in proposed § 734.13(a)(6) as part of the definition of “export.” The June 3 rule also proposed adding a new paragraph (l) to § 764.2 “Violations” providing that the unauthorized release of decryption keys or other information that would allow access to particular controlled technology or software would constitute a violation to the same extent as a violation in connection with the export of the underlying controlled “technology” or “software.”

Although recognizing the need to control the decryption of controlled technical data otherwise exempted by the encryption carve-out, commenters noted that this construction might lead to the conclusion that keys and other data permitting access might be controlled as separate stand-alone items, distinct from the underlying data that they could potentially release. This would pose problems with key and identity management, where such data are stored and transmitted separately. Controlling access information as a distinct item was not the intent of the proposal. As also discussed below with respect to the definition of “technology,” one commenter stated that decryption keys and other such information are not technology and recommended moving the proposed paragraph (a)(5) text to the definition of “release” and control “accessing” them. To address the concerns of such commenters, this final rule creates a new positive authorization requirement in a new § 734.19, stating that “[t]o the extent an authorization would be required to transfer “technology” or “software,” a comparable authorization is required to transfer access information if with “knowledge” that such transfer would result in the release of such “technology” or “software” without a required authorization.” Five commenters found use of the term “cause or permit” inconsistent with BIS's principle of an export's occurring only when actual export or transfer takes place. This final rule replaces the former reference to “cause or permit” with “result in.”

One commenter requested “the removal of § 764.2(l) in its entirety as the current language of § 764.2 is adequate.” With creation of new § 734.19, and in light of the availability of § 764.2 to punish any violation of § 734.19, BIS accepts this comment and does not adopt the proposed § 764.2(l) in this final rule.

To simplify this section, proposed references to “decryption keys, network access codes, passwords and other information,” are replaced with a new § 772.1 definition of “access information,” which uses these as examples only of information that allows access to encrypted technology or encrypted software in an unencrypted format. In response to a commenter's request for a definition of “clear text,” this final rule replaces references to “clear text” with “in an unencrypted form,” as part of the definition of “access information.”

References in the June 3 proposed rule to what is termed “access information” in this final rule (e.g., references to decryption keys) were eliminated in the § 772.1 definition of “technology,” the § 734.13 definition of export, and the § 734.14 definition of reexport.

The June 3 proposed rule created a new § 734.20, Activities that are not Deemed Reexports. This section codified BIS's interagency-cleared Deemed Reexport Guidance previously posted on the BIS Web site and dated October 31, 2013. This guidance was created so that the provisions regarding possible deemed reexports contained in §§ 124.16 and 126.18 of the ITAR would be available for EAR technology and source code in addition to legacy BIS guidance on the topic.

Under BIS's legacy guidance and new § 734.20, release of technology or source code by an entity outside the United States to a foreign national of a country other than the foreign country where the release takes place does not constitute a deemed reexport of such technology or source code if the entity is authorized to receive the technology or source code at issue, whether by a license, license exception, or in situations where no license is required under the EAR for such technology or source code and the foreign national's most recent country of citizenship or permanent residency is that of a country to which export from the United States of the technology or source code at issue would be authorized by the EAR either under a license exception, or in situations where no license under the EAR would be required.

Release of technology or source code by an entity outside the United States to a foreign national of a country other than the foreign country where the release takes place also does not constitute a deemed reexport if: (i) The entity is authorized to receive the technology or source code at issue, whether by a license, license exception, or through situations where no license is required under the EAR; (ii) the foreign national is a bona fide regular and permanent employee (who is not a proscribed person) of the entity; (iii) such employee is a national exclusively of a country in Country Group A:5; and (iv) the release of technology or source code takes place entirely within the physical territory of any such country, or within the United States.

For nationals other than those of Country Group A:5 countries, which are close military allies of the United States, other criteria may apply. In particular, the section specifies the situations in which the releases would not constitute deemed exports in a manner consistent with § 126.18 of the ITAR. For purposes of this section, “substantive contacts” has the same meaning as it has in § 126.18 of the ITAR. The proposed phrase “permanent and regular employee” was a combination of BIS's definition of “permanent employee,” as set forth in a BIS advisory opinion issued on November 19, 2007 (available on the BIS Web site), and the ITAR's definition of “regular employee” in § 120.39. The June 3 proposed rule added specific text excluding persons proscribed under U.S. law to make clear that § 734.20 does not authorize release of technology to persons proscribed under U.S. law, and defined “proscribed person” in § 772.1. (Note: The U.S.-U.K. Exchange of Notes and U.S.-Canadian Exchange of Letters referred to in the existing online guidance can be found on the State Department's Web site. The URLs for the letters are not being published in the EAR because URL addresses periodically change. BIS will place the URL references in an “FAQ” section of its Web site.)

One commenter stated that due to the number of conditions contained in these provisions, this section should be a license exception. BIS does not agree. Many if not most of the transactions to which these provisions apply are already covered by a license or a license exception; this section will generally allow affected entities to comply with the terms of those authorizations in a rational way that will meet U.S. control objectives while minimizing conflict with non-U.S. entities' domestic requirements.

Two commenters requested that BIS replace “is certain” of a foreign person's most recent country of citizenship or permanent residency with “has knowledge,” to address concerns about ability to comply with such a standard. BIS agrees with this comment and adopts “has 'knowledge'” in this final rule.

One commenter requested that BIS add “or within the physical territory of the United States” to certain provisions to account for the possibility of releases in the United States, because often “release of U.S.-origin technology or software could be said to take place partially within the United States and partially within the country in which the foreign person employee is located;” BIS accepts this request. Another commenter requested that for releases to A:5 nationals, BIS “also include countries where the entity conducts official business or operates, which is part of § 734.20(c) Release to other than A:5 nationals.” BIS did not adopt this request because it would expand the provision too broadly.

Two commenters requested that BIS cross reference the “deemed reexport” definition in § 734.14(b). BIS accepts this request. One commenter asked BIS to clarify that this section addresses non-U.S. entities. BIS believes that this is clear from context and is thus not changing the rule in response to this comment. However, BIS is including a description of the purpose of this section in its FAQs.

Two commenters objected to the requirement that employees must be engaged for a year to be eligible for these provisions and asked that it be removed. Additionally, two commenters objected to the associated screening and recordkeeping requirements and asked that they be reduced. BIS does not accept these comments. The year-long period and the screening and recordkeeping requirements reduce the risk of diversion associated with the technology release.

The June 3 proposed rule removed Supplement No. 1 to part 734, “Questions and Answers—Technology and Software Subject to the EAR” on the basis that the questions and answers are illustrative rather than regulatory, and are therefore more appropriately posted as Web site guidance than included in the EAR. BIS specifically solicited comments on whether the questions and answers in existing Supplement No. 1 to part 734 proposed to be removed have criteria that should be retained in part 734.

Thirty commenters stated that BIS should not remove the questions and answers from the EAR. Reasons cited for opposing removal of the supplement included that the questions and answers will not have the same weight on the BIS Web site as they do in the EAR; that they are legally binding in the EAR; that their removal will create uncertainty; that their presence in EAR lessens the likelihood that interpretations will change outside the rulemaking process and promotes consistency of interpretation; and that other supplements contain regulatory information. One of these comments went on to say, “Accordingly, Supplement No. 1 must not be removed unless all its substantive provisions are adequately incorporated into Part 734 or elsewhere in the regulations” (emphasis supplied). BIS believes that the adequate incorporation of substantive provisions is the key point behind the comments. This concern drove the specific solicitation in the June 3 rule to identify criteria in the Supplement that should be retained in part 734. None of the thirty comments opposing removal of this Supplement from the EAR identified any substantive provisions that were not adequately incorporated into part 734 or elsewhere in the EAR. BIS is publishing on its Web site FAQs that will cover the same guidance that was found in Supplement No. 1, in addition to answers to other questions generated by the public comments to the proposed rule. Questions regarding how regulations apply to specific fact patterns are better set out in FAQs. In sum, although Supplement No. 1 will no longer be in the EAR, all its content will be placed into FAQs on BIS's Web site in addition to the other FAQs referred to in this preamble.

In the June 3 proposed rule, paragraph (a)(1) of the definition of technology reads as follows: “Information necessary for the “development,” “production,” “use,” operation, installation, maintenance, repair, overhaul, or refurbishing (or other terms specified in ECCNs on the CCL that control “technology”) of an item. “Technology” may be in any tangible or intangible form, such as written or oral communications, blueprints, drawings, photographs, plans, diagrams, models, formulae, tables, engineering designs and specifications, computer-aided design files, manuals or documentation, electronic media or information gleaned through visual inspection.”

A note addressed modification of items. Proposed paragraphs (a)(2) through (a)(4) of the definition were held in reserve to allow for the eventual mirroring of the corresponding ITAR paragraph structure while not including provisions that were not relevant to the EAR. Proposed paragraph (a)(5) described access information. Proposed paragraph (b) described exclusions from the definition of technology.

For the definition of “technology,” four commenters recommended that “necessary” be revised to read “required” to match the proposed ITAR definition. BIS does not adopt these recommendations. “Required” is a defined term that describes certain technology on the Commerce Control List, and not all technology that is subject to the EAR is controlled on the Commerce Control List. One commenter recommended restoring a note from the definition that existed in the EAR prior to publication of this rule, to the effect that technology not elsewhere specified on the Commerce Control List is designated as EAR99 unless it is not subject to the EAR. BIS does not accept this recommendation in this final rule because a regulatory change is not required to make the same point. BIS will, however, add an FAQ stating that “technology” subject to the EAR and that is not described on the CCL is designated EAR99. One commenter recommended including a note that refers to the General Technology Note. BIS accepts this comment and includes the reference in this final rule.

As explained in the preamble to the June 3 rule, the proposed definition of “technology” was based on the Wassenaar Arrangement definition of technology, including the Wassenaar-defined sub-definitions of “development,” “production,” and “use,” which are currently defined in § 772.1. (No changes were proposed to the definitions of “development,” “production,” and “use” in the June 3 rule, and none are made in this final rule.) The June 3 rule proposed no change to BIS's long-standing policy that all six activities in the definition of “use” (operation, installation (including on-site installation), maintenance (checking), repair, overhaul and refurbishing) must be present for an item to be classified under an ECCN paragraph that uses “use” to describe the “technology” controlled. (See 71 FR 30842, May 31, 2006.) Drawing from this existing framework, the proposed definition of “technology” included the terms “operation, installation, maintenance, repair, overhaul, or refurbishing (or other terms specified in ECCNs on the CCL that control `technology') of an item” because such words are used to describe technology controlled in multiple ECCNs, often with “or” rather than the “and” found in “use.”

One commenter recommended inserting a Note in the definition of technology that states the BIS policy that all six elements are necessary for “use” technology. BIS does not adopt this recommendation in this final rule because the definition of “use” links the six elements with the conjunctive “and” rather than the disjunctive “or.” BIS nonetheless makes this point in an FAQ pertaining to the word “use” in the definition of “technology.” One commenter recommended removing the term “installation” from the definition based on its use in the context of the definition of defense services. BIS does not accept this comment. Many entries on the Commerce Control List explicitly control installation technology, and it is also an element of “use” technology. Three commenters recommended that BIS remove the separate listing of the six “use” elements or limit them to control of 600 series items. BIS does not accept these recommendations. The six elements may be listed separately in entries on the Commerce Control List and are not limited to 600 series entries.

One commenter suggested dropping “or information gleaned through visual inspection” because it was a form or method of transfer, not what constitutes technology. BIS adopts the recommendation in this comment in part. “Information gleaned through visual inspection” is an example of a form of technology, with visual inspection as the method of transfer. The list to which this example belongs, however, illustrates rather than defines “technology;” therefore, BIS adopts the text as Note 1 to the definition of “technology” in this final rule, limiting the definition to what constitutes technology and illustrating the forms in a note.

Another commenter suggested using “revealed” instead of “gleaned,” first to align with “release,” and second, because “use of the term ‘glean' implies the value of the information is based on the capability of the viewer, which is unknowable and unquantifiable. The use of the term ‘reveal' is a more objective measure of what is provided by the visual inspection.” BIS agrees and has adopted the term “revealed” in this final rule.

The June 3 rule proposed adding a note to address a common industry question about modification. The note read as follows: “The modification of an existing item creates a new item and technology for the modification is technical data for the development of the new item.”

Three commenters suggested revisions to this note. Two commenters described the note as overbroad or confusing. One commenter recommended adding “production” as well as “development.” In this final rule, BIS has adopted a revision that clarifies and narrows the description of the technology for modification, and includes “production” technology. The revised note reads as follows: “The modification of the design of an existing item creates a new item and technology for the modified design is technology for the development or production of the new item.” BIS created this note to address the fact that multiple variations of a product are usually created by one or more companies, and companies often struggle with how to classify the technology that is and is not common to the variations. Consider, for example, a company that makes a 9A991.d civil aircraft switch. It later modifies the switch so that it would work in a military aircraft. The modified switch—the “dash one” model—is, in this example, specially designed for a military aircraft and thus controlled under ECCN 9A610.x. The technology that is common to both switches is 9E991, but the additional or different technology to make the 9A610.x switch is controlled under 9E610. That is, the technology additional or different that is required to make the 9A991.d commercial aircraft switch into a 9A610.x switch is the technology for the new, modified item. This example is contained in an FAQ posted on the BIS Web site.

One commenter stated that decryption keys and other such information are not technology and recommended moving the proposed paragraph (a)(5) text to the definition of “release” and control “accessing” them. Another commenter pointed out that keys may also be hardware or software. BIS agrees with these comments; therefore, BIS does not adopt proposed paragraph (a)(5) in this final rule and adds text to the definition of “release” regarding transfer of “access information” (see also discussion above).

The June 3 rule proposed adding three exclusions to clarify the limits of the scope of the definition of “technology:” non-proprietary general system descriptions; information on basic function or purpose of an item; and telemetry data as defined in note 2 to Category 9, Product Group E (see Supplement No. 1 to Part 774 of the EAR).

The first two exclusions paralleled exclusions in the ITAR and the third, the exclusion of telemetry data, mirrored specific exclusions added to both the ITAR and the EAR as part of recent changes regarding the scope of U.S. export controls pertaining to satellites and related items. See 79 FR 27417 (May 13, 2014).

One commenter recommended excluding Build/Design-to-Specifications from the definition of technology and adding sub-definitions of different forms of technology. BIS does not accept this recommendation in this final rule because such specifications are not always outside the scope of the EAR's definition of “development” or “production” technology. However, BIS will incorporate information on this topic into its FAQs. Five commenters objected to use of the term “non-proprietary,” arguing that certain proprietary system descriptions should not be subject to the EAR. One commenter thought that the term “systems” was too narrow. BIS did not adopt these recommendations. Whether a particular technology is one that the possessor would readily share with competitors provides a fairly reliable test of whether that technology is subject to the EAR. With respect to the breadth of the term “system,” BIS notes that this exclusion is not the only provision in the EAR under which technology may be determined to be not subject. BIS did remove the modifier “general,” because of its potential to be ambiguous and subjective. BIS also did not adopt in this final rule the exclusion for “information on basic function or purpose of an item,” because the phrase was too vague and substantively already addressed by other provisions.

One commenter questioned the scope of these exclusions from the definition of technology and another questioned how the exclusions from the definition should be read in conjunction with the provisions in the Scope part that make items not subject to the EAR. Based on these comments, and as noted earlier in the preamble to this final rule, the exclusion of “information on basic function or purpose of an item” is not adopted and the remaining two exclusions are moved from the definition of technology to § 734.3(b)(3).

