Federal Register Vol. 81, No.120,

Background

FCIC amends the Common Crop Insurance Regulations (7 CFR part 457) by revising 7 CFR 457.8 Common Crop Insurance Regulations, Basic Provisions. The changes to the policy made in this rule are applicable for the 2017 and succeeding crop years for all crops with a contract change date on or after June 22, 2016, and for the 2018 and succeeding crop years for all crops with a contract change date prior to June 22, 2016.

FCIC is issuing this final rule without opportunity for prior notice and comment. The Administrative Procedure Act exempts rules “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts” from the statutory requirement for prior notice and opportunity for public comment (5 U.S.C. 553(a)(2)). However, FCIC is providing a 60-day comment period and invites interested persons to participate in this rulemaking by submitting written comments. FCIC may consider the comments received and may conduct additional rulemaking based on the comments.

The changes to the Common Crop Insurance Regulations, Basic Provisions (7 CFR part 457) are as follows:

(a) Section 1—FCIC is revising the definition of “practical to replant.” Concerns have been raised regarding the definition of “practical to replant” and the difficulty and inconsistency that can occur in administering the practical to replant provisions of the crop insurance policy. Approved insurance providers have stated the provisions, as written, regarding “practical to replant” lead to different approved insurance providers reaching differing determinations as to whether it is practical to replant in the same area. FCIC is revising the definition to provide a clear, known deadline for when replanting of the crop is considered to be practical and if not replanted, coverage will not be provided for the initial crop. The definition provides an exception for adverse weather conditions that would either prohibit the physical replanting of the crop, or impact seed germination, emergence, and formation of a healthy plant.

(b) Section 15—FCIC is revising section 15 to allow the allocation of comingled first and second crop production to the associated crop acreage in proportion to the liability for the acreage that was and was not double cropped. Some producers have found challenges keeping separate records of acreage and production that was and was not double cropped because often times the acreage is in the very same field and they harvest both first and second crop production at the same time. For example, if a producer has two fields in the same unit, or one field half of which was first crop acreage and half that was double crop acreage, next to each other and on one field they plant wheat, harvest the wheat, and plant soybeans while the other field was a single crop of soybeans only, they may harvest both soybean fields at the same time making it difficult to keep the production separate. This change has previously been implemented administratively through MGR-11-003.

FCIC is also revising section 15 to allow eligible double cropping acres to be based on either, (1) the greatest number of acres double cropped in two of the last four crop years in which the first insured crop was planted; or (2) the percentage of acres historically double cropped in two of the last four crop years in which the first insured crop was planted. Current double cropping requirements do not adequately recognize changes in growing farm operations or for added land. This change will address both land added to an operation, and account for multiple crop rotations. For example, if a producer has a 100-acre farm and has historically double cropped 50 acres planted to wheat followed by soybeans (50 percent of acres historically double cropped), and the producer purchases and plants an additional 200 acres of wheat for a total of 300 acres of planted wheat, the number of acres eligible for double cropping would be based on 50 percent, or 150 acres. If the producer has historically double cropped wheat followed by soybeans on some or even all of the acreage, there is a reasonable presumption they may continue to do so in the future.

Previously, changes made to the Federal crop insurance policies codified in the Code of Federal Regulations were required to be implemented through the rulemaking process. Such action was not required by the Administrative Procedures Act because contracts were exempt from notice and comment rulemaking and the crop insurance policy is a contract. However, a prior Secretary of Agriculture published a notice in the Federal Register stating that the Department of Agriculture would, to the maximum extent practicable, use the notice and comment rulemaking process when making program changes, including those involving contracts. FCIC has complied with this notice over the subsequent years. Recently, the current Secretary of Agriculture has published a notice in the Federal Register rescinding the prior notice, thereby making contracts again exempt from the notice and comment rulemaking process. This exemption applies to the 30 day notice prior to implementation of a rule. Therefore, the policy changes made by this final rule are effective upon publication in the Federal Register.

This rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, it has not been reviewed by the OMB.

Pursuant to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35, subchapter I), the collections of information in this rule have been approved by OMB under control number 0563-0053.

FCIC is committed to complying with the E-Government Act of 2002, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under section 1(a) of Executive Order 13132, Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The Federal Crop Insurance Corporation has assessed the impact of this rule on Indian tribes and determined that this rule does not, to our knowledge, have tribal implications that require tribal consultation under E.O. 13175. If a Tribe requests consultation, the Federal Crop Insurance Corporation will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress.

FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Program requirements for the Federal crop insurance program are the same for all producers regardless of the size of their farming operation. For instance, all producers are required to submit an application and acreage report to establish their insurance guarantees and compute premium amounts, and all producers are required to submit a notice of loss and production information to determine the indemnity amount for an insured cause of crop loss. Whether a producer has 10 acres or 1000 acres, there is no difference in the kind of information collected. To ensure crop insurance is available to small entities, the Federal Crop Insurance Act (FCIA) authorizes FCIC to waive collection of administrative fees from limited resource farmers. FCIC believes this waiver helps to ensure that small entities are given the same opportunities as large entities to manage their risks through the use of crop insurance. A Regulatory Flexibility Analysis has not been prepared since this regulation does not have a significant impact on a substantial number of small entities, and, therefore, this regulation is exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605).

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See 2 CFR part 415, subpart C.

This rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. With respect to any direct action taken by FCIC or action by FCIC directing the insurance provider to take specific action under the terms of the crop insurance policy, the administrative appeal provisions published at 7 CFR part 11 must be exhausted before any action against FCIC for judicial review may be brought.

This action is not expected to have a significant economic impact on the quality of the human environment, health, or safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation amends 7 CFR part 457 as follows:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Embraer S.A. Model ERJ 170 airplanes; and all Embraer S.A. Model ERJ 190-100 STD, -100 LR, -100 IGW, -200 STD, -200 LR, and -200 IGW airplanes. The NPRM published in the Federal Register on November 30, 2015 (80 FR 74720) (“the NPRM”).

The Agência Nacional de Aviação Civil (ANAC), which is the aviation authority for Brazil, has issued Brazilian Airworthiness Directive 2015-02-02, effective March 6, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Embraer S.A. Model ERJ 170 airplanes; and all Embraer S.A. Model ERJ 190-100 STD, -100 LR, -100 IGW, -200 STD, -200 LR, and -200 IGW airplanes. The MCAI states:

The unsafe condition is failure of the low-stage bleed check valve; simultaneous failures of both low-stage bleed check valves could result in a dual engine in-flight shutdown. The required action is replacement of the AMS controller operation program of the AMS controller processor boards, and replacement of the low-stage bleed check valves and associated seals. You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-6542.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.

An anonymous commenter requested that we revise the NPRM to authorize operators to install used valves that have been overhauled by the manufacturer or other authorized 14 CFR part 145 repair station. The commenter stated that the historical service records required to determine the serviceability of used valves installed on airplanes are not required by 14 CFR 91.417 and are generally not available. According to the commenter, this limits the ability of operators of Embraer Model ERJ 170 airplanes to adequately determine the service history of valves that were previously installed on Embraer Model ERJ 190 airplanes, and whether the installation of a used valve will meet compliance with the requirements of paragraph (j)(1) of the proposed AD.

We disagree to revise this AD to authorize operators to install used valves that have been overhauled. A valve that has been used on a Model ERJ 190 airplane without the AMS controller operational program version Black Label 13 or later version has been subjected to hydraulic pressures above the valve's structural limits. The damage to the valve could be undetectable, and the valve can therefore experience premature cracking. However, as is stated in paragraph (i) of this AD, low-stage bleed check valves having P/N 1001447-6 that can be demonstrated with logged hours only on Model ERJ-170 airplanes and/or on Model ERJ-190 airplanes equipped with the AMS controller operational program version Black Label 13, or a later version, can be used instead of new ones (zero-hour). We have made no changes to this AD in this regard.

Embraer requested that we revise the unsafe condition in the NPRM to indicate that a single valve failure cannot result in a dual engine failure. Embraer stated that a dual engine failure can occur only in the event of simultaneous failures of both valves on both engines on the same flight.

For the reasons stated by Embraer, we agree to include the requested phrasing in all appropriate locations in this final rule.

United Technologies Aerospace Systems (UTAS) requested that we revise the applicability of the NPRM to include Model ERJ “195 airplanes” and limit the applicability for Model ERJ 170 airplanes (including Model ERJ “175 airplanes”) to those “requiring replacement check valves.”

We disagree to revise the applicability of this AD. There is a difference between the commercial designation and the model designation on the type certificate data sheet (TCDS): “ERJ 175” is the commercial designation of Model ERJ 170-200 airplanes on the TCDS, and “ERJ 195” is the commercial designation of Model ERJ 190-200 airplanes on the TCDS. We use the model designation on the TCDS to define the applicability of ADs.

Although this AD is applicable to Model ERJ 190 and Model ERJ 170 airplanes, the only requirement for Model ERJ 170 airplanes is included in paragraph (j)(1) of this AD, which is related to installation of used low-stage bleed check valves having P/N 1001447-6 on Model ERJ 170 airplanes. As noted in the NPRM, ANAC is considering future rulemaking to include a similar requirement. We have made no changes to this AD in this regard.

UTAS requested that we revise paragraph (e), “Reason,” of the proposed AD to specify that cracks were found only on check valve P/N 1001447-6 on Model ERJ 190 airplanes.

Although we agree that cracks may have been found only on check valveP/N 1001447-6 on Model ERJ 190 airplanes, we disagree to revise paragraph (e), “Reason,” of this AD. The unsafe condition of this AD is not limited to Model ERJ 190 airplanes since the check valves may also be installed on Model ERJ 170 airplanes. We have made no changes to this AD in this regard.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

Embraer has issued Service Bulletin 190-36-0023, Revision 03, dated September 24, 2014; and Service Bulletin 190-21-0041, Revision 02, dated July 30, 2013. The service information describes procedures for replacing the engine low-stage bleed check valves. Embraer Service Bulletin 190-21-0041, Revision 02, dated July 30, 2013, also describes procedures for replacing the AMS controller operation program of the AMS controller processor boards. 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.

We estimate that this AD affects 197 airplanes of U.S. registry.

We also estimate that it will 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. Required parts will cost about $638 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $192,666, or $978 per product.

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

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

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

For the reasons discussed above, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under 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.

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to the specified products. The NPRM was published in the Federal Register on March 18, 2016 (81 FR 14804). The NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

You may obtain further information by examining the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-2042.

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (81 FR 14804, March 18, 2016).

We reviewed the available data and determined that air safety and the public interest require adopting this AD as proposed expect for minor editorial changes. We determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

BRP-Powertrain GmbH & Co KG has issued Service Bulletin (SB) SB-912-068/SB-914-049 (one document), dated April 16, 2015. The service information describes procedures for re-identification of the type plate for certain BRP-Powertrain GmbH & Co KG Rotax 912 and 914 engines. 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.

We estimate that this AD affects about 40 engines installed on aircraft of U.S. registry. We also estimate that it will take about 5 hours per engine to inspect and re-identify the type plate. The average labor rate is $85 per hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $17,000.

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 to the extent that it justifies making a regulatory distinction, and

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 787-8 airplanes. The NPRM published in the Federal Register on November 17, 2015 (80 FR 71745), (“the NPRM”). The NPRM was prompted by a report that certain center and outboard stowage bin modules were incorrectly installed. The NPRM proposed to require an inspection of the center and outboard stowage bin modules for missing parts, quick release pins that are not fully engaged, and parts that are installed in incorrect locations; and corrective actions if necessary. We are issuing this AD to detect and correct incorrectly installed center and outboard stowage bin modules that might not remain intact during an emergency landing, resulting in injuries to occupants and interference with airplane evacuation.

We gave the public the opportunity to participate in developing this AD. The following presents the comment received on the NPRM and the FAA's response to that comment.

United Airlines stated that it would be helpful if the service information provided examples (illustrations or descriptions) of incorrectly installed parts that required removal. We infer that the commenter is requesting a revision to the service information to include examples of incorrectly installed parts.

We disagree with the commenter's request. We consider that it would be potentially confusing to show examples of possible incorrect part installations. We have determined that the service information should provide detailed illustrations of proper installation configurations. A general description of the incorrect installations is provided. We have not changed this final rule regarding this issue.

We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this 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 for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We reviewed the following Boeing service information. This service information describes procedures for inspecting the installation of the center and outboard stowage bin modules and doing corrective actions.

• Boeing Alert Service Bulletin B787-81205-SB250036-00, Issue 001, dated September 10, 2013.

• Boeing Alert Service Bulletin B787-81205-SB250039-00, Issue 001, dated October 8, 2013.

• Boeing Alert Service Bulletin B787-81205-SB250040-00, Issue 001, dated October 14, 2013.

• Boeing Alert Service Bulletin B787-81205-SB250041-00, Issue 001, dated October 18, 2013.

• Boeing Alert Service Bulletin B787-81205-SB250042-00, Issue 001, dated October 28, 2013.

• Boeing Alert Service Bulletin B787-81205-SB250043-00, Issue 001, dated November 4, 2013.

• Boeing Alert Service Bulletin B787-81205-SB250044-00, Issue 001, dated November 8, 2013.

• Boeing Alert Service Bulletin B787-81205-SB250045-00, Issue 001, dated November 15, 2013.

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.

We estimate that this AD affects 6 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary replacements that will be required based on the results of the inspection. We have no way of determining the number of aircraft that might need these replacements.

According to the manufacturer, all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

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

For the reasons discussed above, I certify that this AD:

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

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

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

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

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

Discussion

On April 20, 2016, we issued AD 2016-09-04, Amendment 39-18502 (81 FR 26102, May 2, 2016) (“AD 2016-09-04”), for certain Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. AD 2016-09-04 was prompted by the discovery of a number of incorrectly calibrated AOA transducers installed in the stall protection system. AD 2016-09-04 required replacement of incorrectly calibrated AOA transducers. We issued AD 2016-09-04 to detect and replace incorrectly calibrated AOA transducers; incorrect calibration of the transducers could result in late activation of the stick pusher.

Since we issued AD 2016-09-04, we received a report of a typographical error in the regulatory text of AD 2016-09-04. Paragraph (h) of AD 2016-09-04 inadvertently stated, “having a part number or serial number.” This should have stated “having a part number and serial number.” We have revised paragraph (h) of this AD accordingly.

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2015-17, dated July 16, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. The MCAI states:

You may examine the MCAI on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-7266.

We reviewed Bombardier Service Bulletin 601R-27-164, dated March 30, 2015. The service information describes procedures for replacement of incorrectly calibrated AOA transducers with correctly calibrated AOA transducers. 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.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

We are superseding AD 2016-09-04 to correct a typographical error in the regulatory text. No other changes have been made to AD 2016-09-04. Therefore, we determined that notice and opportunity for public comment are unnecessary.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-7266; Directorate Identifier 2016-NM-085-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD.

We estimate that this AD affects 575 airplanes of U.S. registry.

We also estimate that it would take about 4 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts would cost about $10,000 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $5,945,500, or $10,340 per product.

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

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

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

For the reasons discussed above, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under 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.

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

Discussion

On March 31, 2016, we issued AD 2016-08-05, Amendment 39-18481 (81 FR 21709, April 13, 2016) (“AD 2016-08-05”), for certain Bombardier, Inc. Model CL-600-2C10 (Regional Jet Series 700, 701, & 702) airplanes, Model CL-600-2D15 (Regional Jet Series 705) airplanes, Model CL-600-2D24 (Regional Jet Series 900) airplanes, and Model CL-600-2E25 (Regional Jet Series 1000) airplanes. AD 2016-08-05 was prompted by the discovery of a number of incorrectly calibrated AOA transducers installed in the stall protection system. AD 2016-08-05 required replacement of affected AOA transducers. We issued AD 2016-08-05 to detect and replace incorrectly calibrated AOA transducers; incorrect calibration of the transducers could result in late activation of the stick pusher.

Since we issued AD 2016-08-05, we received a report of a typographical error in the regulatory text of AD 2016-08-05. Paragraph (h) of AD 2016-08-05 inadvertently stated, “having a part number or serial number.” This should have stated “having a part number and serial number.” We have revised paragraph (h) of this AD accordingly.

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2015-18, dated July 16, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model CL-600-2C10 (Regional Jet Series 700, 701, & 702) airplanes, Model CL-600-2D15 (Regional Jet Series 705) airplanes, Model CL-600-2D24 (Regional Jet Series 900) airplanes, and Model CL-600-2E25 (Regional Jet Series 1000) airplanes. The MCAI states:

You may examine the MCAI on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-7265.

We reviewed Bombardier Service Bulletin 670BA-27-069, dated March 30, 2015. This service information describes procedures for replacement of incorrectly calibrated AOA transducers with correctly calibrated AOA transducers. 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.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of these same type designs.

We are superseding AD 2016-08-05 to correct a typographical error in the regulatory text. No other changes have been made to AD 2016-08-05. Therefore, we determined that notice and opportunity for public comment are unnecessary.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2016-7265; Directorate Identifier 2016-NM-084-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD.

We estimate that this AD affects 400 airplanes of U.S. registry.

We also estimate that it would take about 4 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts would cost about $10,000 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $4,136,000, or $10,340 per product.

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

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

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

For the reasons discussed above, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under 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.

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

On May 29, 2015, we issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to remove AD 2000-05-17 (65 FR 13875, March 15, 2000) and AD 2001-04-12 (66 FR 13232, March 5, 2001) and add a new AD. AD 2000-05-17 applied to Model EC120B helicopters with engine coupling tube part number (P/N) C631A1002101 and required recurring inspections of each coupling tube for a crack and replacing any cracked coupling tube with a reinforced coupling tube P/N C631A1101101. AD 2001-04-12 applied to Model EC120B helicopters with engine coupling tube P/N C631A1101101 and required repetitive visual checks of each coupling tube for a crack. AD 2000-05-17 and AD 2001-04-12 were prompted by reports of cracks on the reinforced coupling tube and were intended to prevent coupling tube failure, loss of engine drive, and a subsequent forced landing.

The NPRM published in the Federal Register on June 16, 2015 (80 FR 34335). The NPRM was prompted by reports of additional cracks in coupling tubes. Eurocopter France (now Airbus Helicopters) determined that the washer-type engine mount may, in certain cases, induce excessive loading on the coupling tube, which results in binding that increases component wear of the inner diameter of the mounting base. Because of this, the DGAC, on behalf of the European Aviation Safety Agency (EASA), issued AD No. F-2003-325 R1, dated May 12, 2004, for Model EC120B helicopters with engine coupling tube, P/N C631A1101101, and with an engine mount containing certain parts listed in Eurocopter Alert Service Bulletin (ASB) No. 04A005, dated July 16, 2003. DGAC AD No. F-2003-325 R1 requires inspections for helicopters with an engine mount block modified in accordance with Eurocopter Service Bulletin (SB) No. 71-003, Revision 1, dated July 18, 2002; replacing any coupling tube that has a crack; and increasing the life limit of the coupling tube from 1,000 flight hours to 20,000 flight hours. Also, DGAC AD No. F-2003-325 R1 requires, for helicopters with a new spring-loaded engine suspension modification in accordance with Eurocopter SB No. 71-005, Revision 0, dated May 14, 2004, increasing the life limit of the coupling tube to 20,000 flight hours and canceling the repetitive inspections of the coupling tube.

The NPRM proposed to require, for helicopters with certain engine mounts, before further flight, removing from service certain engine mount parts and measuring the height of the engine mounting base. If the height is more than 10.5 millimeters, the NPRM proposed replacing the engine mount with an engine mount that does not have the affected parts. For certain other helicopters, the NPRM proposed to require within 25 hours time-in-serice (TIS) replacing the spring-type engine suspension system, dye-penetrant inspecting the flared coupling for a crack, and replacing any cracked flared coupling. The NPRM also proposed removing coupling tube P/N C631A1002101 from service and prohibiting installation of that coupling tube on any helicopter.

Since the NPRM was issued, the FAA Southwest Regional Office has relocated and a group email address has been established for requesting an FAA alternative method of compliance for a helicopter of foreign design. We have revised the contact information throughout this final rule to reflect the new address and new email address.

After our NPRM (80 FR 34335, June 16, 2015) was published, we received comments from one commenter.

Airbus Helicopters disagrees with the proposed requirement to replace the spring-type engine suspension system in accordance with Eurocopter SB No. 71-005 for helicopters with an improved engine mount under Eurocopter SB No. 71-003. Airbus Helicopters states there have been no coupling tube failures since incorporation of Eurocopter SB No. 71-003, and therefore the proposed requirement would not increase safety levels.

We disagree. Installing the improved engine mount specified in Eurocopter SB No. 71-003 extends the compliance time for a recurring visual inspection of the coupling tube from 5 hours TIS to 25 hours TIS. When issued, that recurring inspection was considered a short-term interim action until an effective modification or action was developed, approved, and available. Eurocopter SB No. 71-005 contained such an effective action to cancel that interim action and was developed and approved in May 2004.

Airbus Helicopters requested that, if we mandate the proposed requirement to replace the spring-type engine suspension system in accordance with Eurocopter SB No. 71-005, we change the proposed compliance time from 25 hours TIS to 18 months to allow for availability of parts.

We disagree. Eurocopter SB No. 71-005 was approved May 13, 2004. The NPRM was published June 16, 2015. The substantial amount of time that has passed since the approval of the service information and publication of our NPRM provided operators with enough notice of our proposal to mandate that procedure such that availability of parts should not be an issue.

This helicopter has been approved by the aviation authority of France and is approved for operation in the United States. Pursuant to our bilateral agreement with France, the DGAC on behalf of EASA, has kept the FAA informed of the situation described above. We are issuing this AD because we evaluated all information provided by the DGAC, reviewed the relevant information, considered the comments received, and determined the unsafe condition exists and is likely to exist or develop on other helicopters of this same type design and that air safety and the public interest require adopting the AD requirements as proposed.

Eurocopter issued ASB No. 04A005, Revision 0, dated July 16, 2003, which prohibits, after June 30, 2004, operating an engine mount made up of the following parts: Support arm, P/N C714A1107201; swaged support arm, P/N C714A1106201; left-hand support bracket, P/N C714A1101102; and right-hand support bracket, P/N C714A1101103. ASB No. 04A005 also specifies measuring the height of the engine mounting base and, if the height is more than 10.5 millimeters, replacing the engine mount with an engine mount that does not have the specified P/N. ASB No. 04A005 does not apply to helicopters modified with an improved engine mount in accordance with SB No. 71-003. ASB No. 04A005 also does not apply to helicopters with a serial number 1170 or larger, as the specified engine mounts are not installed on those helicopters.

Eurocopter also issued SB No. 71-005, Revision 0, dated May 14, 2004, which contains procedures to modify the spring-type engine suspension system and dye-penetrant inspect the flared coupling assembly.

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.

Eurocopter issued SB No. 71-003, Revision 1, dated July 18, 2002, which contains procedures to improve the engine mount. Eurocopter also issued ASB No. 05A003, Revision 2, dated July 16, 2003, for helicopters that have not been modified with an improved engine mount in accordance with SB No. 71-003, which specifies inspecting the coupling tube for a crack every 5 hours and establishing a coupling tube life limit of 1,000 hours. For helicopters that have been modified with an improved engine mount, ASB No. 05A003 specifies inspecting the coupling tube for a crack every 25 hours and increasing the coupling tube life limit to 20,000 hours. ASB No. 05A003 was revised to Revision 3, dated May 11, 2004, to specify an optional spring-type engine suspension modification and cancel the repetitive inspection for this modified configuration.

This AD requires the installation of the spring-type engine suspension modification specified in Eurocopter SB No. 71-005 and does not require the repetitive inspection of the coupling tube and the engine mount base. This AD also does not require you to contact the manufacturer.

We estimate that this AD will affect 23 helicopters of the 115 helicopters of U.S. Registry. At an average labor rate of $85 per work-hour, we estimate that operators may incur the following costs in order to comply with this AD.

Installing new mounting arms and brackets requires about 12 work-hours and required parts cost $9,194, for a total cost per helicopter of $10,214 and $234,922 for the U.S. fleet. Installing the mounting spring kit requires about 14 work-hours and required parts cost $14,621, for a total cost per helicopter of $15,811 and $363,653 for the U.S. fleet. Dye-penetrant inspecting the coupling tube requires about 1 work-hour for a cost per helicopter of $85 and $1,955 for the U.S. fleet.

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

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

We have 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 that this AD:

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

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

(3) Will not affect intrastate aviation in Alaska to the extent that a regulatory, 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.

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

This amendment to part 95 of the Federal Aviation Regulations (14 CFR part 95) amends, suspends, or revokes IFR altitudes governing the operation of all aircraft in flight over a specified route or any portion of that route, as well as the changeover points (COPs) for Federal airways, jet routes, or direct routes as prescribed in part 95.