The June 3 proposed rule retained the existing EAR definition of “required” in § 772.1, but added notes clarifying the application of the term. It removed parenthetical references in the existing definition to CCL Categories 4, 5, 6, and 9 to avoid the suggestion that BIS applies the definition of “required” only to the uses of the term in these categories. BIS has never had a separate definition of “required” used elsewhere in the EAR, and this removal merely eliminated a potential ambiguity and reflects long-standing BIS policy that “required” applies generally to “technology” entries on the CCL. (See, e.g., the Advisory Opinion dated December 27, 2010 on the BIS Web site.) BIS received one comment praising the removal of the references and none objecting to it; the revision is adopted in this final rule. The definition of “required” contained an illustrative example. BIS did not propose any revisions to this example in the June 3 rule. In this final rule, however, BIS revises the example to make clear that technology that is peculiarly responsible for the characteristics of the item that make it controlled is thus “required” technology. This subtle change thus responds to the question of which technology is “peculiarly responsible” but without changing the well-established definition of “required” that is central to the scope of the technology and software controls in the EAR. This revision also addresses issues raised by commenters, discussed more fully below, with respect to the proposed definition of “peculiarly responsible.”

To address common questions BIS has received regarding the meaning of the word “required,” the June 3 rule proposed adding two notes. The first stated that the references to “characteristics” and “functions” are not limited to entries on the CCL that use specific technical parameters to describe the scope of what is controlled. The “characteristics” and “functions” of an item listed are, absent a specific regulatory definition, a standard dictionary's definition of the item. The first note also included examples of this point. The second note referred to the fact that the ITAR and the EAR often divide within each set of regulations or between each set of regulations (a) controls on parts, components, accessories, attachments, and software and (b) controls on the end items, systems, equipment, or other articles into which those parts, components, accessories, attachments, and software are to be installed or incorporated. The note also referred to jurisdiction over technology. The public comments on these parts of the notes were favorable and the first note is included in this final rule without modification, except that it is now designated as Note 2 to the definition of “required.” The second note is split into Notes 1 and 3 to the definition of “required,” and the text is modified from the June 3 proposal as discussed below.

A core tenet of ECR is that the jurisdictional status of the technical data/technology for an article that moves from the USML to the EAR follows the article. BIS and DDTC recognize the need to clarify the jurisdictional line for such technical data/technology. To help those making jurisdictional self-determinations for technical data/technology pertaining to articles affected by the reform effort, BIS and DDTC had proposed in their respective June 3 rules common definitions of “required” and “peculiarly responsible” so that the regulatory line between technical data subject to the ITAR and technology subject to the EAR would be bright. Based on a review of the comments, BIS and DDTC have, however, decided not to publish their proposed common definitions of “required” and “peculiarly responsible.” (See discussion of the public comments on “peculiarly responsible” below.) Rather, DDTC and BIS have determined that a better way for the ITAR to address this bright-line objective is for DDTC to publish, and get public comments on, a proposed definition of “directly related” that will eventually lead to a final ITAR definition acceptable to both DDTC and BIS. The reason for this approach is that, with the exception of technical data specifically enumerated on the USML, technical data is subject to the ITAR only if it is “directly related” to a defense article. This means, by definition, that technology that is indirectly related to, or only “related to,” a defense article, such as by merely being capable for use with, used in connection with, or somehow having something generally to do with the eventual functioning of a defense article, is not subject to the ITAR and is, thus, subject to the EAR. For example, technology required for the production of a 9A610.x aircraft component—which, by definition, means that that it is specially designed for a USML VIII(a) aircraft—does not become subject to the ITAR merely because it generally relates to a defense article by virtue of being a component that will be or is integrated into and necessary for the functioning of the aircraft subject to the ITAR. It is technology required for the aircraft component subject to the EAR, not the whole of the USML aircraft or another defense article, and thus subject to the EAR. On the other hand, technical data that is directly related to the production of a component subject to the ITAR does not become subject to the EAR merely because, for example, it is developed or manufactured with equipment subject to the EAR.

Wanting to nonetheless respond to the comments seeking guidance regarding the jurisdictional status of technology pertaining to items that have moved to the CCL from the USML and to further advance the effort of creating a truly bright line jurisdictional rule, BIS is publishing with this rule as a third note to “required” its guidance on the topic because the meaning of “required” is central to such determinations. Specifically, unclassified technology not specifically enumerated on the USML is “subject to the EAR” if it is “required” for the “development,” “production,” “use,” operation, installation, maintenance, repair, overhaul, or refurbishing (or other terms specified in ECCNs on the CCL that control “technology”) of a commodity or software that is “subject to the EAR.” If such information is technical data that is not “required” for an item subject to the EAR and directly related to a defense article, then it is subject to the ITAR. If the application of industry-standard or dictionary definitions of “directly related” does not resolve doubts about whether any unit of technical data is, as a matter of law, “directly related” (as opposed to indirectly related) to a defense article, one should contact DDTC for resolution of the doubt through established procedures in the ITAR's Part 120.

In the June 3 rule, BIS proposed a definition of the term “peculiarly responsible” that was modeled on the catch-and-release structure BIS adopted for the definition of “specially designed.” Thus, under the proposed definition, an item was “peculiarly responsible” for achieving or exceeding any referenced controlled performance levels, characteristics, or functions if it was used in “development,” “production,” “use,” operation, installation, maintenance, repair, overhaul, or refurbishing of an item subject to the EAR unless (a) the Department of Commerce had determined otherwise in a commodity classification determination, (b) the item was identical to information used in or with a commodity or software that was or had been in production and was EAR99 or described in an ECCN controlled only for Anti-Terrorism (AT) reasons, (c) the item had been or was being developed for use in or with general purpose commodities or software, or (d) the item had been or was being developed with “knowledge” that it would be for use in or with commodities or software described (i) in an ECCN controlled for AT-only reasons and also EAR99 commodities or software or (ii) exclusively for use in or with EAR99 commodities or software.

BIS specifically solicited comments on whether the proposed definition of “peculiarly responsible” effectively explained how items may be “required” or “specially designed” for particular functions. Two commenters offered support for the definition but still suggested revisions. Twelve additional commenters objected to the definition, describing it as confusing and stating that it dramatically expanded the scope of control beyond the existing “required” technology definition. BIS agrees with these comments and does not adopt the proposed definition of “peculiarly responsible” in this final rule. As described above, in this final rule, peculiarly responsible is defined within the scope of the already existing definition of required, thus providing a definition while guaranteeing no expansion of scope.

The June 3 proposed rule included amended text in the temporary export of technology provisions of License Exception TMP by revising § 740.9(a)(3) to clarify that the “U.S. employer” and “U.S. persons or their employees” using this license exception are not foreign subsidiaries. The proposed paragraph streamlined current text without changing the scope. In this final rule, BIS substitutes “foreign person” for “foreign national” in this section for reasons discussed elsewhere in this preamble, except where “natural person” was meant and BIS substituted “individual” for clarity (and in so doing responded to a comment on including foreign nationals in paragraph (a)(3)(iii)). BIS also added authority to reexport or transfer (in-country) to the authority to export; the absence of these terms from the June 3 proposed rule was an oversight.

One commenter stated that BIS should provide for use of this license exception by non-U.S. persons. Another commenter recommended that BIS expand the scope of the license exception to include foreign subsidiaries and affiliates. BIS does not adopt these recommendations. Because of the risks associated with securing temporary exports of technology, BIS is not broadening the provisions for foreign persons beyond those employed by U.S. companies or to allow use by foreign companies.

BIS received two comments on the recordkeeping provision in paragraph (a)(3)(v), with one requesting that it be clarified and one requesting that it be removed in view of the existing broad recordkeeping requirements in the EAR. BIS agrees with these comments and does not adopt the recordkeeping provision in this final rule.

One commenter asked BIS to clarify if TMP is available for remote access to U.S. servers. Another commenter asked BIS to clarify if taking an encrypted device is an export. BIS is not including these changes in regulatory text, because these are applications of the rule that are more appropriate to FAQs. However, BIS is confirming in its FAQs that TMP is available for remote access if its provisions are met. BIS is also confirming in its FAQs that taking an encrypted device is an export and referring to a different paragraph of § 740.9 for authorizing export of devices. Devices are commodities and therefore not eligible for paragraph (a)(3), which authorizes only technology.

One commenter recommended that BIS remove a requirement to encrypt the technology, saying that the list of techniques for securing the data required all to be used. BIS accepts this comment, and this final rule adds “may” before “include” to make clear that the list is illustrative. One commenter recommended allowing obfuscation/tokenization to protect data. BIS agrees that done properly, this is an effective security measure, and will add an FAQ on the topic to its Web site.

The June 3 rule proposed implementing in the EAR the interagency-agreed boilerplate notification for all licenses that was posted on the BIS Web site and began appearing on licenses December 8, 2014. It was a slight revision to the former § 750.7(a), which stated that licenses authorize only the transaction(s) described in the license application and the license application support documents. The proposed revision also codified the existing interpretation that a license authorizing the release of technology to an entity also authorizes the release of the same technology to the entity's foreign nationals who are permanent and regular employees of the entity's facility or facilities authorized on the license, except to the extent a license condition limits or prohibits the release of the technology to nationals of specific countries or country groups.

Two commenters requested that BIS drop the modifier “permanent and” from “regular employees.” BIS does not adopt this request due to risk of diversion associated with non-permanent and non-regular employees. See further discussion of this issue above with respect to activities that are not deemed reexports. The phrase “under U.S. law” that modified “proscribed persons” in the June 3 rule is not adopted in this final rule for reasons discussed in connection with the definition of “proscribed persons” below. Except for that change, this final rule adopts the text proposed in the June 3 rule.

This final rule creates stand-alone sections in the EAR to address the scope and meaning of “publicly available information,” “publicly available technology and software,” and “technical data.” To avoid redundancy, this rule removes those definitions from § 772.1. In light of the changes described above, the definitions of “export,” “reexport,” “required,” “technology,” and “transfer” are revised accordingly. A clarifying note is added at the bottom of the definition explaining that the use of “transfer” does not apply to the unrelated “transfers of licenses” provision in § 750.10 or the antiboycott provisions in Supplement No. 8 to part 760 of the EAR. It also states that the term “transfer” may be included on licenses issued by BIS. In that regard, the changes that can be made to a BIS license are the non-material changes described in § 750.7(c). Any other change to a BIS license without authorization is a violation of the EAR. See §§ 750.7(c) and 764.2(e). Finally, consistent with the explanations above, definitions for the terms “access information,” “foreign person,” “fundamental research,” “proscribed person,” “publicly available encryption software,” “published,” and “release” are added to § 772.1.

One commenter stated that the definition of proscribed persons was overbroad, catching those individuals sanctioned under U.S. law without an export control nexus and recommended deleting “under US law.” BIS agrees with this comment. One commenter recommended striking “scientific” from the definition of “basic scientific research” in part 772 and adding definitions of applied and fundamental research to part 772. BIS does not accept this recommendation. The definition of “basic scientific research” reflects a Wassenaar Arrangement definition; it is retained in this final rule. A definition for applied research is not adopted because it is not necessary as a result of the adoption of a simplified definition of fundamental research, and as fundamental research is defined in § 734.8, use of a cross reference in part 772 is appropriate.

One commenter requested that BIS clarify treatment of U.S.-origin chemical materials that are substantially transformed and exempt Japan and other like-minded countries from reexport controls. One commenter requested that BIS expand controls on missile production and drop Fiji from Country Group D:5. One commenter appended comments on a separate BIS proposed rule for which the comment period was already closed. One commenter stated that items classified under Export Control Classification Number 0A998 will no longer be subject to the EAR under the new note to § 734.3(b)(3). One commenter requested that BIS drop the term “serial” from the definition of “production,” which was not revised by this rule. Although these comments are outside the scope of this rule and thus not addressed in this notice, BIS nonetheless encourages the public to submit thoughts, suggestions, and comments to BIS about the EAR and the export control system. BIS cannot commit to addressing them in every case, but nonetheless encourages as much industry participation as possible in the development and drafting of the regulations.

Since August 21, 2001, the Export Administration Act of 1979, as amended, has been in lapse. However, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of August 7, 2015 (80 FR 48233 (Aug. 11, 2015) has continued the EAR in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.). BIS continues to carry out the provisions of the Export Administration Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222 as amended by Executive Order 13637.

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, this final rule has been reviewed by the Office of Management and Budget (OMB).

2. This final rule does not contain information collections subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA). Notwithstanding any other provision of law, no person is required to respond to, nor is subject to a penalty for failure to comply with, a collection of information, subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.

3. This final rule does not contain policies with Federalism implications as that term is defined under E.O. 13132.

4. Pursuant to the Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601 et seq., BIS has prepared the following final Regulatory Flexibility Act analysis of the impact that this final rule will have on small entities.

The objective of this final rule (and a final rule being published simultaneously by the Department of State) is to provide greater clarity and precision in the EAR and the ITAR by providing, where warranted and possible, common definitions and common terms to regulate the same types of actions and issues. This final rule also seeks to express some concepts more clearly.

The final rule alters definitions in the EAR. It also updates and clarifies application of controls to electronically transmitted technology and software.

The legal basis for this proposed rule is 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp., p. 223; Notice of August 7, 2015, 80 FR 48233 (August 11, 2015); Notice of November 12, 2015, 80 FR 70667 (November 13, 2015).

No other Federal rules duplicate, overlap, or conflict with this final rule.

BIS received one comment from the public in response to the Initial Regulatory Flexibility Analysis (IRFA). The comment stated that while the proposed regulatory text indicated that the extent to which release of access information could be a violation of the EAR was limited by whether the party acted with knowledge, text in the IRFA regarding the impact of this provision created tension by stating that other provisions in the EAR could be used to bring charges for that same type of misconduct. The comment requested that BIS provide clarification in the final rule. BIS addressed this comment by not adopting § 764.2(l), the provision that would have established the violation at issue in the final rule. The Chief Counsel for Advocacy of the Small Business Administration filed no comments in response to the proposed rule.

This final rule will apply to all persons engaged in the export, reexport, or transfer of commodities, technology, or software subject to the EAR. BIS does not maintain data from which it can determine how many of those persons are small entities as identified in the Small Business Administration size standards. Nevertheless, BIS recognizes that some of those persons are likely to be small entities.

This final rule is unlikely to increase the number of transactions that must be reported to BIS because EAR reporting requirements apply only in five specific situations, none of which will change as a result of this final rule. Those situations are: Exports of items on the Wassenaar Arrangement Sensitive List that do not require a license; Exports of High Performance Computers; Exports of certain thermal imaging cameras that do not require a license; Certain exports of Conventional Arms; and 600 series major defense equipment. Because recordkeeping requirements already apply to all transactions that are subject to the EAR, BIS expects that this final rule will not expand recordkeeping requirements.

It is possible that some of these changes will increase the number of licenses that some small entities will have to seek from BIS, although BIS is not aware of any specific instance in which additional licenses will be required.

The following discussion describes the changes made by this final rule. It is divided into two sections: Changes that BIS believes will not impose any new regulatory obligations; and Changes that are not intended to imposed any new regulatory obligation, but that BIS cannot state with certainty will not do so.

This final rule makes certain changes to clarify and streamline the definitions of comparable terms, phrases, and concepts between the EAR and the ITAR. Many of these changes are technical in nature and attempt to consolidate and re-phrase the definitions to enhance readability and to parallel the structure of the ITAR's definition of the same term. There are a small number of new provisions, but these changes do not impose any new regulatory burdens. Specifically, this final rule makes the following changes:

Removes § 734.2(b) which formerly defined export, reexport, release, transfer (in country) and export of encryption source code or object code software, because those terms are defined in separate sections. Section 734.2(b) also stated the policy of applying license requirements that apply to a country to its dependencies and possessions; this policy is currently stated elsewhere in the EAR.

Creates new separate sections defining export, reexport, release and export of encryption source code or object code software. Those terms are clarified and presented in a more organized manner, but substantively unchanged from the former regulatory text.

Creates a new section identifying activities that are not exports, reexports, or transfers. This section restates the transactions that are excluded from the definition of export in former regulatory text and adds two additional activities that are expressly declared not to be exports, reexports or transfers: Space launches; and sending, taking or storing certain technology or software abroad using specified cryptographic techniques. The former, although it was not included in past regulatory text, states an exclusion already set forth in a statute (see 51 U.S.C. 50919(f)) and is consistent with past BIS practice of not treating a space launch as an export, reexport or transfer. The latter is, in fact, new. However, by removing the transactions it describes from the definitions of exports, reexports, or transfers, it removes existing license requirements from those transactions.

Clarifies without substantively changing the provisions related to patent applications and adds specific text stating that technology contained in a patent available from or at any patent office is not subject to the EAR. The addition reflects BIS's long-standing interpretation. To the extent that it could be characterized as new, its only effect would be to appear to release from the EAR technology that some readers of the EAR might have (erroneously) concluded was subject to the EAR.

Adds text to License Exception TMP to emphasize that foreign subsidiaries of U.S. companies are neither U.S. employers nor “U.S. persons or their employees” as those terms are used in the license exception. This additional text adds no restriction that is not already imposed by the definition of “U.S. persons” that currently appears in the text of License Exception TMP.

Adds text codifying in the EAR limits on transactions authorized by a license that currently are imposed by conditions on the license itself.

Adds text specifying that to the extent an authorization would be required to transfer technology or software, a comparable authorization is required to transfer access information (e.g., decryption keys, network access codes, and passwords) with “knowledge” that such transfer would result in the unauthorized release of such technology or software.

This final rule revises the definitions of the two existing terms “required” and “transfer (in-country).” It also adopts BIS's interpretative guidance regarding deemed reexports as regulatory text. These changes are not intended to impose any regulatory obligations on regulated entities, but BIS cannot state with certainty that there will be no impact. This final rule makes the following changes:

Adds to the EAR a definition of “proscribed person.” This definition does not create any new regulated class. It simply provides a clear, shorthand reference to a person who is already prohibited from receiving items or participating in a transaction that is subject to the EAR without authorization, such as persons on the Entity List.

Removes from the definition of the term “required” references to CCL Categories 4, 5, 6 and 9 to accurately reflect BIS's long-standing interpretation that its definition applies wherever the EAR imposes a license requirement for technology “required” for a particular process or activity.

In the definition of “transfer (in-country),” replaces the phrase “shipment, transmission, or release of items subject to the EAR from one person to another person that occurs outside the United States within a single foreign country” with “a change in end use or end user of an item within the same foreign country.” This new text will parallel the term “retransfer” in the ITAR and will eliminate any potential ambiguity that a change in end use or end user within a foreign country is or is not a “transfer (in-country).”

Each of the foregoing changes serves the overall policy goals of reducing uncertainty and harmonizing, to the extent warranted and possible, the requirements of the ITAR and the EAR. In most instances, reduced uncertainty will be beneficial to persons who have to comply with the regulations, particularly persons who engage in transactions subject to both sets of regulations. They will be able to make decisions more quickly and have less need to contact BIS for advice. Additionally, by making these terms more explicit, the possibility of their being interpreted contrary to BIS's intent is reduced. Such contrary interpretations would have three undesirable effects. First, they would undermine the national security and foreign policy objectives that the EAR are intended to implement. Second, persons who are interpreting the regulations in a less restrictive manner than BIS intends may seek fewer licenses from BIS than their competitors who are interpreting the regulations consistent with BIS's intent or who are obtaining advice from BIS, thereby gaining a commercial advantage to the detriment of the relevant national security or foreign policy interests. Third, unnecessary regulatory complexity and unnecessary differences between the terminology of the ITAR and that of the EAR could discourage small entities from even attempting to export. The beneficial effects of making these terms more explicit justify the economic impact that might be incurred by small entities that will have to change their conduct because their contrary interpretations can no longer be relied on given the clearer and more explicit terms in the regulations.

This final rule also adds to the EAR a description of activities that are not deemed reexports. This description formerly appeared as interpretative guidance on BIS's Web site and closely tracks the regulatory text of the ITAR. Deemed reexports are releases of technology or software source code within a single foreign country by a party located outside the United States to a national of a country other than the country in which the releasing party is located. The new section describes three situations in which that party may release the technology or source code without obtaining a license from BIS.

By adopting this guidance as regulatory text that closely tracks the text governing the same activities in the ITAR, BIS reduces both complexity and unnecessary differences between the two sets of regulations with the salutary effects of faster decision making, reduced need to contact BIS for advice, and reduced possibility that small entities would be discouraged from exporting as noted above.

As required by 5 U.S.C. 603(c), BIS's analysis considered significant alternatives. Those alternatives are: (1) The preferred alternative of altering definitions and updating and clarifying application of controls to electronically transmitted technology and software; (2) Maintaining the status quo and not revising the definitions or updating and clarifying application of controls to electronically transmitted technology and software; and (3) Establishing a size threshold below which entities would not be subject to the changes proposed by this rulemaking.

By altering definitions and updating and clarifying application of controls to electronically transmitted technology and software as this final rule does, BIS reduces uncertainty for all parties engaged in transactions that are subject to the EAR. Potential ambiguities are reduced; decisions can be made more quickly; the need to contact BIS for advice is reduced; and the possibility of inconsistent interpretations providing one party commercial advantages over others is reduced. Persons (including small entities) engaged in transactions that are subject to the ITAR and transactions that are subject to the EAR face fewer actual or apparent inconsistencies that must be addressed in their regulatory compliance programs. Although small entities, along with all other parties, will need to become familiar with the revised terminology, in the long run, compliance costs are likely to be reduced when compared to the present situation where the ITAR and the EAR use different terminology to regulate the same types of activity in the same manner. Therefore, BIS adopted this alternative.

If BIS had chosen to maintain the status quo, small entities and other parties would not have to incur the cost and effort of becoming familiar with the revised regulations, and any party who was interpreting the regulations in a way that would clearly be precluded by the more explicit interpretations would not incur the cost of complying with the regulations consistent with their underlying intent and in the way that BIS believes most regulated parties do. However, the benefits of these proposed changes would be lost. Those benefits, greater clarity, consistency between the ITAR and the EAR, and reduced possibility of inconsistent application of the regulations by similarly situated regulated parties, would be foregone. Therefore, BIS has not adopted this alternative.

If BIS had chosen to create a size threshold exempting small entities as currently defined by the SBA size standards from the changes imposed by this final rule, those entities would face a more complicated regulatory environment than larger entities. The small entities would continue to be subject to the EAR as a whole but without the benefit of the clarifications introduced by this final rule. The only way to make a size threshold beneficial to entities falling below the threshold would be to exempt them from all or at least many of the requirements of the EAR. However, doing so would create a major loophole allowing commodities, software, and technology that are controlled for export for national security or foreign policy reasons to go, without restriction, to any party abroad, undermining the interests that the regulations are intended to protect. Therefore, BIS has not adopted this alternative.

For the reasons stated in the preamble, parts 734, 740, 750, and 772 of the Export Administration Regulations (15 CFR subchapter C) are amended as follows:

Background

The Delaware River Basin Commission (“DRBC” or “Commission”) is a federal-interstate compact agency charged with managing the water resources of the Delaware River Basin on a regional basis without regard to political boundaries. Its members are the governors of the four basin states—Delaware, New Jersey, New York and Pennsylvania—and the North Atlantic Division Commander of the U.S. Army Corps of Engineers, representing the federal government.

By Resolution No. 2006-2 on March 1, 2006, the Commission approved revisions to its Basin Regulations—Water Supply Charges, 18 CFR part 420, to clarify the language of the rule to conform to the Commission's decisions and practices, in order to provide better notice to users regarding how the Commission implements its entitlements program and to avoid future controversy. The revisions involved no changes in the substance or administration of the rule. Although the adopted revisions were incorporated into the Commission's Administrative Manual Part III—Basin Regulations—Water Supply Charges, which uses a unique numbering system, the corresponding sections of the Code of Federal Regulations were never updated to include them. This final rule adds the approved changes to the federal code.

Notice of the proposed revisions was published in the Federal Register at 70 FR 60496, October 18, 2005. Notice also appeared in the Delaware Register of Regulations, 9 DE Reg. 674, November 1, 2005; New Jersey Register, 37 N.J.R. 4206, November 7, 2005; New York State Register, November 2, 2005 (page 4); and Pennsylvania Bulletin, 35 Pa.B. 6094, Nov. 5, 2005. The Commission held a public hearing on the proposed revisions on December 7, 2005 and accepted written comments on them through January 10, 2006. The changes were adopted by unanimous vote approving Resolution No. 2006-2 at the Commission's public business meeting on March 1, 2006.

Additional materials can be found on the Commission's Web site, www.drbc.net. These include: the notice of the proposed amendments published in the Federal Register, at http://nj.gov/drbc/library/documents/water-charges-codify/1_FR_PropRule_CertsEntitle101805.pdf; and in the state registers at http://www.nj.gov/drbc/about/regulations/other-rulemakings.html; the text of the draft revisions as proposed, at http://nj.gov/drbc/library/documents/water-charges-codify/6_ProposedText_WaterSupplyChargingRegs_Art5.2.pdf; Resolution No. 2006-2, adopting the revisions as final, at http://nj.gov/drbc/library/documents/water-charges-codify/7_Res2006-02_CertEntitle_adopted030106.pdf; and the Minutes of the Commission's business meeting of March 1, 2006, explaining the differences between the proposed and adopted rule text, at http://nj.gov/drbc/library/documents/water-charges-codify/8_Min_030106_note-pgs18-21.pdf.

With adoption of this final rule, the Commission will reference the CFR version of the Basin Regulations—Water Supply Charges for most purposes. For the foreseeable future, however, both versions will remain posted on the Commission's Web site, at http://www.nj.gov/drbc/about/regulations/.

For the reasons set forth in the preamble, the Delaware River Basin Commission amends part 420 of title 18 of the Code of Federal Regulations as follows:

In a notice published in the Federal Register of March 10, 2014 (79 FR 13263), FDA announced that we had filed a food additive petition (animal use) (FAP 2282) submitted by Kemin Industries, Inc., 2100 Maury St., Des Moines, IA 50317. The petition proposed to amend the food additive regulations to provide for the safe use of chromium propionate as a source of chromium in broiler chicken feed. The notice of petition was subsequently corrected to indicate the submission of an environmental assessment by the petitioner (79 FR 38478, July 8, 2014).

FDA concludes that the data establish the safety and utility of chromium propionate for use as proposed and that the food additive regulations should be amended as set forth in this document.

In accordance with § 571.1(h) (21 CFR 571.1(h)), the petition and documents we considered and relied upon in reaching our decision to approve the petition will be made available for public disclosure (see FOR FURTHER INFORMATION CONTACT). As provided in § 571.1(h), we will delete from the documents any materials that are not available for public disclosure.

The Agency has carefully considered the potential environmental impact of this action and has concluded that the action will not have a significant impact on the human environment and that an environmental impact statement is not required. FDA's finding of no significant impact and the evidence supporting that finding, contained in an environmental assessment, may be seen in the Division of Dockets Management (see ADDRESSES) between 9 a.m. and 4 p.m., Monday through Friday.

Any person who will be adversely affected by this regulation may file with the Division of Dockets Management (see ADDRESSES) either electronic or written objections. Each objection shall be separately numbered, and each numbered objection shall specify with particularity the provision of the regulation to which objection is made and the grounds for the objection. Each numbered objection on which a hearing is requested shall specifically so state. Failure to request a hearing for any particular objection shall constitute a waiver of the right to a hearing on that objection. Each numbered objection for which a hearing is requested shall include a detailed description and analysis of the specific factual information intended to be presented in support of the objection in the event that a hearing is held. Failure to include such a description and analysis for any particular objection shall constitute a waiver of the right to a hearing on the objection.

It is only necessary to send one set of documents. Identify documents with the docket number found in brackets in the heading of this document. Any objections received in response to the regulation may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR part 573 is amended as follows:

The Directorate of Defense Trade Controls (DDTC), U.S. Department of State, administers the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120 through 130). The items subject to the jurisdiction of the ITAR, i.e., defense articles and defense services, are identified on the ITAR's U.S. Munitions List (USML) (22 CFR 121.1). With few exceptions, items not subject to the export control jurisdiction of the ITAR are subject to the jurisdiction of the Export Administration Regulations (“EAR,” 15 CFR parts 730 through 774, which includes the Commerce Control List (CCL) in Supplement No. 1 to part 774), administered by the Bureau of Industry and Security (BIS), U.S. Department of Commerce. Both the ITAR and the EAR create license requirements for exports and reexports of controlled items. Items not subject to the ITAR or to the exclusive licensing jurisdiction of any other set of regulations are subject to the EAR.

BIS is concurrently publishing amendments (BIS companion rule) to definitions, including “export,” “reexport,” “release,” and “transfer (in-country)” in the EAR.

The following changes are made to the ITAR with this interim final rule: (i) Revisions to the definitions for “export” and “reexport or retransfer;” (ii) new definitions for “release” and “retransfer;” (iii) new sections of the ITAR detailing the scope of licenses, unauthorized releases of information; (iv) revisions to the section on “exports” of technical data to U.S. persons abroad; and (v) consolidates §§ 124.16 and 126.18 within one exemption. The remaining definitions published in the June 3, 2015 proposed rule (80 FR 31525), will be the subject of separate rulemakings and the public comments on those definitions will be addressed therein.

The Department received several public comments that address the rule as a whole. These comments are addressed here. Comments on a specific definition or other proposed change are addressed below in the relevant section of the rule.

Several commenters replied to DDTC's request for public comments on the effective date described in the proposed rule, suggesting dates ranging from 60 to 180 days. Some commenters also requested that the rule be published as an interim final rule to allow additional public comments. The Department partially accepts these comments. The Department determined that the changes to definitions and additional definitions included in this rule can be implemented with minimal impact on the export control management systems. However, the Department agrees that additional public comment on all aspects of this rule may be beneficial. Therefore, the rule will be effective 90 days from publication, with a public comment period of 30 days to allow the Department to make any necessary improvements to the rule prior to it becoming effective.

One commenter suggested that the Department place all terms defined within the ITAR in quotations marks, as is done in the EAR. The Department does not accept this comment. The Department has determined that the addition of quotation marks will not enhance the readability of the ITAR.

Several commenters noted that the revised and new definitions in the proposed rule created layered definitions, where exporters must understand multiple definitions of words used within a definition. The Department recognizes that the new definitions require additional study of the new regulations.

One commenter suggested that the Department harmonize § 126.1 with the list of restricted destinations under the EAR, specifically Crimea. The Department does not accept this comment. The imposition of a license requirement under the EAR is not the same as a presumption of denial for exports to a destination listed under § 126.1. All defense articles require authorization from the Department for “export” or “reexport” to, or “retransfer” within, Ukraine and Russia, and all applications are processed consistent with U.S. government policy.

One commenter requested that the Department adopt an intra-company transfer exception, authorizing exports and reexports between company facilities in different destinations. This suggestion is outside the scope of the rulemaking and the Department does not accept the comment.

The Department revises the definition of “export” in § 120.17 to better align with the EAR's revised definition of the term and to remove activities associated with the further movement of a defense article or its “release” outside the United States, which now fall within the definition of “reexport” in § 120.19 or “retransfer” in § 120.51. The definition is revised to explicitly identify that §§ 126.16 and 126.17 (exemptions pursuant to the Australia and United Kingdom Defense Trade Cooperation Treaties) have their own definitions of “export,” which apply exclusively to those exemptions.

Although the wording of paragraph (a)(1) of this section has changed, the scope of the control is the same. Paragraph (a)(2) includes the control listed in the former paragraph (a)(4) (transfer of technical data to a foreign person). Paragraph (a)(3) includes the control listed in the former paragraph (a)(2) (transfer of registration, control, or ownership to a foreign person of an aircraft, vessel, or satellite). Paragraph (a)(4) includes the control listed in the former paragraph (a)(3) (transfer in the United States to foreign embassies). Paragraph (a)(5) maintains the control on performing a defense service. Paragraph (a)(6) is retained from the existing text to continue to advise exporters that the launch of a launch vehicle or payload does not constitute an export, but may involve a defense service. Paragraph (b) is added to clarify that disclosing technical data to a foreign person in the United States is deemed to be an “export” to all countries in which the foreign person holds or has held citizenship or holds permanent residency.

In response to public comments, the Department revised proposed paragraph (a)(4) to clarify that it is the “release” or transfer to an embassy or one of its agencies or subdivisions that is the activity of concern. This includes transfers to employees of an embassy or other foreign persons who will take the defense article to an embassy.