The specified IFR altitudes, when used in conjunction with the prescribed changeover points for those routes, ensure navigation aid coverage that is adequate for safe flight operations and free of frequency interference. The reasons and circumstances that create the need for this amendment involve matters of flight safety and operational efficiency in the National Airspace System, are related to published aeronautical charts that are essential to the user, and provide for the safe and efficient use of the navigable airspace. In addition, those various reasons or circumstances require making this amendment effective before the next scheduled charting and publication date of the flight information to assure its timely availability to the user. The effective date of this amendment reflects those considerations. In view of the close and immediate relationship between these regulatory changes and safety in air commerce, I find that notice and public procedure before adopting this amendment are impracticable and contrary to the public interest and that good cause exists for making the amendment effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me by the Administrator, part 95 of the Federal Aviation Regulations (14 CFR part 95) is amended as follows effective at 0901 UTC, July 21, 2016.

The mission of the Office of Export Enforcement (OEE) at BIS is to enforce the provisions of the Export Administration Regulations (EAR), secure America's trade, and preserve America's technological advantage by detecting, investigating, preventing, and deterring the unauthorized export and reexport of U.S.-origin items to parties involved with: (1) Weapons of mass destruction programs; (2) threats to national security or regional stability; (3) terrorism; or (4) human rights abuses. Export Enforcement at BIS is the only federal law enforcement agency exclusively dedicated to the enforcement of export control laws and the only agency constituted to do so with both administrative and criminal export enforcement authorities. OEE's criminal investigators and analysts leverage their subject-matter expertise, unique and complementary administrative enforcement tools, and relationships with other federal agencies and industry to protect our national security and promote our foreign policy interests. OEE protects legitimate exporters from being put at a competitive disadvantage by those who do not comply with the law. It works to educate parties to export transactions on how to improve export compliance practices, supporting American companies' efforts to be reliable trading partners and reputable stewards of U.S. national and economic security. BIS also discourages, and in some circumstances prohibits, U.S. companies from furthering or supporting any unsanctioned foreign boycott (including the Arab League boycott of Israel).

OEE at BIS may refer violators of export control laws to the U.S. Department of Justice for criminal prosecution, and/or to the Department's Office of the Chief Counsel for Industry and Security for administrative prosecution. In cases where there has been a willful violation of the EAR, violators may be subject to both criminal fines and administrative penalties. Administrative penalties may also be imposed when there is no willful intent, allowing administrative cases to be brought in a much wider variety of circumstances than criminal cases. OEE has a unique combination of administrative enforcement authorities including both civil penalties and denials of export privileges. BIS may also place individuals and entities on lists that restrict or prohibit their involvement in exports, reexports, and transfers (in-country).

In this rule, BIS amends the EAR to update its Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases (the “BIS Guidelines”) found in Supplement No. 1 to part 766 of the EAR in order to make civil penalty determinations more predictable and transparent to the public and aligned with those promulgated by the Treasury Department's Office of Foreign Assets Control (OFAC). OFAC administers most of its sanctions programs under the International Emergency Economic Powers Act (IEEPA), the same statutory authority by which BIS implements the EAR. OFAC uses the transaction value as the starting point for determining civil penalties pursuant to its Economic Sanctions Enforcement Guidelines. Under IEEPA, criminal penalties can reach 20 years imprisonment and $1 million per violation, and administrative monetary penalties can reach $250,000 (subject to adjustment in accordance with U.S. law, e.g., the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74, sec. 701)) or twice the value of the transaction, whichever is greater. Both agencies coordinate and cooperate on investigations involving violations of export controls that each agency enforces, including programs relating to weapons of mass destruction, terrorism, Iran, Sudan, Specially Designated Nationals and Specially Designated Global Terrorists. This guidance would not apply to civil administrative enforcement cases for violations under part 760 of the EAR—Restrictive Trade Practices and Boycotts. Supplement No. 2 to Part 766 continues to apply to enforcement cases involving part 760 violations. This guidance also will not apply to pending matters where, as of July 22, 2016, there are ongoing settlement negotiations and a charging letter has not been filed.

On December 28, 2015, BIS published a proposed rule to amend the BIS Guidelines (80 FR 80710). BIS received eleven submissions commenting on the proposed rule.

Comment: Several commenters, although making suggestions or raising concerns about specific provisions in the proposed rule, commended OEE and BIS for making the BIS Guidelines more transparent, predictable and consistent and for aligning them with OFAC's Economic Sanctions Enforcement Guidelines (“OFAC Guidelines”). One commenter noted that the OFAC Guidelines have “[h]istorically . . . withstood the test of time” and that “using them as a general model makes sense.”

One submission, however, stated that the proposed rule fails to discuss how it advances the goal of Export Control Reform (“ECR”) by not aligning the BIS Guidelines with the administrative penalties and procedures promulgated by the Department of State, Directorate of Defense Trade Controls (“DDTC”) in the International Traffic in Arms Regulations (“ITAR”). The author submits that the alignment of BIS's enforcement policies and procedures with those of DDTC for enforcing export violations under the shared jurisdiction of BIS and DDTC would be more in line with the objectives of ECR.

Response: One of the primary goals of ECR is to transfer less sensitive military items from the United States Munitions List (“USML”) to the more flexible licensing authority of the Commerce Department's Commerce Control List (“CCL”). ECR would thus enhance national security by (i) improving interoperability of U.S. military forces with allied countries, (ii) strengthening the U.S. industrial base by, among other things, reducing incentives for foreign manufacturers to “design out” and avoid U.S.-origin content and services, and (iii) allowing export control officials to focus government resources on transactions that pose greater concern. This goal has been largely accomplished.

It does not necessarily follow, however, that the manner in which controls are enforced on the items transferred to the CCL from the USML should involve aligning BIS Guidelines with those enforcement policies and procedures of DDTC. The licensing and enforcement functions of all three regulatory agencies—DDTC, BIS and OFAC—are encompassed within the ECR initiative. All three have defined jurisdictional roles over licensing exports. BIS has maintained a robust enforcement posture regarding violations of the EAR, and its policies and practices—including with regard to voluntary self-disclosures (“VSDs”), consideration of mitigating and aggravating factors, settlements and the imposition of civil monetary penalties—have historically been much more closely aligned with those of OFAC.

As stated in the proposed rule, both BIS and OFAC administer their regulations under the authority of the International Emergency Economic Powers Act, and the OFAC Guidelines serve as the only other published example of enforcement policies and practices promulgated under that statute. It is therefore consistent with the principles of ECR to bring the BIS Guidelines further into alignment with the OFAC Guidelines, which are more recent than BIS's current Guidelines and account for the higher penalties set forth in the International Emergency Economic Powers Enhancement Act of 2007.

Furthermore, the “higher fences” principle of ECR, referring to the more focused and concentrated enforcement efforts around the more significant military items that remain on the USML also applies to enforcement of items transferred to the CCL. Because of the more flexible licensing authority of the EAR that serves to facilitate trade (e.g., License Exception STA), it is also paramount that the diversion risk with respect to such items of lesser military significance be monitored closely and that the deterrent effect of a strong enforcement response to violations be maintained.

Nevertheless, the proposed rule and this final rule share some characteristics with the enforcement policy of DDTC. Both DDTC and OEE have long placed great emphasis on the importance of VSDs, a policy that is reiterated and reinforced in the proposed rule and in this final rule. More generally, OEE sought to convey in the proposed rule the importance it places on the submission of VSDs, and underscored the fact that, over the past several years, on average only three percent of VSDs submitted have resulted in a civil monetary penalty. OEE does not expect that rate to change significantly, and OEE's practice is consistent with DDTC in responding to most VSDs submitted to it with a warning letter. Additionally, the proposed rule and this final rule provide that the use of funds that would otherwise be paid as a civil penalty may, in some cases, be suspended conditioned upon the respondent using funds in an equivalent amount for compliance activities required under the final order including improving internal compliance programs and conducting audits. Although such suspensions have been used by DDTC in the past, OEE has generally suspended penalties only due to inability to pay. For the foregoing reasons, BIS believes that aligning the BIS Guidelines with the OFAC Guidelines with the adoption of the DDTC practice noted above supports goals of the Export Control Reform Initiative and is making no changes in response to the comment that suggested otherwise.

Comment: One commenter stated that setting a base penalty amount based on whether a violation is egregious or non-egregious reduces uncertainty because exporters can assess whether a violation would be considered egregious based on past Office of Export Enforcement behavior for similar violations.

Response: BIS agrees with this comment and notes that all settlement agreements, charging letters and final orders are posted in the BIS electronic Freedom of Information Act reading room on the BIS Web site for public access.

A significant change in the proposed rule was the introduction of the concept of base penalty amounts for egregious and non-egregious apparent violations and the principle of reducing the base penalty amount by one-half if the case is based on a VSD. Base penalty amounts could then be adjusted based on aggravating, mitigating and general factors (which could be either aggravating or mitigating). The existing guidelines treat a VSD as a mitigating factor of “GREAT WEIGHT.”

Comment: Several commenters expressed concern over the rule's treatment of VSDs, stating that the rule would reduce the incentive for voluntary disclosure and that it seemed to diminish the importance of VSDs. Some stated that the rule would unduly restrict OEE's ability to consider all aggravating and mitigating factors present in a complex fact pattern because the determination of the base penalty amount is based on only four factors. Others indicated that the rule was likely to result in civil penalties in cases that currently receive only a warning letter. One commenter predicted that the proposed rule's treatment of VSDs could limit the government's options for seeking a “global settlement” in a criminal case. The commenters suggested several changes to the base penalty amount calculation and to the mitigating factors recognized by the guidelines to address, inter alia, the impact of the proposed guidelines on the incentive to voluntarily self-disclose violations. Those specific proposals are addressed under the headings “Base Penalty Policy” and “Mitigating Factors” below.

Response: OEE has not changed its view regarding the importance of VSDs and believes that the concern expressed by the commenters that OEE appears to be diminishing the role and importance of VSDs is misplaced. According a VSD 50% mitigation up front in determining the base penalty amount does not “diminish” the importance that OEE accords VSDs. The proposed rule would simply formalize the long-standing practice of OEE to accord up to 50% mitigation to VSDs by assigning them “great weight” as a mitigating factor. While in most instances OEE's practice has been to assign 50% mitigation for the submission and completion of VSDs that meet the requirements of § 764.5, the proposed rule would remove the discretion to assign anything less than that, thus enhancing, not diminishing, the importance of VSDs, and providing that they will result in an initial 50% reduction in the base penalty amount of any penalty to be determined.

OEE continues to encourage the submission of VSDs by persons who believe they may have violated the EAR. The purpose of an enforcement action includes raising awareness, increasing compliance, and deterring future violations, not merely punishing past conduct. VSDs are an indicator of a person's present intent and future commitment to comply with U.S. export control requirements. The purpose of mitigating the enforcement response in voluntary self-disclosure cases is to encourage the notification to OEE of apparent violations about which OEE would not otherwise have learned. As stated in the proposed rule, the submission of VSDs is a critical component of OEE's ability to collect information in carrying out its national security mission. Investigative leads provided by the public, including in the context of VSDs, provide an important tool used by the U.S. Government to enforce export regulations. OEE also is cognizant of the time, energy and financial expense of self-disclosing an apparent violation, especially when undertaken by small and medium enterprises.

OEE believes that the existing incentive of 50% mitigation is sufficient to encourage the submission of VSDs, which is further reinforced by the very low percentage of VSDs that result in civil monetary penalties. As noted above, over the past several years, on average only three percent of VSDs submitted have resulted in a civil monetary penalty. OEE does not expect that rate to change significantly as a result of these guidelines.

This final rule also makes changes to the formula for calculating the base penalty amounts and to the maximum effect of mitigating factors in response to the comments about their impact on VSDs and to comments suggesting that the base penalty amounts as proposed would provide OEE with insufficient flexibility in settlements. The changes to the base penalty amounts and impact of mitigating factors are discussed under the headings “Base Penalty Policy” and “Mitigating Factors” below.

Comment: Several commenters recommended changes to the proposed base penalty amounts. One commenter suggested that OEE may be faced with the prospect of feeling obliged to apply the other factors in such a way as to reduce the base penalty to a more appropriate level, which could produce a result-oriented exercise not entirely consistent with the purpose of the guidelines. Another stated that this formula could result in reduced prospects for settling cases because the penalty would be unrealistically high in cases with multi-million dollar transaction values. Another commenter suggested that this lack of flexibility could limit the government's options for seeking a comprehensive or “global” settlement of all civil and criminal penalties. To further encourage the submission of VSDs, one commenter advocated further decreasing the base penalty amount of the civil monetary penalty in instances involving VSDs as set forth in the Base Penalty Matrix. A commenter also urged that a reference to VSDs be added to the BIS Guidelines for purposes of evaluating General Factor E.—Compliance Program and to Mitigating Factor F. Remedial Response, in determining an appropriate civil monetary penalty amount.

Commenters proposed three different changes to the base penalty amount calculation to address this perceived lack of flexibility.

One proposed change was to set the base penalty for an egregious case that results from a VSD within a range from one-half the transaction value up to one-half of the statutory maximum and to set the base penalty in an egregious case that results from some source other than a VSD within a range from the applicable schedule amount and up to the statutory maximum.

Another proposed change was to set the base penalty amount of the civil monetary penalty in non-egregious cases involving a VSD at no greater than 10 percent of the transaction value, capped at a maximum of $25,000 per violation and in egregious cases involving a VSD to set base penalty at no greater than 10 percent of the statutory maximum applicable to the violation.

A third proposed change was to set a single range for base penalties in egregious cases from the applicable schedule amount to the applicable statutory maximum.

Response: OEE agrees that the formula stated in the proposed rule may have been too rigid and/or unduly restricted OEE's discretion in settling cases, potentially resulting in cases unlikely to be settled because of the unrealistically high penalties in certain cases. OEE is also cognizant of the concern that the potential inflexibility of the proposed formula could have limited the Government's options for seeking a comprehensive or “global settlement” of all criminal and civil penalties and the need to further encourage the submission of VSDs.

Accordingly, this final rule adopts a variation of the first of the proposals for calculating the base penalty amount noted above. The base penalty amount for an egregious case that results from a VSD will be changed from one-half the statutory maximum to a range of up to one-half of the statutory maximum. The base penalty amount for an egregious case that results from some source other than a VSD will be set at a range up to the statutory maximum whereas the proposed rule would have set the base penalty at the applicable statutory maximum. OEE believes that the adoption of this formula, along with changes related to the impact of mitigating factors on the penalty amount discussed below, will provide the degree of flexibility necessary to obtain a reasonable result in settlement negotiations.

OEE did not adopt the second proposal for calculating the base penalty amount which would have set the base penalty amount of the civil monetary penalty in non-egregious cases involving a VSD at no greater than 10 percent of the transaction value, capped at a maximum of $25,000 per violation and in egregious cases involving a VSD to set base penalty at no greater than 10 percent of the statutory maximum applicable to the violation. This proposal focused exclusively on cases based on VSDs and thus would not have addressed the need for greater flexibility in setting the base penalty amount for egregious cases that are not based on VSDs. In addition, this proposal would have set an extremely low base penalty amount for cases based on VSDs, which would then be subject to further adjustment based on other applicable factors. The selected proposal is in keeping with OEE's existing practice of a 50 percent reduction in the case of voluntary disclosures.

OEE did not adopt the third proposal, which would have set a single range from the applicable schedule amount to the applicable statutory maximum for all egregious cases whether based on a VSD or not. This proposal would have abandoned the principle of providing 50 percent reduction in base penalty amount in cases based on a VSD.

Comment: One commenter stated that, under the proposed rule, a warning letter with no civil penalty could result only from a situation where there are no aggravating factors. The commenter stated that some aggravating factors are likely to be present in any transaction that results in a violation even though the violation does not result in harm to national security, economic or political concerns. The commenter listed some examples of conduct that might be construed as being within the scope of aggravating factor III.B.2—“having a reason to know based on readily available information.” Those examples are: Misdelivering goods that are recovered and incorrectly entering data into the Automated Export System. Freight forwarders often input information from conflicting data provided by shippers or make inadvertent mistakes in entering names into screening software. Under the current guidelines, the commenter asserted, these cases likely would result in a warning letter or a no action letter.

Response: The commenter is incorrect. OEE would continue to issue warning letters in many cases including cases with some level of aggravation. In determining whether to conclude enforcement action with a warning letter or a no action letter, OEE would consider all aggravating, general and mitigating factors that apply to the action at issue. OEE does not anticipate that new penalty guidelines would increase the number of administrative enforcement actions brought by OEE. OEE believes that no change to the regulatory text is needed to make this point.

Comment: One commenter stated that the determination that a company acted with willfulness or recklessness because it “should reasonably have been on notice” that the conduct was a violation of the EAR should be modified to limit the applicability of Factor A. Willful or Reckless Violation of Law to instances where the company was on notice and clearly understood that its conduct was unlawful. The commenter stated that determining that a company acted with willfulness or recklessness because it “should reasonably have been on notice” that its conduct violated U.S. law would not be appropriate. Ignorance, the commenter said, should not be equated with willfulness or recklessness. Only if a company actually was on notice and clearly understood that its conduct violated U.S. law should OEE determine that willfulness or recklessness was involved.

Response: Use of the phrase “should reasonably have been on notice” as an example of conduct encompassed within the aggravating factor “Willful or Reckless Violation of Law” is adopted from the general factors set forth in the OFAC guidelines (see 31 CFR part 501, Appendix A, III.A.5). A higher threshold in BIS guidelines would create unnecessary inconsistencies between the agencies' policies and furthermore, OEE is not aware of any significant issue that OFAC's use of this language has created. Additionally, raising the threshold from “should reasonably have been on notice” to “was on notice” would unnecessarily increase the evidentiary burden on OEE. Therefore, OEE is making no changes to the rule in response to this comment.

Comment: One commenter observed that the first four factors (factors A, B, C and D in the proposed rule) upon which a determination of egregiousness may be made for purposes of determining the base penalty amount also appear to factor into the determination of the final penalty amount as aggravating factors. The commenter questioned whether this procedure risks penalizing the company twice for the same factors. The commenter recommended that the factors be limited to one phase or the other or that an internal mechanism be used to safeguard against the inadvertent stacking of these factors—perhaps with a monetary limit after employing the factors the first time in the base phase.

Response: As noted above, the proposed rule and this final rule differ in the method for determining the base penalty amount in egregious cases. The proposed rule would have set the base penalty amount at one-half of the applicable statutory maximum if the case was based on a VSD and at the statutory maximum if the case was based on something other than a VSD. Under this final rule, the base value in an egregious case will be an amount up to one-half of the applicable statutory maximum if the case is based on a VSD and an amount up to the applicable statutory maximum if the case is based on something other than a VSD. Under this procedure, substantial weight will generally be given to Factors A (“willful or reckless violation of law”), B (“awareness of conduct at issue”), C (“harm to regulatory program objectives”), and D (“individual characteristics”), with particular emphasis on Factors A, B, and C. A case will be considered an “egregious case” where the analysis of the applicable Factors, with a focus on Factors A, B, and C, indicates that the case represents a particularly serious violation of the law calling for a strong enforcement response. A determination by OEE that a case is “egregious” must have the concurrence of the Assistant Secretary of Commerce for Export Enforcement.

Aggravating factors A through D are thus germane at two stages of the process: First in determining whether a case is egregious or not and second in determining the degree of egregiousness. Once a case is determined to be egregious based on those factors, a range for determining the final penalty amount is established, either up to half the statutory maximum or up to the statutory maximum, depending upon whether or not the case was brought to OEE's attention pursuant to a VSD. The same factors will necessarily be considered in determining what final penalty will be set within the prescribed range. A determination as to whether a case is egregious is separate and apart from an evaluation of the degree of egregiousness. This rule thus does not preclude consideration of any of the factors A through D in determining the final penalty amount.

Comment: One commenter stated that General Factor D—Individual Characteristics, which is also the fourth criterion for determining whether a violation is egregious, likely could be read in more than one way and that some amplification in the final rule would be welcomed. The commenter did not pose any specific questions about this factor.

Response: The proposed rule discussed five illustrative factors that could be considered in assessing this criterion. They are: the respondent's commercial sophistication, the size and sophistication of its operations, the volume and value of its apparent violations relative to the volume and value of all of its transactions, its regulatory history, any other illegal conduct in connection with the export, and prior criminal convictions of the respondent. Given the infinite possibilities for variation in human behavior, OEE cannot predict in advance all of the possible characteristics of the parties involved in an apparent violation that will ever be relevant in determining whether that apparent violation is egregious. The factors discussed in the proposed rule were intended to provide reasonable guidance as to how OEE would apply this factor. The commenter did not note any specific ambiguity or uncertainty in the proposed regulatory text describing this factor. On that basis, OEE concludes that additional discussion would not likely provide sufficient additional information to be useful and is making no changes to the rule in response to this comment.

Comment: One commenter expressed concern that the proposed rule appeared to diminish the importance of VSDs and could thereby discourage activities or programs by regulated parties to discover violations. To remedy this situation, the commenter recommended that a reference to VSDs be added to the elements of General Factor E—Compliance Program and to Mitigating Factor F—Remedial Response.

Response: As stated above, the importance of VSDs has not diminished and OEE certainly encourages activities designed to uncover violations. Accordingly, this final rule adds references to VSDs to the elements of General Factor E—Compliance Program and to Mitigating Factor F—Remedial Response. This rule also provides that a fully suspended monetary penalty is possible with conditions in certain non-egregious VSD cases.

Comment: One commenter said that not including past violations of an acquired entity where an acquirer takes reasonable action to discover, correct and disclose violations is a welcomed addition.

Response: OEE acknowledges the comment.

Comment: One commenter stated that tips and leads from industry are valuable to enforcement; however, the companies that provide them receive little or no benefit for doing so. The commenter recommended creating a clear incentive for companies to provide information that comes to their attention by adding as a specific mitigating factor the phrase “Has the respondent previously made substantial voluntary efforts to provide information to Federal law enforcement authorities in support of U.S. export control legislation and regulations?”

Response: OEE agrees with the commenter's reasoning on this issue. In this final rule, Mitigating Factor G is modified to include the question: “Has the Respondent previously made substantial voluntary efforts to provide information (such as providing tips that led to enforcement actions against other parties) to federal law enforcement authorities in support of the enforcement of U.S. export control regulations?”

Comment: Another submission noted that in an apparent violation, a license exception may have been available but was not used or was used incorrectly. The commenter recommended that Factor H. License Was Likely to Be Approved be amended to acknowledge the availability of a license exception.

Response: OEE agrees that if a license exception that would have authorized the export was available at the time of export, but was not properly utilized or asserted by the respondent, that license exception availability should be treated as a mitigating factor. Accordingly, this final rule amends Mitigating Factor H by adding the question: “Would the export have qualified for a license exception?”

Comment: One commenter stated that the order in which mitigating factors are captured and applied in the mathematical formula is not clear. The commenter also stated that “to further complicate the equation, there is a cumulative mitigation cap at 75%.”

Response: OEE believes that the order in which mitigating factors are considered will not affect the outcome of a case. Therefore this final rule does not specify the order in which the factors are to be considered. In recognition of the importance of voluntary self-disclosures, this final rule removes the proposed 75 percent limit on mitigation when the when the apparent violation is not egregious and investigation is based on a voluntary self-disclosure, but retains that limit in other cases.

Comment: One commenter stated that violations should not be considered egregious on the basis of charging multiple violations on a single export.

Response: OEE agrees and would not consider multiple violations arising out of the same act in and of itself to constitute egregiousness. Consistent with current practice, for cases that settle before filing of a charging letter with an Administrative Law Judge, OEE will generally charge only the most serious violation per transaction. If OEE issues such a proposed charging letter and subsequently files a charging letter with an Administrative Law Judge because a mutually agreeable settlement cannot be reached, OEE will continue to reserve its authority to proceed with all available charges based on the facts presented. In this final rule, Section III.A.4 Pattern of Conduct has been modified to make this practice clear.

Comment: One commenter asserted that the criteria for determining whether violations are related would change under the proposed rule. The commenter noted that the current guidelines appear to use the criterion “whether they stemmed from the same underlying error or omission” to determine whether violations are related and stated that such language does not appear in the proposed guidelines. The commenter asserted that under the current guidelines, the insertion of inaccurate Electronic Export Information (EEI) data in many transactions because the respondent did not realize that a default value would have to be overridden likely would be considered related violations and probably would not result in increased penalties. The commenter stated that it is not clear whether the results would be the same under the proposed guidelines. Another commenter stated that the proposed rule would allow OEE to consider a lesser charge on related violations or it can consider them as separate chargeable offenses. The commenter stated that related violations should be lesser. The commenter asserted that the EAR could add on so many reporting requirements that one clerical mistake could result in an infinite number of violations. This would be unfair to the respondent. Related violations should not be treated as separate offenses.

Response: In certain situations where multiple recurring violations resulted from a single inadvertent error, such as misclassification, when determining whether to bring charges, OEE will generally regard that as one violation instead of multiple violations in determining if the matter is considered egregious. However, when determining a penalty, each violation is potentially chargeable. In this final rule Factor A.4 Pattern of Conduct is revised to make this point explicit.

Comment: A commenter questioned whether multiple shipments being exported to the same end user under an expired license would be counted separately or as one violation?