The Department also removed proposed paragraphs (a)(6) and (7). Proposed paragraph (a)(6) is no longer necessary, and the Department will address controls on encrypted technical data in a separate rulemaking. Proposed paragraph (a)(7) will also be addressed in a separate rulemaking, and until such time, the existing ITAR controls remain in place.

One commenter suggested that the Department adopt the definition of “export” that was in the EAR, which states “[e]xport means an actual shipment or transmission of items out of the United States,” and state that the other activities identified in § 120.17 are “subject to the regulations in the same manner and with the same effect as an export.” The Department does not accept this comment. All of the activities identified in this section are an “export.”

Several commenters stated that the definition of “export” is too broad, as individuals may share information that they do not believe to be technical data and accidentally violate the ITAR. The Department does not accept this comment. For information to be ITAR-controlled, it must be directly related to a defense article or specifically enumerated on the USML, and not satisfy one of the exclusions in § 120.10(b).

One commenter suggested that the Department revise paragraphs (a)(1) and (2) so that (a)(1) includes only hardware exports and (a)(2) includes all technical data exports, whether to a foreign person in the United States or to someone in another country. The Department does not accept this comment. A major purpose of this rule is to harmonize the ITAR with the EAR, and the Department determined it would better align the definition of “export” by adopting the EAR's framework of including one paragraph for an “export” that moves a defense article to another country, whether tangible or intangible, and another paragraph that addresses the “export” of technical data to foreign persons in the United States.

One commenter suggested that the changes to paragraph (a)(2), which define transfers to a foreign person in the United States as an “export,” and transfers to a foreign person outside the United States, but within one foreign country, as a “reexport” under § 120.19(a)(2), would preclude a U.S. company from obtaining a DSP-5 to authorize their overseas foreign national employee to receive technical data. The Department does not accept this comment. The sending or taking of technical data out of the United States to a foreign person employee will remain an “export” under paragraph (a)(1).

One commenter requested that the Department exclude software object code from paragraph (a)(2) so that the provision of ITAR-controlled object code to a foreign person is not an “export.” The Department does not accept this comment. Due to the sensitivity of items that remain defense articles following the revisions on the USML through ECR, retaining those items that provide the United States a critical military or intelligence advantage, ITAR control of the “release” of object code that is within the scope of the USML to foreign persons is appropriate.

Several commenters requested that the Department remove the portion of (a)(6) that addressed the provision of physical access to technical data. The Department has removed paragraph (a)(6). However, as described above for paragraph (a)(7), while the act of providing physical access does not constitute an “export,” any release of technical data to a foreign person is an “export,” “reexport,” or “retransfer” and will require authorization from the Department. If a foreign person views or accesses technical data as a result of being provided physical access, then an “export” requiring authorization will have occurred and the person who provided the foreign person with physical access to the technical data is an exporter responsible for ITAR compliance.

A commenter suggested that the Department revise paragraph (b) to state that only the last country of citizenship or permanent residency will be considered for foreign persons, to harmonize with the EAR. The Department does not accept this comment. A main tenet of ECR is that the ITAR will have higher walls around fewer, more sensitive items, and this aspect of the control system is an example of the more stringent controls that the ITAR maintains.

One commenter noted that the preamble to the proposed rule and paragraph (b) are inconsistent because the preamble language was not limited to “releases” in the United States. The Department confirms that a disclosure to a foreign person in the United States is an “export,” while a “release” to a third-country foreign person abroad is a “reexport,” and a “release” to a foreign person within their own country is a “retransfer.” However, all such activities require authorization, and all citizenships held and any permanent residency status must be accounted for in the authorization.

One commenter requested the Department define permanent residency. The Department notes that permanent resident is defined at 8 U.S.C. Chapter 12, Immigration and Nationality, for the purpose of U.S. law. For the purpose of the ITAR related to third-country foreign persons in a foreign country, the Department generally considers the right to reside in the country indefinitely, be employed by an employer in the country, to make unlimited entry and exit to/from the country without a visa, and rights of voting or office holding in making a determination.

The Department revises the definition of “reexport” in § 120.19 to better align with the EAR's revised definition and describe transfers of items subject to the jurisdiction of the ITAR between two foreign countries. The activities identified are the same as those in paragraphs (a)(1) through (3) of the revised definition of “export,” except that the shipment, “release,” or transfer is between two foreign countries or is to a third country national foreign person outside of the United States.

One commenter requested that the Department address the implications of § 124.16 and § 126.18 on the control in § 120.19(a)(2). The Department notes that § 120.19(a)(2) does not impose a new license requirement. However, the Department has determined that the authorization that may be requested for an agreement under § 124.16 may be used for any authorization from the Department. Therefore, § 124.16 is converted into an exemption and moved to § 126.18(d).

One commenter requested that the Department state that no “reexport” occurs if an item is moved from one foreign country to another either under the possession of the same end user or by being sent to the same end user. The Department does not accept this comment. Any movement of a defense article between two foreign countries is a “reexport” and requires an authorization. However, an “export” authorization may authorize further “reexport.”

The Department adds a definition of “release” in § 120.50. This term is added to harmonize with the EAR, which has long used the term to cover activities that disclose information to foreign persons. “Release” includes the activities encompassed within the undefined term “disclose.” The activities that are captured include allowing a foreign person to inspect a defense article in a way that reveals technical data to the foreign person and oral or written exchanges of technical data with a foreign person. The adoption of the definition of “release” does not change the scope of activities that constitute an “export” and other controlled transactions under the ITAR. The word software was removed from the proposed definition of “release” because the Department is not revising the definitions of defense article and technical data at this time, and as such, all ITAR controlled software remains technical data under § 120.10.

Several commenters requested that the Department revise (a)(1) by replacing inspection with examination or “close examination” and state that such inspection or examination must “actually reveal technical data or software” to the foreign person. The Department does not accept this comment. Inspection and examination are synonyms. Adding the modifier “close” may be appropriate in certain circumstances, but other defense articles may not require a close examination for the “release” of technical data to occur. The Department is confident that limiting the control to situations where a visual or other inspection “releases” technical data sets the appropriate scope of control. Additionally, the Department confirms that the information about the defense article must be technical data and not simply attributes, such as size or weight.

The Department adds a definition of “retransfer” in § 120.51. This interim final rule moves “retransfer” from the definition of “reexport” in § 120.19, better describes the activities being regulated and harmonizes it with the EAR, which controls “exports,” “reexports,” and “transfers (in country)” as discrete events. Under the definition adopted in this interim final rule, a “retransfer” occurs with a change of end use or end user within the same foreign territory. Certain activities may fit within the definition of “reexport” and “retransfer,” such as the disclosure of technical data to a third country national abroad. Authorizations to “reexport” or “retransfer” a defense article are generally issued through the General Correspondence process under § 123.9(c), or by an exemption.

One commenter requested that the Department confirm that the new definition of “retransfer”—i.e., a change in end use or end user—means that authorizations will no longer be required for transfers to subcontractors or intermediate consignees within the same country. The Department does not accept this comment. Providing a defense article to a subcontractor, or any party not explicitly authorized, for additional processing or repair is a change in the end user and end use of the defense article. Such a “retransfer” requires authorization, even if the party is required to return the defense article to the transferor.

One commenter requested that the Department remove “change of end use” from the definition of “retransfer,” asserting that this is an expansion of the scope of activities controlled under the ITAR. The commenter alternatively requested that the Department confirm that the party responsible for any violation due to change in end use is the ultimate consignee. The Department does not accept these comments. Change in end use is within the prior definition of reexport/retransfer that was in § 120.19. An ultimate consignee may also contact the Department to obtain authorization for a change in end use under § 123.9(c). If a violation does occur, the Department will assess responsibility pursuant to its civil enforcement authority based on the relative culpability of all of the parties to the transaction. (See, e.g., § 127.1(c)).

The Department revises § 125.4(b)(9) to better harmonize controls on the “release” of controlled information to U.S. persons abroad and to update the provisions of this section. The most significant updates are that foreign persons authorized to receive technical data in the United States will be eligible to receive that same technical data abroad, when on temporary assignment on behalf of their employer, and that the exemption will now authorize a “reexport” or “retransfer” as well. The revisions also clarify that a person travelling abroad may use this exemption to “export” technical data for their own use abroad. In all events, the technical data must be secured while abroad to prevent unauthorized “release.”

In response to public comments, the Department includes the ability to use this exception to authorize “reexports” and “retransfers,” in addition to “exports.” The Department also revises the introductory text from the proposed text to clarify that the requirement that a person be travelling or on temporary assignment abroad only applies to foreign person employees, maintaining the current scope of the exemption for U.S. persons. Further, the Department removes the additional proposed recordkeeping requirement, as the Department has determined that the recordkeeping requirements in § 123.26 applicable to all exemptions are sufficient.

One commenter noted that the data security provisions appear to be wholly within the control of the person abroad, and not the exporter, at least in instances where the exporter is not also the person abroad. The Department agrees that the person in possession of the technical data abroad will have the primary responsibility for ensuring that the technical data is adequately secured, consistent with paragraph (b)(9)(ii). As with all “exports,” however, the exporter is responsible for ITAR compliance and must, prior to using the exemption, be confident that the person abroad is aware of the requirement and will properly implement the necessary security.

One commenter requested that the Department remove the reference to “encryption of the technical data” from the security provision in subparagraph (ii). The Department partially accepts this comment. Subparagraph (ii) requires that sufficient security precautions be taken and has been revised to clarify that the list of security precautions is exemplary.

One commenter requested that the Department explicitly state that technical data stored on servers in the United States may be accessed by a U.S. person in a foreign country through a secure/encrypted connection, using this exemption. The Department confirms that a U.S. person or authorized foreign person may access technical data in the United States from abroad using a secure connection. This activity constitutes an “export” of the technical data because it is sent to the foreign country, even if only as a transient or temporary document in electronic storage, and such export may be authorized by this exemption.

One commenter requested that the Department include foreign subsidiaries and affiliates of U.S. companies in paragraph (b)(9), so long as the foreign subsidiary or affiliate is authorized to receive the technical data. The Department does not accept this comment. If an authorization exists that allows a foreign subsidiary or affiliate access to technical data, that authorization is an authorization to “export” that technical data to its employees within the approved territory. If the employees are outside of approved territory, they are not authorized to receive the technical data.

One commenter requested that the Department clarify whether a party who followed DDTC guidance in direct conflict with the National Industrial Security Program Operating Manual (NISPOM), as provided by subparagraph (v), would be at risk of violating the NISPOM. The Department notes that the Secretary of State has the authority to impose different conditions on “exports” apart from those imposed by the Department of Defense, as noted in 71 FR 20534, 20535 (April 21, 2006), and that this paragraph is not being revised by the current rulemaking.

One commenter requested that the Department clarify whether a U.S. person sending or taking technical data overseas on an encrypted device for his personal use or use by another U.S. person is engaged in an “export.” As noted above, the Department will address the proposed § 120.52(a)(4) in a separate rulemaking.

One commenter requested that the Department insert a note cross-referencing to § 120.52 for other options for sending information to persons abroad. As noted above, the Department will address the proposed § 120.52 in a separate rulemaking.

One commenter stated that this section implies that technical data sent to a foreign country in compliance with the proposed § 120.52(a)(4) is an “export.” As noted above, the Department will address the proposed § 120.52 in a separate rulemaking.

The Department adds § 123.28 and § 124.1(e) to clarify the scope of a license, in the absence of a proviso, and to state that authorizations are granted based on the information provided by the applicant. This means that while providing false information to the U.S. government as part of the application process for the “export,” “reexport,” or “retransfer” of a defense article or the performance of a defense service is a violation of the ITAR (see § 127.2(a)), the Department may also deny, revoke, suspend, or amend the license under § 126.7(a) as a result of the false information.

One commenter suggested that the Department not adopt these sections, as an exporter could identify a defense article, end user, or end use in the supporting documentation for a license application that the Department did not intend to authorize in the license itself. The Department does not accept this comment. The Department reviews all information submitted by an applicant and includes provisos to condition the scope of the authorization to the defense articles, parties, and end uses that are intended to be authorized.

The Department invites public comment on any of the definitions set forth in this rulemaking.

The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the U. S. government and that rules implementing this function are exempt from sections 553 (rulemaking) and 554 (adjudications) of the Administrative Procedure Act (APA). Although the Department is of the opinion that this rulemaking is exempt from the rulemaking provisions of the APA, the Department is publishing this rule with a 30-day provision for public comment and without prejudice to its determination that controlling the import and export of defense articles and defense services is a foreign affairs function.

Since the Department is of the opinion that this rulemaking is exempt from the rulemaking provisions of 5 U.S.C. 553, there is no requirement for an analysis under the Regulatory Flexibility Act.

This rulemaking does not involve a mandate that will 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 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.

For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996 (the “Act”), a major rule is a rule that the Administrator of the OMB Office of Information and Regulatory Affairs finds has resulted or is likely to result in: (1) An annual effect on the economy of $100,000,000 or more; (2) a major increase in costs or prices for consumers, individual industries, federal, state, or local government agencies, or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and foreign markets.

The Department does not believe this rulemaking will have an annual effect on the economy of $100,000,000 or more, nor will it result in a major increase in costs or prices for consumers, individual industries, federal, state, or local government agencies, or geographic regions, or have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and foreign markets. The proposed means of solving the issue of data protection are both familiar to and extensively used by the affected public in protecting sensitive information.

This rulemaking will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rulemaking does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this rulemaking.

Executive Orders 12866 and 13563 direct agencies to assess 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, distributed impacts, and equity). The executive orders stress the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rulemaking has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rulemaking has been reviewed by the Office of Management and Budget (OMB).

The Department of State has reviewed the rulemaking in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

The Department of State has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not preempt tribal law. Accordingly, Executive Order 13175 does not apply to this rulemaking.

This rulemaking does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35; however, the Department of State seeks public comment on any unforeseen potential for increased burden.

Accordingly, for the reasons set forth above, title 22, chapter I, subchapter M, parts 120, 123, 124, 125, and 126 are amended as follows:

I. Table of Abbreviations CFR Code of Federal Regulations DHS Department of Homeland Security FR Federal Register NPRM Notice of proposed rulemaking § Section U.S.C. United States Code II. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a Notice of Proposed Rulemaking (NPRM) with respect to this rule because to do so would be impracticable. The NPRM process would be contrary to public interest in this situation due to the extremely hazardous conditions this event could potentially pose if held without an enforceable special local regulation area. Furthermore, the event staff submitted the application for marine event on March 18, 2016, limiting the Coast Guard to two months to complete an NPRM and full comment period, which is the main factor in our decision to forego the NPRM process.

We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the Federal Register. Delaying the effective date until 30 days after publication would be impracticable, for the reasons stated above.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Columbia River (COTP) has determined that potential hazards associated with high-speed watercraft will be a safety concern for anyone within Columbia River mile 330 and 332 during the event hours. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the special local regulation area during the event hours.

This rule establishes a special local regulation area from 7 a.m. to 6 p.m. on June 10, 2016. The special local regulation area will cover all navigable waters within the Columbia River in the vicinity of Columbia Park, commencing at the Interstate 395 Bridge and continuing up river approximately 2.0 miles and terminating at the northern end of Wade Island. The duration of the special local regulation area is intended to protect personnel, vessels, and the marine environment in these navigable waters for the entirety of the Tri-City Water Follies Spring Testing event. No vessel or person will be permitted to enter the special local regulation area specified in this rule without obtaining permission from the COTP or a designated representative.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

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. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.

This regulatory action determination is based on the size, location, and duration. The special local regulation for the Tri-City Water Follies Test event will only be effective from 7 a.m. to 6 p.m. on the date of the test event. Furthermore, the Tri-City Water Follies Test event is directly related to the main Tri-City Water Follies Hydroplane racing event which has occurred annually for the last 50 years and is extremely well received in the Kennewick-Pasco-Richland metropolitan area. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the special local regulation area and the rule allows vessels to seek permission from the COTP or his designated representative to enter the area.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a Special Local Regulation for a limited access area lasting less than 12 hours that will prohibit vessels from entering an area encompassing Columbia River mile 330 and 332 unless given permission to do so by the Captain of the Port Columbia River or his designated representative. It is categorically excluded from further review under paragraph 34(h) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

On December 21, 2015, the Northwest Power Boat Association notified the Coast Guard that it will be conducting hydroplane boat races from 7 a.m. to 7 p.m. daily from June 3, 2016 through June 5, 2016, as part of the Richland Regatta. The races will be held in the vicinity of Howard Amon Park, Richland, WA. In response, on March 21, 2016, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Safety Zone; Richland Regatta, Columbia River, Richland, WA (81 FR 14998). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this marine event. During the comment period that ended April 20, 2016, we received no comments.

We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the Federal Register. Due to delays in processing this regulation, it would be impracticable to delay the effective date until 30 days after publication, as this delay would eliminate the safety zone's effectiveness and usefulness in preventing the potential dangers to the public caused by the racing of vessels at high speeds.

The Coast Guard is issuing this rule under the authority in 33 U.S.C. 1231. The Captain of the Port Columbia River (COTP) has determined that potential hazards associated with the hydroplane races on June 3, 2016, through June 5, 2016, will be a safety concern for all waterway users on the Columbia River between River Miles 337 and 338 during the event. The hydroplane races pose significant dangers to the maritime public including excessive noise, vessels racing at high speeds in proximity to other vessels, and flying debris in the event of an accident. The purpose of this rule is to ensure the safety of vessels and the navigable waters before, during and after the scheduled event.

As noted above, we received no comments on our NPRM published March 21, 2016. There are no changes in the regulatory text of this rule from the proposed rule in the NPRM.

This rule establishes a safety zone from 7 a.m. to 7 p.m. on June 3, 2016, through June 5, 2016. The safety zone will include all navigable waters of the Columbia River in the vicinity of Howard Amon Park, Richland, WA between River Miles 337 and 338. The duration of the zone is intended to ensure the safety of vessels and these navigable waters during the scheduled hydroplane races. No vessel or person will be permitted to enter, transit through, anchor in, or remain within the regulated area unless authorized by Captain of the Port Sector Columbia River or a designated representative.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize on analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.

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. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.

This regulatory action determination is based on the following factors. The safety zone will only be effective for twelve hours daily over a three day period, and while non-participant vessels will be unable to enter, transit through, anchor in, or remain within the event area without authorization from the Captain of the Port Sector Columbia River or a designated representative, they may operate in the surrounding areas during the enforcement period. Additionally, non-participant vessels may still enter, transit through, anchor in, or remain within the event area during the enforcement period if authorized by the COTP Sector Columbia River or a designated representative. The Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A. above this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone from 7 a.m. to 7 p.m. daily from June 3, 2016 through June 5, 2016. The safety zone would cover all navigable waters of the Columbia River in the vicinity of Howard Amon Park, Richland, WA. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of Commandant Instruction M16475.lD. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places, or vessels.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

I. General Information A. Does this action apply to me?

Entities potentially affected directly by this final action include owners or operators of sources of new and modified operations within the oil and natural gas production and processing segments of the oil and gas sector (herein after referred to as “oil and natural gas operations”). Such entities are expected to be in the groups indicated in the following table. In addition, state, local and tribal governments may be affected by the rule if they update state rules to adopt the changes being made to federal permit program rules.

In addition to being available in the docket, an electronic copy of this document will be posted at: http://www3.epa.gov/airquality/oilandgas/actions.html. Upon its publication in the Federal Register, only the published version may be considered the final official version of the notice, and will govern in the case of any discrepancies between the Federal Register published version and any other version.

The information presented in this document is organized as follows:

This action affects the determination of what constitutes a “stationary source” for the PSD and NNSR preconstruction permit programs under title I of the CAA, and the determination what constitutes a “major source” for the title V operating permit program. Under the PSD and NNSR programs, a “stationary source” is defined as a “building, structure, facility, or installation” that emits or may emit a “regulated NSR pollutant.” 2 40 CFR 51.165(a)(1)(i), 51.166(b)(5). In turn, a “building, structure, facility, or installation” is defined as “all of the pollutant-emitting activities” that satisfy three prongs: they “belong to the same industrial grouping”; “are located on one or more contiguous or adjacent properties”; and “are under the control of the same person (or persons under common control).” 40 CFR 51.165(a)(1)(ii); 51.166(b)(6). Under the title V program, “stationary source” is defined similarly, but with reference to a different set of pollutants; however, the term “building, structure, facility, or installation” is not defined. Instead, the same three-prong test is incorporated into the definition of “major source.” 40 CFR 70.2; 71.2. We 3 use the term “source determination” to describe a case-specific examination of particular pollutant-emitting activities to see whether, under the definitions just discussed, they are collectively a “stationary source” for purposes of the PSD or NNSR programs or are potentially (depending on their level of emissions) a “major source” for the purposes of the title V program.

On September 18, 2015, the EPA proposed two options for clarifying the meaning of the term “adjacent” in the second prong discussed in the previous paragraph as applied to oil and gas sources, under both the preconstruction and operating permits programs. Source Determination for Certain Emission Units in the Oil and Natural Gas Sector. See 80 FR 56579, September 18. 2015. The preamble to the proposal provided a discussion of the history of making source determinations generally, and for these segments specifically, the previous guidance we have issued and the litigation that resulted. We explained our rationale for the two options we proposed for clarifying the term “adjacent” as it is used in determining the scope of a source for purposes of air permitting for these segments. The EPA's preferred option, referred to as Option 1, would have required permitting authorities to aggregate, for permitting purposes, all onshore oil and natural gas emitting equipment 4 that are within the two-digit Standard Industrial Classification (SIC) code 13 5 (hereafter referred to as “oil and natural gas operations”), are under common control of a single person (or persons under common control), and that are located within 1/4 mile of each other. We believed that establishing a “bright line” based on the proximity of the equipment (in this case, 1/4 mile), as several oil and gas-producing states seemed to have done, would simplify permitting because it would avoid a more detailed case-by-case evaluation based on the relationship of the emitting equipment. We also proposed a second option, Option 2, which would have aggregated all emitting equipment within 1/4 mile but would also have allowed permitting authorities to aggregate emitting equipment located beyond 1/4 mile based on the relationship between the operations. The EPA described this relationship as “exclusive functional interrelatedness,” but requested comment on more specific ways to describe a relationship that meets the common sense notion of a plant. Finally, we requested comment on whether some combination of these two options might be preferable. This final rulemaking notice does not repeat all of the discussion, but refers interested readers to the preamble of the proposed rule for additional background.

This section provides a brief summary of the requirements of the final rule. Further discussion of the basis for these requirements and summaries of our responses to significant comments are provided in the next section.

Based on the range and substance of the comments received, the EPA has made two revisions to the proposed definition of “adjacent” that are reflected in the final rule. As discussed in the proposal, we proposed that pollutant-emitting activities from onshore oil and natural gas operations that are located on the same “surface site,” as defined in 40 CFR 63.761,6 or on surface sites located within 1/4 mile of each other, would be considered “adjacent” for purposes of determining the source. We selected 1/4 mile as a “bright line” distance for clarifying the meaning of “adjacent” based on proximity to be consistent with those states that also use a “bright line” approach as a way of delineating sources in this category. This also was, in our view, a reasonable distance within which sources in oil and natural gas operations are likely to be interconnected. However, we received comments from several entities that said that we misunderstood the states' approach. According to them, several states that use the 1/4 mile boundary do not aggregate everything within it, as we proposed. Rather they use the 1/4 mile boundary to define an area beyond which they would not consider pollutant emitting equipment to be adjacent and part of a single source. Within 1/4 mile, these states determine on a case-by-case basis which equipment should be considered a single source because it meets the “common sense notion of a plant.”

For the reasons discussed more fully later in this notice, we have decided to modify the proposed definition in response to the recommendations made by commenters. As we proposed under both Option 1 and Option 2, emitting equipment in the oil and natural gas production and processing segments located at a single onshore surface site will be considered “adjacent” under the final rule and, thus, part of a single stationary source, assuming the equipment is also under the control of one person (or persons under common control) and belongs to the two-digit SIC code 13. Also, as we proposed in Option 1, we are finalizing a definition that equipment on separate surface sites located more than 1/4 mile apart is not “adjacent” and, therefore, is not part of the same stationary source. However, in this final rule, we are modifying Option 1 by incorporating an element from Option 2 and the state policies on which we modeled Option 1. Specifically, we would not require that all emitting equipment located on separate surface sites within 1/4 mile of each other be considered “adjacent.” Instead, emitting equipment located on separate surface sites within 1/4 mile of each other would only be aggregated as a single stationary source if the emitting equipment also have a relationship that meets the “common sense notion of a plant.”

This expression, the “common sense notion of a plant,” has been a criterion by which we have made source determinations for sources in all industries since our PSD rules were revised in 1980 (45 FR 52676, August 7, 1980) in response to the D.C. Circuit Court of Appeals Alabama Power decision. Alabama Power Co. v. Costle, 636 F. 2d 323, 397 (D.C. Cir. 1979). In the onshore oil and natural gas production and processing segments, the “plant” is not as easy to discern as it is for other industrial operations, such as an electric utility generating plant or an oil refinery. Unlike these industrial operations, onshore oil and natural gas operations may not have an obvious boundary and may be located on property owned and controlled by others.

As explained in our proposal, one way in which we historically have evaluated whether activities meet the common sense notion of a plant was through the use of “functional interrelatedness” or “operational dependence.” See 80 FR 56581, September 18. 2015. Our proposed Option 2 would have looked for “exclusive functional interrelatedness” of emitting equipment outside the 1/4 mile radius. See 80 FR 56587, September 18. 2015. We asked for comment on whether we should further define “exclusive functional interrelatedness” to give additional clarity to regulators and the regulated community.

Rather than looking for “functional interrelatedness” in oil and natural gas operations and giving this term more specific definition, we have decided in this final rule that it is preferable to look for “shared equipment” to determine when emitting activities in oil and natural gas operations have a relationship that meets the “common sense notion of a plant.” The EPA has applied the generalized notion of “functional interrelatedness” in other ways in other source categories, in some cases, at the request of the source. However, for oil and natural gas operations, we find it preferable to use a term that will give a more precise and clear criterion for defining when emitting activities within a 1/4 mile proximity are sufficiently related to be considered adjacent, in line with the objectives of the proposal.

For onshore oil and natural gas production, this final rule establishes that, where separate surface sites located within 1/4 mile of each other include shared equipment necessary to process or store oil or natural gas, these surface sites will be aggregated. The EPA has concluded that equipment satisfying these criteria will meet the common sense notion of a plant. Under this final rule, separate surface sites that do not include shared emitting equipment, even if within 1/4 mile, will not be aggregated.

For example, an owner or operator proposing to construct a new well site should draw a 1/4 mile circle from the center of the proposed new well site. If there is commonly-controlled emitting equipment located within that 1/4 mile circle and within major SIC code 13, and that equipment is used to process or store the oil, natural gas or the byproducts of production that will come from the new well site, then the emissions from that equipment should be included in determining whether the new well site is a major source. Examples of shared equipment include, but are not limited to, produced fluids storage tanks, phase separators, natural gas dehydrators or emissions control devices. In this example, the shared equipment is necessary for the operation of the new well site, and should be considered part of the same source because together all of the equipment operates as a “plant.” However, under the terms of this rule, we would not consider two well sites that feed to a common pipeline to be part of the same stationary source if they do not share any processing or storage equipment between them.

We believe this change from the proposed rule is responsive to both the comments that we received from several states about the burden of aggregating individual surface sites, and from the industry about the independent nature of many, if not most, surface sites.

We proposed to clarify the meaning of “adjacent” in all of the permitting rules, both the rules that apply to the EPA and delegated states as the permitting authority, as well as the rules that apply to state, local or tribal permitting authorities. However, we requested comment on whether we should require state, local and tribal permitting authorities to make this proposed change to their regulations. Several states, including both those with oil and natural gas operations and those without, expressed a desire to retain their existing approach to source determinations in permitting. These states, particularly those with oil and natural gas operations, expressed concern about the increased burden of the EPA's proposed Option 1. After reviewing the comments, the EPA has decided to adopt this change in its permitting rules, but to not require state, local and tribal permitting authorities to adopt this change. However, if they choose to do so, state, local and tribal permitting authorities may adopt the EPA's revised definition and submit their revised program to the EPA for approval.

The EPA received more than 19,000 comments on the proposed rule. In this section we summarize the major comments and our responses. For details of all the significant comments and our responses, please refer to the Response to Comments document in the docket for this rulemaking.

In the proposed rule, the EPA described the history and the current status of making source determinations for onshore oil and natural gas operations. We described the guidance that had been issued, the source determinations that have been made and the lack of clarity that has often resulted. We proposed two options for clarifying the term “adjacent” when making source determinations for onshore oil and natural gas operations.

Several commenters stated that providing clear and reasonable definitions in rulemaking would benefit the regulated community, regulators and other stakeholders by providing needed certainty. The current lack of clarity, according to commenters, has resulted in increased costs due to permitting delays and litigation following the issuance of a permit. Several commenters also supported our decision to provide this clarification through rulemaking, rather than by additional guidance.

Other commenters did not believe that a rulemaking is necessary. These commenters stated that the rulemaking is not necessary because the term “adjacent” is unambiguous, that it is synonymous with “contiguous,” i.e., that “adjacent' means touching, sharing a border, or abutting. These commenters pointed to the dictionary definition of the word “adjacent” as being “contiguous.” Some of these commenters went on to say that the meaning of the term “adjacent” has been clearly established in relevant case law, citing Summit Petroleum Corp. v. EPA, 690 F.3d 733, 742 (6th Cir. 2012). And some commenters questioned our authority to adopt the two meanings of the term that we proposed, claiming that the proposed definitions violated the D.C. Circuit Court of Appeals' holdings in Alabama Power or that the EPA simply lacked authority to define the term “adjacent” in a way that, according to commenters, conflicted with the dictionary definition and/or the decision of the Sixth Circuit Court of Appeals in Summit Petroleum.

We agree with the commenters who stated that a rulemaking is the best way to provide clarity in permitting. However, we recognize that most permits are issued by states, and that some states have substantial experience in making source determinations for oil and natural gas operations. Accordingly, in recognition of this state expertise, and in response to many comments, we are making the meaning of “adjacent” adopted in this rule mandatory only for the permit programs administered by the EPA or delegated states, while leaving to other states the decision of whether to make a similar change to their approved permitting.

We disagree with commenters who claim that the EPA lacks authority to define adjacent by regulation or that state the rulemaking is unnecessary because of the dictionary meaning of “adjacent” and the Summit Petroleum decision. These commenters are mistaken that the EPA cannot define “adjacent” by rule to mean all emitting equipment within a specified radius.7 Commenters gave two reasons for this: first, that to do so would not comport with Alabama Power, and second, that the EPA's authority to give a meaning to “adjacent” that varies from its dictionary definition is foreclosed by the Summit Petroleum decision.

Regarding the first point, the CAA affords the EPA discretion in the permitting context to provide a more specific meaning to the term “stationary source” that is used in the Act. See, Chevron USA, Inc. v. NRDC, 467 U.S. 837 (1984) (discussing the meaning of the term stationary source under the CAA). Through a rulemaking process, we are defining the statutory term “stationary source” for a particular context: the PSD, NNSR and title V programs as applied to oil and natural gas operations. The definition of the term “stationary source” in section 302(z) of the Act, the related definition in section 111(a)(3), the structure of the Act, and its legislative history do not supply a clear meaning of “stationary source” in this context. Thus, it is permissible for the agency, in a rulemaking process, to apply a reasonable interpretation of the statute that resolves an ambiguity.8 It is also permissible for the EPA to create a rule using a “bright line,” as we are doing here, for purposes of better administering the Act, see Emily's List v. Fed. Election Comm'n, 581 F.3d 1, 22 n.20 (D.C. Cir. 2002).