Response: OEE recognizes the importance of distinguishing between truly unrelated multiple violations and multiple violations arising out of the same fact pattern. OEE will continue to consider inadvertent, compounded clerical errors as related and not separate infractions for the purpose of determining if the case is egregious. In this final rule, Factor III.I Related Violations has been revised to make this point explicit.

Comment: One commenter expressed appreciation of the introduction of “no action” determinations. To assist in emphasizing this option, the commenter recommended referring to it in the second sentence under heading “II. Types of Responses to Apparent Violations” and under the heading “III. Factors Affecting Administrative Sanctions”

Response: OEE agrees and this final rule adopts the recommendation.

Comment: One commenter stated that the guidelines appear to lower the threshold for issuing warning letters, resulting in the possibility of issuing warning letters in the absence of a violation. The commenter noted that current and proposed guidelines provide for a “no action” letter when OEE determines that there is insufficient evidence to conclude that a violation has occurred. However, the commenter referred to a difference between the current and proposed guidance regarding letters. The current guidelines provide that “OEE will not issue a warning letter if, based on available information, it concludes that a violation did not occur.” The proposed guidelines, state that “If OEE determines that a violation may have occurred . . . . OEE may issue a warning letter.” The proposed guidelines do not explicitly state that OEE will not issue a warning letter based on its conclusion that a violation did not occur as appears in the current guidelines. The commenter asserted that this difference between the current and proposed guidelines could mean the issuance of warning letters in situations where a violation did not occur. If such is the case, the commenter observed the difference could be significant in future investigations because the proposed guidelines provide that generally the base penalty amount will be reduced by up to 25 percent in the Respondent's first violation and a violation is considered a “first violation” if the respondent, among other things, did not receive a warning letter in three years preceding the date of the transaction giving rise to the violation. The commenters recommend that the guidelines state that there must be at least an apparent violation before a warning letter is issued.

Response: OEE would not issue a warning letter based on its conclusion that a violation did not occur. OEE agrees, however, that the consideration of warning letters within a 3-year time frame for purposes of determining whether a Respondent is entitled to up to 25% mitigation as a “first offense” is inconsistent when the warning letter does not constitute a finding that a violation did occur, with an opportunity for the Respondent to respond to the allegation.

Accordingly, this final rule revises Section IV.B.2.b of the guidelines to provide that first offense mitigation will therefore be determined without regard to the prior issuance of warning letters received by that Respondent. Prior issuance of a warning letter may, however, evidence a pattern and practice of non-compliance and failure to rectify compliance shortcomings and be considered aggravating under General Factor E. Compliance Program and Aggravating Factor A. Willful or Reckless Violation of Law. For example, if OEE alerted a Respondent to unlawful conduct through issuance of a warning letter and the current charges are a continuation of that conduct, or involve similar conduct, that fact may be taken into account.

Comment: One commenter observed that the statement in the proposed rule that warning letters will typically be issued for VSDs absent the presence of aggravating factors implies that in cases where aggravating factors are present, a civil monetary penalty would necessarily ensue.

Response: As discussed above, the commenter misunderstands the impact on VSDs. OEE issues a warning letter for almost all VSDs including those with aggravating factors. In recent years, OEE has only sought charges in a small percentage of VSD cases. While all cases charged had significant aggravating factors, many of the cases with warning letters also had aggravating factors, though less serious than in the cases charged. OEE does not believe that these guidelines will result in a significant change in the number of cases charged and is making no change to the guidelines in response to this comment.

Comment: Some commenters suggested that more certainty was needed with respect to the meaning of no action letters and warning letters. One commenter stated that the proposed rule would allow OEE to take no action if it determines that there is insufficient evidence to conclude that a violation has occurred, determines that a violation did not occur and/or, based on an analysis of the Factors outlined in Section III of the guidelines, concludes that the conduct does not rise to a level warranting an administrative response. However, the commenter asserted, OEE can “put time back on the clock anytime it desires and reprocess a `final determination.' ” The commenter stated that exporters need closure at some point. This practice is no less than double jeopardy, the commenter asserted.

Another commenter noted that a warning letter does not constitute a final agency determination as to whether a violation has occurred. This leaves the recipient in a state of uncertainty as to whether a violation occurred and, therefore, how to proceed in similar situations in the future. The commenter requested that OEE eliminate that perceived uncertainty by ensuring that a warning letter provide guidance as to whether OEE believes a violation occurred, and, if so, limit the warning to the substance of the violation.

Response: As stated in the proposed rule, the majority of cases brought to the attention of OEE through VSDs result in the issuance of warning letters, containing a finding that an apparent violation may have taken place. No action letters are simply that: No action will be taken in cases where there is insufficient evidence to conclude that a violation may have taken place. The use of the words “apparent” and “may” simply reflect that reality. In instances where it appears to OEE that a violation(s) did occur but that pursuing a civil monetary penalty is not appropriate under the circumstances, a warning letter will also be issued.

Although warning letters and no action letters constitute the final OEE disposition of the matter, neither constitutes final agency action with respect to a violation of the EAR. To help clarify this point, this final rule refers to OEE's disposition when describing OEE's action with respect to warning letters and no action letters, and clearly states that these are not “final agency actions.”

Neither the proposed rule nor this final rule state that OEE may resume an investigation into a matter concerning which it previously issued a no action letter “anytime it desires.” The proposed rule text stated that “A no-action determination represents a final determination (OEE's . . . disposition in this final rule) as to the apparent violation, unless OEE later learns of additional information regarding the same or similar transactions or other relevant facts.” Reopening an investigation or inquiry because the enforcement agency learns of new relevant information does not constitute double jeopardy as that term is understood in connection with Fifth Amendment to the United States Constitution. OEE believes that no change to the rule is needed on this point.

Warning letters currently identify the transaction or conduct OEE believes violated the EAR and will continue to do so.

Several commenters addressed the question of determining transaction value.

Comment: One commenter stated that where a violation is related to a transaction that has been reported into the Automated Export System (AES), that value should be relied upon as the transaction value unless there is evidence indicating that the reported AES value was erroneous or otherwise flawed because the commenter believed that approach to determining the transaction value is accurate. Two commenters pointed out the difficulty in determining the transaction value of the export or deemed export of technology. One commenter stated that the proposed rule standard of “the economic benefit derived by the Respondent” is extremely subjective and open to wide interpretation. The other commenter stated that “the value of a transaction identified on commercial invoices, customs declarations, or similar documents may reflect the value of the media transferred instead of the technical data itself, especially in situations where the data is not being sold, but is being used for offshore production or some other related activity.” (Emphasis in the original.)

Response: This final rule amends the definition of “transaction value” by adding a reference to AES filings. However, it is impossible for OEE to determine in advance the appropriate method by which to value all exports or deemed exports of technology, particularly where the technology at issue is not traded widely enough to provide a basis for determining a market value, is being transferred to a firm related to the exporter, or is being transferred as part of a larger transaction involving an agreement to produce or repair a part or product. In such instances, OEE will have to apply the “the economic benefit derived by the Respondent” standard, which remains in this final rule.

Comment: Two commenters objected to penalizing a freight forwarder using the monetary value of a shipment, given that forwarding fees almost always represent a minor fraction of the value of goods being exported.

Response: OEE recognizes that the consequence of using the same transaction value for both forwarders and exporters may create the impression of disproportionate penalties on forwarders. However, OEE has and will continue to take into account that transaction values may not be indicative of the nature of a party's role in the transaction, including applying mitigation based on general factor D where appropriate. OEE believes that definition of “transaction value” provides adequate flexibility to achieve fair results and that a specific separate standard for freight forwarders is not needed. Accordingly, this final rule makes no changes in response to this comment.

Comment: One commenter raised six specific questions about how transaction value would be determined. OEE's response is set forth immediately following each question. OEE does not believe that any changes to the proposed rule are needed in response to these questions and this final rule makes none.

1. “In the proposed definition, what transaction is the `subject transaction'”?

Response: The subject transaction is the transaction or transactions identified in a proposed charging letter or charging letter wherein OEE alleges that a violation occurred.

2. “How will the referenced documents (e.g., commercial invoices, bills of lading, signed Customs declarations, or similar documents) be used in determining value”?

Response: In many cases, such documents will list a price or value that is likely to be the appropriate transaction value. However, in instances where OEE believes that the price or value listed in such documents is inaccurate or is otherwise inappropriate as a measure of transaction value, it may, in accordance with the definition, consider the market value of the items that were the subject of the transaction and/or, in limited situations, “the economic benefit derived by the Respondent” standard as noted above.

3. “How will BIS reconcile inconsistent information found in these related documents”?

Response: This will have to be determined on a case-by-case basis depending on the facts of each case.

4. “At what point in BIS's internal deliberations will the transaction value be considered as `not otherwise ascertainable'”?

Response: This will have to be determined on a case-by-case basis depending on the facts of each case.

5. “Will the disclosing or investigated party be allowed an opportunity to speak to that issue before the conclusion is reached”?

Response: The respondent would have the opportunity to challenge OEE's transaction value determination during settlement negotiations or in pleadings before an administrative law judge.

6. “How will `market value' and `economic benefit' be evaluated”?

Response: OEE cannot determine in advance a method that always will be appropriate under any circumstance that may occur in the future. These determinations will have to be made on a case-by-case basis depending on the facts of each case.

Two commentators expressed concern regarding the statements in the proposed Guidelines that “[p]enalties for settlements reached after the initiation of an enforcement proceeding and litigation through the filing of a charging letter will usually be higher than those described by these Guidelines” and that “[i]f a case does not settle before issuance of a charging letter and the case proceeds to adjudication, the resulting charging letter may include more violations than alleged in the proposed charging letter.” The commenters stated that such practices could put inappropriate pressure to settle even if the respondent has a legitimate defense, or feels that the proposed penalty is excessive. They could constitute coercion and a denial of procedural due process. One commenter stated that BIS should establish reasonable limits concerning when it is appropriate for OEE to tack on additional charges or seek higher penalties than originally proposed.

Response: OEE notes that it is common in settlement negotiations for parties to seek early resolution in hopes of avoiding the expenditure of resources necessary to litigate a case. Doing so is not coercive, but the most efficient means of reaching resolution. It is common government practice for an agency, in an effort to reach settlement before trial, to propose a subset or sampling of charges, reserving the ability to bring a fuller set of charges should litigation prove necessary. It also is commonly recognized that the additional resources the government must expend to take a case to trial also can justify a penalty greater than the amount the agency may have accepted prior to litigation. Both practices are designed to efficiently utilize limited government resources and provide an incentive for early settlements. OEE considers the totality of the circumstances in charging and penalty determinations, including any defenses raised in response to a proposed charging letter and any arguments made concerning the appropriate penalty levels. OEE is making no changes to the proposed rule in response to these comments.

Comment: Two commenters suggested that the proposed rule seemed to state or at least imply that cases could not or would not be settled once adjudication begins or once a decision is made to initiate an enforcement action.

Response: Cases may be settled after OEE decides to initiate an enforcement action or after administrative adjudication begins. Section II.C of the proposed rule and this final rule state: “Cases may be settled before or after the issuance of a charging letter. See § 766.18 of the EAR.” OEE believes that no change to the text of the proposed rule is needed to address this point.

Comment: Several commenters stated that references to OEE and BIS in the proposed rule are confused and undefined. That it is difficult to understand exactly who in BIS is responsible for doing what in the administrative enforcement process.

Response: OEE is the organizational unit of BIS that has been delegated the responsibility for determining what cases will be referred to the Department of Justice for criminal prosecution and what administrative sanctions will be sought. The reference to BIS in this final rule is therefore changed in most instances to refer specifically to OEE. This change was made throughout the guidelines for ease of reference even though, for example under § 764.1 of the EAR, OEE does not issue penalties.

Comment: One commenter proposed delete the subheading “Egregious Case” from the base penalty matrix and changing the headings above the two columns by substituting “Non-Egregious” for “NO” and “Egregious” for “YES.” The commenter stated that this change would make the penalty matrix easier to understand.

Response: This final rule addresses this matter by adding question marks immediately following the phrases “Egregious Case” and “Voluntary Self Disclosure,” making clear that they are questions to which a yes or no answer is appropriate.

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 rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB).

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act (PRA), unless that collection of information displays a currently valid OMB Control Number. This rule does not contain any collections of information.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq., generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to the notice and comment rulemaking requirements under the Administrative Procedure Act (5 U.S.C. 553) or any other statute. Under section 605(b) of the RFA, however, if the head of an agency certifies that a rule will not have a significant impact on a substantial number of small entities, the statute does not require the agency to prepare a regulatory flexibility analysis. Pursuant to section 605(b), the Chief Counsel for Regulation, Department of Commerce, certified to the Chief Counsel for Advocacy, Small Business Administration at the proposed rule stage that this rule would not have a significant impact on a substantial number of small entities. The rationale for that certification is at 80 FR 80710, 80712 (December 28, 2015) and is not repeated here. BIS received no comments on the certification. Consequently, BIS has not prepared a final regulatory flexibility analysis.

Although the Export Administration Act expired on August 20, 2001, 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 Export Administration Regulations in effect under the International Emergency Economic Powers Act. 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.

Accordingly, this rule amends part 766 of the Export Administration Regulations (15 CFR parts 730-774) (EAR) as follows:

We are making technical amendments to § 229.1100,1 § 229.1104,2 § 229.1105,3 § 229.1115,4 § 229.1125,5 § 230.405,6 § 230.456,7 Form SF-3,8 Form 8-K 9 and Form 10-D.10

For the reasons set out above, Title 17, Chapter II, of the Code of Federal Regulations is amended as follows:

Table of Contents I. Executive Summary A. Purpose of the Final Rule B. Summary of the Major Provisions of the Final Rule C. Legal Authority D. Costs and Benefits II. Background A. Need for the Regulation/History of This Rulemaking B. Summary of Comments to the Proposed Rule C. General Overview of the Final Rule III. Legal Authority IV. Comments on the Proposed Rule and FDA Response A. Introduction B. Description of General Comments and FDA Response C. Purpose and Scope of the Final Rule (§ 1271.1) D. Donor Screening (§ 1271.75) E. Exceptions From the Requirement of Determining Donor Eligibility (§ 1271.90) F. Labeling Requirements (§ 1271.370) V. Effective Date VI. Economic Analysis of Impacts VII. Analysis of Environmental Impact VIII. Paperwork Reduction Act of 1995 IX. Federalism I. Executive Summary A. Purpose of the Final Rule

FDA is issuing this final rule to amend certain regulations regarding donor eligibility, including the screening and testing of donors of particular HCT/Ps, and related labeling. We are finalizing these changes in response to our enhanced understanding in this area and in response to comments from stakeholders regarding the importance of embryos to individuals and couples seeking access to donated embryos.

FDA is amending existing regulations to provide additional flexibility to HCT/P establishments to make available for reproductive use embryos originally intended for reproductive use for a specific individual or couple when those embryos are subsequently intended for directed or anonymous donation. Specifically, this rulemaking redesignates the current Title 21 of the Code of Federal Regulations (CFR) 1271.90(b) (§ 1271.90(b)) to new § 1271.90(c), and would insert a new § 1271.90(b) entitled “Exceptions for reproductive use” to clarify that if an embryo was originally intended for reproductive use for a specific individual or couple, its use for directed or anonymous donation, would not be prohibited under § 1271.45(c), even when the applicable donor eligibility requirements under part 1271, subpart C, are not met. FDA also clarifies that we are not creating an exception for deficiencies that occurred in making the donor eligibility determination for either the oocyte donor or the semen donor as required under § 1271.45(b), or for deficiencies in performing donor screening or testing, as required under §§ 1271.75, 1271.80, and 1271.85.

The final rule also requires appropriate labeling for embryos that would describe the donor eligibility status of the individual donors whose gametes were used to form the embryo. The content of the labeling is not different from that required under current regulations. Consistent with current regulations, the intent of the labeling is to help ensure that physicians have specific and accurate information to provide to recipients for use in making informed medical decisions.

FDA has authority for this rulemaking under section 361 of the Public Health Service Act (PHS Act) (42 U.S.C. 264). Under section 361 of the PHS Act, FDA may issue and enforce regulations necessary to prevent the introduction, transmission, or spread of communicable disease between the States or from foreign countries into the States.

Because this rule imposes no additional regulatory burdens, the costs associated with this rule are expected to be minimal.

Under the authority of section 361 of the PHS Act, by delegation from the Surgeon General and the Secretary of Health and Human Services, FDA may make and enforce regulations necessary to prevent the introduction, transmission, or spread of communicable diseases. Communicable diseases include, but are not limited to, those transmitted by viruses, bacteria, fungi, parasites, and transmissible spongiform encephalopathy agents. Certain diseases are transmissible through implantation, transplantation, infusion, or transfer of HCT/Ps derived from donors infected with those diseases. To prevent the introduction, transmission, or spread of such communicable diseases, we consider it necessary to require establishments to take appropriate measures to prevent the use of HCT/Ps from infected donors. FDA regulates HCT/Ps intended for implantation, transplantation, infusion, or transfer into a human recipient under part 1271 that was issued under the authority of section 361 of the PHS Act. Part 1271 requires HCT/P establishments to screen and test donors for relevant communicable disease agents and diseases, to prepare and follow written standard operating procedures for the prevention of the spread of communicable diseases, and to maintain records. Part 1271 also requires that for most HCT/Ps, the donor must be determined to be eligible, based on the results of screening and testing for relevant communicable disease agents and diseases. In most cases, a donor who tests reactive for a particular communicable disease, or who possesses clinical evidence of, or risk factors for, communicable disease agents and diseases, would be considered ineligible, and HCT/Ps from that donor would not ordinarily be used.

FDA has published three final rules that make up part 1271. In the Federal Register of January 19, 2001 (66 FR 5447), we published regulations requiring HCT/P establishments to register and list their HCT/Ps with FDA (registration final rule). In the Federal Register of May 25, 2004 (69 FR 29786), we published regulations requiring most donors to be tested and screened for relevant communicable disease agents and diseases (donor eligibility final rule). In the Federal Register of November 24, 2004 (69 FR 68612), we published regulations requiring certain HCT/P establishments to follow current good tissue practice (CGTP), which governs the methods used in, and the facilities and controls used for, the manufacture of HCT/Ps, recordkeeping, and the establishment of a quality program (CGTP final rule). These regulations apply to HCT/Ps recovered on or after May 25, 2005.

As part of our ongoing effort to implement our framework for regulating HCT/Ps, in the Federal Register of May 25, 2005 (70 FR 29949), we issued an interim final rule entitled “Human Cells, Tissues, and Cellular and Tissue-Based Products; Donor Screening and Testing, and Related Labeling” (2005 interim final rule), which had an effective date simultaneous with publication. This interim final rule was then adopted without change in the Federal Register of June 19, 2007 (72 FR 33667), in the final rule entitled “Human Cells, Tissues, and Cellular and Tissue-Based Products; Donor Screening and Testing, and Related Labeling” (2007 final rule). The 2007 final rule amended regulations regarding the screening and testing of donors of HCT/Ps, timing of specimen collection, record retention requirements, and related labeling requirements in response to public comments concerning the importance of cryopreserved embryos to individuals seeking access to donated embryos. The 2007 final rule also added an exception to the donor eligibility requirements in § 1271.90(a)(4) for cryopreserved embryos that, while originally exempt from the donor eligibility requirements because the donors were sexually intimate partners, are later intended for directed or anonymous donation.

In recent years, industry and the medical community have expressed concerns that the exception added by the 2007 final rule does not fully address the need for access to cryopreserved embryos. The stakeholders have raised concerns that the current regulations still unduly restrict the use of embryos that were originally intended for personal reproductive use, and therefore impose limitations on individuals and couples involved in family building. In response to these concerns, FDA published the proposed rule “Revisions to Exceptions Applicable to Certain Human Cells, Tissues, and Cellular and Tissue-Based Products” in the Federal Register of December 31, 2014 (79 FR 78744). The proposed rule intended to increase access to embryos for reproductive use by expanding the current exceptions to the prohibitions on use under § 1271.90, providing HCT/P establishments with the flexibility to make available any embryo originally formed for reproductive use for a specific individual or couple and now intended for reproductive use in a directed or anonymous donation, provided that specific criteria are met, including requirements for labeling.

We received approximately 10 comment letters on the proposed rule by the close of the comment period. We received comments from academia, professional organizations, and individuals. The comments were balanced between those expressing support for the proposed rule and those raising concerns about how the proposed exception will impact public health. They addressed the following topics: Purpose and scope of the final rule, donor screening, exceptions from the requirement of determining donor eligibility, and labeling requirements.

FDA is adopting as final, without material change, the proposed rule to amend certain regulations regarding donor eligibility and related labeling.

We are making revisions to the following FDA regulations:

Section 1271.90 sets forth exceptions where HCT/P establishments are not required to make a donor eligibility determination under § 1271.50 or to perform donor screening or testing under §§ 1271.75, 1271.80, and 1271.85. We are adding language to the exceptions listed in this section to provide clarity and update the regulation by allowing for an embryo originally intended for reproductive use for a specific individual or couple, to be subsequently used for directed or anonymous donation, even when the donor eligibility requirements under part 1271, subpart C are not met.

We are amending § 1271.90 as follows:

• Changing the heading of this section by deleting “from the requirement of determining donor eligibility,” and inserting “other” before “exceptions.” The heading for § 1271.90 will read “Are there other exceptions and what labeling requirements apply?” We made this change for clarity; the new heading will be more accurate.

• Changing § 1271.90(a)(3) by replacing “exempt” with “excepted,” which is the term used in the introductory title for this provision. Thus, this change will make the language more consistent. The beginning of § 1271.90(a)(3) will read, “Cryopreserved cells or tissue for reproductive use, other than embryos, originally excepted . . . .”

• Changing current § 1271.90(a)(4) by replacing “exempt” with “excepted”.

• Redesignating current § 1271.90(b) as § 1271.90(c) and adding a new paragraph (b) to § 1271.90.

• Changing newly designated § 1271.90(c) by removing “paragraph (a)” and adding in its place “paragraphs (a) and (b)” in the introductory text, revising § 1271.90(c)(2) to replace “(b)(6)” with “(c)(6)”, and by adding “recovery or” before “cryopreservation” in new § 1271.90(c)(6) to clarify that some testing and screening activities may take place before recovery of the gametes, not just before cryopreservation of the embryos.

We are redesignating the current § 1271.90(b) to § 1271.90(c), and adding a new § 1271.90(b) entitled “Exceptions for reproductive use.” Under finalized § 1271.90(b), an embryo originally intended for reproductive use for a specific individual or couple that is subsequently intended for directed or anonymous donation is excepted from the prohibition on use under § 1271.45(c) even when the applicable donor eligibility requirements under part 1271, subpart C are not met. Accordingly, when an establishment fails to comply with applicable donor eligibility requirements under part 1271, subpart C, the establishment will not be prohibited from making available for reproductive use such embryos for reproductive purposes in accordance with this section. The exception from the prohibition on use does not create an exception for deficiencies that occurred in making the donor eligibility determination for either the oocyte donor or the semen donor as required under § 1271.45(b), or for deficiencies in performing donor screening or testing, as required under §§ 1271.75, 1271.80, and 1271.85.

We note that the language we are adding to the exceptions currently listed in § 1271.90 is additive. It creates an additional exception for the use of certain reproductive HCT/Ps that are not currently excepted, but it does not impact or restrict the exceptions currently provided for in the regulations.

Under § 1271.90(c), HCT/P establishments must prominently label an HCT/P described in § 1271.90(a) and (b). The labeling requirements are intended to help ensure that physicians have specific and accurate information to provide to recipients for use in making informed medical decisions.

The nonsubstantive change to § 1271.90(c)(2) clarifies that the labeling requirements contained in § 1271.90(c)(2) do not apply to reproductive cells or tissue labeled in accordance with § 1271.90(c)(6). The change to § 1271.90(c)(6) includes “recovery or” before the word “cryopreservation”. Thus, the § 1271.90(c)(6) provision requires HCT/P establishments to prominently label an HCT/P described in § 1271.90(a)(3) or (a)(4) with “Advise recipient that screening and testing of the donor(s) were not performed at the time of recovery or cryopreservation of the reproductive cells or tissue, but have been performed subsequently” for HCT/Ps described in § 1271.90(a)(3) or (a)(4). This change is made to recognize that some testing and screening activities may take place even before recovery of HCT/Ps, not just before cryopreservation.

Section 1271.370 sets forth labeling requirements in addition to those that apply under §§ 1271.55, 1271.60, 1271.65, and 1271.90. Because, as discussed previously, this rule redesignates the current labeling requirements under § 1271.90(b) to § 1271.90(c), we are amending § 1271.370(b)(4) to revise the reference from § 1271.90(b) to § 1271.90(c).

FDA is issuing this final rule under the authority of section 361 of the PHS Act (42 U.S.C. 264). Under section 361 of the PHS Act, FDA may issue and enforce regulations necessary to prevent the introduction, transmission, or spread of communicable disease between the States or from foreign countries into the States. It is important to recognize that HCT/Ps recovered in one State may be sent to another for processing, and then shipped for use throughout the United States, or beyond. FDA has been involved in many recalls where HCT/Ps processed in a single establishment have been distributed in many States. In any event, intrastate transactions affecting interstate communicable disease transmission may also be regulated under section 361 of the PHS Act. (See Louisiana v. Mathews, 427 F. Supp. 174, 176 (E.D. La. 1977); Independent Turtle Farmers of Louisiana, Inc. v. United States of America, et al., 2010 U.S. Dist. LEXIS 31117). This final rule incorporates changes in response to our enhanced understanding of the uses of certain types of HCT/Ps in specific situations and in response to comments from stakeholders regarding the importance of embryos to individuals and couples seeking access to donated embryos.