As to the second point, while the Summit Petroleum decision is a motivating factor for this action, the decision, and the Court's reference to the dictionary meaning of “adjacent” in that decision, are not preclusive of our authority to take the action. The Summit Petroleum Court addressed the issue of whether, in the absence of a rule defining the term “adjacent,” the EPA had permissibly interpreted the term in a particular source determination. The Court looked to the dictionary definition of “adjacent” to determine whether the EPA's interpretation of this term would “permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation.” Summit Petroleum, 690 F.3d at 740 (quoting Christensen v. Harris Cnty., 529 U.S. 576, 588 (2000)). In this rulemaking action, the EPA is not interpreting the term “adjacent” in the existing regulation; instead we are assigning a meaning to the term by going through a rulemaking process. When an agency is defining a word by rule, the agency is free to give specialized meaning to the word without being bound to hew precisely to a particular dictionary definition. See Stenberg v. Carhart, 530 U.S. 914, 942 (2000) (noting that an “explicit definition” can permissibly “vary from the term's ordinary meaning”). And in fact, the PSD regulations in 40 CFR 51.166 are replete with such specialized meanings, for example in the definitions of “significant” and “process unit.” 9

Even if commenters were correct—and they are not—that the EPA is bound by a particular dictionary definition of “adjacent” when defining the term for specialized use, commenters are mistaken about the meaning of the term. While many dictionary definitions of “adjacent” include “contiguous” as one definition, this is not the only definition of the word “adjacent.” For example, one online dictionary defines “adjacent” to mean “lying near, close, or contiguous; adjoining; neighboring.” 10 Another dictionary provides the following “Synonym Discussion of Adjacent”: “Adjacent may or may not imply contact but always implies absence of anything of the same kind in between . . .” 11 This dictionary makes a further distinction in its “Synonym Discussion”, stating that the word “adjoining” definitely implies meeting and touching at some point or line.” 12 So, while we agree that “adjacent” can mean contiguous, we do not agree that it unambiguously must. We are finalizing this rule to provide a bright line distance beyond which pollutant-emitting operations in the onshore oil and natural gas production and processing segments are not considered “adjacent.” The decision to use both words “contiguous” and “adjacent” in our PSD rules was a deliberate choice, designed to include emitting equipment that is on property that is touching (contiguous) with equipment that may not be contiguous, but still meets the common sense notion of a plant. Had we intended “adjacent” to mean exactly the same as “contiguous,” we would not have included the word “adjacent.”

Finally, we disagree with commenters who argue the Summit Petroleum Court provided sufficient guidance on the meaning of “adjacent” to obviate the need for this rulemaking. The Court's decision is binding only in the Sixth Circuit, which leaves the issue unresolved elsewhere.13 The Court also did not provide guidance on how “nearby” sources must be to consider them “adjacent” for purposes of permitting. This is the question that we have taken up in this rulemaking, specific to onshore oil and natural gas operations. We have clarified that “adjacent” for these segments means within 1/4 mile and having shared equipment.

I. Background

By statute, SIPs meeting the requirements of sections 110(a)(1) and (2) of the CAA are to be submitted by states within three years after promulgation of a new or revised NAAQS to provide for the implementation, maintenance, and enforcement of the new or revised NAAQS. EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Sections 110(a)(1) and (2) require states to address basic SIP elements such as the requirements for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the newly established or revised NAAQS. More specifically, section 110(a)(1) provides the procedural and timing requirements for infrastructure SIPs. Section 110(a)(2) lists specific elements that states must meet for the infrastructure SIP requirements related to a newly established or revised NAAQS. The contents of an infrastructure SIP submission may vary depending upon the data and analytical tools available to the state, as well as the provisions already contained in the state's implementation plan at the time in which the state develops and submits the submission for a new or revised NAAQS.

Section 110(a)(2)(D) has two components: 110(a)(2)(D)(i) and 110(a)(2)(D)(ii). Section 110(a)(2)(D)(i) includes four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submissions. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), are provisions that prohibit any source or other type of emissions activity in one state from contributing significantly to nonattainment of the NAAQS in another state (prong 1) and from interfering with maintenance of the NAAQS in another state (prong 2). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), are provisions that prohibit emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state (prong 3) or from interfering with measures to protect visibility in another state (prong 4). Section 110(a)(2)(D)(ii) requires SIPs to include provisions ensuring compliance with sections 115 and 126 of the Act, relating to interstate and international pollution abatement.

North Carolina's November 2, 2012, 2008 8-hour Ozone submission; August 23, 2013, 2010 1-hour NO2 submission; March 18, 2014, 2010 1-hour SO2 submission; and December 4, 2015, 2012 Annual PM2.5 submission cite to the State's regional haze SIP as satisfying prong 4 requirements. However, at those dates, EPA had not yet fully approved North Carolina's regional haze SIP because the SIP relied on the Clean Air Interstate Rule (CAIR) to satisfy the nitrogen oxides (NOX) and SO2 Best Available Retrofit Technology (BART) requirements for the CAIR-subject electric generating units (EGUs) in the State and the requirement for a long-term strategy (LTS) sufficient to achieve the state-adopted reasonable progress goals.1

EPA demonstrated that CAIR achieved greater reasonable progress toward the national visibility goal than BART for NOX and SO2 at BART-eligible EGUs in CAIR affected states, and revised the regional haze rule (RHR) to provide that states participating in CAIR's cap-and-trade program need not require affected BART-eligible EGUs to install, operate, and maintain BART for emissions of SO2 and NOX. See 70 FR 39104 (July 6, 2005). As a result, a number of states in the CAIR region designed their regional haze SIPs to rely on CAIR as an alternative to NOX and SO2 BART for CAIR-subject EGUs. These states also relied on CAIR as an element of a LTS for achieving their reasonable progress goals.

The United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) initially vacated CAIR in 2008,2 but ultimately remanded the rule to EPA without vacatur to preserve the environmental benefits provided by CAIR.3 On August 8, 2011, acting on the D.C. Circuit's remand, EPA promulgated the Cross State Air Pollution Rule (CSAPR) to replace CAIR and thus to address the interstate transport of emissions contributing to nonattainment and interfering with maintenance of the two air quality standards covered by CAIR as well as the 2006 PM2.5 NAAQS.4 See 76 FR 48208.

Due to CAIR's status as a temporary measure following the D.C. Circuit's 2008 ruling, EPA could not fully approve regional haze SIP revisions to the extent that they relied on CAIR to satisfy the BART requirement and the requirement for a long-term strategy sufficient to achieve the state-adopted reasonable progress goals. On these grounds, EPA finalized a limited disapproval of North Carolina's regional haze SIP on June 7, 2012, triggering the requirement for EPA to promulgate a federal implementation plan (FIP) unless North Carolina submitted and EPA approved a SIP revision that corrected the deficiency. See 77 FR 33642. EPA finalized a limited approval of North Carolina's regional haze SIP on June 27, 2012, as meeting the remaining applicable regional haze requirements set forth in the CAA and the RHR. See 77 FR 38185.

On October 31, 2014, North Carolina submitted a regional haze plan revision to correct the deficiencies identified in the June 7, 2012, limited disapproval by replacing reliance on CAIR with reliance on a BART alternative to satisfy NOX and SO2 BART requirements for EGUs formerly subject to CAIR. EPA finalized approval of the October 31, 2014, SIP revision and converted North Carolina's regional haze plan from a limited approval to a full approval on May 12, 2016. That action also removed EPA's obligation to implement a FIP to correct the previous deficiencies for North Carolina's initial regional haze plan.

In a proposed rulemaking (NPRM) published on April 8, 2016 (81 FR 20600), EPA proposed to approve the prong 4 portions of North Carolina's infrastructure SIP submissions for the 2008 8-hour Ozone, 2010 1-hour NO2, 2010 1-hour SO2, and 2012 annual PM2.5 NAAQS based on final approval of the State's October 31, 2014, SIP revision. As discussed above, EPA subsequently finalized that SIP revision and converted North Carolina's regional haze plan from a limited approval to a full approval. The details of the aforementioned North Carolina infrastructure SIP submissions and the rationale for EPA's action is explained in the NPRM. Comments on the proposed rulemaking were due on or before April 29, 2016. EPA received no adverse comments on the proposed action.

EPA is approving the prong 4 portions of North Carolina's November 2, 2012, 2008 8-hour Ozone infrastructure SIP submission; August 23, 2013, 2010 1-hour NO2 infrastructure SIP submission; March 18, 2014, 2010 1-hour SO2 infrastructure SIP submission; and December 4, 2015, 2012 Annual PM2.5 infrastructure SIP submission. All other applicable infrastructure requirements for these SIP submissions have been or will be addressed in separate rulemakings.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. See 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 SIP 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 as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

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 August 2, 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).

40 CFR part 52 is amended as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

Organization of this document. The following outline is provided to aid in locating information in this preamble.

This rulemaking addresses submissions from the Connecticut Department of Energy and Environmental Protection (CT DEEP). The state submitted its infrastructure SIP for each NAAQS on the following dates: 2008 Pb—October 13, 2011; 2008 ozone—December 28, 2012; 2010 NO2—January 2, 2013; and 2010 SO2—May 30, 2013. This rulemaking also addresses certain infrastructure SIP elements for the 1997 and 2006 PM2.5 NAAQS for which EPA previously issued a conditional approval. See 77 FR 63228 (October 16, 2012). The state submitted these infrastructure SIPs on September 4, 2008, and September 18, 2009, respectively. Lastly, this rulemaking addresses one infrastructure SIP element for the 1997 8-hour ozone NAAQS for which EPA previously issued a conditional approval. See 76 FR 40248 (July 8, 2011). The state submitted this infrastructure SIP on December 28, 2007.

EPA did not receive any comments, adverse or otherwise, in response to the Notice of Proposed Rulemaking (NPR). See 80 FR 54471 (September 10, 2015).

EPA is approving SIP submissions from Connecticut certifying that the state's current SIP is sufficient to meet the required infrastructure elements under sections 110(a)(1) and 110(a)(2) for the 2008 Pb, 2008 ozone, 2010 NO2, and 2010 SO2 NAAQS, with the exception of certain aspects relating to PSD which we are conditionally approving. A summary of EPA's actions regarding these infrastructure SIP requirements is contained in Table 1 below.

In the above table, the key is as follows:

A. What decisions has EPA made in this rule?

On November 25, 2015, and December 28, 2015, Nevada submitted final complete program revision applications seeking authorization of changes to its hazardous waste program that correspond to certain federal rules promulgated between July 1, 2005, and June 30, 2008, (also known as RCRA Clusters XVI through XVIII). EPA concludes that Nevada's application to revise its authorized program meets all of the statutory and regulatory requirements established by RCRA, as set forth in RCRA section 3006(b), 42 U.S.C. 6926(b), and 40 CFR part 271. Therefore, EPA grants Nevada final authorization to operate as part of its hazardous waste program the changes listed in Section G of the direct final rule (81 FR 15440), as further described in the authorization application.

Nevada has responsibility for permitting treatment, storage, and disposal facilities within its borders (except in Indian country) and for carrying out the aspects of the RCRA program described in its revised program application. New federal requirements and prohibitions imposed by federal regulations that EPA promulgates pursuant to the Hazardous and Solid Waste Amendments of 1984 take effect in authorized states at the same time that they take effect in unauthorized states. Thus, EPA will implement those requirements and prohibitions in Nevada, including the issuance of new permits implementing those requirements, until the State is granted authorization to do so.

The effect of this decision is that the changes described in Nevada's authorization application will become part of the authorized state hazardous waste program and therefore will be federally enforceable. Nevada will continue to have primary enforcement authority and responsibility for its state hazardous waste program. EPA retains its authorities under RCRA sections 3007, 3008, 3013, and 7003, including its authority to:

• Conduct inspections, and require monitoring, tests, analyses or reports;

• Enforce RCRA requirements, including authorized state program requirements, and suspend or revoke permits; and

• Take enforcement actions regardless of whether the state has taken its own actions.

This action does not impose additional requirements on the regulated community because the regulations for which Nevada is being authorized by today's action are already effective and are not changed by today's action.

On March 23, 2016, EPA published a proposed rule (81 FR 15497) and a direct final rule (81 FR 15440) to authorize Nevada's November 25 and December 28, 2015, applications to make revisions to Nevada's State Hazardous Waste Management program that correspond to certain federal rules promulgated between July 1, 2005, and June 30, 2008 (also known as RCRA Clusters XVI through XVIII). EPA stated that if adverse comments were received by May 9, 2016, the rule would be withdrawn and not take effect. On May 9, 2016, EPA received a comment opposing approval; however, due to the reasons explained below, EPA is not withdrawing the direct final rule but rather is responding to the comment and reaffirming the effective date of June 6, 2016, of the rule, pursuant to 40 CFR 271.21(b)(3)(iii)(B).

EPA received four comments on the proposed rule, Nevada: Final Authorization of State Hazardous Waste Management Program Revisions. Three comments stated, “Good” and do not require a response. The fourth comment stated, “Instead of not authorizing Nevada's antifreeze recycling program (and in the process violate 271.1(h), the partial authorization prohibition) EPA should instead require the program to be amended so it is no less stringent than EPAs [sic] requirements. This has been wrong since 2009!”

The State of Nevada adopted regulations for the “Recycling of Used Antifreeze” effective October 3, 1996, at NAC 444.8801-9071. These regulations are applicable to those categories of antifreeze that are recycled and have been determined to be hazardous waste because they either exhibit a characteristic of hazardous waste (i.e., the toxicity characteristic) or they are a listed hazardous waste in the state of their origin, for those categories of antifreeze entering Nevada from another State (NAC 444.8871). Under the Federal code, spent antifreeze destined to be recycled, as defined by Nevada, would be subject to the requirements of 40 CFR 261.6(b)-(d) “Requirements for Recyclable Materials.” In the Nevada regulations at NAC 444.8801-9071, spent antifreeze that is recycled is not regulated as universal waste, but is subject to requirements that are less stringent than the Federal regulations at 40 CFR 261.6(b)-(d). Accordingly, EPA cannot authorize Nevada's regulations specific to the recycling of used antifreeze.

However, Nevada has incorporated the federal regulations contained in 40 CFR 261.6(b)-(d) at NAC 444.8632. The purpose of EPA's notice in the Federal Register is to direct generators and recyclers of used antifreeze to comply with 40 CFR 261.1(b)-(d) as incorporated by reference in NAC 444.8632, rather than the antifreeze-specific provisions at NAC 444.8801-9071. Because Nevada's authorized program regulates used antifreeze recycling at NAC 444.8632 in a program that is no less stringent than the federal requirements, there is no gap in coverage of used antifreeze recycling that could be considered a partial authorization, and EPA is not running afoul of the requirement contained in 40 CFR 271.1(h). Additionally, as noted in the guidance document, Clarification of EPA Policy on Authorizing Incomplete or Late “Clusters” Under 40 CFR 271.21 and Availability of Public Information under RCRA Section 3006(f), Nov. 6, 1992,

The Office of Management and Budget (OMB) has exempted this action from the requirements of Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011). Therefore this action is not subject to review by OMB. This action authorizes state requirements for the purpose of RCRA section 3006 and imposes no additional requirements beyond those imposed by state law. Accordingly, I certify that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this action authorizes pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538). For the same reason, this action also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely authorizes state requirements as part of the state RCRA hazardous waste program without altering the relationship or the distribution of power and responsibilities established by RCRA. This action also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant and it does not make decisions based on environmental health or safety risks. This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Under RCRA section 3006(b), EPA grants a state's application for authorization as long as the state meets the criteria required by RCRA. It would thus be inconsistent with applicable law for EPA, when it reviews a state authorization application, to require the use of any particular voluntary consensus standard in place of another standard that otherwise satisfies the requirements of RCRA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). “Burden” is defined at 5 CFR 1320.3(b). Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. Because this rule authorizes pre-existing state rules which are at least equivalent to, and no less stringent than existing federal requirements, and imposes no additional requirements beyond those imposed by state law, and there are no anticipated significant adverse human health or environmental effects, the rule is not subject to Executive Order 12898.

The Congressional Review Act, 5 U.S.C. 801-808, 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 document 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 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). However, this action is effective 75 days after the date of initial publication in the Federal Register.