We received approximately 10 comment letters on the proposed rule by the close of the comment period, each containing one or more comments on one or more issues. We received comments from academia, professional organizations, and individual consumers.

We describe and respond to the comments in sections IV.B through IV.F. We have numbered each comment to help distinguish among different comments. We have grouped similar comments together under the same number, and, in some cases, we have separated different issues discussed in the same comment and designated them as distinct comments for purposes of our responses. The number assigned to each comment is purely for organizational purposes and does not signify the comment's value or importance or the order in which the comments were received.

Several comments made general remarks supporting the proposed rule without focusing on a particular proposed provision. In the following paragraphs, we discuss and respond to such general comments.

(Comment 1) There were several comments that were in support of the proposed rule and suggested that we provide even more guidance on donor eligibility, screening, and testing of donors of reproductive cells. One suggestion was that FDA's donor eligibility, screening, and testing requirements closely parallel American Society of Reproductive Medicine/Society for Assisted Reproductive Technology guidelines.

(Response) FDA acknowledges and appreciates the supportive comments. We appreciate the interest in additional guidance for the screening and testing of donors of reproductive cells. We continue to review existing regulations with respect to providing additional guidance or modifying these regulations as appropriate, in the future.

(Comment 2) One comment asked if the final rule would be applied retrospectively to embryos formed and cryopreserved on or after May 25, 2005.

(Response) Yes, the final rule applies to embryos formed and cryopreserved on or after May 25, 2005.

(Comment 3) One comment noted that preventing the spread of communicable disease protects the population and the family receiving the donation. Two comments suggested that the proposed rule conflicts with FDA regulations that serve to prevent the introduction, transmission, and spread of communicable disease. One comment expressed concern that the proposed rule appears to relax the testing requirements for donors and conflicts with the PHS Act, specifically section 361, that provides FDA with the authority to make and enforce regulations “to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from State or possession into any other State or possession” (42 U.S.C. 264(a)). This commenter's interpretation of the proposed rule is that it removes the requirement for reproductive tissue donors to be tested, and only requires reproductive tissue donor testing “when possible.” According to the comment, FDA seems to posit informed consent as an adequate response to the health risks faced by recipients of donated embryos. The commenter would like FDA to strike the qualifier “when possible” from the text of the proposed rule because the commenter believes this approach would provide a greater level of protection to the recipient than the proposed rule and preserve FDA's intention of relaxing the current donor eligibility regulations in the interest of family building.

(Response) As stated previously, we consider it necessary that establishments take appropriate measures to prevent the use of HCT/Ps from donors infected with communicable diseases. Part 1271 requires HCT/P establishments to screen and test donors for relevant communicable disease agents and diseases, and to maintain records. Part 1271 also requires for most HCT/Ps that the donor must be determined to be eligible, based on the results of screening and testing for relevant communicable disease agents and diseases. We have retained the qualifier “when possible” in § 1271.90(a)(4) to provide HCT/P establishments with the flexibility to make available any embryos originally formed for reproductive use for a specific individual or couple and now intended for reproductive use in a directed or anonymous donation, provided that specific criteria are met, including requirements for labeling.

The final rule provides for the continued applicability of labeling requirements for embryos intended for reproductive use that would be excepted from the prohibition on use. The rule requires prominent labeling that describes the donor eligibility status of the individual donors whose gametes were used to form the embryo. The required labeling will provide information to the treating physician to permit discussion of the potential risks of communicable disease with the recipient.

(Comment 4) Some of the comments expressed concern about the risk of accepting an unscreened donation. Another comment noted that eligibility of the HCT/P donor must be assessed prior to usage to ensure the safety of recipients, their offspring, and the public as a whole; and furthermore, ensuring the proper screening of the donor's HCT/P enables the control of the spread of disease.

(Response) We agree that the proper screening of HCT/P donors minimizes the risk of introducing, transmitting, or spreading communicable diseases. As stated in the proposed rule, we consider it necessary to require establishments to take appropriate measures to prevent the use of HCT/Ps from infected donors. Part 1271 requires HCT/P establishments to screen and test donors for relevant communicable disease agents and diseases, and to maintain records. Part 1271 also requires, for most HCT/Ps, that donor be determined to be eligible, based on the results of screening and testing for relevant communicable disease agents and diseases. In most cases, a donor who tests reactive for a particular communicable disease, or who possesses clinical evidence of, or risk factors for, a communicable disease agent and disease, would be considered ineligible, and cells or tissues from that donor would not ordinarily be used.

(Comment 5) A few comments expressed the belief that the proposed rule will allow for better genetic profiling. One of those comments stated that labeling will make it easier to identify particular genotypes for research. Another comment stated that genetically profiling all donors and to the extent possible all embryos will reduce the risk of recipients of embryos giving birth to children with serious genetic disorders. The commenter asked FDA to require establishments to genetically screen all donors and the embryo when possible.

(Response) These comments address a topic that is outside the scope of this rulemaking.

(Comment 6) One comment sought transparency as to which embryos are excepted and requested specific examples of how the rule provides additional flexibility to make embryos available for directed and anonymous donation. Specifically, the commenter asked whether donation would be allowed when the embryo was originally intended for transfer to a sexually intimate partner, where one of the gamete providers (either a directed or anonymous donor) would be considered ineligible based on screening and testing.

(Response) The rulemaking provides additional flexibility to make embryos available when there have been changes in the original plans for use of the embryos. Under finalized § 1271.90(b), an embryo originally intended for reproductive use for a specific individual or couple that is subsequently intended for directed or anonymous donation is excepted from the prohibition on use under § 1271.45(c) even when the applicable donor eligibility requirements under part 1271, subpart C are not met. Accordingly, when an establishment fails to comply with applicable donor eligibility requirements under part 1271, subpart C, the establishment will not be prohibited from making available for reproductive use such embryos for reproductive purposes in accordance with this section. The exception from the prohibition on use does not create an exception for deficiencies that occurred in making the donor eligibility determination for either the oocyte donor or the semen donor as required under § 1271.45(b), or for deficiencies in performing donor screening or testing, as required under §§ 1271.75, 1271.80, and 1271.85.

We note that the change we are making to the exceptions currently listed in § 1271.90 is additive. It creates an additional exception for the use of certain reproductive HCT/Ps that are not currently excepted, but it does not impact or restrict the exceptions currently provided for in the regulations.

(Comment 7) One comment recommends that the term “embryos formed for autologous use” not be used in conjunction with embryos. The commenter reasons that after a sperm or oocyte form an embryo, the embryo should not be considered autologous, given the definition at § 1271.3(a).

(Response) We agree with the comment and are not adopting, as part of the final rule, the term “embryos formed for autologous use”. Likewise, we are not adopting, as part of the final rule, the reference to § 1271.90(a)(1) in § 1271.90(a)(4).

(Comment 8) Several comments were in support of labeling because it allows the physician to fully discuss the risks of any communicable disease and it allows the patient to make a fully informed decision. One commenter noted that factors affecting decisions of an HCT/P recipient may outweigh the expert advice of medical doctors. Another comment referenced § 1271.90(c)(6) of the proposed rule (embryo labeling requirements) that states establishments are required to “advise recipients that screening and testing of the donor(s) were not performed at the time of recovery or cryopreservation of the reproductive cells or tissues, but have been performed subsequently.” The comment further states that “Description of the Proposed Rule” provides that these labeling requirements are “based on the expectation that a physician will be closely involved in the decision of the embryo and the recognition that physicians are under legal and ethical obligations that require them to discuss the risks of communicable disease transmission stemming from the use of HCT/Ps.” The comment asked that FDA revise the rule to expressly require establishments to counsel recipients on the risk of disease.

(Response) We agree that the recipients should be fully informed about the risk of communicable disease before accepting an embryo for implantation; however, we decline to make the suggested change. As stated in the preamble of the proposed rule, the proposed labeling requirements are based on the expectation that a physician will be closely involved in the decision to use an embryo and the recognition that physicians are under legal and ethical obligations that require them to discuss the risks of communicable disease transmission stemming from the use of HCT/Ps. FDA relies on physicians to meet these obligations when discussing procedures involving HCT/Ps with recipients. Further, we expect that a recipient would be fully informed of the risks involved in using an embryo for reproductive purposes as finalized under § 1271.90(b) even when the donor eligibility requirements under part 1271, subpart C are not met.

(Comment 9) One comment suggested that while a labeling requirement that is tiered according to the risks may mitigate the risks, it does not go far enough in abolishing the risks.

(Response) As described under proposed § 1271.90(c)(2) through (6), an embryo originally intended for reproductive use for a specific individual or couple that is subsequently intended for directed or anonymous donation must be labeled as applicable. We acknowledge that the labeling requirement will not abolish all risks of implanting those embryos. Rather, as stated in the proposed rule, the required labeling would provide information to the treating physician to permit discussion of the potential risks of communicable diseases with the recipient. Our expectation is that the recipient will become fully informed of the risk when the donor eligibility requirements under part 1271, subpart C are not met, so that the recipient can make a well informed decision about receiving the embryo.

This rule is effective August 22, 2016.

We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). We have developed a comprehensive Economic Analysis of Impacts that assesses the impacts of the final rule. We believe that this final rule is not a significant regulatory action as defined by Executive Order 12866.

The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the costs associated with this rule are expected to be minimal, we certify that the rule will not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $146 million, using the most current (2015) Implicit Price Deflator for the Gross Domestic Product. This final rule would not result in an expenditure in any year that meets or exceeds this amount.

This rule amends certain regulations regarding donor eligibility and labeling related to the screening and testing of donors of particular HCT/Ps. The final rule will provide additional flexibility to HCT/P establishments to make available for reproductive use embryos originally intended for reproductive use for a specific individual or couple and subsequently intended for directed or anonymous donation. Specifically, the final rule will clarify that if an embryo was originally intended for reproductive use for a specific individual or couple, its use for directed or anonymous donation would not be prohibited under § 1271.45 (c), even when the applicable donor eligibility requirements under part 1271, subpart C are not met. This exception from prohibition for use would not create an exception for deficiencies that occurred in making the donor eligibility determination for either the oocyte donor or the semen donor as required under § 1271.45(b), or for deficiencies in performing donor screening or testing, as required under §§ 1271.75, 1271.80, and 1271,85. The final rule also requires appropriate labeling that describes the donor eligibility status of the individual donors whose gametes were used to form the embryo.

This rule will provide greater accommodation of individuals and couples wanting access to embryos originally intended for reproductive use for a specific individual or couple, while continuing to emphasize the applicability of the donor eligibility screening and testing requirements for individual gamete donors. The final rule will provide HCT/P establishments with the flexibility to make embryos originally intended for reproductive use for a specific individual or couple now available for directed or anonymous donation, provided that specific criteria are met. Consistent with current regulations, the labeling requirements will help ensure that physicians have specific and accurate information to provide to recipients for use in making informed medical decisions. Because this rule imposes no additional regulatory burdens, the costs associated with this rule are expected to be minimal.

We have determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

The labeling requirements contained in this final rule are not subject to review by the Office of Management and Budget (OMB) because they do not constitute a “collection of information” under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C 3501-3520). Rather, the requirement to label HCT/Ps in accordance with the final rule is a “public disclosure of information originally supplied by the Federal government to the recipient for the purpose of disclosure to the public” (5 CFR 1320.3(c)(2)). Therefore, FDA concludes that these requirements in this document are not subject to review by OMB because they do not constitute a “collection of information” under the PRA.

We have analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that 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. Accordingly, we conclude that the rule does not contain policies that have federalism implications as defined in the Executive Order and, consequently, a federalism summary impact statement is not required.

Therefore, under the Public Health Service Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 1271 is amended as follows:

Background

This Treasury decision contains final regulations that amend 26 CFR part 1 under section 833 of the Internal Revenue Code (the Code). Section 833(a) provides that Blue Cross and Blue Shield organizations, and certain other organizations involved in providing health insurance as described in section 833(c), are entitled to: (1) Treatment as stock insurance companies for purposes of sections 831 through 835 (related to taxation of non-life insurance companies generally); (2) a special deduction determined under section 833(b); and (3) computation of unearned premium reserves under section 832(b)(4) based on 100 percent, and not 80 percent, of unearned premiums for purposes of determining “insurance company taxable income” under section 832.

Section 833(c)(5) was added to the Code by section 9016 of the Patient Protection and Affordable Care Act (Pub. L. 111-148, 124 Stat. 119) (the Affordable Care Act), effective for taxable years beginning after December 31, 2009. Section 833(c)(5), as enacted by the Affordable Care Act, provided that section 833 did not apply to any organization unless the organization's medical loss ratio (MLR) for the taxable year was at least 85 percent. For purposes of section 833, an organization's MLR was its percentage of total premium revenue expended on reimbursement for clinical services provided to enrollees under its policies during such taxable year (as reported under section 2718 of the Public Health Service Act (42 U.S.C. 300gg-18)).

Section 2718 of the Public Health Service Act (PHSA) was added by section 1001 and amended by section 10101 of the Affordable Care Act. Section 2718 of the PHSA is administered by the Department of Health and Human Services. Section 2718(a) of the PHSA requires a health insurance issuer to submit a report for each plan year to the Secretary of the Department of Health and Human Services concerning the percentage of total premium revenue, after accounting for collections or receipts for risk adjustment and risk corridors and payments of reinsurance, that the issuer expends: (1) On reimbursement for clinical services provided to enrollees under such coverage; (2) for activities that improve health care quality; and (3) on all other non-claims costs, excluding federal and state taxes and licensing or regulatory fees.

Section 2718(b) of the PHSA requires that a health insurance issuer offering group or individual health insurance coverage, with respect to each plan year, provide an annual rebate to each enrollee under such coverage, on a pro rata basis, if the ratio of the amount of the premium revenue the issuer expends on costs for reimbursement for clinical services provided to enrollees under such coverage and for activities that improve health care quality to the total amount of premium revenue (excluding federal and state taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance under sections 1341, 1342, and 1343 of the Affordable Care Act (42 U.S.C. 18061, 18062, and 18063)) for the plan year is less than a prescribed percentage. Section 2718(b)(1)(B)(ii) of the PHSA provides that beginning on January 1, 2014, the medical loss ratio computed under section 2718(b) of the PHSA shall be based on expenses and premium revenues for each of the previous three years of the plan.

The Department of Health and Human Services published in the Federal Register (75 FR 74864) an interim final rule under section 2718 of the PHSA on December 1, 2010, an interim final rule and final rule on December 7, 2011 (76 FR 76596 and 76574), and a final rule on May 16, 2012 (77 FR 28790). These rules implementing section 2718 of the PHSA are codified at 45 CFR part 158 (HHS Regulations).

On December 6, 2010, the Treasury Department and the IRS published Notice 2010-79 (2010-49 I.R.B. 809), which provided interim guidance and transitional relief to organizations under section 833(c)(5). The interim guidance applied to an organization's first taxable year beginning after December 31, 2009.

The interim guidance provided that for purposes of determining whether an organization's percentage of total premium revenue expended on reimbursement for clinical services provided to enrollees was at least 85 percent (and thus satisfied the requirement of section 833(c)(5)), organizations were required to use the definition of “reimbursement for clinical services provided to enrollees” set forth in the HHS Regulations. In addition, the interim guidance provided that for purposes of determining whether the 85-percent requirement of section 833(c)(5) was satisfied, the IRS would not challenge the inclusion of amounts expended for “activities that improve health care quality” as described in the HHS Regulations.

Notice 2010-79 also stated that the consequences for an organization with an MLR of less than 85 percent (an insufficient MLR) were as follows: (1) The organization would not be taxable as a stock insurance company by reason of section 833(a)(1) (but may have been taxable as an insurance company if it otherwise met the requirements of section 831(c)); (2) the organization would not be allowed the special deduction set forth in section 833(b); and (3) the organization would only take into account 80 percent, rather than 100 percent, of its unearned premiums for purposes of computing premiums earned on insurance contracts under section 832(b)(4). However, Notice 2010-79 provided that solely for the first taxable year beginning after December 31, 2009, the IRS would not treat an organization as losing its status as a stock insurance company by reason of section 833(c)(5) provided the following conditions were met: (1) The organization was described in section 833(c) in the immediately preceding taxable year; (2) the organization would have been taxed as a stock insurance company for the current taxable year but for the enactment of section 833(c)(5); and (3) the organization would have met the requirements of section 831(c) to be taxed as an insurance company for the current taxable year but for its activities in the administration, adjustment, or settlement of claims under cost-plus or administrative services-only contracts.

On July 5, 2011, the Treasury Department and the IRS published Notice 2011-51 (2011-27 I.R.B. 36) extending the interim guidance and transitional relief provided in Notice 2010-79 to an organization's first taxable year beginning after December 31, 2010. On June 11, 2012, the Treasury Department and the IRS published Notice 2012-37 (2012-24 I.R.B. 1014) extending the interim guidance and transitional relief provided in Notice 2010-79 and Notice 2011-51 through an organization's first taxable year beginning after December 31, 2012.

On May 13, 2013, the Treasury Department and the IRS published in the Federal Register (78 FR 27873) a notice of proposed rulemaking (REG-126633-12) addressing the computation of an organization's MLR for purposes of section 833(c)(5) and the consequences of non-application of section 833 if an organization had an insufficient MLR. The proposed regulations provided that the numerator of an organization's MLR is the total premium revenue expended on “reimbursement for clinical services provided to enrollees” under its policies for the taxable year, but does not include amounts expended for “activities that improve health care quality.” In addition, the Treasury Department and the IRS concluded that, for administrative convenience and to be consistent with the MLR calculation under section 2718(b)(1)(B)(ii) of the PHSA, it was appropriate to compute the MLR for a taxable year under section 833(c)(5) using the same three-year period used under section 2718(b) of the PHSA. Therefore, the proposed regulations provided that amounts used for purposes of section 833(c)(5) for each taxable year should be determined based upon amounts reported under section 2718 of the PHSA for that taxable year and the two preceding taxable years, subject to the same adjustments that apply for purposes of the PHSA. The proposed regulations also provided that if an organization has an insufficient MLR, then section 833(a) does not apply to that organization.

On January 7, 2014, the Treasury Department and the IRS published in the Federal Register (79 FR 755) final regulations (TD 9651) adopting the provisions of the proposed regulations with certain modifications. These modifications included transition rules to phase in the same three-year period used under section 2718(b) of the PHSA to compute the MLR for a taxable year. Accordingly, the final regulations provide that for the first taxable year beginning after December 31, 2013, an organization's MLR is computed on a one-year basis. For the first taxable year beginning after December 31, 2014, an organization's MLR is computed on a two-year basis. Finally, for the first taxable year beginning after December 31, 2015, and for all succeeding taxable years, the final regulations provide that an organization's MLR is determined based on amounts reported under section 2718 of the PHSA for that taxable year and the two preceding taxable years, subject to the same adjustments that apply for purposes of section 2718 of the PHSA. The final regulations apply to taxable years beginning after December 31, 2013.

Congress subsequently passed the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235, 128 Stat. 2130) (the Appropriations Act), which was signed into law by the President on December 16, 2014. Section 102 of Division N of the Appropriations Act made a technical correction to section 833(c)(5) (the Technical Correction). The Technical Correction provides that in calculating its MLR numerator, an organization includes both the cost of reimbursement for clinical services and amounts expended for activities that improve health care quality. In addition, the Technical Correction provides that the consequences for not meeting the MLR threshold are only that section 833(a)(2) and (3) do not apply. Therefore, an organization with an insufficient MLR is treated as if it were a stock insurance company under section 833(a)(1). The Technical Correction applies to taxable years beginning after December 31, 2009.

These final regulations restate § 1.833-1 of the Income Tax Regulations (26 CFR part 1) and incorporate the Technical Correction. As explained in this preamble, the Technical Correction, in effect, retroactively amended the rules in the existing final regulations to determine the MLR and the consequences of an insufficient MLR. In order to avoid any confusion caused by the effect of the Technical Correction on the existing final regulations, the Treasury Department and the IRS are publishing the existing final regulations, as revised by the Technical Correction, in their entirety in this Treasury decision.

Section 1.833-1 of the Income Tax Regulations generally provides that an organization's MLR with respect to a taxable year is the ratio, expressed as a percentage, of the organization's MLR numerator to its MLR denominator. Prior to the Technical Correction, the existing final regulations only included in the MLR numerator an organization's total premium revenue expended on reimbursement for clinical services provided to enrollees. Consistent with the Technical Correction, § 1.833-1(c)(1)(i) of these final regulations describes an organization's MLR numerator as the total premium revenue the organization expended on reimbursement for clinical services and activities that improve health care quality provided to enrollees under its policies for the taxable year. For purposes of section 833(c)(5), these final regulations define the term “activities that improve health care quality” to have the same meaning as the term has in section 2718 of the PHSA and the regulations issued under that section (see 45 CFR 158.150). In addition, consistent with the Technical Correction, the transition rules for computation of the MLR in § 1.833-1(c)(2)(i) and (ii) of these final regulations include the premium revenue expended on activities that improve health care quality.

Consistent with the Technical Correction, these final regulations provide that the consequences for an organization described in section 833(c) that has an MLR of less than 85 percent are the following: (1) The organization is not allowed the special deduction set forth in section 833(b); and (2) it must take into account 80 percent, rather than 100 percent, of its unearned premiums under section 832(b)(4). Unlike under the rule in the existing final regulations, an organization that has an MLR of less than 85 percent does not lose its eligibility to be treated as a stock insurance company under section 833(a)(1).

These final regulations apply to taxable years beginning after December 31, 2016. However, taxpayers may rely on these final regulations for taxable years beginning after December 31, 2009.

Certain IRS regulations, including this one, are exempt from the requirement of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply.

The Treasury Department and the IRS have determined that section 553(b) of the APA does not apply to these regulations, including because good cause exists under section 553(b)(B) of the APA. Section 553(b)(B) provides that an agency is not required to publish a notice of proposed rulemaking in the Federal Register when the agency, for good cause, finds that notice and public comment thereon are impracticable, unnecessary, or contrary to the public interest. The Treasury Department and the IRS have determined that notice and public comment are unnecessary inasmuch as these revisions (1) merely incorporate the Technical Correction by adding or removing language in the existing final regulations and make nonsubstantive conforming changes to reflect the Technical Correction and (2) provide taxpayers with immediate guidance. For the same reason, a delayed effective date is not required pursuant to section 553(d)(3) of the APA. Pursuant to section 7805(f)(3) of the Code, these final regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comments on its impact on small businesses, and no comments were received.

The principal author of these regulations is Rebecca L. Baxter, Office of Associate Chief Counsel (Financial Institutions & Products). However, other personnel from the Treasury Department and the IRS participated in their development.

The IRS notices and Treasury decisions cited in this preamble are made available by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

Accordingly, 26 CFR part 1 is amended as follows:

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port DHS Department of Homeland Security E.O. Executive Order FR Federal Register NAD 83 North American Datum of 1983 NPRM Notice of Proposed Rulemaking U.S.C. United States Code II. Background Information and Regulatory History

On February 10, 2016, the Tuskegee Airmen National Historical Museum submitted an application for a marine event for an aerial display spanning three days in conjunction with the Detroit River Days Festival on June 24, 25, and 26, 2016. A safety zone is required by the Federal Aviation Administration to separate aircraft from persons and property on the ground or water's surface for all air shows. For the purposes of this event, the Coast Guard is establishing a safety zone around the proposed flight path and a standoff zone between the flight path and the shore, matching the safety zone created for this same event in 2015 [USCG-2015-0491].

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231, 33 CFR 1.05-1 and 160.5; and Department of Homeland Security Delegation No. 0170.1. Having reviewed the application for a marine event submitted by the sponsor on February 10, 2016, the Captain of the Port Detroit (COTP) has determined that an aircraft aerial display proximate to a gathering of watercraft poses a significant risk to public safety and property. Such hazards include potential aircraft malfunctions, loud noise levels, and waterway distractions. Therefore, the COTP is establishing a safety zone around the event location to help minimize risks to safety of life and property during this event.

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking with respect to this rule because waiting for a notice and comment period to run would be impracticable, unnecessary, and contrary to the public interest. Although an initial marine event application was submitted on February 10, 2016, final details regarding event area and patrol parameters were not known to the Coast Guard with sufficient time for the Coast Guard to solicit public comments before the start of the event. Thus, delaying the effective date of this rule to wait for a notice and comment period to run would be impracticable and contrary to the public interest because it would inhibit the Coast Guard's ability to protect the public from the hazards associated with this air show.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. For the same reasons discussed in the preceding paragraph, waiting for a 30 day notice period to run would be impracticable and contrary to the public interest.

This rule establishes a safety zone on U.S. waters of the Detroit River, Detroit, MI, from a point on shore in Milliken State Park at 42°19.87′ N., 083°01.65′ W., proceeding South-Southeast approximately 450 yards to a point mid-river corresponding with the international boundary at 42°19.67′ N., 083°01.57′ W., then proceeding approximately 1.3 miles West-Southwest along the international boundary to a point mid-river at 42°19.28′ N., 083°03.03′ W. and then proceeding to a point on shore just west of the Joe Lewis Arena at 42°19.45′ N., 083°03.17′ W., and then following the U.S. bank of the Detroit River upstream to the point of origin (NAD 83).

Entry into, transiting, or anchoring within this safety zone is prohibited unless authorized by the COTP or his on-scene representative on a case-by-case basis. The COTP or his on-scene representative may be contacted via VHF Channel 16 to coordinate vessel transits during the enforcement period.

We developed this rule after considering numerous statutes and executive orders (E.O.) related to rulemaking. Below we summarize our analyses based these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of E.O. 12866, Regulatory Planning and Review, as supplemented by E.O. 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of E.O. 12866 or under section 1 of E.O. 13563. The Office of Management and Budget has not reviewed it under those Orders.

We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues. The safety zone created by this rule will be relatively small and enforced for a relatively short duration, and is designed to minimize the impact on navigation. Moreover, under certain conditions, vessels may still transit through the safety zone when permitted by the COTP on a case-by-case basis.

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 proposed rule would not have a significant economic impact on a substantial number of small entities.

This rule will affect the following entities, some of which might be small entities: The owners or operators of vessels intending to transit or anchor in portions of the Detroit River from 12:30 p.m. to 6:30 p.m. on June 24, 25 and 26, 2016.

This safety zone will not have a significant economic impact on a substantial number of small entities for the reasons cited in the Regulatory Planning and Review section. Additionally, before the enforcement of these zones, Coast Guard Sector Detroit will issue a local Broadcast Notice to Mariners so vessel owners and operators can plan accordingly.

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 so that they can better evaluate its effects on them. If this 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 above. The Coast Guard will not retaliate against 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 E.O. 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

Also, this proposed rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed 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 (NEPA)(42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a safety zone and is therefore categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under 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.

This rule will not cause a taking of private property or otherwise have taking implications under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This action is not a “significant energy action” under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

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

On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act) (Sec. 701 of Pub. L. 114-74), which amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment Act) (Pub. L. 101-410), to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect.

The 2015 Act requires agencies to: (1) Adjust the level of civil monetary penalties with an initial “catch-up” adjustment through an interim final rulemaking (IFR); and (2) make subsequent annual adjustments for inflation. Catch-up adjustments are to be based on the percent change between the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October in the year of the previous adjustment, and the October 2015 CPI-U. Annual inflation adjustments are to be based on the percent change between the October CPI-U preceding the date of the adjustment, and the prior year's October CPI-U.

The Executive Office of the President Office of Management and Budget (OMB) published guidance on February 24, 2016, advising the heads of federal agencies how to implement the 2015 Act. See https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf. In the guidance, OMB provided the applicable multipliers that federal agencies should use when calculating their first adjustment. Agencies may not increase penalty levels by more than 150 percent of the corresponding levels in effect on November 2, 2015. Note: The 150 percent limitation is on the amount of the increase; therefore, the adjusted penalty level(s) are up to 250 percent of the level(s) in effect on November 2, 2015.

The Veterans' Benefits Improvement and Health-Care Authorization Act of 1986 authorized VA to levy civil monetary penalties against lenders that make false certifications in VA's home loan guaranty program. Public Law 99-576, sec. 402, Oct. 28, 1986, codified at 38 U.S.C. 3710(g)(4). Any lender that knowingly and willfully makes a false certification related to VA's credit information and loan processing standards is liable to the United States Government for a civil penalty equal to two times the amount of the Secretary's loss on the loan involved or to another appropriate amount, not to exceed $10,000, whichever is greater. See 38 CFR 36.4340(k). The applicable multiplier for a law enacted in 1986 is 2.15628. Therefore, this rule increases the civil penalty found at 38 CFR 36.4340(k)(1)(i) and 36.4340(k)(3) to the greater of two times the amount of the Secretary's loss on the loan involved or to another appropriate amount, not to exceed $21,563.

The Program Fraud Civil Remedies Act of 1986 authorized federal agencies to establish civil penalties and assessments against persons who commit fraud in federal programs. See Public Law 99-509, secs. 6101-6104, Oct. 21, 1986. For participants in VA's programs, a person is subject to a civil penalty (in addition to any other remedy that may be prescribed by law) for making a fraudulent claim or statement, as described in 38 CFR 42.3. .

The Program Fraud Civil Remedies Act of 1986 originally established the amount of the civil penalty at $5,000. See Public Law 99-509, secs. 6101-6104, Oct. 21, 1986. VA increased the amount to $5,500 in 1990, in accordance with the Inflation Adjustment Act. VA has not changed the amount other than when it implemented the adjustment due to the Inflation Adjustment Act.

As stated above, OMB has advised that the applicable multiplier for laws enacted in 1986 is 2.15628. Rather than applying the multiplier to $5,500, however, VA is applying the multiplier to the amount originally established in the Program Fraud Civil Remedies Act of 1986, $5,000. The initial adjustment from $5,000 to $5,500 is not to be taken into account. This is because, under the 2015 Act, agencies are to exclude from the catch-up prior inflationary adjustments implemented under the Inflation Adjustment Act. Therefore, as of the effective date of this rule, the amounts found at 38 CFR 42.3(a)(1) and 38 CFR 42.3(b)(1) are amended from $5,500 to $10,781.

VA is also updating the language to account for the codification of the authority cited by 38 U.S.C. Ch. I, Pt. 41, Refs & Annos. Currently, the language states that the cited authorities are “. . . to be codified at 31 U.S.C. 3801-3812.” The authorities are now codified at 31 U.S.C. 3801-3812. Consequently, VA is removing “to be codified” and replacing it with “codified”.

In accordance with 5 U.S.C. 553(b)(B) and (d)(3), the Secretary of Veterans Affairs finds, with good cause, that notice and public procedure thereon are unnecessary. This interim final rule merely calculates the adjustment percentages, specified by the 2015 Act, for codification as a VA regulation.

This final rule does not impose any additional responsibilities on any entity and therefore requires no adjustment to any entity's current operations, policies, or practices. Instead, it simply adjusts the amount of each civil monetary penalty as prescribed by the 2015 Act.

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action,” which requires review by OMB, as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.”

The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined that it is not a significant regulatory action under Executive Order 12866.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This interim final rule will have no such effect on State, local, and tribal governments, or on the private sector.

This interim final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Accordingly, no proposed rulemaking was required in connection with the adoption of this final rule. Pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analyses requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance number and title for the program affected by this document is 64.114, Veterans Housing—Guaranteed and Insured Loans.

The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Robert D. Snyder, Chief of Staff, Department of Veterans Affairs, approved this document on May 31, 2016, for publication.

For the reasons set out in the preamble, VA amends 38 CFR parts 36 and 42 as follows:

Throughout this document, “we,” “us” and “our” refer to the EPA.

On May 2, 2016, the EPA proposed a limited disapproval of the major nonattainment NSR portion of ADEQ's NSR SIP submittal for PM2.5 as it pertains to the requirements of CAA section 189(e). See 81 FR 26185. ADEQ's NSR SIP submittal generally includes requirements for the PM2.5 nonattainment NSR program for major sources consistent with the provisions promulgated in the EPA's 2008 NSR PM2.5 Rule. Specifically, ADEQ's NSR SIP submittal includes the PM2.5 significant emission rates at R18-2-101(130), regulation of certain PM2.5 precursors (SO2 and NOX) at R18-2-101(130), the regulation of PM10 and PM2.5 condensable emissions at R18-2-101(122)(f), and the emissions offset requirements at R18-2-403(A)(3). The EPA approved these provisions into ADEQ's SIP as part of a limited approval and limited disapproval, and other actions, on November 2, 2015 (80 FR 67319). At that time, we did not determine that the submittal fully addressed section 189(e) in title I, Part D, subpart 4 of the Act, related to NSR permitting requirements for PM2.5 for major stationary sources in PM2.5 nonattainment areas, and instead finalized a limited approval related to the requirements of subpart 4 based on this issue.

For PM2.5 nonattainment areas, CAA section 189(e) requires that the control requirements applicable under plans in effect under part D of the CAA for major stationary sources of PM2.5 also apply to major stationary sources of PM2.5 precursors, except where the Administrator determines that such sources do not contribute significantly to PM2.5 levels that exceed the standards in the area. In our May 2, 2016 proposed action, we proposed to determine that ADEQ's NSR SIP submittal does not fully satisfy the major nonattainment NSR requirements for PM2.5 under section 189(e) of the Act for the Nogales and West Central Pinal PM2.5 nonattainment areas, based on our finding that the submittal does not include rules regulating VOCs or ammonia as PM2.5 precursors under the major source nonattainment NSR program, nor does it include a demonstration showing that the regulation of VOCs and ammonia is not necessary under section 189(e).

The preamble in the Federal Register notification for our proposed action contains more information on the basis for this rulemaking and on our evaluation of the submittal.

The EPA's May 2, 2016 proposed action provided a 30-day public comment period. During this period, we did not receive any comments on our proposal.

No comments were submitted on our proposed action. Therefore, as authorized in sections 110(k) of the Act, the EPA is finalizing a limited disapproval of the ADEQ NSR SIP submittal for the Nogales and West Central Pinal PM2.5 nonattainment areas under section 189(e) of the Act related to PM2.5 precursors.

As a result of this final action, the EPA must promulgate a federal implementation plan (FIP) under section 110(c) to address the deficiencies that are the subject of this action unless we approve subsequent SIP revisions that correct the deficiencies within 24 months. In addition, sanctions will be imposed unless the EPA approves subsequent SIP revisions that correct these deficiencies within 18 months of the effective date of this action. These sanctions would be imposed under section 179 of the Act and 40 CFR 52.31.

Additional information about these statutes and Executive Orders can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

This action does not impose an information collection burden under the PRA because this action does not impose additional requirements beyond those imposed by state law.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities beyond those imposed by state law.

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action does not impose additional requirements beyond those imposed by state law. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, will result from this action.

This action does not have federalism implications. It 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.

This action does not have tribal implications, as specified in Executive Order 13175, because the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, and will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not impose additional requirements beyond those imposed by state law.

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.

The EPA lacks the discretionary authority to address environmental justice in this rulemaking.

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 22, 2016. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule 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)).

This document announces that, on June 15, 2016, OMB approved the information collection requirements contained in the Commission's Low Power Television Digital Rules Report and Order, FCC 15-175, published at 81 FR 5041, February 1, 2016. The OMB Control Number is 3060-1177. The Commission publishes this document as an announcement of the effective date of the requirement. If you have any comments on the burden estimates listed below, or how the Commission can improve the collections and reduce any burdens caused thereby, please contact Cathy Williams, Federal Communications Commission, Room 1-C823, 445 12th Street SW., Washington, DC 20554. Please include the OMB Control Number, 3060-1177, in your correspondence. The Commission will also accept your comments via the Internet if you send them to [email protected].

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 and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received OMB approval on June 15, 2016 for the information collection requirements contained in FCC 15-175, 47 CFR 74.800. Under 5 CFR 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.

No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060-1177. The foregoing document is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.

The total annual reporting burdens and costs for the respondents are as follows:

OMB Control No.: 3060-1177.

OMB Approval Date: June 15, 2016.

OMB Expiration Date: June 30, 2019.

Title: 47 CFR 74.800, Channel Sharing Agreement.

Form Numbers: Not applicable.

Respondents: Business or other for profit entities; Not for profit institutions; State, local or Tribal government.

Number of Respondents/Responses: 100 respondents; 100 responses.

Estimated Hours per Response: 1 hr.

Frequency of Response: One time reporting requirement.

Total Annual Burden: 100 hours.

Total Annual Cost: $54,000.

Obligation to Respond: Required to obtain benefits. The statutory authority for this information collection is contained in sections 1, 4(i) and (j), 7, 154(i), 301, 302, 303, 307, 308, 309, 312, 316, 318, 319, 324, 325, 336 and 337 of the Communications Act of 1934, as amended.

Nature and Extent of Confidentiality: There is no need for confidentiality with this collection of information.

Privacy Act Assessment: No impact(s).

Needs and Uses: On December 18, 2015, the Commission released a Third Report and Order and Fourth Notice of Proposed Rulemaking, In the Matter of Amendment of Parts 73 and 74 of the Commission's Rules to Establish Rules for Digital Low Power Television and Television Translator Stations, MB Docket No. 03-185, FCC 15-175. Low power television and television translator stations (collectively “LPTV stations”) will be required to include certain terms in their channel sharing agreements (CSAs) and to file their CSAs with the Commission. This new requirement is provided in 47 CFR 74.800.

Table of Contents I. Executive Summary II. Background III. Legislative Mandate Under the Moving Ahead for Progress in the 21st Century Act (MAP-21) IV. Notice and Comment Are Unnecessary V. American Society of Agricultural and Biological Engineers (ASABE) Standards Development VI. Summaries of and Availability of ASABE Standards 390.4; “Definitions and Classifications of Agricultural Field Equipment” and 279.14; “Lighting and Marking of Agricultural Equipment on Highways” VII. NHTSA Is Incorporating ASABE Standards by Reference VIII. Costs and Benefits IX. Rulemaking Analyses I. Executive Summary

On July 6, 2012, the President signed into law the Moving Ahead for Progress in the 21st Century Act (MAP-21), Public Law 112-141. Section 31601 of MAP-21 contains a non-discretionary mandate concerning daytime and nighttime visibility of agricultural equipment that may be operated on public roads.1 It requires NHTSA 2 to establish lighting and marking standards equivalent to an existing industry standard for agricultural equipment that may be operated on public roads.

This rulemaking implements that mandate by adopting the American Society of Agricultural and Biological Engineers (ASABE) Standard 279.14, a voluntary industry consensus standard, for originally manufactured agricultural equipment.

NHTSA has not regulated the manufacture of most agricultural equipment in the past, because it did not have specific authority to do so. Under the National Traffic and Motor Vehicle Safety Act (49 U.S.C. Chapter 30101 et. seq.) (Safety Act), NHTSA is authorized to regulate motor vehicles and items of motor vehicle equipment. NHTSA has interpreted most types of agricultural equipment to be outside the definition of “motor vehicle” contained in the Safety Act, and therefore beyond NHTSA's safety authority. As defined in the Safety Act, a motor vehicle means “a vehicle driven or drawn by mechanical power and manufactured primarily for use on public streets, roads, and highways. . . .” (49 U.S.C. 30102). We have stated that vehicles equipped with tracks, agricultural equipment, and other vehicles incapable of highway travel are not motor vehicles. We have also determined that certain vehicles designed and sold solely for off-road use (e.g., airport runway vehicles and underground mining vehicles) are not motor vehicles, even if they may be operationally capable of highway travel. Also, vehicles are not motor vehicles if they were designed to be used primarily at off-road job sites and, although capable of being operated on public roads from one job site to another, use roads only incidentally to the primary purpose for which they were manufactured (e.g., mobile cranes).3

Use of most agricultural equipment on the public roadways is intermittent and merely incidental to its primary off-road use. In a limited number of circumstances NHTSA has determined a piece of agricultural equipment to be a motor vehicle based on the specific factors listed above, such as its necessary and recurring use of public roads.4 However, NHTSA does not consider the vast majority of pieces of agricultural equipment to be motor vehicles within the meaning of the Safety Act.

Consequently, States have been the primary sources of regulations for agricultural equipment lighting and marking. The result has been a varied landscape of regulations. NHTSA understands that this has created difficulties for manufacturers seeking to sell and market agricultural equipment that will meet all State on-road use requirements in multiple States. A national requirement for lighting and marking on agricultural equipment may reduce costs and increase efficiency for manufacturers selling agricultural equipment in multiple States.

As discussed in greater detail in Section VI below, ASABE's development of voluntary standards has begun to standardize the requirements for agricultural equipment. Some States have adopted versions of ASABE Standard 279 as their requirement for lighting and marking on agricultural equipment.

MAP-21 contains a non-discretionary mandate requiring NHTSA to establish a Federal rule for lighting and marking on agricultural equipment that is equivalent to the ASABE lighting and marking standard. NHTSA is issuing this rule in response to that mandate. This creates a federal, nationwide standard for lighting and marking on agricultural equipment, which may reduce the burden on manufacturers manufacturing agricultural equipment for sale in multiple States.

Section 31601 of MAP-21 contains the non-discretionary requirement that NHTSA establish minimum lighting and marking standards for agricultural equipment that may be operated on public roads. Section 31601 requires NHTSA's standards to be equivalent to ASABE 279.14, or any successor standard. The term “agricultural equipment,” as it applies in this section of MAP-21, has the meaning given the term “agricultural field equipment” in ASABE Standard 390.4, entitled “Definitions and Classifications of Agricultural Field Equipment,” or any successor standard. Standard 390.4 defines “agricultural field equipment” as “any agricultural tractor,5 self-propelled machine,6 implement 7 or any combination thereof that is primarily designed for agricultural field operations.” Additionally, “public road” is defined as “any road or street under the jurisdiction of and maintained by a public authority and open to public travel.”

Given the clear and direct language contained in section 31601, NHTSA does not have the discretion to choose to base its standards on any standard other than ASABE Standard 279.14 or an equivalent standard, or to set a standard that differs in any way from ASABE Standard 279.14 or an equivalent standard.

NHTSA is required to promulgate the rule required by section 31601 within two years of MAP-21's enactment. At least once every five years after promulgating the rule, NHTSA is required to review it and update it consistent with the most recent revision of ASABE Standard 279.

Section 31601 also specifies that the promulgated rule may not prohibit the operation on public roads of agricultural equipment that is equipped with lighting and marking materials and equipment that comply with revisions of ASABE Standard 279 that are later than the one reflected in the rule. The promulgated rule also may not prohibit the operation on public roads of agricultural equipment that is equipped with lighting and marking materials and equipment in addition to those required by the rule.

The promulgated rule may not require retrofitting of agricultural equipment manufactured before the effective date of the rule.

Section 31601 also contains the requirement that NHTSA establish such standards at least one year after the date on which the rule establishing such standards is promulgated. Accordingly, the compliance date for this rule is June 22, 2017.

Finally, section 31601(b)(1) requires that NHTSA consult with representatives from ASABE, appropriate Federal agencies, and with other appropriate persons prior to promulgating this rule. NHTSA met with representatives from ASABE, the Association of Equipment Manufacturers, and AGCO in April 2013 to consult with them regarding this rulemaking. We have also reached out to other agricultural equipment manufacturers. Additionally, NHTSA has identified the following appropriate Federal agencies and consulted with them regarding this rulemaking: the Federal Motor Carrier Safety Administration, the Occupational Safety and Health Administration, and the United States Department of Agriculture.

Generally, agencies may promulgate final rules only after issuing a notice of proposed rulemaking and providing an opportunity for public comment under procedures required by the Administrative Procedure Act (APA), as provided in 5 U.S.C. 553(b) and (c). However, 5 U.S.C. 553(b)(3)(B) provides an exception to these requirements when notice and public comment procedures are “impracticable, unnecessary, or contrary to the public interest.”

NHTSA finds that notice and comment is unnecessary prior to adoption of this final rule because Congress statutorily mandated that NHTSA adopt specific existing lighting and agricultural marking standards. By incorporating these standards into federal regulation, NHTSA is performing a non-discretionary act.

MAP-21 expressly requires NHTSA to establish lighting and marking standards for agricultural equipment that are equivalent to ASABE Standard 279.14, or any successor standard. NHTSA is not aware of any other lighting and marking standard for agricultural equipment that is equivalent to ASABE Standard 279.14 or any successor standard. Because NHTSA's statutory authority is limited to either incorporating ASABE Standard 279.14, or an equivalent standard, NHTSA is unable to amend the rule to address any comments it may receive during a comment period. For this reason, a notice and comment period is unnecessary for this rulemaking.

Therefore, NHTSA may adopt this rule without issuing a notice of proposed rulemaking and receiving public comment, in accordance with the APA. For these same reasons, the rule will be effective on June 22, 2016.

Since its inception in 1907, ASABE 8 has been an educational and scientific organization in the areas of agricultural, food and biological systems. Over the years, membership has grown to over 8,000 members in over 100 countries. Its involvement in the industry has evolved to include the creation and development of its own voluntary standards that have become widely accepted. Many States use ASABE standards as the basis for their own regulations. ASABE has developed a comprehensive standards development process that gives its Standards Committee members as well as the general membership population ample involvement and input in the journey from proposal to final adopted standard.

ASABE's standard creation is a 12 step process from start to finish that is supervised by ASABE's Standards Development and Oversight Committees.9 After making it through the proposal phase, a draft standard is created that is voted on by all members of the Standards Development Committee. In order for it to be approved, at least 50% of the total Standards Development Committee must vote and it must receive 75% of those votes in favor. Upon receiving approval from the Standards Development Committee, it is sent to the Oversight Committee, which reviews both the standard and the voting results of the Standards Committee. After receiving approval from the Oversight Committee the standard is approved and published.10

ASABE initially developed Standard 279, “Lighting and Marking of Agricultural Equipment on Highways,” in 1954. Since then, the standard has been modified and revised numerous times. ASABE continues to update it. It contains voluntary standards specified for lighting and marking for all types of agricultural field equipment (as defined in ASABE Standard 390) that may be operated on public highways and roads. ASABE defines “agricultural field equipment” as “any agricultural tractor, self-propelled machine, implement or any combination thereof that is primarily designed for agricultural field operations.” Section 31601 of MAP-21 defines “agricultural equipment,” for purposes of this rulemaking, to be the same as ASABE's definition for “agricultural field equipment.”

ASABE Standard 279.14 and the definition of “agricultural field equipment” at 390.4 are the versions of the standards that are expressly identified in MAP-21. MAP-21 states that NHTSA may establish a rule that is equivalent to these or any successor standards. MAP-21 additionally states that NHTSA may not prohibit the operation on public roads of agricultural equipment that is equipped with lighting and marking in accordance with later versions of the ASABE standard than the one incorporated at promulgation.

ASABE has updated both Standard 279, which is currently on version 279.18, and the definition section, which is currently on version 390.5, since MAP-21 became effective. Based on our review, NHTSA does not believe that ASABE's updates to these standards are significant for purposes of this rulemaking.

ASABE Standard 390.4 defines agricultural field equipment as “Agricultural tractors, self-propelled machines, implements, and combinations thereof designed primarily for agricultural field operations.”

At the present time, many States use various versions of the standard. States do not always incorporate the latest version of Standard 279 or update their standards to reflect the latest version. This has created a landscape with a variety of slightly differing standards by State. Adopting ASABE Standard 279.14, as mandated by Congress, may help standardize lighting and marking requirements for agricultural field equipment by establishing one federal requirement.

The lighting and marking 11 parameters of ASABE Standard 279.14 are as follows:

Why we need to publish a rule. Under the Endangered Species Act, a species may warrant protection through listing if it is endangered or threatened throughout all or a significant portion of its range. Listing a species as an endangered or threatened species can only be completed by issuing a rule.

This rule finalizes the listing of the elfin-woods warbler (Setophaga angelae) as a threatened species. It includes provisions under the authority of section 4(d) of the Act that are necessary and advisable for the conservation needs of the elfin-woods warbler.

The basis for our action. Under the Act, we may determine that a species is a threatened species based on any of five factors: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence. We have determined that this species is currently at risk throughout all of its range due to threats related to habitat modification on private lands under agricultural and other land use requiring vegetation clearance (Factor A) and to other natural or manmade factors, such as restricted distribution and lack of connectivity, genetic drift, hurricanes, and the effects of climate change (Factor E).

Under section 4(d) of the Act, the Secretary of the Interior has discretion to issue such regulations she deems necessary and advisable to provide for the conservation of the species. The Secretary also has the discretion to prohibit by regulation, with respect to a threatened species, any act prohibited by section 9(a)(1) of the Act.

Habitats within some of the physically degraded private lands adjacent to elfin-woods warbler existing populations must be improved before they are suitable for the species; therefore, some activities that would normally be prohibited under 50 CFR 17.31 and 17.32 will contribute to the conservation of the elfin-woods warbler. For the elfin-woods warbler, the Service has determined that species-specific regulations authorized by section 4(d) of the Act are necessary and advisable to provide for the conservation of this species.

Peer review and public comment. We sought comments from independent specialists to ensure that our determination is based on scientifically sound data, assumptions, and analyses. We invited these peer reviewers to comment on the listing proposal. We considered all comments and information we received during the comment period.

Please refer to the proposed listing rule (80 FR 58674, September 30, 2015) for a detailed description of previous Federal actions concerning the elfin-woods warbler.

In the proposed rule published on September 30, 2015 (80 FR 58674), we requested that all interested parties submit written comments on the proposal by November 30, 2015. We also contacted appropriate Federal and State agencies, scientific experts and organizations, and other interested parties and invited them to comment on the proposal. On October 3, 2015, we published a newspaper notice in the Primera Hora inviting general public comment. We did not receive any requests for a public hearing.