I. Background

The State Health Insurance Assistance Program (SHIP) was created under Section 4360 of the Omnibus Budget Reconciliation Act (OBRA) of 1990 (Pub. L. 101-508). This section of the law authorized the Centers for Medicare & Medicaid Services (CMS) to make grants to States to establish and maintain health insurance advisory service programs for Medicare beneficiaries. Grant funds were made available to support information, counseling, and assistance activities relating to Medicare, Medicaid, and other related health insurance options such as: Medicare supplement insurance, long-term care insurance, managed care options, and other health insurance benefit information. In January 2014, in the Consolidated Appropriations Act of 2014, Congress transferred the funding for the SHIP program from CMS to the Administration for Community Living (ACL). This transfer reflects the existing formal and informal collaborations between the SHIP programs and the networks that ACL serves.

On February 4, 2016, ACL and CMS issued an IFR (81 FR 5917) that transferred all provisions of the existing SHIP regulations at 42 CFR part 403 Subpart E, (§§ 403.500 through 403.512), to a new part at 45 CFR 1331.1-1331.7. The IFR also changed all references to CMS' administration of the program to ACL and made a technical change to reflect new Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, codified at 45 CFR part 75. This final rule adopts, without making any changes, the regulatory requirements established in the IFR.

HHS received one responsive comment to the IFR. The commenter expressed support for the rule and optimism for the new opportunities that come with the SHIP's transfer to ACL. We are grateful for the commenter's support and look forward to continuing to improve the program's effectiveness and efficiency.

This rule is not being treated as a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rule has not been reviewed by the Office of Management and Budget.

The Secretary certifies under 5 U.S.C. 605(b), the Regulatory Flexibility Act (Pub. L. 96-354), that this regulation will not have a significant economic impact on a substantial number of small entities. The primary impact of this regulation is on entities applying for SHIP funding opportunities, specifically researchers, States, public or private agencies and organizations, institutions of higher education, and Indian tribes and Tribal organizations. The regulation does not have a significant economic impact on these entities.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Ch. 3506; 5 CFR 1320 Appendix A.1) (PRA), ACL and CMS have determined that there are no new collections of information contained in this final rule.

Under the Administrative Procedure Act (APA), ACL and CMS are required to publish a notice of proposed rulemaking and provide the public with an opportunity to comment on proposed regulations prior to establishing a final rule unless it is determined for good cause that the notice and comment procedure is impracticable, unnecessary or contrary to public interest. 5 U.S.C. 553(b). As noted previously, Congress has already transferred the SHIP program to ACL under the Consolidated Appropriations Act of 2014. This final rule makes no changes other than aligning the location of the regulations within the Code of Federal Regulations with other ACL programs; amending the name of the administering agency to ACL; and updating a reference to new Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, which have already undergone notice and comment rulemaking, therefore, there is good cause under 5 U.S.C. 553(b)(B) for waiving proposed rulemaking as unnecessary.

Agencies are required to delay the effective date of their final regulations by 30 days after publication, as required under 5 U.S.C. 553(d), unless an exception under subsection (d) applies. Under 5 U.S.C. 553(d), ACL and CMS may waive the delayed effective date requirement if they find good cause and explain the basis for the waiver in the final rulemaking document or if the regulations grant or recognize an exemption or relieve a restriction.

In the present case, there is good cause to waive the delayed effective date for this final rule, because the substance of the regulation, other than the name of the administering agency, is identical to the current regulation.

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that a covered agency prepare a budgetary impact statement before promulgating a rule that includes any Federal mandate that may result in expenditures by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million, adjusted for inflation, or more in any one year. ACL and CMS have determined that this rule does not result in the expenditure by State, local, and Tribal government in the aggregate or by the private sector of more than $100 million in any one year.

This rule is not a major rule as defined in 5 U.S.C. Section 804(2).

Section 654 of the Treasury and General Government Appropriations Act of 1999 requires Federal agencies to determine whether a policy or regulation may affect family wellbeing. If the agency's conclusion is affirmative, then the agency must prepare an impact assessment addressing seven criteria specified in the law. These regulations do not have an impact on family well-being as defined in the legislation.

Executive Order 13132 on “federalism” was signed August 4, 1999. The purposes of the Order are: “. . . to guarantee the division of governmental responsibilities between the national government and the States that was intended by the Framers of the Constitution, to ensure that the principles of federalism established by the Framers guide the executive departments and agencies in the formulation and implementation of policies, and to further the policies of the Unfunded Mandates Reform Act . . .” Executive Order 13132 applies to actions with federalism implications, which are actions that have substantial direct effect on 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. For actions that have federalism implications and preempt state law or have federalism implications and impose substantial compliance costs on states and local governments, the agency must consult with state and local officials before publishing the rule and include a federalism statement in the preamble.

The Department certifies that this rule does not have a substantial direct effect on 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.

ACL and CMS are not aware of any specific state laws that would be preempted by the adoption of the regulation.

Accordingly, the interim final rule amending 42 CFR part 403 and adding 45 CFR part 1331 that published on February 4, 2016 (81 FR 5917), is adopted as a final rule without change.

The Administration for Community Living (ACL) was created in 2012 by merging the HHS Administration on Aging (AoA), Administration on Intellectual and Developmental Disabilities (AIDD), and the Office of Disability (Statement of Organization Functions, and Delegations of Authority; Administration for Community Living, 77 FR 23250 (Apr. 28 2012)). This consolidation reflected these organizations' shared mission to maximize the independence, well-being, and health of older adults, people with disabilities across the lifespan, and their families and caregivers. Since the creation of ACL, a number of synergistic programs have been transferred under its purview, including the State Health Insurance Assistance Programs (SHIPs) from the Centers for Medicare and Medicaid Services (CMS) (Department of Health and Human Services Appropriations Act, 2014, Public Law 113-76 (Jan 17, 2014)) and the National Institute on Disability, Independent Living, and Rehabilitation Research (NIDILRR) and the Independent Living Administration from the Department of Education in 2014 (Workforce Investment and Opportunity Act of 2014, Public Law 113-128 (July 22, 2014)).

Many of ACL's component programs and organizations had existing regulations prior to their transfer. ACL is consolidating these regulations in a single place to streamline administration and increase access and transparency. This rule renames the Administration on Aging's subchapter C of chapter XIII, subtitle B, title 45 from “The Administration on Aging, Older Americans Programs” to “The Administration for Community Living.” It then rearranges the existing AoA rules sequentially. This rule also transfers the existing AIDD rules from subchapter I to ACL's subchapter C. Conforming edits are made throughout in order to correct internal citations.

Publication of this document constitutes final action on this change under the Administrative Procedures Act (5 U.S.C. 553). ACL has found that notice and public comment procedures are unnecessary because ACL is making a technical change merely updating the location and order of existing content.

This Final Rule will be effective July 1, 2016, in order to allow the Long Term Care Ombudsman final rule, one of the sections being renumbered within ACL's subchapter, to take effect.

Although this Final Rule contains no changes to programmatic or reporting requirements, we include the following table summarizing the changes made in order to simplify public understanding of the Final Rule:

For the reasons discussed in the preamble, under the authority at 5 U.S.C. 301, 42 U.S.C. 3001 et seq., and 42 U.S.C. 15001 et seq., the Department of Health and Human Services, the Administration for Community Living, and the Administration for Children and Families amend title 45, chapter XIII, subchapter C, and title 45, chapter XIII, subchapter I, respectively, as follows:

Navigation and Vessel Inspection Circular (NVIC) 04-08 is available on the Internet at: http://www.uscg.mil/hq/cg5/nvic/pdf/2008/NVIC%2004-08%20CH%201%20with%20Enclosures%2020130607.pdf. It can also be viewed on the Coast Guard's Web site at: www.uscg.mil/nmc.

Coast Guard regulations contained in 46 CFR part 10, subpart C, contain the medical and physical standards that merchant mariner applicants must meet prior to being issued a merchant mariner medical certificate. NVIC 04-08 provides guidance to the regulated community on how to comply with the regulations pertaining to medical and physical qualifications for merchant mariners.

On December 24, 2013, the Coast Guard published a final rule in the Federal Register (78 FR 77796) entitled “Implementation of the Amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, and Changes to National Endorsements.” It amended 46 CFR parts 1, 10, 11, 12, 13, and 15 to implement the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978 (STCW Convention), including the 2010 amendments to the STCW Convention, and the Seafarers' Training, Certification and Watchkeeping Code, as well as updating requirements for national endorsements. The final rule also established the merchant mariner medical certificate as a document issued independently of the merchant mariner credential. Merchant mariner credentials issued after January 24, 2014, and that require a general medical examination are not valid for service unless accompanied by a valid medical certificate. Enclosures (1) and (6) of NVIC 04-08 required revision to reflect changes implemented with the final rule and a reorganization of the mariner credentialing function.

Guidance on medication use contained in Enclosure (4) to NVIC 04-08 prior to Change-2 noted that use of certain medications was considered disqualifying for issuance of credentials. The guidance did not provide details on the types of medications that might lead to denial of a medical certificate, nor did it provide discussion of the information and criteria that the Coast Guard considers in determining whether to issue a waiver for certain medications.

In developing this policy, the Coast Guard sought recommendations from the Merchant Mariner Medical Advisory Committee (MEDMAC) on waiver considerations for mariner applicants whose conditions require the use of potentially impairing medications while operating under the authority of the credential. In response to Coast Guard Task Statement 14-09, Medical Evaluation of Merchant Mariners Treated with Potentially Impairing Medications, MEDMAC recommended that medications with central nervous depressant effects, such as opioid, benzodiazepine, or non-benzodiazepine medications, be considered disqualifying and generally not waiverable. They also recommended that the following medications be determined disqualifying: medications that impair vision, anticoagulants, anti-metabolites and cancer treatments, sedating anti-histamines, antipsychotics, opioid-like analgesics, anti-seizure medications, and stimulant medications, such as amphetamine and methylphenidate. MEDMAC's recommendations did not include specific criteria for waiver consideration for mariners whose conditions require the use of potentially impairing medication while operating under the authority of the credential.

On January 28, 2015, the Coast Guard published a notice in the Federal Register requesting public comments on a proposed revision to Enclosure (4) that would provide more in-depth guidance on these issues (80 FR 4582).

We summarize the policy contained in Change-2 to NVIC 04-08 and address the public comments received on the proposed revision to Enclosure (4) below.

Enclosure (1) and Enclosure (6). The revised Enclosure (1) Medical Certification Standards summarizes the medical and physical requirements for mariner endorsements and provides additional guidance regarding the medical certificate. The revision to Enclosure (6) provides guidance on the medical review process used to determine if a mariner meets the medical and physical standards for issuance of a medical certificate.

Enclosure (4)—Medications. The revision to Enclosure (4) provides guidance to the regulated community on medications that may be deemed disqualifying for issuance of a medical certificate due to risks of impairment or other safety concerns. The new guidance also clarifies the extenuating circumstances related to the use of potentially impairing medications that the Coast Guard weighs in evaluating risks to public and maritime safety, and in determining suitability for a medical waiver. The revised enclosure additionally provides a safety warning to mariners advising them to refrain from operating under the authority of the credential when they are under the influence of any medication that can cause drowsiness, or impair cognitive ability, judgment, or reaction time. The revised guidance for mariners seeking a waiver to use potentially impairing medications while operating under the authority of the credential follows.

Medications that may impair cognitive ability, judgment or reaction time are considered disqualifying for issuance of credentials. The underlying condition, as well as the effects of the medications, may lead to denial of a medical certificate or may result in issuance of a waiver.

Due to the documented risks of impaired cognition, judgment, and reaction time associated with the use of certain legally prescribed controlled substances; the Coast Guard has determined that use of these medications while acting under the authority of the credential generally will not be waived. These medications include, but are not limited to opioid/opiate medications, benzodiazepine medications, non-benzodiazepine sedative hypnotic medications, and barbiturate medications. However, waivers may be considered, on a case-by-case basis, if the Coast Guard determines that there are exceptional circumstances that warrant consideration for a waiver.

Exceptional Circumstances. The criteria for waiver consideration for applicants seeking to use, or be under the influence of, medications that may impair their cognitive ability, judgment, or reaction time, while acting under the authority of the credential, are listed below. Applicants unable to meet all of the criteria are only considered for a waiver under extraordinary circumstances, if the Coast Guard deems the risk of impairment to be sufficiently low. The criteria follow.

1. The mariner was previously granted a waiver allowing use of the same medication while working under the authority of the credential, where the credential was of the same scope of authority.

2. The mariner demonstrated compliance with all terms of the prior waiver.

3. There were no accidents or other safety concerns related to medication, judgment, cognitive ability, or reaction time during the course of the prior waiver period(s).

4. The mariner has been on a stable medication regimen for a minimum of 2 years, as documented by the treating physician and pharmacy records.

a. Mariners who have required periodic increases in medication dosing during the preceding 2-year period would not meet this criterion.

b. Mariners who have consistently or periodically supplemented their medication regimen with other disqualifying medications during the 2-year period are not likely to be considered as meeting this criterion. For example, an individual who has been on a stable dose of one opioid pain medication for 2 years, but has also periodically taken or filled prescriptions for an opioid cough medication during that same time period, would not be considered as being on a stable dose of medicine.

c. Mariners whose medication dose has been decreased or tapered off, without subsequent dose increase, may be considered as meeting this criterion.

5. The mariner is not seeking to use, or be under the influence of, more than one medication with risk for impairment while working under the authority of the credential.

6. The mariner's treating physician provides written assessment that adequately addresses all information requested in the section on Recommended Evaluation Data for Medication Waivers Requiring Special Consideration, and that supports a determination that the mariner is at low risk for medication impairment based upon objective testing and standard evaluation tools.

7. When requested, formal neuropsychological/neurocognitive testing, performed as outlined in the section providing guidance on formal neuropsychological/neurocognitive evaluation, documents the absence of significant medication impairment.

8. The mariner does not use any other medications or have any other medical conditions, which may alone, or in combination, adversely affect the mariner's fitness.

9. Use of methadone may not be waived under any circumstances.

The risk presented by the mariner's position may be considered in determining whether to grant a waiver. Because of the wide-range of operational conditions, it is impossible to set out in advance which positions may be suitable for a waiver. The Coast Guard retains final authority for the issuance of waivers. Waivers may include restrictions and/or operational limitations on the credential.

Recommended Evaluation Data for Medication Waivers Requiring Special Consideration. Applicants seeking consideration for a medication waiver for the use of medications that may impair cognitive ability, judgment, or reaction time, while acting under the authority of the credential, should submit the additional information detailed below, for each medication.

1. A letter from the prescribing and/or treating physician that includes the following:

a. Whether the physician has familiarized himself/herself with the detailed guidelines on medical conditions and medications contained in NVIC 04-08.

b. Whether the physician understands the safety-sensitive nature of the credential and the specialized shipboard environment.

c. A detailed discussion of the condition that requires the use of the potentially impairing medication.

d. A description of any known complications experienced by the mariner from the use of a particular medication, level of current stability, and prognosis of the underlying condition. The physician should also provide his or her professional opinion on whether the condition is suitable for safety-sensitive work.

e. A description of the dosage and frequency of use of the medication (this description should be very specific; “as needed” is not sufficient information). The description should also reflect that the physician has reviewed the mariner's pharmacy records for documentation of the number of pills dispensed for use each month and documentation of the length of time that the mariner has been on the medication.

f. A detailed statement about whether the mariner is taking the medication as directed, and if there are any concerns of misuse or overuse of the medication.

g. A statement about whether the mariner is compliant with therapy and follow-up appointments.

h. A statement about whether the mariner requires use of this medication while at work, or while aboard the vessel. If the mariner requires use of the potentially impairing medication while at work or while aboard the vessel, the physician should provide a detailed explanation and rationale for the use.

i. A statement about whether the physician has advised the mariner of the risks of impairment related to the medication. The physician should also discuss any risks advised, as well as any instructions discussed with the mariner for mitigating risk.

j. A statement about whether the mariner's other medications, medical conditions, and work/sleep conditions might compound the impairing effects of this medication. This discussion should reflect that the physician has knowledge of the specifics of the mariner's medications, medical conditions, and work/sleep schedule.

k. A statement about whether the physician has formally evaluated the mariner for the presence of any impairing medication effects. This discussion should include a description of the method of evaluation utilized, as well as the findings.

l. A medical opinion of whether the mariner has any medication effects that would impede safe operation of a vessel or interfere with work in a safety sensitive position. This discussion should include the rationale for the physician's opinion.

m. A statement of whether the physician has advised the mariner that it is safe to operate a vessel, operate hazardous machinery, and perform safety sensitive functions while under the influence of this medication.