In accordance with our peer review policy published on July 1, 1994 (59 FR 34270), we solicited expert opinion from six knowledgeable individuals with scientific expertise that included familiarity with the elfin-woods warbler and its habitat, biological needs, and threats. We received responses from four of the peer reviewers.

We reviewed all comments we received from the peer reviewers for substantive issues and new information regarding the listing of elfin-woods warbler. The peer reviewers generally concurred with our methods and conclusions, and provided additional information, clarifications, and suggestions to improve this final rule. Substantive peer reviewer comments are addressed in the following summary and incorporated into the final rule as appropriate.

(1) Comment: One peer reviewer stated that the proposed listing rule did not include references to the Puerto Rico Breeding Bird Atlas Project of the Sociedad Ornitológica Puertorriqueña, Inc. (SOPI; http://www.aosbirds.org/prbba/SpeciesEWWA.html). The peer reviewer noted there is one record of the elfin-woods warbler being detected during this project on March 31, 2005, in an area between Jayuya and Adjuntas (hexagon 913) in the central mountains of Puerto Rico by Bailey McKay and Richard West. The peer reviewer also indicated that during a Bicknell's thrush study conducted by the Vermont Center for Ecostudies between January and March, 2015, elfin-woods warblers were detected in the Maricao Commonwealth Forest (MCF) and El Yunque National Forest (EYNF), but were not detected in the Carite Commonwealth Forest (CCF) or in the municipalities of Jayuya and Adjuntas.

Our Response: We appreciate these comments. We have added the new information regarding the observation of the elfin-woods warbler between Jayuya and Adjuntas to this final rule. The information available from the Web site provided by this reviewer classified this report as a possible observation of the elfin-woods warbler (identified with Code X (seen or heard within safe dates) in the database).

(2) Comment: A peer reviewer provided information about a nest-building activity by the elfin-woods warbler at the MCF recorded on May 5, 2002. The peer reviewer also provided information about the location and description of the nest.

Our Response: We appreciate this information, and have included the new nesting record in this final rule.

(3) Comment: A peer reviewer stated that bird enthusiasts and wildlife photographers may pose a problem to the elfin-woods warbler, as some of them use recordings to attract these birds, probably altering their normal behavior. The peer reviewer indicated this situation appears to be increasing, and the existing regulations do not clearly address this potential harassment.

Our Response: We appreciate this new information. At this time the Service does not have sufficient information to consider this action as a threat to the elfin-woods warbler. However, we will be monitoring the species and will keep track of the effect of these actions. When this final rule is effective (see DATES), regulations issued by the Service under the Act and by the Commonwealth of Puerto Rico under its laws will address actions that may result in take of the species.

(4) Comment: One peer reviewer emphasized the need for research on the elfin-woods warbler and its status to inform managers and to facilitate the species' future delisting. He indicated that automated recording units (ARUs), which automatically record sounds for later computer analyses, suggest tremendous potential for surveying the more inaccessible sites in CCF, Toro Negro, and EYNF.

Our Response: We acknowledge this comment and will develop recovery actions, including research needs, in the recovery plan for the species. The Service concurs with the peer reviewer on the use of ARUs to survey for the elfin-woods warbler in inaccessible sites. We have already initiated a project with academia and local nongovernmental organizations using ARUs to assess the presence of the elfin-woods warbler at the CCF and EYNF.

(5) Comment: One peer reviewer made reference to the description of the elfin-woods warbler included in the proposed listing rule, indicating that adult and sub-adult elfin-woods warbler do not have a stripe above the eyes.

Our Response: We appreciate this information. We described the elfin-woods warbler in the proposed listing rule based on Raffaele 1989 (p. 168). However, considering the expertise of this peer reviewer on the elfin-woods warbler, we included this detailed information and specified that adult and sub-adult elfin-woods warbler do not have a stripe above the eyes.

(6) Comment: One per reviewer indicated that the breeding season of the elfin-woods warbler should be extended to include the entire months of July and August because during these months the family groups stay together as a cohesive unit, which is essential for the survival of fledglings.

Our Response: We concur with this rationale and have made changes to the “Life History” and 4(d) Rule sections of this final rule to reflect the peer reviewer's input.

(7) Comment: A peer reviewer indicated that disturbances such as shade and coffee tree seasonal pruning and other activities described in the proposed 4(d) rule should be conducted from September 1 through February 28, which is the time period that the peer reviewer suggests is outside the breeding season of the elfin-woods warbler.

Our Response: The proposed 4(d) rule that was published with the proposed listing rule indicated that coffee tree seasonal pruning and other activities would be conducted from July 1 through February 28. However, we concur with the information presented by the peer reviewer, and have made changes to this final rule to reflect the peer reviewer's input.

(8) Comment: One peer reviewer warned about the potential of chemicals used for agriculture (such as pesticides, herbicides, and fertilizers) gaining access to the food chain and eventually to arthropods feeding birds such as the elfin-woods warbler.

Our Response: Under the proposed and this final 4(d) rule, pest control substances (e.g., pesticides, herbicides) and fertilizers will be applied only twice a year during the establishment period of shade and coffee trees (i.e., the first 2 years). The Service believes that during this period, the structure of the agroforestry system is not mature enough to sustain the occurrence of elfin-woods warblers within these areas. Therefore, we do not expect that the elfin-woods warbler will be negatively affected by these actions.

(9) Comment: A peer reviewer suggested modifying the following sentence in the Proposed Determination section: “Current available information indicates that the elfin-woods warbler has a limited distribution, with only two known populations occurring within EYNF and MCF, including the private lands adjacent to MCF, and at least one extirpated population from CCF.” The suggested modification is as follows: “Current available information indicates that the elfin-woods warbler has a limited distribution, with only two known populations occurring within EYNF and MCF, including the private lands adjacent to MCF, and at least one possibly extirpated population from CCF.”

Our Response: Based on the best available information, the elfin-woods warbler appears to be extirpated from CCF. However, we do not discard the possibility that the species still occurs in this forest. Therefore, we accept the peer reviewer's comment and have modified this rule accordingly.

Three of the peer reviewers consulted are also from Federal agencies. Only two provided peer review of the proposed rule, and their comments are addressed above under Peer Reviewer Comments. One additional Federal agency commented during the open comment period, but did not provide substantive information regarding the proposed listing.

(10) Comment: One Commonwealth agency indicated it does not expect any significant impacts on the elfin-woods warbler as a result of the projects it conducts. However, the agency asked to be contacted should additional information on the habitat and location of the species become available in order to prevent potential impacts from future projects.

Our Response: We appreciate these comments. Any new information about the species' distribution and habitat will be available to Commonwealth and Federal agencies via the Service's Environmental Conservation Online System (ECOS) Web site (http://ecos.fws.gov/ecp/) to be considered in future projects. For projects with a Federal nexus, consultations under section 7 of the Act address potential impacts to federally listed species.

We received three public comments. While all indicated support for the listing of the elfin-woods warbler as a threatened species, none provided substantive comments requiring the Service's response.

Based upon our review of the comments from peer reviewers, other Federal and Commonwealth agencies, and the public, as summarized above, we reevaluated our proposed rule and incorporated the following changes into this final rule.

(1) We modified the information in the species description to specify that adult and sub-adult elfin-woods warbler do not have a stripe above the eyes (see “Species Description and Taxonomy,” below).

(2) We added information regarding the report of the elfin-woods warbler between the municipalities of Adjuntas and Jayuya as part of the species' range (see “Historical and Current Distribution,” below).

(3) We modified the information regarding the breeding season of the elfin-woods warbler to include the entire months of July and August (see “Life History,” below).

(4) We modified the provisions of the 4(d) rule to set forth that coffee tree seasonal pruning and other activities must be conducted from September 1 to February 28 (see 4(d) Rule, below).

(5) We added information regarding an additional elfin-woods warbler's nest-building activity at the Maricao Commonwealth Forest (see “Life History,” below).

The elfin-woods warbler was originally classified under the genus Dendroica, but is now recognized as Setophaga (Lovette et al. 2010, p. 765). Angela and Cameron Kepler discovered the species in 1971, in the Dwarf forest type at El Yunque National Forest (EYNF) (Kepler and Parkes 1972, p. 3-5). The bird is about 12.5 centimeters (cm) (5 inches (in)) in length (Raffaele 1998, p. 406). The adult's upper body is predominantly black and white, with conspicuous white patches on the ear coverts and sides of the neck (Raffaele 1989, p. 168; Delannoy 2015, pers. comm.). The elfin-woods warbler is often mistaken for the black and white warbler (Mniotilta varia), but the elfin-woods warbler is distinguished by its incomplete white eye-ring and entirely black crown. Immature elfin-woods warblers are similar to adults, except that they are grayish-green on the back, and yellowish-green on the head and underparts (Raffaele 1989, p. 168). The bird's call comprises a series of short, rapidly uttered, unmusical notes in one pitch, increasing in volume and ending with a short series of distinct double notes (Curson et al. 1994, p. 156).

Little detailed information has been published on the life history of the elfin-woods warbler. Some authors noted that the elfin-woods warbler is an extremely active warbler, moving among the dense vines of forest strata with more foliage cover or smaller branch tips, foraging insects, usually at intermediate foliage heights of 3 to 15 meters (m) (10 to 50 feet (ft)) (Colón-Merced 2013, p. 2). Opportunistic observations indicate the elfin-woods warbler feeds on moths, dragonflies, and other types of insects; however, its specific diet remains unknown (Colón-Merced 2013, p. 2). Raffaele et al. (1998, p. 406) indicated that the breeding season of the species occurs from March to June. However, Delannoy (2015, pers. comm.) stated that based on available information (i.e., Delannoy 2009), the breeding season of the elfin-woods warbler should include the entire months of July and August because family groups stay together as a cohesive unit during May, June, July, and August. Delannoy (2009, p. 1) reported that four pairs of elfin-woods warblers banded between 2004 and 2008 remained together in their territories in the Maricao Commonwealth Forest (MCF), suggesting that the species is monogamous. In addition, he reported that the elfin-woods warbler maintained territorial defense throughout the year and documented that calling activity increases from January to April and declines considerably during the time pairs are incubating eggs or brooding nestlings.

Arroyo-Vázquez (1992, p. 363) reported the first detailed observation of two nests found in March and April of 1990 in aerial leaf litter at heights between 1.3 to 7.6 m (4.3 to 25 ft) and documented a clutch size of two to three eggs. Also, he observed that the pair's cup nest was woven from rootlets and fibers obtained from tree ferns and lined with grass leaves and down feathers. Raffaele et al. (1998, p. 406) further described the nest of the elfin-woods warbler as a compact cup, usually close to the trunk and well-hidden among epiphytes of a small tree. Salguero (2015, pers. comm.) indicated that on May 5, 2002, he and Carina Roig recorded a pair of elfin-woods warblers constructing a nest on a fork tip branch of a Pinus caribaea (Caribbean pine) about 5.0 m (16.4 ft) above ground at the former camping area near the MCF offices. Rodríguez-Mojica (2004, p. 22) reported the first nesting event inside a rotten tree stump of Palo Colorado (Cyrilla racemiflora) 7.0 m (23.3 ft) above ground in an abandoned camping area at the MCF. He described the nest structure as consisting of a tightly woven cup of fine plant fibers with dry leaves on its outside and noted that cavity-nesting is not common in warblers.

Arroyo-Vázquez (1992, p. 363) and Rodríguez-Mojica (2004, p. 22) suggested that the species selected aerial leaf litter and cavity-nesting sites to avoid predation. Some authors have suggested that elfin-woods warbler nest predators may include the pearly-eyed thrasher (Margarops fuscatus), Puerto Rican tanager (Nesospingus speculiferus), Puerto Rican screech owls (Megascops nudipes), Puerto Rican boa (Chilabothrus inornatus, listed as Epicrates inornatus), Puerto Rican racer (Alsophis portoricensis), and feral cats (Felis catus) (Delannoy 2009, p. 2). Other potential predators of immature and adult individuals include the Indian mongoose (Herpestes auropunctatus) and black rat (Rattus rattus) (Arroyo-Vázquez 1992, p. 364).

The elfin-woods warbler is endemic to the island of Puerto Rico and was initially thought to occur only in the Luquillo Mountains at EYNF in eastern Puerto Rico (Kepler and Parks 1972, pp. 5-6; Pérez-Rivera 1979, p. 58). During the early 1970s, the species was reported in the MCF in western Puerto Rico (Pérez-Rivera 1979, p. 58; Cruz and Delannoy 1984, p. 92). In addition, the elfin-woods warbler was reported in the Toro Negro Commonwealth Forest in the Cordillera Central (central mountain range) (Pérez-Rivera 1979, p. 58), and in the area of Guavate in the Carite Commonwealth Forest in east-central Puerto Rico (Pérez-Rivera and Maldonado 1977, p. 134). More recently, Miranda-Castro et al. (2000, pp. 119-123) and Anadón-Irizarry (2006, p. 34) conducted elfin-woods warbler surveys in other forests of the Cordillera Central (i.e., Tres Picachos, Carite, Toro Negro, Susúa, and Guilarte Commonwealth Forests, and Bosque del Pueblo in Adjuntas), but did not detect the species. However, on March 31, 2005, Bailey McKay and Richard West recorded a possible observation of the elfin-woods warbler between the municipalities of Adjuntas and Jayuya while collecting breeding bird data for the Puerto Rico Breeding Bird Atlas Project (Salguero 2015, pers. comm.; SOPI 2005).

Between 2011 and 2013, the Service, in collaboration with the Puerto Rican Ornithological Society, Inc., and BirdLife International, conducted a study using a habitat suitability model and a single-season occupancy modeling approach to assess the current geographic distribution of the elfin-woods warbler. The project included surveys between January and July during the species' breeding season within habitat currently occupied by the species in the MCF and predicted habitat within the Cordillera Central (Anadón-Irizarry 2013, p. 2). The predicted habitat included public and private lands within the municipalities of Jayuya, Ciales, Adjuntas, Ponce, Orocovis, and Juana Díaz. The species was detected only in the MCF and adjacent private lands (Service 2014, p. 12).

The elfin-woods warbler is particularly difficult to survey because of its small size, its constant moving behavior, and the dense vegetation of areas where it is found (Raffaele 1989, p. 168). In fact, Kepler and Parkes (1972, pp. 5-6) attribute the belated discovery of elfin-woods warbler to the above factors and their similarity to the black and white warbler. Even the vocalization of the elfin-woods warbler can be easily mistaken with other species. Although the presence of the elfin-woods warbler in the forests of the Cordillera Central of Puerto Rico cannot be disregarded based on the previous facts, the available information suggests that the current distribution of the species is now restricted to two populations in (1) EYNF and (2) MCF and adjacent private lands (Anadón-Irizarry 2006, p. 5; Delannoy 2007, p. 4; González 2008, p. 19). The EYNF and the MCF are located about 150 kilometers (km) (93 miles (mi)) from each other (Arendt et al. 2013, p. 2). These habitats are considered essential to elfin-woods warbler abundance and are very important for maintaining healthy populations of the species (Delannoy 2007, p. 24), as they are the only currently known areas where the species still occurs. Although there is suitable habitat for the species between these two forests (Colón-Merced 2013, p.51), the probability of dispersal for the species is low because EYNF is isolated from the central mountain range of Puerto Rico. Urban areas around EYNF increased by more than 2,000 percent between 1936 and 1988, and continue to encroach on forested areas today (Thomlinson and Rivera 2000, p. 17). Between 1988 and 1993, urbanization around this forest increased by 31 percent and represented a 5 percent loss in vegetative cover, more than 80 percent of which was dense forest (Thomlinson and Rivera 2000, p. 17).

El Yunque National Forest—EYNF is located in the Sierra de Luquillo in eastern Puerto Rico and covers 11,310 hectares (ha) (28,000 acres (ac)) of the island's area (Weaver 2012, p. 1). This forest was proclaimed as a Crown Reserve by Spain in 1876, and as a Forest Reserve by the U.S. Government since 1903. It is considered the oldest forest reserve and largest protected area in Puerto Rico, and is managed by the U.S. Forest Service (USFS). Elevations of this forest range from 100 to 1,075 m (328 to 3,526 ft) and temperatures change with altitude, ranging between 23.5 and 27 degrees Celsius (°C) (74 to 81 degrees Fahrenheit (°F)) at the base of the mountain to between 17 and 20 °C (63 to 68 °F) on the mountain peaks (García-Martinó et al. 1996, p. 414). Mean annual rainfall ranges from approximately 245 cm/year (96 in/year) at lower elevations to approximately 400 cm/year (157 in/year) at higher elevations (Brown et al. 1983, p. 11). The EYNF contains five of the six Holdridge Life Zones found in Puerto Rico (Ewel and Whitmore 1973, pp. 32-49). These five zones are the lower montane wet forest, lower montane rain forest, subtropical moist forest, subtropical wet forest, and subtropical rain forest. In 1951, Wadsworth recognized four major forest types at EYNF: Dwarf, Palo Colorado, Tabonuco, and Sierra Palm (Anadón-Irizarry 2006, p. 9).

At EYNF, the elfin-woods warbler was originally discovered in the Dwarf forest (Kepler and Parkes 1972, pp. 3-5). This forest type falls within the lower montane rain forest life zone (Ewel and Whitmore 1973, p. 49) and occupies 368 ha (909 ac) of EYNF (Weaver 2012, p. 5). It is found on exposed peaks with short, stunted vegetation above 900 m (2,952 ft) elevation (Weaver 2012, p. 58). In general, the Dwarf forest is not well populated with birds (Snyder et al. 1987, p. 61).

Later, the species was documented at lower elevations in the Palo Colorado, Tabonuco, and Sierra Palm forests (Wiley and Bauer 1985, pp. 12-18). The Palo Colorado forest occurs within the lower montane rain forest life zone, between approximately 600 and 900 m (1,968 and 2,952 ft) (Weaver 2012, p. 1). This forest type covers about 3,441 ha (8,502 ac) of the EYNF (Weaver 2012, p. 5). This forest is mainly composed of fast-growing trees with height not more than 24 m (78 ft) (Lugo 2005, p. 506).

The Tabonuco forest is found between 150 and 600 m (492 and 1,968 ft) elevation, and occupies 5,663 ha (13,993 ac) of the EYNF (Weaver 2012, p. 5). This forest is dominated by the Tabonuco tree (Dacryodes excelsa), which grows primarily on the subtropical wet forest life zones (Ewel and Whitmore 1973, p. 32). The understory of this forest is sparsely vegetated, and the canopy is rich in aerial plants (e.g., bromeliads, orchids, vines, and arboreal ferns) (Ewel and Whitmore 1973, p. 32).

The Sierra Palm forest (also known as palm breaks) may reach canopy heights of 15 m (50 ft) with 17 cm (7 in) average diameters at breast height (dbh) and grows mainly on steep slopes at approximately 450 m (1,476 ft) elevation, covering about 1,838 ha (4,541 ac) of the EYNF (Weaver 2012, pp. 5 and 56). The Sierra Palm forest occurs on steep windward slopes and poorly drained riparian areas (Lugo 2005, p. 496). This forest is dominated by the Sierra palm (Prestoea montana) and occurs within the subtropical rain forest life zone (Ewel and Whitmore 1973, p. 4).

Maricao Commonwealth Forest and Adjacent Lands—The main population of the elfin-woods warbler in western Puerto Rico occurs within the MCF, located between the municipalities of Maricao, San Germán, Sabana Grande, and Mayagüez (Ricart-Pujals and Padrón-Vélez 2010, p. 1). This forest is currently administered by the Puerto Rico Department of Natural and Environmental Resources (PRDNER) and covers about 4,168 ha (10,543 ac) with elevations ranging between 150 and 875 m (492 and 2,870 ft) above sea level. Annual average temperature is 21.7 °C (71 °F), and annual average rainfall is 233 cm/year (92 in/year) (Silander et al. 1986, p. 210). Three of the six life zones reported for Puerto Rico occur on the MCF: Subtropical moist forest, subtropical wet forest, and lower montane wet forest (Ricart-Pujals and Padrón-Vélez 2010, p. 8). The habitats where the elfin-woods warbler has been found within the MCF include Podocarpus Forest, Exposed Woodland Forest, Timber Plantations, and Dry Slopes Forest.

The Podocarpus Forest occupies only 80 ha (197 ac) of the MCF and is located on the slopes and highest peaks (600-900 m (1,968-2,952 ft)) within the lower montane wet forest life zone (Department of Natural Resources (DNR) 1976, p. 185). Podocarpus Forest is dominated by Podocarpus coriaceus trees and has closed canopies and well-developed understories composed of tree ferns (Cyathea spp.), Sierra palms, and vines (Tossas and Delannoy 2001, pp. 47-53; Anadón-Irizarry 2006, p. 53; González 2008, pp. 15-16).

The Exposed Woodland Forest occupies 2,711 ha (6,700 ac) of the MCF and is found in valleys, slopes, and shallow soils with a more or less continuous canopy (González 2008, pp. 15-16). These forest associations are found at elevations ranging from 470 to 800 m (1,542 to 2,624 ft) within the subtropical wet forest life zone (DNR 1976, p. 185).

Timber Plantations occupy approximately 1,111 ha (2,745 ac) of the MCF in elevations ranging from 630 to 840 m (2,066 to 2,755 ft) within the subtropical wet forest and the subtropical moist forest life zones (DNR 1976, p. 185). This habitat—dominated by the María trees (Calophyllum calaba), eucalyptus (Eucalyptus robusta), and Caribbean pine (Pinus caribaea)—was planted in areas that were completely deforested for agriculture (Delannoy 2007, p. 9; González 2008 p. 5).

Dry Slopes Forest occupies approximately 1,367.3 ha (3,377 ac) of the MCF in elevations ranging from 120 to 300 m (394 to 984 ft) within the subtropical moist forest life zone (DNR 1976, p. 185). This habitat is found in shallow and excessively drained serpentine-derived soils dominated by xerophytic vegetation, thin trees, and a low open canopy. This forest type is more common in the southern and southeastern slopes of the MCF (DNR 1976, p. 185).

Outside the MCF, the elfin-woods warbler has been detected within secondary forests and existing shade-grown coffee plantations (González 2008, pp. 15-16). Secondary forests are found at elevations ranging from 130 to 750 m (426 to 2,460 ft), and the shade-grown coffee plantations are found at elevations ranging from 300 to 600 m (984 to 1,968 ft) (Gonzalez 2008, p. 59; Puerto Rico Planning Board 2015). Also, the elfin-woods warbler has been documented at very low densities outside the MCF in pasturelands, Gallery forests, and rural residential areas, but not in sun-grown (unshaded) coffee plantations (González 2008, pp. 15-16). Young secondary forests developed as a result of abandonment of agriculture during the 20th century. These forests are less than 25 years old with an open canopy height of 12 to 15 m (40 to 50 ft) (González 2008, p. 6) and are found within the subtropical moist and subtropical wet forest life zones (DNR 1976, p. 185). Their understories are well-developed and dominated by grasses, vines, and other early-successional species (González 2008, p. 6). Mature secondary forests are over 25 years old and develop on humid to very humid, moderate to steep slopes. They are characterized by their closed canopies, reaching heights of 20 to 30 m (66 to 100 ft), and sparse to abundant understories (González 2008, p. 6). Some of these forests were used in the past for cultivation of shade-grown coffee and survived untouched because landowners abandoned agriculture activities (Delannoy 2007, p. 10). The shade-grown coffee plantations are covered with tall mature forests dominated mostly by guaba (Inga vera) and guaraguao (Guarea guidonia) trees. Found on moderate to steep, humid mountain sides, these trees reach heights of 15 to 20 m (50 to 66 ft), and their understories constantly develop without grasses (González 2008, p. 6). Shade-grown coffee plantations are stable agro-ecosystems that provide habitat, nesting, and feeding for many native, endemic, and migratory species. Some of the best examples of this habitat are found in north, northwest, and northeast MCF (Delannoy 2007, p. 10). Studies have shown that biodiversity of plants, insects, reptiles, birds, and some mammals are higher in shade-grown than in sun-grown coffee plantations (Borkhataria et al. 2012, p. 165).

Carite Commonwealth Forest—The Carite Commonwealth Forest (CCF) is within the known historical range of the elfin-woods warbler; however, the species was last observed in this forest about 15 years ago (Pérez-Rivera 2014, pers. comm.). The CCF has been managed for conservation by PRDNER since 1975 (DNR 1976, p. 169). This forest covers about 2,709 ha (6,695 ac), and ranges between 620 and 900 m (2,034 and 2,952 ft) in elevation (DNR 1976, p. 169). The CCF contains four forest types: Dwarf, Palo Colorado, Plantations, and Secondary (Silander et al. 1986, p. 188). These forest types are similar to the forests utilized by the elfin-woods warbler in EYNF and MCF.

Although the elfin-woods warbler has not been recently observed in this forest (Anadón-Irizarry 2006, p. 54; Anadón-Irizarry 2014, pers. comm.), the habitat suitability model developed for the species (Colón-Merced 2013, p. 51) suggests CCF still provides suitable habitat for the species due to its similarity in elevation, climatic conditions, and vegetation associations with EYNF and MCF. The CCF's similarity to EYNF and MCF suggests that this forest could provide habitat for the expansion of the elfin-woods warbler's current range to maintain the species' historical, geographical, and ecological distribution.