2. When specifically requested by the reviewing authority, additional amplifying information, to include a formal neuropsychological/neurocognitive evaluation.

a. In particular, mariners seeking waivers to use or be under the influence of potentially impairing opioid/opiate, benzodiazepine, sedative hypnotic, and/or barbiturate medications, while acting under the authority of the credential, may be asked to submit the results of a formal neuropsychological/neurocognitive evaluation.

b. The Coast Guard will not normally request a neuropsychological/neurocognitive evaluation unless the applicant meets all other requirements for waiver consideration. This is to prevent mariners from undergoing costly testing when issuance of a waiver is unlikely.

c. Mariners are advised that submission of neuropsychological/neurocognitive evaluation results does not guarantee issuance of a waiver.

d. When a formal neuropsychological/neurocognitive evaluation is requested, the assessment should include objective assessment of the following functions, at a minimum:

(1) Alertness, arousal, and vigilance;

(2) Attention (focused, shifting, and divided), processing speed, and working memory;

(3) Reaction time (choice and complex), psychomotor function, upper motor speed, and coordination;

(4) Sensory perceptual function;

(5) Executive function: mental flexibility, adaptive problem solving, abstract reasoning, impulse control, risk taking/risk assessment, organizational ability (including visual spatial organization), and planning;

(6) Memory; and

(7) Communication skills.

e. When a formal neuropsychological/neurocognitive evaluation is requested, the evaluation and narrative interpretation must be provided by a neuropsychologist who is board-certified and licensed in the United States.

f. The report of the formal neuropsychological/neurocognitive evaluation should also include:

(1) Documentation of witnessed administration of the medication in question by a licensed medical provider; and

(2) Documentation of the time interval between ingestion of the medication and administration of the neuropsychological/neurocognitive testing battery.

Certain medications, whether prescription or over-the-counter, have known impairing effects and their labels warn about the risk of drowsiness and caution against use while driving or operating hazardous machinery.

The nature of shipboard life and shipboard operations is such that mariners may be subject to unexpected or emergency response duties associated with vessel or crew safety, and prevention of pollution and maritime security at any time while aboard a vessel.

In the interest of safety of life and property at sea, the Coast Guard views shipboard life and the attendant shipboard duties that can arise without warning, as safety sensitive duties that are analogous to operating hazardous machinery. As such:

1. Mariners are advised to discuss all medication use with their treating providers and to inform them of the safety sensitive nature of their credential; and

2. Mariners are cautioned against acting under the authority of their credential while under the influence of medications that:

a. Can cause drowsiness; or

b. Can impair cognitive ability, judgment, or reaction time; or

c. Can carry warnings that caution against driving or operating heavy machinery.

3. Mariners are advised that they are considered to be acting under the authority of the credential anytime they are aboard a vessel in a situation to which 46 CFR 5.57(a) applies, even when off-watch or while asleep.

The Coast Guard's notice sought general comments on whether the proposed revision to Enclosure (4) adequately addresses safety concerns regarding merchant mariners whose medical conditions require use of potentially impairing medication. The Coast Guard received 13 comment letters in response.

The majority of commenters expressed general agreement with the proposed policy clarification, noting that it provides a case-by-case or individualized assessment of a mariner applicant's condition, instead of imposing a blanket denial for all mariner applicants who require the use of potentially impairing medications, while operating under the authority of the credential. The Coast Guard notes that even prior to Change-2, NVIC 04-08 provided for a case-by-case evaluation of each applicant's condition. The additional specificity of the guidance and criteria included in Change-2 will help provide a consistent framework for those evaluations.

One commenter suggested that the guidance in the proposed policy be made enforceable by incorporating it into regulation. This same commenter also recommended that the guidance include a requirement for mariners to inform vessel owners/operators when they are under the influence of prescription or over-the-counter medications. The Coast Guard disagrees with both comments. First, the purpose of this proposed policy is not to regulate, but instead, to provide guidance to the regulated community on how the Coast Guard evaluates mariners who require the use of certain medications. The policy provides the framework for individualized assessment and allows flexibility for consideration of factors specific to each affected mariner. On the issue of requiring mariners to inform vessel owners/operators about their medications, the Coast Guard does not have any statutory authority to enact such a requirement.

Two commenters disagreed with the policy clarification, arguing that it is overly restrictive in that it presumes that all mariners on the medications are impaired and does not give sufficient deference to the opinion of the treating physician. The Coast Guard notes that the policy is stringent, but holds that it strikes an adequate balance that includes strong consideration of the treating physician's opinion along with objective assessment for signs of impairment. Because of the safety sensitive nature of the medical certificate, the Coast Guard contends that neither mariner self-assessment, nor provider limited office-based assessment, is sufficient to rule out the risk of significant cognitive impairment in cases where the mariner seeks to use medications with known risk of impairment while operating under the authority of their credential. The Coast Guard notes that this opinion was also shared by all of the medical professionals who provided comment on the policy. They all agreed that the treating provider's office assessment would not be sufficient to ensure that a mariner applicant was free of impairing medication effects when using medications of this type.

Three commenters opposed the proposed policy clarification, arguing that the Coast Guard should never issue waivers for mariners who require the use of potentially impairing medications, while operating under the authority of the credential, regardless of the circumstances. The Coast Guard acknowledges that individuals who use potentially impairing medications may suffer impairment, but finds that there is no evidence to support a conclusion that all individuals will uniformly suffer impairment. On this basis, the Coast Guard disagrees with imposing a new, blanket exclusion against all mariners who require the use of potentially impairing medication while operating under the authority of the credential. The merchant mariner medical regulations contained in 46 CFR part 10, subpart C, do not prohibit the use of legally prescribed medications, to include opioids, benzodiazepines, and non-benzodiazepine sedative hypnotics; and NVIC 04-08 has always provided for an individualized assessment of mariner applicants.

The Coast Guard additionally emphasizes that the proposed policy clarification is not a change in policy; rather, it provides the regulated community with specificity and outlines the factors that the Coast Guard will consider during the individualized assessment of mariner applicants who require the use of potentially impairing medications, while operating under the authority of the credential. The individualized assessment considers whether the specifics of an applicant's medical condition, medical history, medication use, and cognitive functioning indicate a low likelihood of impairment, or indicate findings that suggest impairment. The Coast Guard contends that the policy clarification contained in Change-2 to NVIC 04-08 adequately strikes a balance between potential safety concerns and putting mariners out of work unnecessarily, and that individuals who meet all of the criteria outlined in this policy are at low enough risk to warrant consideration for a medical waiver. A blanket exclusion of mariner applicants who meet all of these criteria would likely put mariners out of work without sufficient cause.

One commenter recommended that the Coast Guard provide stronger guidance for over-the-counter anti-motion sickness agents, noting that some of these agents are so sedating that they are sometimes used to induce sleep. The Coast Guard agrees and included a safety warning for use of anti-motion sickness agents that cause drowsiness or impairment.

One commenter argued that the proposed policy clarification's requirement for mariners to report all over-the-counter medications taken is confusing and unnecessarily broad. The commenter noted that while the current medication guidance only requires reporting of over-the-counter medications that were taken for a period of 30 days or more, the proposed guidance suggests that mariners would be held accountable if they did not remember to report even a single dose of a vitamin or fiber tablet taken. The Coast Guard acknowledges that the proposed language on medication disclosure may cause unnecessary concern and confusion. The language in the proposed policy was revised, therefore, to retain the language from the current guidance document regarding the disclosure of over-the-counter medications. The revised language reads: mariner applicants need only report over-the-counter medications that were taken for a period of 30 days or more, within the 90 days prior to the date that the applicant signs the application to the Coast Guard.

Regarding the use of neuropsychological/neurocognitive evaluation, two commenters asserted that the Coast Guard should require neuropsychological/neurocognitive evaluation for all mariners seeking to use potentially impairing medication, while operating under the authority of the credential. Another commenter agreed that such testing would be useful, but contended that such testing would be time and cost prohibitive. Two commenters opposed requiring neuropsychological/neurocognitive evaluations for all applicants in this category because they deemed it unnecessary and expensive. The Coast Guard agrees that while it might be ideal to review neuropsychological/neurocognitive evaluation results for all mariner applicants who seek to use potentially impairing medications when operating under the authority of the credential, such testing may not be necessary in all cases. Therefore, the Coast Guard has retained the wording from the proposed policy indicating that a neuropsychological/neurocognitive evaluation need only be provided when requested by the Coast Guard, as part of the individualized assessment.

Another commenter argued that the Coast Guard would not be able to implement a process to request neuropsychological/neurocognitive evaluation on the basis that testing is time-consuming and expensive, and that there are no objective neurocognitive evaluation tools that are readily available to primary care providers. The Coast Guard agrees that neuropsychological/neurocognitive evaluation may be expensive and time consuming and that the associated evaluation tools are not readily available to primary care providers. However, we disagree with the assertion that their use is not warranted in certain situations. Such a situation may occur during the course of conducting an individualized assessment. Without information from a neuropsychological/neurocognitive evaluation, the evaluator is left to presume the presence or absence of medication impairment based upon limited information. To presume that an applicant is impaired by their medication and deny them medical certification when no impairment truly exists, may result in extraordinary costs for the mariner applicant, including loss of employment, with resultant loss of home and healthcare. Alternatively, to assume that no medication impairment exists when a mariner applicant is actually experiencing impairment, may result in unacceptably high costs to public and maritime safety, should a maritime casualty result. It is important to note that this section of the proposed policy describes the information that the Coast Guard will consider when determining whether extenuating circumstances exist that warrant consideration for a medical waiver for mariners seeking to use potentially impairing medications, while operating under the authority of the credential. As is often the case for any medical condition that is disqualifying and generally not approved for waiver, the evaluation to determine extenuating circumstances may often require assessment and testing that is beyond the scope of the primary care provider. When formal neuropsychological/neurocognitive evaluation is requested as part of the individualized assessment for use of impairing medications, while operating under the authority of the credential, the Coast Guard fully expects that this evaluation will be performed by a specialist trained to perform such evaluations. The Coast Guard also notes that while this testing may be time-consuming and expensive, a formal neuropsychological/neurocognitive evaluation can provide critical documentation on the presence or absence of impairing medication effects for those mariners seeking to use potentially impairing medication, while operating under the authority of the credential. When the Coast Guard determines that a formal neuropsychological/neurocognitive evaluation is needed, the results of the assessment will be considered in the context of the other extensive medical documentation provided to determine whether extenuating circumstances exist that warrant special consideration for a medical waiver. The decision of whether such testing is too time-consuming or too expensive will ultimately be left up to the individual mariner who seeks to demonstrate extenuating circumstances.

On the question of which neuropsychological/neurocognitive functions should be measured, and the appropriate standard for test outcome, one commenter opined that such a determination would require further substantial research on individual job requirements. Another commenter recommended that the Coast Guard add memory and communication skills to the proposed list of neuropsychological/neurocognitive domains, to make the overall panel similar to that used by the Federal Aviation Administration. Another commenter recommended that a witness observe the mariner applicant taking the medication in question prior to the administration of the neuropsychological/neurocognitive evaluation. The Coast Guard considered all of these comments and noted that there are already well-established, validated testing measures for various domains of neuropsychological/neurocognitive functioning. Additionally, other modes of transportation have identified specific neuropsychological/neurocognitive domains that are critical for tasks such as flying an airplane or for driving a motor vehicle. The neuropsychological/neurocognitive functions identified for evaluation in the proposed policy reflect those functions recommended as critical for safe motor vehicle driving. In consideration of the public comments, the current policy has been revised to include testing of memory and communication skills as required elements of the neuropsychological/neurocognitive evaluation, when such testing is requested by the Coast Guard. The current policy also specifies that medication administration should be witnessed and documented by a provider prior to the conduct of neuropsychological/neurocognitive evaluation, when such testing is requested by the Coast Guard.

This document is issued under the authority of 5 U.S.C. 552(a), 46 U.S.C. 7101 et seq., 46 CFR part 10, subpart C, and Department of Homeland Security Delegation No. 0710.1.

This is a synopsis of the Commission's Report and Order, MB Docket No. 16-29, adopted and released May 16, 2016. The full text of this document is available for public inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street SW., Washington, DC, 20554. This document will also be available via ECFS (http://fjallfoss.fcc.gov/ecfs/). 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).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980, see 5 U.S.C. 601-612, do not apply to this proceeding.

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

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:

The DGN fishery is managed under the Fishery Management Plan for U.S. West Coast Fisheries for Highly Migratory Species (50 CFR part 660, subpart K) and occurs off the coast of California. NMFS regulations provide that no person may fish with, set, or haul back drift gillnet gear in U.S. waters of the Pacific Ocean east of the 120° W. meridian from June 1 through August 31 during a forecasted, or occurring, El Niño event off the coast of southern California (50 CFR 660.713(c)(2)). This area, which falls within the Southern California Bight (SCB), is referred to in the regulations as the “Pacific loggerhead conservation area.”

Under 50 CFR 660.713(c)(2)(ii), the AA is to rely on information developed by NOAA offices (the Climate Prediction Center (CPC) and the West Coast Office of the Coast Watch program) to make the determination that an El Niño event is forecasted or occurring off southern California. The AA is to use monthly sea surface temperature (SST) charts to determine whether there are warmer-than-normal SSTs off southern California “during the months prior to the closure months for years in which an El Niño event has been declared” by the CPC. Specifically, the AA is to use SST data from the third and second months prior to the month of closure.

NMFS published these regulations to protect loggerhead sea turtles, which are listed under the Endangered Species Act. The regulations addressed a reasonable and prudent alternative (RPA) included in NMFS' 2000 biological opinion on issuance of an incidental take permit under the Marine Mammal Protection Act. The biological opinion concluded that bycatch in the DGN fishery was likely to jeopardize the continued existence of loggerhead sea turtles and, as an RPA, recommended the fishery be closed during the summer months when El Niño conditions are present to avoid the likelihood of jeopardy.

On March 5, 2015, the CPC issued an El Niño Advisory, declaring that El Niño conditions were present in equatorial waters. Since that initial advisory, all monthly CPC updates have stated that El Niño conditions remain in these waters. The May 12, 2016, update reaffirmed El Niño conditions are currently present.

In May 2016, NMFS staff reviewed the SST anomalies in the SCB during March and April of 2016, relying on SST maps available through NOAA's Coast Watch program (for details see http://coastwatch.pfeg.noaa.gov/erddap/index.html). These maps indicated that SSTs were above normal in the SCB. NMFS concluded that a determination of El Niño conditions off southern California is warranted based on SSTs that are warmer than normal during the third and second months prior to the month of the closure, consistent with regulations at 50 CFR 660.713(c)(2)(ii).

If SSTs return to normal or below normal during a closure period, regulations at 50 CFR 660.713(c)(2)(iii) state that the AA may re-open the fishery after publishing a Federal Register notice announcing that El Niño conditions are no longer present in the SCB.

This action is required by regulations at 50 CFR 660.713 and is exempt from Office of Management and Budget review under Executive Order 12866.

NMFS finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) for the time-area closure of the DGN fishery. Notice and comment procedures are impracticable and contrary to the public interest. The most recent El Niño determination occurred on May 12, 2016, and regulations require that the closure period begin on June 1; therefore, there is insufficient time for notice and comment procedures. For the same reasons, NMFS also finds good cause under 5 U.S.C. 553(d)(3) to waive the general requirement for a 30-day delay in effectiveness for this action. This measure is based upon the best available information and is necessary for the conservation of loggerhead sea turtles. The closure period anticipated by the regulation ends, at the latest, on August 31, 2016. A delay in effectiveness may allow the fishery to interact with and injure or kill loggerhead sea turtles that may occur within the SCB during the time period in which the regulation was intended to protect loggerheads.