El Yunque National Forest—Kepler and Parkes (1972, p. 15) estimated the elfin-woods warbler population at fewer than 300 pairs occurring in 450 ha (1,111 acres) at EYNF. Waide (1995, p. 9) reported an estimated population of 138 pairs in 329 ha (812 ac) in the Dwarf forest at EYNF. According to Anadón-Irizarry (2006, p. 24), the species' mean abundance was highest (0.48 individuals (ind)/point count) in the Palo Colorado forest, slightly lower (0.42 ind/point count) in the Dwarf forest, lowest (0.01 ind/point count) in the Tabonuco forest, and none were recorded in Sierra Palm forest. Arendt et al. (2013, p. 8) conducted bird surveys approximately monthly from 1989 to 2006, and reported a decline of the elfin-woods warbler population in EYNF over that period of 17 years. The species showed a significant general decline from 0.2 ind/ha to 0.02 ind/ha in the Dwarf forest, and from 1 ind/ha to 0.2 ind/ha in the Palo Colorado forest (Arendt et al. 2013, p. 9).

Maricao Commonwealth Forest and Adjacent Lands—Cruz and Delannoy (1984, p. 92) suggested that the elfin-woods warbler was not uniformly distributed throughout the MCF and that it was found in different habitats within three studied sites. Anadón-Irizarry (2006, p. 27) conducted a survey from 2003 to 2004, in 102.4 ha (253 ac) of MCF and recorded 778 elfin-woods warblers in 18 counts for an average of 0.42 ind/ha/count. González (2008, pp. 23-28) reported the most recent population estimate for the elfin-woods warbler at the MCF and adjacent areas. González (2008, p. 18) estimated 97.67 elfin-woods warbler individuals in an area of 203.2 ha (0.48 ind/ha) within the MCF. In areas adjacent to the MCF, he estimated 43.02 individuals in an area of 374.4 ha (0.11 ind/ha).

Additionally, González (2008, p. 27) reported that the highest densities of elfin-woods warbler recorded per point-count stations in MCF were within the Podocarpus Forest (0.88 ind/ha). Moderate densities were recorded in Exposed Woodland (0.53 ind/ha), Timber Plantations (0.38 ind/ha), and Dry Slope Forest (0.06 ind/ha) (González 2008 p. 27). González (2008 p. 27) stated these results are similar to estimates obtained by previous studies in the same type of forests. In lands adjacent to the MCF, the shade-grown coffee plantations exhibited the highest elfin-woods warbler abundance (0.24 ind/ha) (González 2008, p. 24).

Based on the studies mentioned above, in 2010, BirdLife International estimated the overall elfin-woods warbler population in Puerto Rico to be at least 1,800 mature individuals (Arendt et al. 2013, p. 2).

Carite Commonwealth Forest—In 1977, Pérez-Rivera and Maldonado (1977, p. 134) reported the species for the first time in the CCF. Two years later, Pérez-Rivera (1979, pp. 5-8) indicated that the species was more common than was expected when discovered. However, he mentioned that because the species appeared to be specialized to certain types of habitats, any kind of habitat disturbance or modification would cause a rapid decline of the species (Pérez-Rivera 1979, p. 58). The species was later recorded by Pérez-Rivera during the 1980s and 1990s in the following areas: Cerro La Santa, Camino El Seis, first recreation area near the forest entrance, private land near Barrio Farallón, and Fincas Las 300 (Delannoy 2007, pp. 22-23). Based on Pérez-Rivera's observations within these areas, the species seemed to be an uncommon and rare in CCF (i.e., 1 or 2 sightings every 10 visits) (Delannoy 2007, pp. 22-23). The species was later detected occasionally by Pérez-Rivera within the same areas until it was last observed by him more than 15 years ago (Pérez-Rivera 2014, pers. comm.).

The surveys conducted by Anadón-Irizarry between 2003 and 2004, and between 2012 and 2013, failed to detect the species within the CCF. The study conducted during the period of 2003-2004 (Anadón-Irizarry 2006, p. 54) included traditional areas previously searched by Pérez-Rivera, and the surveys were conducted along 5.0 km (3.1 mi) of existing trails. The most recent surveys, conducted between 2012 and 2013, avoided the use of existing trails and included nontraditional areas, but they also failed to detect the species (Anadón-Irizarry 2014, pers. comm.). However, during these surveys, the amount of surveyed area within nontraditional habitat was not significant (i.e., 15 survey stations).

Although these studies failed to detect the species, Anadón-Irizarry (2006, p. 54; 2014, pers. comm.) suggested the possibility that the species is still present in isolated pockets of forest that were not searched during the studies (Delannoy 2007, p. 22). The apparent persistent and relatively sedentary behavior of this species to inhabit certain small and isolated pockets of the forest might have led these authors to suggest that it is possible that CCF may harbor undetected elfin-woods warblers (Anadón-Irizarry 2006, p. 54; Delannoy 2007, pp. 22-23; Pérez-Rivera 2014, pers. comm.). Anadón-Irizarry (2006, p. 54), Delannoy (2007, pp. 22-23), and Pérez-Rivera (2014, pers. comm.) have suggested that the species was extirpated from the traditional areas searched by them during the 1980s, 1990s, and between 2003 and 2004 due to habitat modification activities (i.e., transmission antenna development and road development) that occurred in those years. If this is the case, a comprehensive assessment of the status of this population would require extensive searches covering a much larger area into the fragmented landscape of the CCF (Delannoy 2007, pp. 22-23). Therefore, during early 2016 the Service contracted for a survey to include traditional and nontraditional areas within and beyond CCF's boundaries. A total of 60 sites were surveyed between March and April 2016 using ARBIMON portable recorders (Aide and Campos 2016). Surveyed areas also included suitable habitat identified by the habitat suitability model developed by Colón-Merced (2013). None of the 23,944 1-minute recordings analyzed for the presence of the elfin-woods warbler resulted in positive detection, indicating the species is not present in CCF (Aide and Campos 2016).

Section 4 of the Act, and its implementing regulations at 50 CFR part 424, set forth the procedures for adding species to the Federal Lists of Endangered and Threatened Wildlife and Plants. Under section 4(a)(1) of the Act, we may list a species based on:

(A) The present or threatened destruction, modification, or curtailment of its habitat or range;

(B) Overutilization for commercial, recreational, scientific, or educational purposes;

(C) Disease or predation;

(D) The inadequacy of existing regulatory mechanisms; or

(E) Other natural or manmade factors affecting its continued existence.

Listing actions may be warranted based on any of the above threat factors, singly or in combination.

The majority of extant elfin-woods warbler populations are restricted to two disjunct primary habitats in montane forests at EYNF and at MCF and private lands adjacent to MCF. Although the elfin-woods warbler has not been recently observed in CCF, this forest and adjacent lands still contains suitable habitat for the species. The elfin-woods warbler needs suitable forested habitats for essential behaviors such as foraging, breeding, and sheltering (Anadón-Irizarry 2006, pp. 5-8).

In the past, the majority of the forested areas in Puerto Rico—EYNF, MCF, and CCF—were impacted by agricultural practices; extraction of timber for construction and charcoal (Dominguez-Cristobal 2000, pp. 370-373; Dominguez-Cristobal 2008, pp. 100-103); development of infrastructure for utilities and communications; and construction of roads, recreational facilities, and trails, negatively affecting elfin-woods warbler habitat (DNR 1976, p. 169; Waide 1995, p. 17; Delannoy 2007, p. 4; Anadón-Irizarry 2006, p. 28; Pérez-Rivera 2014, pers. comm.). Currently, each agency manages these forests for conservation purposes under its authorities and mandates to promote habitat conservation (see Factor D. The Inadequacy of Existing Regulatory Mechanisms, below); habitat modification pressures from agriculture practices and the development of new infrastructure within the forests are currently very low. However, typical forest management of existing disturbed areas (e.g., trail maintenance, road maintenance, transmission antenna maintenance, and recreational facility improvements) and research activities (e.g., species surveys, endangered species reintroductions) still occur within these forests. The maintenance performed on roads, trails, transmission antenna facilities, and recreational facilities is not presently affecting elfin-woods warbler habitat within these forests. When a management or research activity is conducted, both USFS and PRDNER closely coordinate with the Service during design and planning stages. These planning efforts minimize possible adverse effects on the species and its habitat. In contrast, the expansion of existing facilities (i.e., transmission antennas, access roads, access gates, administration buildings, utilities) within the forests is still a possibility and may result in the degradation of suitable habitat of elfin-woods warbler.

Although the threats to the species and its habitat have been minimized within the lands managed and administrated by USFS and PRDNER within EYNF, MCF, and CCF, respectively, the species is still also threatened with habitat destruction, fragmentation, and degradation in 15 percent of its suitable occupied habitat within private lands adjacent to MCF. These private lands are known to be susceptible to habitat modification caused by unsustainable agricultural practices and other land uses requiring vegetation clearance (e.g., deforestation, monoculture of minor fruits, livestock related activities, human-induced fires, residential use, road improvements). Although not known to be currently occupied, the areas outside EYNF and CCF are also vulnerable to these threats because they are not within the protected lands. In the Municipality of Maricao, the Puerto Rico Department of Agriculture (PRDA) has identified 301 properties (8,442 acres) with potential to be developed as agricultural lands for coffee and citrus plantations (Resolución Conjunta del Senado 2014, p. 2). Although the conversion of forested areas to sun-grown coffee plantations is still occurring on private lands adjacent to MCF, the magnitude of this activity is localized and at a lower level than it was in the past. However, PRDA has expressed its intention to increase the acreages of coffee plantations in Puerto Rico to 16,000 acres by 2016 (PRDA 2015, no page number). PRDA's goal is to provide incentives to landowners (i.e., $1,300/acre) for the establishment of new planting areas of sun-grown or partially shaded coffee (i.e., 1,000 coffee trees per acre) (Regulation 6372, p. 3-6; Regulation Governing the Incentives Programs of the Coffee Production Industry in Puerto Rico). Some of these areas, previously used for agriculture, were abandoned and are currently forested. The majority of the sun-grown coffee plantations were converted several decades ago, resulting in the elimination of native forest, thus reducing the habitat value for wildlife, including the elfin-woods warbler (Delannoy 2007, p. 20). The most recent studies conducted in MCF and adjacent lands (i.e., Delannoy 2007, p. 15; González 2008, p. 59) did not detect elfin-woods warblers in sun-grown coffee plantations on privately owned lands adjacent to the forest. The establishment of a sun-grown coffee plantation requires the deforestation of the area, removing habitat that elfin-woods warblers are or could be using.

The increase of urban development in private lands adjacent to EYNF and CCF has negatively affected elfin-woods warbler suitable habitat around these forests. Gould et al. (2007, pp. 29-31) suggested there is an increasing urbanization trend of the limited land area of eastern Puerto Rico where these forests are located. Urban development in this region increased more than 15 percent between 1991 and 2003 (Gould et al. 2007, pp. 29-31). Martinuzzi et al. (2007, pp. 294-296) reported that almost 52 percent of the island is classified under either “Urban” use (i.e., 16 percent; 142,562 ha) or “Densely Populated Rural” use (i.e., 36 percent; 320,219 ha) classes. The Urban-use class enhances the contiguity between the compact urban areas across the island, and gives an accurate view of how an “urban ring” encircles interior mountainous and protected areas like EYNF and CCF (Martinuzzi et al. 2007, p. 294). The Densely Populated Rural-use class surrounds the urban-use areas and represents most of the territory where human developments expand out from the urban centers following secondary routes (Martinuzzi et al. 2007, p. 294). Although the most evident land-use changes in the last 25 years have been the intensification of urbanization that surrounds these forests (Helmer 2004, pp. 33-35, Gould et al. 2007, pp. 29-31, Martinuzzi et al. 2007, p. 294), it is not known how much of these lands currently contain habitat suitable for the elfin-woods warbler.

In 2014, the Service developed a candidate conservation agreement (CCA) with USFS and PRDNER to promote the conservation of the elfin-woods warbler. The purpose of the CCA is to implement measures to conserve, restore, and improve the elfin-woods warbler's habitat and populations within EYNF and MCF (Service 2014, p. 6). The CCA provides that PRDNER and USFS will promote, develop, and implement the best management practices to avoid any potential threat to suitable and occupied elfin-wood warbler habitat and populations. It also provides that both agencies will implement restoration and habitat enhancement efforts within degraded areas of EYNF and MCF. The agencies will also (1) determine the habitat use, movement, and activity patterns of the species; (2) design and establish long-term population monitoring programs; and (3) develop outreach and education programs to improve mechanisms to promote habitat conservation and restoration within private lands adjacent to both forests.

Although the elfin-woods warbler also occurs on privately owned lands adjacent to MCF that are not covered by the CCA, these areas are part of a habitat restoration initiative in southwestern Puerto Rico implemented by the Service since 2010, through the Partners for Fish and Wildlife (PFW) and Coastal (CP) Programs. The PFW and CP are voluntary programs that provide technical and financial assistance to landowners to implement restoration and conservation practices on their lands for a particular amount of time. These programs promote the restoration of degraded habitat that was likely occupied by the species before the conversion to agricultural lands and that may be restored as suitable elfin-woods warbler habitat in the future. In some cases, occupied suitable habitat for the species is enhanced and protected through cooperative agreements with the private landowners.

Between 2010 and 2014, a total of 522 ha (1,290 acres) of degraded tropical upland forest and 21 km (13 miles) of riparian buffers have been restored and conserved through these programs in collaboration with the Natural Resources Conservation Service (NRCS), Farm Service Agency (FSA), PRDNER, Envirosurvey Inc. (a local nongovernmental organization), and other partners. Although this initiative promotes the restoration and enhancement of degraded habitat adjacent to the MCF and may potentially provide suitable habitat for the elfin-woods warbler, challenges such as limited resources and uncertainty about landowner participation may affect the implementation of management practices that mitigate impacts of agricultural practices.

The elfin-woods warbler's restricted distribution makes it vulnerable to habitat destruction and modification. The majority of extant elfin-woods warbler populations occur on public lands managed for conservation purposes where activities that may affect the species or its habitat are regulated, and measures to minimize or avoid those impacts are being implemented based on management plans or agencies' management mandates. The elfin-woods warbler has been reported on private lands only outside MCF. Private lands adjacent to EYNF have not been surveyed, and recent surveys conducted within the CCF and adjacent private lands did not detect the elfin-woods warbler (Aide and Campos 2016). Nonetheless, the agricultural activities and development projects on private lands adjacent to EYNF, MCF, and CCF may result in the loss or fragmentation of habitat that may be suitable for the species as has been suggested by some researchers. Therefore, we believe that habitat curtailment or modification is a threat to the elfin-woods warbler.

Based on the available information, overutilization has not been documented as a threat to the elfin-woods warbler.

Delannoy (2009, p. 2) indicated that the Puerto Rican sharp-shinned hawk (Accipiter striatus venator) infrequently preys on the elfin-woods warbler. Other potential elfin-woods warbler nest predators may include the pearly-eyed thrasher, Puerto Rican tanager, Puerto Rican screech owl, Puerto Rican boa, Puerto Rican racer, and feral cat (Delannoy 2009, p. 2). Additionally, Arroyo-Vázquez (1992, p. 364) noted that the Indian mongoose and black rat are potential egg and nestling predators. Nonetheless, we are not aware of any scientific or commercial information that predation of elfin-woods warblers is having an adverse effect on the species, and therefore we believe that predation is not a threat to the elfin-woods warbler. Similarly, we have no evidence of any disease affecting the species.

In 1999, the Commonwealth of Puerto Rico approved Law No. 241-1999, known as the New Wildlife Law of Puerto Rico (Nueva Ley de Vida Silvestre de Puerto Rico). The purpose of this law is to, among other things, protect, conserve, and enhance both native and migratory wildlife species; declare as property of Puerto Rico all wildlife species within its jurisdiction; issue permits; regulate hunting activities; and regulate exotic species. In 2004, the Commonwealth of Puerto Rico approved the Regulation Governing the Management of Vulnerable and Endangered Species on the Commonwealth of Puerto Rico (Regulation 6766; Reglamento para Regir el Manejo de las Especies Vulnerables y en Peligro de Extinción en el Estado Libre Asociado de Puerto Rico). Regulation 6766 prohibits collecting, killing, or harming species listed under Territorial law, as well as possessing, transporting, or selling items derived from listed species, and requires authorization from the PRDNER Secretary for any action that may affect designated critical habitat of listed species under this regulation (Departamento de Recursos Naturales y Ambientales 2004, pp. 9, 18). In 2004, the Commonwealth of Puerto Rico included the elfin-woods warbler in Regulation 6766 as a “vulnerable species” (a species that, although is not listed as endangered or critically endangered, faces a high risk of extinction in a foreseeable future).

In addition to laws that specifically protect the elfin-woods warbler, MCF and CCF are protected under Puerto Rico's Forests Law (Law No. 133-1975; Ley de Bosques de Puerto Rico), as amended in 2000, which prohibits causing damage to and collection of flora and fauna in public forests. Moreover, all Commonwealth forests are designated as Critical Wildlife Areas (CWA) by PRDNER. The CWA designation constitutes a special recognition by this agency with the purpose of providing information to other Commonwealth and Federal agencies about the conservation needs of these areas, and assisting permitting agencies in precluding negative impacts as a result of permit approvals or endorsements (PRDNER 2005, p. 6).

The Migratory Bird Treaty Act (MBTA) (16 U.S.C. 703-712) provides protection for the elfin-woods warbler, which is defined as a migratory bird under the MBTA. The MBTA makes it unlawful to pursue; hunt; take; capture; kill; attempt to take, capture, or kill; possess; offer for sale; sell; offer to barter; barter; offer to purchase; purchase; deliver for shipment; ship; export; import; cause to be shipped, exported, or imported; deliver for transportation; transport or cause to be transported; carry or cause to be carried; or receive for shipment, transportation, carriage, or export, any migratory bird, or any part, nest, or egg of such bird, or any product, whether or not manufactured, which consists of, or is comprised in whole or part, of any such bird, or any part, nest, or egg thereof. However, no provisions in the MBTA prevent habitat destruction unless direct mortality or destruction of active nests occurs.

Finally, the elfin-woods warbler co-occurs with other species that are listed under the Act. In the EYNF, the species co-occurs with the Puerto Rican sharp-shinned hawk (Accipiter striatus venator), Puerto Rican boa, Puerto Rican broad-winged hawk (Buteo platypterus brunnescens), Puerto Rican parrot (Amazona vittata), and several federally listed plants: Styrax portoricensis, uvillo (Eugenia haematocarpa), Lepanthes eltoroensis, chupacallos (Pleodendron macranthum), capa rosa (Callicarpa ampla), palo colorado (Ternstroemia luquillensis), Ternstroemia subsessilis, and Ilex sintenisii. In the MCF, the species co-occurs with the Puerto Rican sharp-shinned hawk, Puerto Rican boa, and several federally listed plants: Cranichis ricartii, Gesneria pauciflora, palo de rosa (Ottoschulzia rhodoxylon), palo colorado (Ternstroemia luquillensis), higuero de sierra (Crescentia portoricensis), and Cordia bellonis. Because of the occurrence of these federally listed species within the same habitat where the elfin-woods warblers occurs, any Federal action, funding, or permit within these forests or in private lands adjacent to these forests that may affect these listed species requires a section 7 consultation under the Act. Therefore, the elfin-woods warbler may benefit from indirect protection of these listed species (i.e., implementation of habitat restoration practices and habitat protection).

Based on the information currently available to us, the Federal and Commonwealth regulatory mechanisms are being implemented and are functioning as designed. Lack of enforcement of these laws and regulations has not been identified as having a negative impact to the species or exacerbating other negative effects to the species. Therefore, we do not find existing regulations to be inadequate.

The geographic location of islands in the Caribbean Sea makes them prone to hurricane impacts (Wiley and Wunderle 1993, p. 320). In fact, the frequency of hurricane occurrences is higher in the southeastern United States and the Caribbean than other regions of the world (Wiley and Wunderle 1993, p. 320). Hurricanes can have both direct and indirect effects on bird populations, which may determine the characteristics of local avifauna (Wauer and Wunderle 1992, p. 656; Wunderle et al. 1992, p. 323). Arendt et al. (2013, p. 2) suggested that catastrophic weather events such as hurricanes can negatively affect the elfin-woods warbler due to its restricted distribution and low number of individuals. Some species may cope with hurricane-induced changes by selecting different prey items, while others may switch their foraging behavior and locations (Wauer and Wunderle 1992, p. 657; Wunderle et al. 1992, pp. 323-326).

The frequency of hurricane-induced damage equivalent to F3 (severe) on the Fujita scale (Fujita 1971) is at least three times greater in the northeastern quadrant of Puerto Rico, where EYNF and CCF are located, compared to the rest of the island (White et al. 2014, p. 30). In contrast, the western side of Puerto Rico, where MCF is located, is subject to different hurricane trajectories and risks than the eastern portion of the island (White et al. 2010, p. 16). For example, in 1998, Hurricane Georges struck MCF, which previously had been spared from hurricanes since 1932 (Tossas 2006, p. 81). Hence, studies of the effects of hurricanes on bird populations in Puerto Rico are limited to the northeastern region and little is known about how bird species are affected elsewhere on the island (Tossas 2006, p. 81).

Delannoy (2007, p. 24) suggested that elfin-woods warbler populations at MCF appeared to be stable. However, studies conducted from 1989 to 2006 at EYNF documented a declining trend in the elfin-woods warbler population during the study period (Arendt et al. 2013, pp. 8-9). Arendt et al. (2013, p. 8) stated that this documented downward population trend could be related to intrinsic causes (e.g., physiological, genetic). Nonetheless, they further suggest that it is more likely that natural habitat conversion and degradation, resulting from cyclonic events, are playing an important role in the species' decline at EYNF. Direct effects of hurricanes on habitat include massive defoliation, snapped and wind-thrown trees, massive tree mortality, and landslides (Lugo 2008, p. 368). For example, Hurricane Hugo (1989) and Hurricane Georges (1998) caused extensive damage in EYNF, which damage may have adversely impacted the elfin-woods warbler's primary habitat (Arendt et al. 2013, pp. 8-9). Arroyo (1991, p. 55) noted that the species was not recorded during 1990 from areas it was reported from previously at EYNF. This forest was heavily damaged by Hurricane Hugo, with more than 80 percent of the forest completely defoliated (Boucher 1990, p. 164). In contrast, at the MCF, Arroyo (1991, pp. 55-56) recorded an apparent vertical migration pattern of the species during months of heaviest rains. Moreover, Tossas (2006, p. 84) found that the elfin-woods warbler was one of two species that recovered within a year to pre-hurricane population levels after Hurricane Georges. This finding suggested that warblers abandoned defoliated sites immediately after the hurricane and shifted to protected patches with adequate foraging substrate and prey until the defoliated sites recovered (Tossas 2006, p. 84). Arendt et al. (2013, p. 9) indicated that these contrasting findings may be the result of disproportionate damage caused by storms in the respective forests. Moreover, the landscape at EYNF is different from that of the MCF in that at EYNF there is no continuous forested vegetation beyond the forest boundaries mainly due to conversion of agricultural lands and lowland broadleaf forests to urbanized areas (Lugo et al. 2004, p. 29). Therefore, the probability of dispersion to undamaged areas within and outside EYNF could be reduced for the elfin-woods warbler depending on the damages to the vegetation. The lack of suitable habitat around the EYNF also reduces the probability of elfin-woods warbler re-colonization from the MCF, which is 150 km (93 mi) away (Arendt et al. 2013, p. 2).

As discussed above, Anadón-Irizarry (2006, p. 54), Delannoy (2007, p. 24), and Anadón-Irizarry (2014, pers. comm.) have suggested the elfin-woods warbler no longer exists within CCF. Pérez-Rivera (2014, pers. comm.) has suggested that the habitat modification caused by Hurricane Hugo and Hurricane Georges at CCF may have had a negative effect on the elfin-woods warbler. However, he acknowledged that before concluding the species was extirpated from the forest due to these climatological events, a formal and extensive survey should be conducted to include nontraditional areas within and outside of CCF (Pérez-Rivera 2014, pers. comm.). He suggested hurricanes might be detrimental to low densities and habitat-specialized species, but at the same time might benefit insectivorous species like the elfin-woods warbler. In 1989, a month after Hurricane Hugo, Pérez-Rivera (1991, pp. 474-475) recorded the Antillean euphonia (Euphonia musica) shifting its feeding and foraging behavior in CCF as a result of the habitat disturbance following the hurricane. Some authors (i.e., Wauer and Wunderle 1992, p. 657; Wunderle et al. 1992, pp. 323-326) have suggested that the frequency of hurricanes in the Caribbean may be determining some of the characteristics of the local avifauna, such as the shifting into new habitats due to hurricane-induced changes.

Hurricanes can have positive effects on forest and bird ecology by temporarily increasing forest productivity (Wiley and Wunderle 1993, p. 337), particularly for species with ample distribution (White et al. 2014, p. 31). However, the immediate negative effects of these powerful atmospheric events for a species with demographically vulnerable populations, such as the elfin-woods warbler, outweigh the benefits accrued via short-term primary productivity of vegetation (White et al. 2014, p. 31). This might explain the declining elfin-woods warbler population trend documented by Arendt et al. (2013, pp. 8-9) at EYNF.

Studies predict an increase in hurricane intensity in the Atlantic, with higher wind speeds and greater amounts of precipitation, but a reduction in the overall number of storms (Jennings et al. 2014, p. 8). As mentioned above, hurricanes may result in direct negative effects to the species and its habitat.

Based on the above information, it is possible that the elfin-woods warbler could experience local extinction due to these catastrophic weather events. While the species appears to have the ability to temporarily move to undisturbed areas and survive in MCF, such dispersal ability has not been documented at EYNF. Having two geographically separate populations on both ends of Puerto Rico may benefit the elfin-woods warbler since, based on the history of hurricanes striking the island, it is unlikely for both EYNF and MCF to be impacted by the same weather system at once. However, the fact that there are only two known populations left makes the species more vulnerable to extinction if one is lost due to a catastrophic weather event. It is important to note, however, that there are no specific studies corroborating hurricanes as a main cause of elfin-woods warbler population declines at EYNF and MCF, nor that hurricanes caused the apparent extirpation of the species from CCF.

Regarding climate, general long-term changes have been observed, including changes in amount of precipitation, wind patterns, and extreme weather events (e.g., droughts, heavy precipitation, heat waves, and the intensity of tropical cyclones) (Intergovernmental Panel on Climate Change (IPCC) 2007, p. 30). For example, projected decreases in precipitation in the Caribbean suggest drier wet seasons, and even drier dry seasons (Jennings et al. 2014, p. 1).

As previously mentioned, the elfin-woods warbler is currently known only from specific habitat types at EYNF and MCF, which makes the species susceptible to the effects of climate change. It has been stated that higher temperatures, changes in precipitation patterns, and any alteration in cloud cover will affect plant communities and ecosystem processes in EYNF (Lasso and Ackerman 2003, pp. 101-102). In fact, the distribution of tropical forest life zones in the Caribbean is expected to be altered due to both intensified extreme weather events and progressively drier summer months (Wunderle and Arendt 2011, p. 44). At EYNF, such alteration may allow low-elevation Tabonuco forest species to colonize areas currently occupied by Palo Colorado forest (Scatena and Lugo1998, p. 196). Dwarf forests at EYNF also are very sensitive to the effects of climate change because of their occurrence in narrowly defined environmental conditions (Lasso and Ackerman 2003, p. 95). Dwarf forest epiphytes may experience moisture stress due to higher temperatures and less cloud cover with a rising cloud base, affecting epiphyte growth and flowering (Nadkarni and Solano 2002, p. 584). As previously mentioned, both the Palo Colorado and Dwarf forests have been reported to have the highest elfin-woods warbler mean abundance (Anadón-Irizarry 2006, p. 24). Although the available information predicting changes in habitat due to the effects of climate change pertains to EYNF, similar changes would be expected for the MCF and CCF, which lies within two of the same life zones as EYNF.

As indicated above, such climate changes are likely to alter the structure and distribution of the habitat used by the elfin-woods warbler. According to Arendt et al. (2013, p. 9), approximately 50 percent of the Caribbean birds show medium to high vulnerability to the effects of climate change. Based on that information, species that are dependent on specific habitat types, and that have limited distribution or have become restricted in their range, like the elfin-woods warbler, will be most susceptible to the effects of climate change. However, while continued change is expected, the magnitude and rate of that change is unknown in many cases. In tropical and subtropical forests, significant knowledge gaps exist in predicting the response of natural systems to the effects of climate change, and uncertainties exist with studies forecasting trends in climate (Jennings et al. 2014, p. 33). Moreover, regionally downscaled climate models projecting temperature and precipitation patterns at fine scales are not readily available for locations within the Caribbean region, including Puerto Rico (Jennings et al. 2014, p. 33). While existing large-scale global climate models are useful in determining potential future trends (Angeles et al. 2007, p. 556), the lack of fine-scale data in Puerto Rico's mountainous regions is especially troublesome, as variations in climate with elevation over short horizontal distances cannot be captured by existing climate models, especially in predictions of extreme events (Meehl et al. 2007, p. 477).

Fires are not part of the natural processes for subtropical and moist forests in Puerto Rico (Santiago-Garcia et al. 2008, p. 604). In fact, Méndez-Tejeda et al. (2015, p. 363) concluded that the majority of forests fires in Puerto Rico are produced by human actions. However, as annual rainfall decreases over time in the Caribbean region, longer periods of drought are expected in the future (Breshears et al. 2005, pp. 146-147; Larsen 2000, pp. 510-512). In 2000, Flannigan et al. (2000, pp. 225-226) projected an increase of the global fire occurrence over the next century due to the effects of climate change. In Puerto Rico, historical evidence suggests fire frequency is increasing (Burney et al. 1994, p. 277; Robbins et al. 2008, pp. 530-531). Moreover, the interactions between climate warming and drying, and increased human development, are considered to have the potential to increase the effects of fires (Robbins et al. 2008, pp. 530-531).

In EYNF, CCF, and adjacent lands, fires are not considered common. The tropical rain and moist forest conditions of EYNF and CCF (i.e., average annual rainfall of 304.8 cm (120 in) or more) and the very high humidity during most of the year are not conditions conducive to fires as they are in the dry, temperate climates encountered in other regions. The last fire incident in EYNF, recorded in 1994, was categorized as a “minimal fire” that was quickly controlled by USFS staff (USFS 2015, no page number). In the CCF area, fires are considered human-induced and occur in a low frequency along the road PR-184 (Monsegur 2015, pers. comm.). Although the road-side fires are considered minimal, they have the potential to extend to forested lands within CCF and adjacent private lands affecting suitable elfin-woods warbler habitat.

In the Maricao area (i.e., Municipalities of Sabana Grande and San Germán), fires occur more frequently on the southern dry slopes of MCF and adjacent private lands, particularly during the dry season (Avila 2014, pers. comm.). Human-induced fires modify the landscape and ecological conditions of the habitat by promoting growth of nonnative trees and grasses (Brandeis and Woodall 2008, p. 557). These landscape modifications may reduce the quality and quantity of potential elfin-woods warbler habitat. Moreover, these fires alter the habitat, decreasing the ability of the species to disperse to other forested habitats. Although the primary habitat for the species in MCF (i.e., Podocarpus forest) (González 2008, pp. 20-21) is not prone to fire disturbance because it is located on the highest peaks within the lower montane wet forest life zone, suitable habitat at lower elevations might be in danger if these fires extend to forested lands within the forest or private lands. Severe fires in moist tropical forests have the potential to alter microclimates, allowing atypical forest species to invade, increasing the chance of recurrent fires (Sherman et al. 2008, p. 536).

As discussed under Factor A above, the Service, USFS, and PRDNER signed a CCA in 2014, to implement strategic conservation actions. In the context of Factor E, these actions include the development and implementation of programmatic reforestation and habitat enhancement efforts within areas degraded by hurricanes to improve the recovery of the elfin-woods warbler within EYNF and MCF (Service 2014, pp. 18-19). Additionally, the CCA will help develop and design studies to gather information on the elfin-woods warbler (e.g., habitat needs, habitat use, movement and activity patterns, responses to biotic and abiotic factors, and genetic variation) in order to better design and implement conservation strategies for the recovery of the species.

Based on the information available and limited distribution of the elfin-woods warbler, we believe that this species is currently threatened by natural or manmade factors such as hurricanes and human-induced fire. The effects of climate change may exacerbate these threats by increasing intensity and frequency of hurricanes and environmental effects, although information is lacking on the specific extent of these effects. Thus, we consider these other natural and manmade factors to be threats to this species.

We have carefully assessed the best scientific and commercial information available regarding the past, present, and future threats to elfin-woods warbler. Current available information indicates that the elfin-woods warbler has a limited distribution, with only two known populations occurring within EYNF and MCF, including the private lands adjacent to MCF, and at least one possibly extirpated population from CCF. As discussed in the Summary of Factors Affecting the Species section of this rule, threats to the elfin-woods warbler include loss, fragmentation, and degradation of habitat on private lands adjacent to MCF (Factor A). Some of these lands are subjected to habitat modification caused by unsustainable agricultural practices (i.e., sun-grown coffee plantations), small residential development, and livestock related activities. Moreover, the increase of urban development on private lands adjacent to EYNF and CCF has also negatively affected suitable elfin-woods warbler habitat around these forests. The activities result in the elimination of native forest, thus reducing the suitable habitat available and the habitat value for the elfin-woods warbler.

Other natural or manmade factors (i.e., hurricanes, the effects of climate change, human-induced fires; Factor E) also have been identified as threats to the species. There are only two known remaining populations making the species more vulnerable to extinction if one population is lost due to a catastrophic weather event. The effects of climate change also are expected to alter the structure and distribution of the habitat used by the elfin-woods warbler, which may be particularly susceptible because of the limited distribution and specific forest types used by the species. Human-induced fires have been reported in the Maricao area mostly within the lower southern slopes of the MCF and adjacent private lands, particularly during the dry season, and occasionally in the CCF area. Habitat disturbance caused by human-induced fires may also affect the ability of the species to disperse to other forested habitats.

The Act defines an endangered species as any species that is “in danger of extinction throughout all or a significant portion of its range” and a threatened species as any species “that is likely to become endangered throughout all or a significant portion of its range within the foreseeable future.” We find that the elfin-woods warbler is not presently in danger of extinction throughout its entire range based on the low to moderate severity and non-immediacy of threats currently impacting the species. The available information indicates that elfin-woods warbler populations appear to be stable in MCF and that there are no immediate threats precipitating a demographic decline of the elfin-woods warbler in that forest. In Maricao, the species has been reported adjacent to the Commonwealth forest in shade-grown coffee plantations, demonstrating that the species may tolerate some degree of habitat disturbance. At EYNF, the most current information reported a declining trend of the elfin-woods warbler population, mainly attributed to hurricanes striking that forest. However, there are no specific studies corroborating that hurricanes are in fact the main cause of elfin-woods warbler population declines at EYNF and other factors may be influencing the decline (e.g., population low densities and patchy spatial arrangement). Although the species appears to be stable at the MCF, it may be declining at EYNF and extirpated from CCF. The cumulative effects of habitat modification by human actions (e.g., unsustainable agricultural practices) and natural events such as hurricanes would make the two known populations more vulnerable to extinction due to their restricted distribution, limited population numbers, and specific ecological requirements. Therefore, on the basis of the best available scientific and commercial information, we list the elfin-woods warbler as threatened in accordance with sections 3(20) and 4(a)(1) of the Act. We find that an endangered species status is not appropriate for elfin-woods warbler because the species is not currently in imminent danger of extinction throughout all of its range.

Conservation measures provided to species listed as endangered or threatened under the Act include recognition, recovery actions, requirements for Federal protection, and prohibitions against certain practices. Recognition through listing results in public awareness, and conservation by Federal, State, Tribal, and local agencies; private organizations; and individuals. The Act encourages cooperation with the States and other countries and calls for recovery actions to be carried out for listed species. The protection required by Federal agencies and the prohibitions against certain activities are discussed, in part, below.

The primary purpose of the Act is the conservation of endangered and threatened species and the ecosystems upon which they depend. The ultimate goal of such conservation efforts is the recovery of these listed species, so that they no longer need the protective measures of the Act. Subsection 4(f) of the Act calls for the Service to develop and implement recovery plans for the conservation of endangered and threatened species. The recovery planning process involves the identification of actions that are necessary to halt or reverse the species' decline by addressing the threats to its survival and recovery. The goal of this process is to restore listed species to a point where they are secure, self-sustaining, and functioning components of their ecosystems.

Recovery planning includes the development of a recovery outline shortly after a species is listed and preparation of a draft and final recovery plan. The recovery outline guides the immediate implementation of urgent recovery actions and describes the process to be used to develop a recovery plan. The plan may be revised to address continuing or new threats to the species, as new substantive information becomes available. The recovery plan identifies site-specific management actions that set a trigger for review of the five factors that control whether a species remains endangered or may be downlisted or delisted, and methods for monitoring recovery progress. Recovery plans also establish a framework for agencies to coordinate their recovery efforts and provide estimates of the cost of implementing recovery tasks. Recovery teams (composed of species experts, Federal and State agencies, nongovernmental organizations, and stakeholders) are often established to develop recovery plans. When completed, the recovery outline, draft recovery plan, and the final recovery plan will be made available on our Web site (http://www.fws.gov/endangered), or from our Caribbean Ecological Services Field Office (see FOR FURTHER INFORMATION CONTACT).

Implementation of recovery actions generally requires the participation of a broad range of partners, including other Federal agencies, States, Tribes, nongovernmental organizations, businesses, and private landowners. Examples of recovery actions include habitat restoration (e.g., restoration of native vegetation), research, captive propagation and reintroduction, and outreach and education. The recovery of many listed species cannot be accomplished solely on Federal lands because their range may occur primarily or solely on non-Federal lands. To achieve recovery of these species requires cooperative conservation efforts on private, State, and Tribal lands.

Following publication of this final listing rule, funding for recovery actions will be available from a variety of sources, including Federal budgets, State programs, and cost share grants for non-Federal landowners, the academic community, and nongovernmental organizations. In addition, pursuant to section 6 of the Act, the Commonwealth of Puerto Rico would be eligible for Federal funds to implement management actions that promote the protection or recovery of the elfin-woods warbler. Information on our grant programs that are available to aid species recovery can be found at: http://www.fws.gov/grants.

Please let us know if you are interested in participating in recovery efforts for this species. Additionally, we invite you to submit any new information on this species whenever it becomes available and any information you may have for recovery planning purposes (see FOR FURTHER INFORMATION CONTACT).

Section 7(a) of the Act requires Federal agencies to evaluate their actions with respect to any species that is proposed or listed as an endangered or threatened species and with respect to its critical habitat, if any is designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7 (a)(1) of the Act directs all Federal agencies to “utilize their authorities in furtherance of the purposes of the Act by carrying out programs for the conservation of” endangered and threatened species. Section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of any endangered or threatened species or destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into consultation with the Service.

Federal agency actions within the species' habitat that may require consultation as described in the preceding paragraph include management and any other landscape-altering activities on Federal lands administered by the USFS; issuance of section 404 Clean Water Act (33 U.S.C. 1251 et seq.) permits by the U.S. Army Corps of Engineers; and construction and maintenance of roads or highways by the Federal Highway Administration.

Under section 4(d) of the Act, the Service has discretion to issue regulations that we find necessary and advisable to provide for the conservation of threatened wildlife. We may also prohibit by regulation, with respect to threatened wildlife, any action prohibited by section 9(a)(1) of the Act for endangered wildlife. 50 CFR 17.31(a) applies all the general prohibitions for endangered wildlife set forth at 50 CFR 17.21 to threatened wildlife; 50 CFR 17.31(c) states that whenever a 4(d) rule applies to a threatened species, the provisions of § 17.31(a) do not apply to that species. Permit provisions for threatened species are set forth at 50 CFR 17.32.

Some activities that would normally be prohibited under 50 CFR 17.31 and 17.32 will contribute to the conservation of the elfin-woods warbler because habitats within some of the physically degraded private lands adjacent to elfin-woods warbler existing populations must be improved before they are suitable for the species. Therefore, for the elfin-woods warbler, the Service has determined that species-specific exceptions authorized under section 4(d) of the Act are necessary and advisable to promote the conservation of this species.

As discussed above in the Summary of Factors Affecting the Species section of this listing rule, threats to the species include loss, fragmentation, and degradation of habitat due to unsustainable agricultural practices and land use requiring vegetation clearance. Agricultural practices occurring on private lands adjacent to MCF, especially those involving habitat modification (e.g., deforestation and conversion of shade-grown coffee to sun-grown coffee plantations), can result in vegetation removal and habitat alteration, thereby degrading habitats used by the elfin-woods warbler for feeding, sheltering, and reproduction.

The private lands surrounding MCF are considered the most active coffee production lands in Puerto Rico. Sun-grown coffee plantations adjacent to MCF were converted several decades ago, resulting in the elimination of native forest overstory, reducing the habitat value for wildlife, including the elfin-woods warbler. Although the majority of the coffee-related agricultural lands were converted to sun-grown coffee plantations, several parcels of land surrounding MCF are currently part of a multi-agency habitat restoration initiative in southwestern Puerto Rico implemented by the Service and NRCS since 2010, through the PFW, CP, and U.S. Department of Agriculture Farm Bill Programs. Activities that improve or restore physical habitat quality, such as the conversion of sun-grown coffee to shade-grown coffee, reforestation with native trees, riparian buffering, and forested habitat enhancement (i.e., exotic species removal, and native tree planting), would have a positive effect on elfin-woods warbler populations and would provide an overall conservation benefit to the species. The NRCS conservation practices promoted under this initiative are the Multi-Story Cropping (Practice 379) and Tree/Shrub Establishment (Practice 612) (USFWS 2011). The Multi-Story Cropping practice promotes the establishment of stands of trees or shrubs that are managed as overstory with an understory of woody and/or non-woody plants that are grown for a variety of products. The purpose of this practice is to improve crop diversity by growing mixed but compatible crops having different heights in the same area. This will improve soil quality, reduce erosion, enhance degraded areas, and provide habitat for wildlife species such as the elfin-woods warbler. The Tree/Shrub Establishment Practice promotes the establishment of woody plants by planting seedlings or cuttings, direct seeding, or natural regeneration. The purpose is to promote forest products such as timber, wildlife habitat, long-term erosion control, and improvement of water quality, and to improve or restore natural diversity.

Under this 4(d) rule, all of the prohibitions set forth at 50 CFR 17.31 and 17.32 apply to the elfin-woods warbler, except that incidental take caused by the following activities conducted within habitats currently occupied by the elfin-woods warbler on private, Commonwealth, and Federal lands would not be prohibited, provided those activities both abide by the conservation measures in the rule and are conducted in accordance with applicable Commonwealth, Federal, and local laws and regulations:

(1) The conversion of sun-grown coffee to shade-grown coffee plantations by the restoration and maintenance (i.e., removal of invasive, exotic, and feral species; shade and coffee tree seasonal pruning; shade and coffee tree planting and replacement; coffee bean harvest by hands-on methods; and the use of standard pest control methods and fertilizers within the plantations) of shade-grown coffee plantations and native forests associated with this type of crop. To minimize disturbance to the elfin-woods warbler, shade and coffee tree seasonal pruning must be conducted between September 1 and February 28, which is outside the peak of the elfin-woods warbler's breeding season. The Service considers the use of pest control methods (e.g., pesticides, herbicides) and fertilizers “standard” when it is used only twice a year during the establishment period of shade and coffee trees (i.e., the first 2 years). During this period, the structure of the agroforestry system is not mature enough to sustain the occurrence of elfin-woods warblers within these areas.

Once the shade-grown coffee system reaches its full functionality and structure (i.e., 3 to 4 years), few or no chemical fertilizers, herbicides, or pesticides are required, and their use would be restricted under the 4(d) rule. This is the time period when the shade-grown coffee system is mature enough to support the presence of wildlife species. Researchers have found that the number of species of birds in coffee plantations with structurally and floristically diverse canopies is similar to the number of species in natural forest habitat and is higher than other agricultural landscapes without trees (Perfecto et al. 1996, pp. 603-605).

The restoration of agricultural lands due to the planting of native trees to provide shade to coffee trees or by selective removal of exotic species creates physically stable and suitable habitats for the elfin-woods warbler. Moreover, the cultivation of shade-grown coffee has many other ecological and human-health benefits such as the reduction of soil erosion, moderation of soil temperatures, and reduced need for fertilizers and pesticides (Borkhataria et al. 2012, p.168). Therefore, restoration, conservation, and protection of shade-grown coffee plantations would provide suitable habitat for the feeding, sheltering, and reproduction activities of this species and may provide habitat to promote the elfin-woods warblers' dispersal and recolonization of lands adjacent to the existing populations.

(2) Riparian buffer establishment through the planting of native vegetation and removal of exotic species may improve the habitat conditions of Gallery forests along the sub-watersheds associated with lands adjacent to the elfin-woods warbler's existing populations. Gallery forests serve as biological corridors that maintain connectivity between forested lands and associated agricultural lands, reducing the fragmentation in the landscape.

(3) Reforestation and forested habitat enhancement projects within secondary forests (i.e., young and mature) that promote the establishment or improvement of habitat conditions for the species by the planting of native trees, selective removal of native and exotic trees, seasonal pruning of native and exotic trees, or a combination of these.

The intent of these exceptions is to provide incentive for landowners to carry out these activities in a manner which we believe will provide benefits to the species such as: (1) Maintaining connectivity of suitable elfin-woods warbler habitats, allowing for dispersal between forested and agricultural lands; (2) minimizing habitat disturbance by conducting certain activities outside the peak of the elfin-woods warbler's breeding season (i.e., pruning between September 1 to February 28); (3) maximizing the amount of habitat that is available for the species; and (4) improving habitat quality. While these activities may cause some temporary disturbance to the elfin-woods warbler or its habitat, we do not expect these activities to adversely affect the species' conservation efforts. In fact, we expect they will have a net beneficial effect on the species.

Based on the rationale above, the provisions included in this rule authorized under section 4(d) of the Act are necessary and advisable to provide for the conservation of the elfin-woods warbler. Nothing in this 4(d) rule would change in any way the recovery planning provisions of section 4(f) of the Act, the consultation requirements under section 7 of the Act, or the ability of the Service to enter into partnerships for the management and protection of the elfin-woods warbler.

We may issue permits to carry out otherwise prohibited activities involving threatened wildlife under certain circumstances. Under regulations governing permits for threatened wildlife species, which are codified at 50 CFR 17.32, a permit may be issued for the following purposes: For scientific purposes, to enhance the propagation or survival of the species, economic hardship, zoological exhibition, educational purposes, and for incidental take in connection with otherwise lawful activities. There are also certain statutory exemptions from the prohibitions, which are found in sections 9 and 10 of the Act.

It is our policy, as published in the Federal Register on July 1, 1994 (59 FR 34272), to identify to the maximum extent practicable at the time a species is listed, those activities that would or would not constitute a violation of section 9 of the Act (for this species, those section 9 prohibitions that would be adopted through the 4(d) rule). The intent of this policy is to increase public awareness of the effect of a final listing on proposed and ongoing activities within the range of a listed species. Based on the best available information, the following actions are unlikely to result in a violation of section 9, if these activities are carried out in accordance with existing regulations and permit requirements. This list is not comprehensive:

(1) Activities authorized, funded, or carried out by Federal or Commonwealth agencies (e.g., expansion or construction of communication facilities; expansion of recreational facilities; pipeline construction; bridge construction; road rehabilitation and maintenance; expansion, construction, or maintenance of aqueduct facilities; habitat management; Federal and Commonwealth trust species reintroductions; trail maintenance; camping areas maintenance; research, repair, and restoration of landslides; etc.), when such activities are conducted in accordance with the consultation and planning requirements for listed species under section 7 of the Act; and

(2) Agricultural and silviculture practices implemented within existing agricultural lands (i.e., degraded habitat not suitable for the species) other than sun- to shade-grown coffee conversion and maintenance, including herbicide, pesticide, and fertilizer use outside of coffee plantations, which are carried out in accordance with any Commonwealth and Federal existing regulations, permit and label requirements, and best management practices.

We believe the following activities may potentially result in a violation of section 9 the Act. This list is not comprehensive:

(1) Unauthorized collecting or handling of the species;

(2) Destruction/alteration/fragmentation of habitat essential to fulfilling the lifecycle of the species; and

(3) Introduction of nonnative species that compete with or prey upon the elfin-woods warbler.

Questions regarding whether specific activities would constitute a violation of section 9 of the Act should be directed to the Caribbean Ecological Services Field Office (see FOR FURTHER INFORMATION CONTACT).

Section 3(5)(A) of the Act defines critical habitat as (i) the specific areas within the geographical area occupied by the species, at the time it is listed on which are found those physical or biological features (I) essential to the conservation of the species and (II) which may require special management considerations or protection; and (ii) specific areas outside the geographical area occupied by the species at the time it is listed upon a determination by the Secretary that such areas are essential for the conservation of the species. Elsewhere in this issue of the Federal Register we have published a proposed rule to designate critical habitat for the elfin-woods warbler.

We have determined that environmental assessments and environmental impact statements, as defined under the authority of the National Environmental Policy Act, need not be prepared in connection with listing a species as an endangered or threatened species under the Endangered Species Act. We published a notice outlining our reasons for this determination in the Federal Register on October 25, 1983 (48 FR 49244).

A complete list of references cited in this rulemaking is available on the Internet at http://www.regulations.gov and upon request from the Caribbean Ecological Services Field Office (see FOR FURTHER INFORMATION CONTACT).

The primary authors of this final rule are the staff members of the Caribbean Ecological Services Field Office.

Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below: