Federal Register Vol. 81, No.142,
Federal Register Volume 81, Issue 142 (July 25, 2016)
Federal Register Volume 81, Issue 142 (July 25, 2016)
| Page Range | 48315-48685 | |
| FR Document |
Document Created: 2015-12-31 23:05:31
Document Modified: 2015-12-31 23:05:31
| Page and Subject | |
|---|---|
| 81 FR 48317 - Delegation of Authority Under Sections 614(a)(1) and 610 of the Foreign Assistance Act of 1961 | |
| 81 FR 48315 - Delegation of Authority Under Section 610 of the Foreign Assistance Act of 1961 | |
| 81 FR 48464 - Sunshine Act Meeting | |
| 81 FR 48443 - Western Gulf of Mexico Planning Area (WPA) Outer Continental Shelf (OCS) Oil and Gas Lease Sale 248 (WPA Sale 248); MMAA104000 | |
| 81 FR 48442 - Notice of a Federal Advisory Committee Meeting: Manufactured Housing Consensus Committee | |
| 81 FR 48366 - Continuum of Care Program: Solicitation of Comment on Continuum of Care Formula | |
| 81 FR 48449 - Gulf of Mexico, Outer Continental Shelf (OCS), Western Planning Area (WPA) Oil and Gas Lease Sale 248; MMAA104000 | |
| 81 FR 48384 - Certain Biaxial Integral Geogrid Products From the People's Republic of China: Amended Preliminary Results of Countervailing Duty Investigation | |
| 81 FR 48387 - Certain Corrosion-Resistant Steel Products From India, Italy, Republic of Korea and the People's Republic of China: Countervailing Duty Order | |
| 81 FR 48384 - Utility Scale Wind Towers from the People's Republic of China: Rescission of Countervailing Duty Administrative Review; 2015 | |
| 81 FR 48364 - Proposed Establishment of Restricted Area R-2306F; Yuma Proving Ground, AZ. | |
| 81 FR 48390 - Certain Corrosion-Resistant Steel Products From India, Italy, the People's Republic of China, the Republic of Korea and Taiwan: Amended Final Affirmative Antidumping Determination for India and Taiwan, and Antidumping Duty Orders | |
| 81 FR 48462 - Notice of Public Comment Period on Proposed Uniform Language for Testimony and Reports | |
| 81 FR 48369 - Drawbridge Operation Regulation; Keweenaw Waterway, Houghton and Hancock, MI | |
| 81 FR 48329 - Safety Zone; Pleasure Beach Bridge, Bridgeport, CT | |
| 81 FR 48327 - Drawbridge Operation Regulation; Fox River, DePere to Oshkosh, WI | |
| 81 FR 48408 - Extension of Public Comment Period on the Environmental Assessment Addressing the Consolidation and Renovation at Marine Corps Forces Reserve Center Brooklyn, New York | |
| 81 FR 48404 - Notice of Availability (NOA) for a Finding of No Significant Impact (FONSI) for the Environmental Assessment (EA) Addressing the Closure of Former Defense Fuel Support Point (DFSP) Moffett Field Located in Santa Clara County, California | |
| 81 FR 48417 - Information Collections Being Submitted for Review and Approval to the Office of Management and Budget | |
| 81 FR 48419 - Information Collections Being Submitted for Review and Approval to the Office of Management and Budget | |
| 81 FR 48427 - Office of Direct Service and Contracting Tribes National Indian Health Outreach and Education-Health Reform Funding Opportunity | |
| 81 FR 48377 - Public Availability of FY 2015 Service Contract Inventories | |
| 81 FR 48375 - Pike/San Isabel National Forests; Colorado; Pike/San Isabel National Forests Travel Management Plan | |
| 81 FR 48426 - Health Center Program | |
| 81 FR 48376 - North Gifford Pinchot Resource Advisory Committee | |
| 81 FR 48426 - Findings of Research Misconduct | |
| 81 FR 48437 - Request for Public Comment: 60 Day Proposed Information Collection: Environmental Health Assessment of Tribal Child Care Centers in the Pacific Northwest | |
| 81 FR 48398 - Proposed Collection; Comment Request | |
| 81 FR 48462 - Notice of Lodging of Proposed Consent Decree Under the Clean Water Act and the Oil Pollution Act | |
| 81 FR 48500 - Agency Information Collection Activities: Information Collection Renewal; Submission for OMB Review; Interagency Guidance on Asset Securitization Activities | |
| 81 FR 48498 - Agency Information Collection Activities: Proposed Information Collection; Submission for OMB Review; Reduction of Permanent Capital Notice | |
| 81 FR 48499 - Minority Depository Institutions Advisory Committee | |
| 81 FR 48499 - Agency Information Collection Activities: Information Collection Renewal; Submission for OMB Review; Disclosure and Reporting of CRA-Related Agreements | |
| 81 FR 48408 - Submission for OMB Review; Comment Request | |
| 81 FR 48377 - Notice of Solicitation of Applications for the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program | |
| 81 FR 48381 - Notice of Solicitation of Applications for the Repowering Assistance Program | |
| 81 FR 48365 - Proposed 2020 Census Residence Criteria and Residence Situations; Extension of Comment Period | |
| 81 FR 48401 - 36(b)(1) Arms Sales Notification | |
| 81 FR 48421 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
| 81 FR 48421 - Notice of Proposals To Engage in or To Acquire Companies Engaged in Permissible Nonbanking Activities | |
| 81 FR 48421 - Formations of, Acquisitions by, and Mergers of Bank Holding Companies | |
| 81 FR 48423 - Submission for OMB Review; Contract Funding-Limitation of Costs/Funds | |
| 81 FR 48424 - Agency Information Collection Activities: Proposed Collection; Comment Request | |
| 81 FR 48396 - 36(b)(1) Arms Sales Notification | |
| 81 FR 48464 - Agency Forms Submitted for OMB Review, Request for Comments | |
| 81 FR 48421 - Agency Information Collection Activities; Submission for OMB Review; Comment Request | |
| 81 FR 48414 - Orders Granting Authority To Import and Export Natural Gas, To Import and Export Liquefied Natural Gas, To Vacate Authority, and Errata During June 2016 | |
| 81 FR 48405 - 36(b)(1) Arms Sales Notification | |
| 81 FR 48393 - Submission for OMB Review; Comment Request | |
| 81 FR 48498 - Limitation on Claims Against a Proposed Public Transportation Project | |
| 81 FR 48502 - Proposed Collection; Comment Request for Regulation Project | |
| 81 FR 48490 - Military Reservist Economic Injury Disaster Loans Interest Rate for Fourth Quarter FY 2016 | |
| 81 FR 48399 - 36(b)(1) Arms Sales Notification | |
| 81 FR 48502 - Proposed Collection; Comment Request for Form 14693 | |
| 81 FR 48501 - Proposed Collection; Comment Request for Regulation Project. | |
| 81 FR 48496 - Commercial Driver's License Standards: Application for Exemption; Daimler Trucks North America (Daimler) | |
| 81 FR 48496 - Hours of Service of Drivers: WestRock Exemption; FAST Act Extension of Compliance Date | |
| 81 FR 48464 - Advisory Committee on Presidential Library-Foundation Partnerships | |
| 81 FR 48495 - Hours of Service of Drivers: U.S. Department of Energy (DOE); FAST Act Extension of Expiration Date | |
| 81 FR 48493 - Qualification of Drivers; Exemption Applications; Vision | |
| 81 FR 48404 - Proposed Collection; Comment Request | |
| 81 FR 48407 - Proposed Collection; Comment Request | |
| 81 FR 48490 - Oklahoma Disaster # OK-00105 | |
| 81 FR 48420 - Notice to All Interested Parties of the Termination of the Receivership of 10499, Columbia Savings Bank, Cincinnati, Ohio | |
| 81 FR 48395 - International Whaling Commission; 66th Meeting; Announcement of Public Meeting | |
| 81 FR 48395 - Caribbean Fishery Management Council; Public Meeting | |
| 81 FR 48394 - Caribbean Fishery Management Council; Public Meeting | |
| 81 FR 48485 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Adjustments to Its Options Regulatory Fee | |
| 81 FR 48475 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Adjustments to Nasdaq's Options Regulatory Fee | |
| 81 FR 48465 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change Relating to the Reporting of U.S. Treasury Securities to the Trade Reporting and Compliance Engine | |
| 81 FR 48482 - Self-Regulatory Organizations; The Depository Trust Company; Order Approving Proposed Rule Change To Establish a Link With Euroclear | |
| 81 FR 48477 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Equities Rule 1.1 To Establish an Official Closing Price for Exchange-Listed Securities if the Exchange Is Unable To Conduct a Closing Auction | |
| 81 FR 48487 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Nasdaq Rule 7018 | |
| 81 FR 48321 - Airworthiness Directives; CFM International, S.A. Turbofan Engines Modified by Supplemental Type Certificate SE00034EN | |
| 81 FR 48441 - Current List of HHS-Certified Laboratories and Instrumented Initial Testing Facilities Which Meet Minimum Standards To Engage in Urine Drug Testing for Federal Agencies | |
| 81 FR 48331 - Security Zone, Delaware River, Schuylkill River; Philadelphia, PA | |
| 81 FR 48371 - Determination of Rates and Terms for Making and Distributing Phonorecords (Phonorecords III) | |
| 81 FR 48386 - U.S. Department of Commerce Trade Finance Advisory Council Establishment | |
| 81 FR 48450 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Integrated Photonics Institute for Manufacturing Innovation Operating Under the Name of the American Institute for Manufacturing Integrated Photonics | |
| 81 FR 48449 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Advanced Media Workflow Association, Inc. | |
| 81 FR 48462 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-OpenDaylight Project, Inc. | |
| 81 FR 48450 - United States v. VA Partners I, LLC, ValueAct Capital Master Fund, LP, and ValueAct Co-Invest International, LP; Proposed Final Judgment and Competitive Impact Statement | |
| 81 FR 48490 - Petition for Exemption; Summary of Petition Received; Florida Air Transport | |
| 81 FR 48491 - Petition for Exemption; Summary of Petition Received; AirNet II | |
| 81 FR 48319 - Special Conditions: Avmax Aviation Services Inc., Bombardier Model DHC-8-100/-200/-300 Series Airplanes; Installed Rechargeable Lithium Batteries and Battery Systems | |
| 81 FR 48323 - Extension of the Requirement for Helicopters to Use the New York North Shore Helicopter Route | |
| 81 FR 48415 - Information Collections Being Submitted for Review and Approval to the Office of Management and Budget | |
| 81 FR 48438 - Eunice Kennedy Shriver National Institute of Child Health and Human Development (NICHD); Notice of Closed Meeting | |
| 81 FR 48438 - Eunice Kennedy Shriver National Institute of Child Health & Human Development; Notice of Closed Meeting | |
| 81 FR 48439 - National Heart, Lung, and Blood Institute; Notice of Closed Meeting | |
| 81 FR 48440 - National Heart, Lung, and Blood Institute; Notice of Meeting | |
| 81 FR 48439 - Government-Owned Inventions; Availability for Licensing | |
| 81 FR 48348 - Extension of Deadline for Action on the Section 126 Petition From Connecticut | |
| 81 FR 48440 - Agency Information Collection Activities: Submission for OMB Review; Comment Request | |
| 81 FR 48350 - Clean Data Determination for 1997 PM2.5 | |
| 81 FR 48409 - Applications for New Awards; Training of Interpreters for Individuals Who Are Deaf or Hard of Hearing and Individuals Who Are Deaf-Blind Program | |
| 81 FR 48373 - Notification of Submission to the Secretary of Agriculture; Pesticides; Certification of Pesticide Applicators | |
| 81 FR 48335 - Final Priority-Training of Interpreters for Individuals Who Are Deaf or Hard of Hearing and Individuals Who Are Deaf-Blind Program | |
| 81 FR 48425 - Submission for OMB Review; Comment Request | |
| 81 FR 48394 - Marine Mammals; File No. 20481 | |
| 81 FR 48647 - Migratory Bird Hunting; Seasons and Bag and Possession Limits for Certain Migratory Game Birds | |
| 81 FR 48362 - Radio Experimentation and Market Trials-Streamlining Rules | |
| 81 FR 48356 - National Emission Standards for Hazardous Air Pollutants for the Portland Cement Manufacturing Industry | |
| 81 FR 48372 - National Emission Standards for Hazardous Air Pollutants for the Portland Cement Manufacturing Industry | |
| 81 FR 48333 - Safety Zone; Illinois River Mile 69.3 to 69.8; Meredosia, IL | |
| 81 FR 48346 - Limited Approval, Limited Disapproval of California Air Plan Revisions, Eastern Kern Air Pollution Control District | |
| 81 FR 48619 - Energy Conservation Program: Test Procedures for Ceiling Fans | |
| 81 FR 48491 - Notice of Final Federal Agency Actions on Proposed Transportation Projects in Florida | |
| 81 FR 48597 - Program Integrity and Improvement | |
| 81 FR 48505 - Community Reinvestment Act; Interagency Questions and Answers Regarding Community Reinvestment; Guidance | |
| 81 FR 48557 - Small Business Mentor Protégé Programs |
Issue
Forest Service
Procurement and Property Management Office, Agriculture Department
Rural Business-Cooperative Service
Census Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Navy Department
Centers for Medicare & Medicaid Services
Children and Families Administration
Health Resources and Services Administration
Indian Health Service
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Coast Guard
Fish and Wildlife Service
Ocean Energy Management Bureau
Antitrust Division
Copyright Royalty Board
Federal Aviation Administration
Federal Highway Administration
Federal Motor Carrier Safety Administration
Federal Transit Administration
Comptroller of the Currency
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for the Bombardier Model DHC-8-100/-200/-300 series airplanes. These airplanes, as modified by Avmax Aviation Services Inc. (Avmax), will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport-category airplanes. This design feature is rechargeable lithium batteries to replace the existing nickel-cadmium and lead-acid rechargeable batteries. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for these design features. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
This action is effective on Avmax July 25, 2016. We must receive your comments by September 8, 2016.
Send comments identified by docket number FAA-2015-1087 using any of the following methods:
• Federal eRegulations Portal: Go to
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•
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Nazih Khaouly, FAA, Airplane and Flight Crew Interface Branch, ANM-111, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone 425-227-2432; facsimile 425-227-1149.
The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is impracticable because these procedures would significantly delay issuance of the design approval and thus delivery of the affected airplanes. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon publication in the
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.
On September 8, 2015, Avmax Aviation Services Inc. applied for a supplemental type certificate (STC) for the installation of rechargeable lithium batteries to replace the existing nickel-cadmium and lead-acid rechargeable batteries in Bombardier Model DHC-8-100/-200/-300 series airplanes.
The Model DHC-8-100/-200/-300 series airplanes are transport-category, twin-engine turboprops with a maximum capacity of 37 (100 and 200 series) or 50 (300 series) passengers and a maximum takeoff weight of 36,300 lbs (100 and 200 series) or 43,000 lbs (300 series).
Under the provisions of 14 CFR 21.101, Avmax must show that the Bombardier Model DHC-8-100/-200/-300 series airplanes, as changed, continue to meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. A13NM, or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.”
In addition, if the regulations incorporated by reference do not provide adequate standards regarding the change, the applicant must comply with certain regulations in effect on the date of application for the change.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for an STC to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model.
In addition to the applicable airworthiness regulations and special conditions, the Model DHC-8-100/-200/-300 series airplanes must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.101.
The Bombardier Model DHC-8-100/-200/-300 series airplanes, as modified by Avmax, will incorporate the following novel or unusual design feature: Installed rechargeable lithium batteries and battery systems.
Rechargeable lithium batteries are a novel or unusual design feature in transport-category airplanes. This type of battery has certain failure, operational, and maintenance characteristics that differ significantly from those of the nickel-cadmium and lead-acid rechargeable batteries currently approved for installation on transport-category airplanes.
The current regulations governing installation of batteries in large transport-category airplanes were derived from Civil Air Regulations (CAR) part 4b.625(d) as part of the re-codification of CAR 4b that established 14 CFR part 25 in February 1965. The recodified battery requirements, § 25.1353(c)(1) through (c)(4), basically reworded the CAR requirements.
Increased use of nickel-cadmium batteries in small airplanes resulted in increased incidents of battery fires and failures that led to additional rulemaking affecting large transport-category airplanes as well as small airplanes. On September 1, 1977, and March 1, 1978, with Amendments 25-41 and 25-42, respectively, the FAA added paragraphs (c)(5) and (c)(6) to § 25.1353, governing nickel-cadmium battery installations on large transport-category airplanes. On December 10, 2007, Amendment 25-123 moved the contents of paragraph (b) in § 25.1353 to the new subpart H, resulting in the relocation of the regulations governing the installation of batteries in § 25.1353 from paragraph (c) to paragraph (b).
The proposed use of rechargeable lithium batteries for equipment and systems on airplanes prompted the FAA to review the adequacy of these existing battery regulations. Our review indicates that the existing regulations do not adequately address several failure, operational, and maintenance characteristics of lithium batteries, which could affect the safety and reliability of the lithium battery installations.
At present, the airplane industry has limited experience with the use of lithium batteries in applications involving commercial aviation. However, other users of this technology, ranging from wireless-telephone manufacturers to the electric-vehicle industry, have noted safety problems with rechargeable lithium batteries. These problems include overcharging, over-discharging, and flammability of cell components.
In general, lithium batteries are significantly more susceptible to internal failures that can result in self-sustaining increases in temperature and pressure (
Discharge of some types of lithium battery cells beyond a certain voltage (typically 2.4 volts), can cause corrosion of the electrodes of the cell, resulting in loss of battery capacity that cannot be reversed by recharging. This loss of capacity may not be detected by the simple voltage measurements commonly available to flightcrews as a means of checking battery status—a problem shared with nickel-cadmium batteries.
Unlike nickel-cadmium and lead-acid batteries, some types of lithium batteries use liquid electrolytes that are flammable. The electrolyte can serve as a source of fuel for an external fire if there is a breach of the battery container.
These problems, which users of lithium batteries experience, raise concerns about the use of these batteries in commercial aviation. The intent of these special conditions is to establish appropriate airworthiness standards for lithium battery installations in the Bombardier Model DHC-8-100/-200/-300 series airplanes and to ensure, as required in §§ 25.601 and 25.1309, that these battery installations are not hazardous or unreliable.
These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to Bombardier Model DHC-8-100/-200/-300 series airplanes as modified by Avmax. Should Avmax apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. A13NM incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.
This action affects only certain novel or unusual design features on two model series of airplanes. It is not a rule of general applicability.
The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon publication in the
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(g), 40113, 44701, 44702, 44704.
In lieu of the requirements of 14 CFR 25.1353(c)(1) through (c)(4) at Amendment 25-51, all rechargeable lithium batteries and battery systems on Model DHC-8-100/-200/-300 airplanes, as modified by Avmax Aviation Services Inc., must be designed and installed as follows:
1. Safe cell temperatures and pressures must be maintained during any foreseeable charging or discharging condition and during any failure of the charging or battery monitoring system not shown to be extremely remote. The rechargeable lithium battery installation must preclude explosion in the event of those failures.
2. Design of the rechargeable lithium batteries must preclude the occurrence of self-sustaining, uncontrolled increases in temperature or pressure.
3. No explosive or toxic gases emitted by any rechargeable lithium battery in normal operation, or as the result of any failure of the battery charging system, monitoring system, or battery installation which is not shown to be extremely remote, may accumulate in hazardous quantities within the airplane.
4. Installations of rechargeable lithium batteries must meet the requirements of § 25.863(a) through (d).
5. No corrosive fluids or gases that may escape from any rechargeable lithium battery may damage surrounding structure or any adjacent systems, equipment, or electrical wiring of the airplane in such a way as to cause a major or more-severe failure condition, in accordance with § 25.1309(b) and applicable regulatory guidance.
6. Each rechargeable lithium battery installation must have provisions to prevent any hazardous effect on structure or essential systems caused by the maximum amount of heat the battery can generate during a short circuit of the battery or of its individual cells.
7. Lithium battery installations must have a system to control the charging rate of the battery automatically, designed to prevent battery overheating or overcharging, and,
a. A battery-temperature sensing and over-temperature warning system with a means for automatically disconnecting the battery from its charging source in the event of an over-temperature condition, or,
b. A battery-failure sensing and warning system with a means for automatically disconnecting the battery from its charging source in the event of battery failure.
8. Any rechargeable lithium battery installation, the function of which is required for safe operation of the airplane, must incorporate a monitoring and warning feature that will provide an indication to the appropriate flight crewmembers whenever the state-of-charge of the batteries has fallen below levels considered acceptable for dispatch of the airplane.
9. The instructions for continued airworthiness required by § 25.1529 must contain maintenance requirements to assure that the battery is sufficiently charged at appropriate intervals specified by the battery manufacturer and the equipment manufacturer that contain the rechargeable lithium battery or rechargeable lithium battery system. This is required to ensure that rechargeable lithium batteries and rechargeable lithium battery systems will not degrade below specified ampere-hour levels sufficient to power the airplane systems for intended applications. The instructions for continued airworthiness must also contain procedures for the maintenance of batteries in spares storage to prevent the replacement of batteries with batteries that have experienced degraded charge retention ability or other damage due to prolonged storage at a low state of charge. Replacement batteries must be of the same manufacturer and part number as approved by the FAA. Precautions should be included, in the instructions for continued airworthiness maintenance instructions, to prevent mishandling of the rechargeable lithium battery and rechargeable lithium battery systems, which could result in short-circuit, or other unintentional impact damage caused by dropping batteries or other destructive means that could result in personal injury or property damage.
The term “sufficiently charged” means that the battery will retain enough of a charge, expressed in ampere-hours, to ensure that the battery cells will not be damaged. A battery cell may be damaged by lowering the charge below a point where the battery experiences a reduction in the ability to charge and retain a full charge. This reduction would be greater than the reduction that may result from normal operational degradation.
These special conditions are not intended to replace § 25.1353(c) in the certification basis of Bombardier Model DHC-8-100/-200/-300 series airplanes. These special conditions apply only to rechargeable lithium batteries and lithium battery systems and their installations on Bombardier Model DHC-8-100/-200/-300 series airplanes, as modified by Avmax. The requirements of § 25.1353(c) remain in effect for batteries and battery installations on Bombardier Model DHC-8-100/-200/-300 series airplanes that do not use lithium batteries.
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
We are superseding airworthiness directive (AD) 2013-02-02 for certain CFM International, S.A. CFM56-3, CFM56-3B, and CFM56-3C turbofan engines. AD 2013-02-02 required removal from service of certain high-pressure turbine (HPT) disks manufactured by Global Material Solutions of Pratt & Whitney, at reduced maximum life limits. This AD corrects the serial numbers (S/Ns) listed in AD 2013-02-02. This AD was prompted by reports that certain HPT disk S/Ns in AD 2013-02-02 and in certain Pratt & Whitney service information are incorrect. We are issuing this AD to prevent uncontained release of multiple turbine blades, damage to the engine, and damage to the airplane.
This AD is effective August 9, 2016.
The Director of the Federal Register approved the incorporation by reference
We must receive any comments on this AD by September 8, 2016.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
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For service information identified in this AD, contact Pratt & Whitney, 400 Main St., East Hartford, CT 06108; phone: 860-565-7700; fax: 860-565-1605. You may view this service information at the FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7125. It is also available on the Internet at
You may examine the AD docket on the Internet at
Kenneth Steeves, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7765; fax: 781-238-7199; email:
On January 14, 2013, we issued AD 2013-02-02, Amendment 39-17323 (78 FR 5712, January 28, 2013), (“AD 2013-02-02”) for all CFM56-3, CFM56-3B, and CFM56-3C turbofan engines modified by Supplemental Type Certificate SE00034EN, with certain HPT disks, installed. AD 2013-02-02 required removal from service of certain high-pressure turbine (HPT) disks manufactured by Global Material Solutions of Pratt & Whitney, at reduced maximum life limits. AD 2013-02-02 resulted from a report of a forging process error during manufacture of these HPT disks. We issued AD 2013-02-02 to prevent uncontained release of multiple turbine blades, damage to the engine, and damage to the airplane.
Since we issued AD 2013-02-02, we received reports that certain HPT disk S/Ns GLKBAA9307, GLKBAA9335, GLKBAA9404, GLKBAA9407, and GLKBAA9409, in AD 2013-02-02 and in certain Pratt & Whitney service information are incorrect. The correct S/Ns are: GKLBAA9307, GKLBAA9335, GKLBAA9404, GKLBAA9407, and GKLBAA9409.
We reviewed Pratt & Whitney Corp. Special Instruction No. 6F-12, Revision A, dated May 17, 2016. The Special Instruction describes procedures for reducing the maximum life limit for affected HPT disks. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We are issuing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This AD requires removal from service of affected HPT disks at certain recalculated reduced maximum life limits.
No domestic operators use this product. Therefore, we find that notice and opportunity for prior public comment are unnecessary and that good cause exists for making this amendment effective in less than 30 days.
This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments before it becomes effective. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We estimate that this AD affects 0 engines installed on airplanes of U.S. registry. We also estimate that it will take about 61 hours per engine to comply with this AD. The average labor rate is $85 per hour. Required parts cost about $0 per engine. Based on these figures, we estimate the cost of this AD on U.S. operators to be $0.
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
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective August 9, 2016.
This AD supersedes AD 2013-02-02.
This AD applies to CFM International, S.A. CFM56-3, CFM56-3B, and CFM56-3C turbofan engines, modified by Supplemental Type Certificate SE00034EN, with a high-pressure turbine (HPT) disk, part number (P/N) 880026, serial number (S/N) GKLBAA9307, GKLBAA9335, GKLBAA9404, GKLBAA9407, or GKLBAA9409, installed.
This AD was prompted by reports that certain HPT disk serial numbers in AD 2013-02-02 and in certain Pratt & Whitney service information are incorrect. We are issuing this AD to prevent uncontained release of multiple turbine blades, damage to the engine, and damage to the airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) For CFM56-3, CFM56-3B, and CFM56-3C turbofan engines operating to 20,100 lbs maximum takeoff (MTO) thrust, remove the HPT disk from service on or before accumulating 8,000 cycles-since-new (CSN).
(2) For CFM56-3B and CFM56-3C turbofan engines operating to 22,100 lbs MTO thrust, remove the HPT disk from service on or before accumulating 8,000 CSN.
(3) For CFM56-3C turbofan engines operating to 23,500 lbs MTO thrust, remove the HPT disk from service on or before accumulating 4,000 CSN.
(4) For HPT disks that have been used in multiple models or thrust installations, use the formula in the ADDED DATA section of Pratt & Whitney Special Instruction 6F-12, Revision A, dated May 17, 2016 to calculate the remaining life on the disk.
The Manager, Engine Certification Office, FAA, may approve AMOCs for this AD. Use the procedures found in 14 CFR 39.19 to make your request. You may email your request to:
For more information about this AD, contact Kenneth Steeves, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803; phone: 781-238-7765; fax: 781-238-7199; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Pratt & Whitney Corp. Special Instruction No. 6F-12, Revision A, dated May 17, 2016.
(ii) Reserved.
(3) For Pratt & Whitney service information identified in this AD, contact Pratt & Whitney, 400 Main St., East Hartford, CT 06108; phone: 860-565-7700; fax: 860-565-1605.
(4) You may view this service information at FAA, Engine & Propeller Directorate, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call 781-238-7125.
(5) You may view this service information at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule.
This rulemaking amends the expiration date of the final rule requiring pilots operating civil helicopters under Visual Flight Rules to use the New York North Shore Helicopter Route when operating along that area of Long Island, New York. The current rule expires on August 6, 2016. The FAA finds it necessary to extend the rule for an additional four years to preserve the current operating environment while the FAA conducts ongoing helicopter research that will be considered to determine appropriate future actions.
This final rule is effective August 7, 2016, through August 6, 2020.
For information on where to obtain copies of rulemaking documents and other information related to this final rule, see “How To Obtain Additional Information” in the
For technical questions concerning this action, contact Kenneth Ready, Airspace and Rules Team, AJV-113, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone (202) 267-3396; email
The FAA's authority to issue rules on aviation safety is found in Title 49 of the
The FAA has broad authority and responsibility to regulate the operation of aircraft, the use of the navigable airspace and to establish safety standards for and regulate the certification of airmen, aircraft, and air carriers. (49 U.S.C. 40104
Section 553(d)(3) of the Administrative Procedure Act requires that agencies publish a rule not less than 30 days before its effective date, except as otherwise provided by the agency for good cause found and published with the rule. The current rule expires on August 6, 2016. To prevent confusion among pilots using the route and avoid disruption of the current operating environment, the FAA finds that good cause exists to make this rule effective in less than 30 days.
In response to concerns from a large number of local residents regarding noise from helicopters operating over Long Island, the FAA issued the New York North Shore Helicopter Route final rule (77 FR 39911, July 6, 2012). The rule requires civil helicopter pilots operating Visual Flight Rules (VFR), whose route of flight takes them over the north shore of Long Island between the Visual Point Lloyd Harbor (VPLYD) waypoint and Orient Point (VPOLT), to use the North Shore Helicopter Route, as published in the New York Helicopter Chart (“the Chart”). The rule was promulgated to maximize use of the route, as published per the Chart, to secure and improve upon decreased levels of noise that had been voluntarily achieved. Under the rule, pilots are permitted to deviate from the route and altitude requirements when necessary for safety, weather conditions, or transitioning to or from a destination or point of landing. In addition, the rule is based on a voluntary VFR route that was developed by the FAA, working with the Eastern Region Helicopter Council. The voluntary route originally was added to the Chart on May 8, 2008.
The rule originally had a two-year duration and was set to terminate on August 6, 2014. The FAA limited the duration of the rule because, at the time of promulgation, the FAA did not have data on the current rate of compliance with the voluntary route nor the circumstances surrounding an operator's decision not to use the route. The FAA concluded there would be no reason to retain the rule if the FAA determined the noise situation along the North Shore of Long Island did not improve. Accordingly, the Agency decided that the rule would expire in two years, if it was determined there is no meaningful improvement in the effects of helicopter noise on quality of life or that the rule was otherwise unjustified. Specifically, the FAA stated that should there be such an improvement, the FAA may, after appropriate notice and opportunity for comment, decide to make the rule permanent. Likewise, should the FAA determine that reasonable modification could be made to the route to better address noise concerns (and any other relevant concerns), the FAA may choose to modify the rule after notice and comment.
On June 23, 2014, the FAA issued a two-year extension of the rule's termination date to provide additional time for the Agency to assess the rule's impact and consider whether to make the mandatory use of the route permanent (79 FR 35488). Since then, the FAA has been engaged in a variety of helicopter research initiatives that could inform the Agency's future actions on this rule. Topics addressed by these research efforts, described in more detail below, include modeling of helicopter performance and noise, helicopter noise-abatement procedures, and community response to helicopter noise.
The FAA has initiated efforts to improve helicopter performance-modeling capabilities for more accurate operational impact analysis. This research is scheduled to be completed in 2016, with an implementation plan for incorporation into the FAA's Aviation Environmental Design Tool (AEDT).
The FAA's Center of Excellence, called the Aviation Sustainability Center (ASCENT), has funded Pennsylvania State University to conduct modeling of helicopters to identify potential noise-abatement procedures that may result in quieter operations. The first phase of this project focuses on integrating the tools needed to predict helicopter-source noise and providing the necessary integration within AEDT to be able to illustrate potential noise impacts of such noise abatement procedures. The second phase of the project is focused on developing noise-abatement procedures for either individual helicopters or classes of helicopters. These phases of the research are scheduled to be completed by August 2017. At that time, the FAA will need to determine whether to initiate and support flight tests during 2018, which would be necessary prior to advancing the use of the procedures with helicopter operators.
The FAA is also engaged in research and collaboration with helicopter operators, seeking to educate pilots on the benefits of noise-abatement procedures, when to institute them, and the piloting procedures for achieving quieter operations. This project addresses noted issues by developing a strategy for pilot awareness of noise-abatement techniques, looking at ways to illustrate the benefits through modeling, and examining the potential for video training on how to incorporate noise-abatement procedures. This research will utilize the findings of the ASCENT project described above.
Finally, the FAA has two projects to review methodologies to determine community response to helicopter operations. One project is administered through the ACRP. The objectives of the ACRP research project are to: (1) Determine the significance of acoustical and non-acoustical factors that
Both of these projects provide an opportunity for the FAA to compare methodologies and determine the most effective approach for conducting a helicopter noise-annoyance survey. At the completion of the projects, the FAA intends to select the most effective, survey methodology and determine if a larger scale, community survey would better inform the FAA on appropriate methods to address concerns over helicopter noise. The FAA will then consider the need for a comprehensive helicopter community annoyance survey. While the research reaches maturity by the end of 2017, applying the research will take longer.
This final rule extends for an additional four years (
Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 and Executive Order 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, the Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this final rule.
Department of Transportation Order DOT 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If the expected cost impact is so minimal that a proposed or final rule does not warrant a full evaluation, this order permits that a statement to that effect and the basis for it to be included in the preamble if a full regulatory evaluation of the cost and benefits is not prepared. Such a determination has been made for this final rule. The reasoning for this determination follows:
This final rule extends for an additional four years (
The FAA has, therefore, determined that this final rule is not a “significant regulatory action” as defined in section 3(f) of Executive Order 12866, and is not “significant” as defined in DOT's Regulatory Policies and Procedures.
The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation.” To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.
Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA. However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.
The FAA believes that this final rule does not have a significant economic impact on a substantial number of small entities for the following reasons. With this final rule, the regulatory provisions already in place will be extended four years to provide the FAA with sufficient time to consider results of the described research efforts in determining appropriate future actions on the rule. The final regulatory flexibility analysis for the 2012 final rule determined that it had a minimal cost impact on a substantial number of small entities. This final rule extends those requirements. Thus, the FAA expects a minimal economic impact on a substantial number of small entities.
Therefore, as provided in section 605(b), the head of the FAA certifies that this rulemaking will not result in a significant economic impact on a substantial number of small entities.
The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $155 million in lieu of $100 million. This final rule does not contain such a mandate; therefore, the requirements of Title II of the Act do not apply
The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. The FAA has determined that there is no new requirement for information collection associated with this final rule.
In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has determined that there are no ICAO Standards and Recommended Practices that correspond to these proposed regulations.
Executive Order 13609, Promoting International Regulatory Cooperation, promotes international regulatory cooperation to meet shared challenges involving health, safety, labor, security, environmental, and other issues and to reduce, eliminate, or prevent unnecessary differences in regulatory requirements. The FAA has analyzed this action under the policies and agency responsibilities of Executive Order 13609, and has determined that this action would have no effect on international regulatory cooperation.
FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” identifies FAA actions that, in the absence of extraordinary circumstances, are categorically excluded from requiring an environmental assessment (EA) or environmental impact statement (EIS) under the National Environmental Policy Act. This rule qualifies for the categorical exclusion in paragraph 5-6.6.f of that Order, which includes “[r]egulations. . . excluding those that if implemented may cause a significant impact on the human environment. There are no extraordinary circumstances that warrant preparation of an EA or EIS.
The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. The agency determined that this action will not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, does not have Federalism implications.
The FAA analyzed this final rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). The agency has determined that it is not a “significant energy action” under the executive order and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.
An electronic copy of rulemaking documents may be obtained from the Internet by—
1. Searching the Federal eRulemaking Portal (
2. Visiting the FAA's Regulations and Policies Web page at
3. Accessing the Government Printing Office's Web page at
Copies may also be obtained by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Commenters must identify the docket or amendment number of this rulemaking.
All documents the FAA considered in developing this rulemaking action, including economic analyses and technical reports, may be accessed from the Internet through the Federal eRulemaking Portal referenced in item (1) above.
The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. A small entity with questions regarding this document, may contact its local FAA official, or the person listed under the
Air traffic control, Airspace, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends chapter I of Title 14 of the Code of Federal Regulations as follows:
49 U.S.C. 106(g), 40103, 40106, 40109, 40113, 44502, 44514, 44701, 44715, 44719, 46301.
This subpart prescribes a special air traffic rule for civil helicopters operating VFR along the North Shore, Long Island, New York, between August 6, 2012, and August 6, 2020.
Coast Guard, DHS.
Final rule.
The Coast Guard is modifying the operating schedule for all drawbridges over the Fox River between DePere, WI and Oshkosh, WI. This rule will establish drawbridge schedules that coincide with lock schedules during the boating season and standard winter drawbridge schedules.
This rule is effective August 24, 2016.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Mr. Lee D. Soule, Bridge Management Specialist, Ninth Coast Guard District; telephone 216-902-6085, email
On May 6, 2016, we published a notice of proposed rulemaking (NPRM) entitled Drawbridge Operation Regulation; Fox River, DePere to Oshkosh, WI, in the
The Coast Guard is issuing this rule under authority 33 U.S.C. 499. Currently, the regulation for Fox River drawbridges (33 CFR 117.1087) includes the opening schedule for drawbridges in Green Bay, WI, where large commercial vessel traffic continues to transit. This rule does not include any changes to the schedules for drawbridges over the commercial ship channel in Green Bay.
The sections of the current regulation that includes all other drawbridges between river mile 7.13 in DePere, WI at the DePere Pedestrian bridge, to river mile 58.3 in Oshkosh, WI, describe inconsistent dates and times for required drawbridge openings, particularly for the four highway drawbridges in Oshkosh. They also include reference to the George Street bridge at mile 7.27. The George Street bridge has been removed in the past 15 years. In the current regulation, the Oshkosh drawbridges contain exemptions during certain dates and times where the drawbridges are not required to open for vessels or vessels must provide advance notice prior to passing during nighttime hours.
This rule establishes the requirement for all drawbridges, except the Canadian National Railroad (CN-RR) bridge at mile 55.72 in Oshkosh, to open on signal between the hours of 8 a.m. and midnight each day from April 27 to October 7 every year. This schedule will match the lock schedule established by FRNSA and drawbridge schedules used by WIS-DOT. Between the hours of midnight and 8 a.m., except for the CN-RR bridge in Oshkosh, all drawbridges would open for vessels if at least 2-hours advance notice of arrival is provided.
The CN-RR bridge at mile 55.72 in Oshkosh is located where Fox River feeds into the southwest section of Lake Winnebago. The portion of Fox River in the Oshkosh area, and Lake Winnebago, are among the busiest portions of the Fox River System for recreational vessel traffic. The CN-RR bridge provides 6 feet of vertical clearance in the closed position and prevents most vessels from passing under the bridge, thereby requiring the drawbridge to open regularly for vessels. This is also the location of first responders and public safety vessels that may require the bridge to open at any time to perform rescue or emergency operations on Lake Winnebago. Vessels in distress or seeking shelter from weather on Lake Winnebago may also need the CN-RR bridge to open at any time. A delay in bridge openings at this location may endanger life or property and is therefore exempted from the proposed 2-hour advance notice requirement from vessels for all other drawbridges between midnight and 8 a.m.
All drawbridges would be required to open if at least 12-hours advance notice is provided prior to passing between October 8 and April 26 each year.
This rule removes the George Street bridge from the regulation, establishes consistent annual dates for drawbridge schedules between river miles 7.13 and 58.3, eliminates currently exempted bridge opening times during certain days and times in Oshkosh, makes permanent the requirement for vessels to provide 2-hours advance notice between midnight and 8 a.m., and establishes the winter bridge operating schedules throughout the entire river system.
The dates, times, and conditions have been employed by local authorities for approximately 10 years and are generally accepted by vessel operators in the area as established conditions. The dates, times, and conditions have also been reviewed and accepted by WIS-DOT and FRNSA during the development of this rule.
The Coast Guard provided a comment period of 45 days and received one comment. Canadian National Railway Company (CN-RR) wished to clarify for the record that the bridge described in the NPRM as the “CN-RR bridge at Mile 55.72 over Fox River in Oshkosh, WI” should reflect Wisconsin Central Ltd. as the entity holding common carrier responsibilities at this location. The Coast Guard recognizes that Wisconsin Central, Ltd. is owned by CN-RR, but for consistency in describing bridge owners throughout the Fox River system in official publications, and since the bridges are locally known and referred to as “Canadian National” bridges, we will continue to describe the railroad drawbridge at Mile 55.72 in Oshkosh as the CN-RR bridge.
Additionally, CN-RR commented on the disparity of proposed bridge operations between nearby highway bridges and the CN-RR bridge at Mile 55.72 in Oshkosh, WI. The NPRM excluded the CN-RR bridge at Mile
We developed this rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive Orders, and we discuss First Amendment rights of protesters.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.
This regulatory action determination is based on the ability that vessels can still transit the bridge given advanced notice during times when vessel traffic is at its lowest. This rule provides a drawbridge schedule that is virtually the same as has been used by vessel operators in the area for approximately 10 years.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard did not receive any comments from the Small Business Administration on this rule. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities. This rule standardizes drawbridge schedules that have been in place and would not have a significant economic impact on any vessel owner or operator because the bridges will open with advance notice during low traffic times on the waterway or when ice conditions hinder normal navigation.
While some owners or operators of vessels intending to transit the bridges may be small entities, for the reasons stated in section V.A above, this rule would not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it 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.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have made a determination that 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 simply promulgates the operating regulations or procedures for drawbridges. This action is categorically excluded from further review, under figure 2-1, paragraph (32)(e), of the Instruction.
Under figure 2-1, paragraph (32)(e), of the Instruction, an environmental analysis checklist and a categorical exclusion determination are not required for this rule.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Bridges.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05-1; Department of Homeland Security Delegation No. 0170.1.
(b) All drawbridges between mile 7.13 in DePere and mile 58.3 in Oshkosh, except the Canadian National Railroad bridge at mile 55.72, shall open as follows:
(1) From April 27 through October 7, the draws shall open on signal, except between the hours of midnight and 8 a.m., the draws shall open if at least 2-hours advance notice is given.
(2) From October 8 through April 26, the draws shall open if at least 12-hours advance notice is given.
(c) The draw of the Canadian National Railroad bridge at mile 55.72 shall open on signal, except from October 8 through April 26; the draw shall open if at least 12-hours advance notice is given.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone on the navigable waters of Pleasure Beach, Bridgeport, CT for Pleasure Beach Bridge. This temporary safety zone is necessary to provide for the safety of life on navigable waters. This regulation prohibits entry into, transit through, mooring or anchoring within the safety zone unless authorized by Captain of the Port (COTP), Sector Long Island Sound.
This rule is effective without actual notice from July 25, 2016 until December 31, 2016. For the purposes of enforcement, actual notice from July 1, 2016 until July 25, 2016.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, contact Petty Officer Jay TerVeen, Prevention Department, U.S. Coast Guard Sector Long Island Sound, telephone (203) 468-4446, email
The Coast Guard was made aware of damage to Pleasure Beach Bridge which creates a hazard to navigation. A temporary final rule entitled, “Safety Zone; Pleasure Beach Bridge, Bridgeport, CT” was published in the
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 an NPRM with respect to this rule because doing so would be impracticable, given the imminent conclusion of the previous safety zone and the ongoing repairs. This rule is necessary to protect the safety of waterway users.
We are issuing this rule, and under 5 U.S.C. 553(d)(3), and for the same reasons stated in the preceding paragraph, the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The legal basis for this temporary rule is 33 U.S.C. 1231.
On December 09, 2015, the Coast Guard was made aware of damage sustained to Pleasure Beach Bridge, Bridgeport, CT that has created a hazard to navigation. After further analysis of the bridge structure, the Coast Guard concluded that the overall condition of the structure created a continued hazard to navigation. The COTP Sector LIS has determined that the safety zone established by this temporary final rule is necessary to provide for the safety of life on navigable waterways.
The safety zone established by this rule will cover all navigable waters of the entrance channel to Johnsons Creek in the vicinity of Pleasure Beach Bridge, Bridgeport, CT. This safety zone will be bound inside an area that starts at a point on land at position 41-10.2N, 073-10.7W and then east along the shoreline to a point on land at position 41-9.57N, 073-9.54W and then south across the channel to a point on land at position 41-9.52N, 073-9.58W and then west along the shoreline to a point on land at position 41-9.52N, 073-10.5W and then north across the channel back to the point of origin.
This rule prohibits vessels from entering, transiting, mooring, or anchoring within the area specifically designated as a safety zone during the period of enforcement unless authorized by the COTP or designated representative.
The Coast Guard will notify the public and local mariners of this safety zone through appropriate means, which may include, but are not limited to, publication in the
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and executive orders and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This temporary rule involves the establishment of a safety zone. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination, a Categorical Exclusion Determination, and EA Checklist, will be in the docket for review. 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
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; and Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(d)
(2) In accordance with the general regulations in § 165.23, entry into or movement within this zone is prohibited unless authorized by the COTP, Long Island Sound.
(3) Operators desiring to enter or operate within the safety zone should contact the COTP Sector Long Island Sound at 203-468-4401 (Sector Sector Long Island Sound Command Center) or the designated representative via VHF channel 16 to obtain permission to do so.
(4) Any vessel given permission to enter or operate in the safety zone must comply with all directions given to them by the COTP Sector Long Island Sound, or the designated on-scene representative.
(5) Upon being hailed by a U.S. Coast Guard vessel by siren, radio, flashing light or other means, the operator of the vessel shall proceed as directed.
Coast Guard, DHS.
Temporary Final Rule.
The Coast Guard is establishing temporary security zones in the waters of the Delaware River, Schuylkill River, and Darby Creek, in Philadelphia, PA. These temporary zones are intended to restrict vessels from portions of the Delaware River, Schuylkill River, and Darby Creek during the Democratic National Convention from July 25, 2016, to July 29, 2016. During the enforcement period, no unauthorized vessels or people will be permitted to enter or move within the security zone without permission from the Captain of the Port or his designated representative. This security zone is necessary to provide security for the Democratic National Convention.
This rule is effective from 11:00 a.m. on July 25, 2016, to 1:00 a.m. on July 29, 2016.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Petty Officer Tom Simkins, U.S. Coast Guard, Sector Delaware Bay, Waterways Management Division, Coast Guard; telephone (215)271-4851, email
The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the final details for the Democratic National Convention were not known until July 12, 2016. Delaying the effective date by first publishing an NPRM and holding a comment period would be contrary to the rule's objectives of ensuring safety of life on the navigable waters and protection of the Democratic Nation Convention and the accompanying high-ranking government officials.
For similar reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this temporary rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port, Delaware Bay has determined that these temporary security zones are necessary to provide for the security of the Democratic Nation Convention and the accompanying high-ranking government officials, and to protect against sabotage or terrorist attacks to human life, vessels, mariners, and waterfront facilities at or near this event.
The Democratic National Convention will take place in Philadelphia, PA from July 25, 2016 until July 29, 2016. During this event many high-ranking government officials will be arriving in Philadelphia, PA. The Coast Guard is establishing several security zones in portions of the Delaware River, Schuylkill River, and Darby Creek in Philadelphia, PA.
The first security zone includes all the waters of the Delaware River from the New Jersey shore line, to the Pennsylvania shore line, beginning at the west end of Little Tinicum Island extending in a Northeasterly direction and ending at the mouth of the Schuylkill River;
The second security zone includes all the waters of the Schuylkill River inside a boundary described as 500 yards south of the I-95 Bridge and ending 500 yards north of the George C. Platt Memorial Bridge.
The third security zone includes all waters of Darby Creek inside a boundary described as originating from 500 yards south of the Conrail Railroad Bridge and ending 100 yards north of the I-95 Bridge.
Access to this security zone will be restricted while the zone is being enforced. Only vessels or people specifically authorized by the Captain of the Port, Delaware Bay, or his designated representative may enter or remain in the regulated area. These security zones will be enforced with actual notice by the United States Coast Guard representatives on scene, as well as other methods listed in 33 CFR 165.7.
We developed this rule after considering numerous statutes and executive orders (Executive Orders) related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive Orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.
This regulatory action determination is based on the size, location, duration, and time-of-year of the security zone. Vessel traffic will be able to safely transit around this security zone which will impact a small designated area of the Delaware River, Schuylkill River, and Darby Creek in Philadelphia, PA for less than 12 hours. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 identifying the security zone locations and describing the process in which vessels can request permission to transit the security zones.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000 The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the security zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves three security zones which will be enforced for less than 12 hours at any one time and includes all the waters of the Delaware River from the New Jersey shore line, to the Pennsylvania shore line, beginning at the west end of Little Tinicum Island extending in a Northeasterly direction and ending at the mouth of the Schuylkill River; all the waters of the Schuylkill River inside a boundary described as 500 yards south of the I-95 bridge and ending 500 yards north of the George C. Platt Memorial Bridge; and all waters of Darby Creek inside a boundary described as 500 yards south of the Darby Creek Railroad Bridge and ending 100 yards north of the I-95 Bridge.
It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(1) The first security zone includes all the waters of the Delaware River from the New Jersey shore line, to the Pennsylvania shore line, beginning at the est end of Little Tinicum Island extending in a Northeasterly direction and ending at the mouth of the Schuylkill River;
(2) The second security zone includes all the waters of the Schuylkill River inside a boundary described as 500 yards south of the I-95 Bridge and ending 500 yards north of the George C. Platt Memorial Bridge.
(3) The third security zone includes all waters of Darby Creek inside a boundary described as originating 500 yards south of the Conrail Railroad Bridge and ending 100 yards north of the I-95 Bridge.
(b)
(c)
(2) To seek permission to enter, contact the COTP or the COTP's representative on VHF-FM channel 16. Those in the security zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(d)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for certain waters of the Illinois River from mile 69.3 to mile 69.8. This safety zone is needed to protect persons, property and infrastructure from potential damage and safety hazards associated with work being performed on new power lines across the river. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port, Upper Mississippi River (COTP). Deviation from the safety zone may be requested and will be considered on a case-by-case basis as specifically authorized by the COTP or a designated representative.
This rule is effective from July 25, 2016 through August 16, 2016. This rule will be enforced from 7 a.m. until 7 p.m. daily beginning on July 25, 2016 through August 16, 2016.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email LCDR Sean Peterson, Chief of Prevention, U.S. Coast Guard; telephone 314-269-2332, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency finds good cause 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 NPRM with respect to this rule because Ameren, the company performing the power line operations, notified the Coast Guard on July 8, 2016 of the dates for these operations, requiring helicopters to stretch power lines across the river. This notice did not allow for the full NPRM process to be completed. Due to the risks associated with power line work crossing the navigational channel, a safety zone is needed to protect persons and property on the waterway. It would be impracticable to publish a NPRM because the safety zone must be established beginning July 25, 2016. Broadcast Notice to Mariners and information sharing with waterway users will update mariners of the safety zone and enforcement times during the operations.
We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The COTP has determined that potential hazards associated with using helicopters to stretch power lines across the navigational channel presents safety concerns for anyone within this limited area of the waterway. This rule provides additional safety measures, to protect persons and vessels, in the form of a safety zone from mile 69.3 to mile 69.8 on the Illinois River to protect those in the area and for the Coast Guard to maintain navigational safety.
The Coast Guard is establishing a temporary safety zone prohibiting access to the Illinois River from mile 69.3 to mile 69.8, extending the entire width of the river from 7 a.m. until 7 p.m. daily, beginning on July 25, 2016 and scheduled to end on August 16, 2016, or until conditions allow for safe navigation, whichever occurs earlier. Deviation from the safety zone may be requested and will be considered on a case-by-case basis as specifically authorized by the COTP or a designated representative. The COTP may be contacted by telephone at 314-269-2332 or can be reached by VHF-FM channel 16.
We developed this rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.
This regulatory action determination is based on the limited location, enforcement periods and impacts on navigation. This rule establishes a temporary safety zone limiting access to a one-half mile area on the Illinois River from mile 69.3 to mile 69.8, for 12 hours each day for approximately 3 weeks. The impacts on navigation will be limited to ensure the safety of mariners and vessels during the period that helicopters will be pulling power lines across the navigational channel. Notifications of enforcement times will be communicated to the marine community via Broadcast Notice to Mariners. Deviation requests will be reviewed and considered 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 rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A. above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) To seek permission to enter, contact the COTP or the COTP's representative via VHF-FM channel 16, or through Coast Guard Sector Upper Mississippi River at 314-269-2332. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
Office of Special Education and Rehabilitative Services, Department of Education.
Final priority.
The Assistant Secretary for Special Education and Rehabilitative Services announces a final priority under the Training of Interpreters for Individuals Who Are Deaf or Hard of Hearing and Individuals Who Are Deaf-Blind program. The Assistant Secretary may use this priority for competitions in fiscal year 2016 and later years. We take this action to provide training and technical assistance to better prepare novice interpreters to become highly qualified nationally certified sign language interpreters.
This priority is effective August 24, 2016.
Kristen Rhinehart-Fernandez, U.S. Department of Education, 400 Maryland Avenue SW., Room 5062, Potomac Center Plaza (PCP), Washington, DC 20202-2800. Telephone: (202) 245-6103 or by email:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
We published a notice of proposed priority (NPP) for this competition in the
First, designating national certification as a desired outcome for novice interpreters in the experiential learning program will ensure consistency in the training of these interpreters, as well as the competencies these interpreters will possess by the end of the training period. This will also ensure that novice interpreters will effectively meet the evolving needs of youth and adults in the United States who are deaf and hard of hearing or are deaf-blind, including those who are consumers of the Vocational Rehabilitation (VR) system.
Second, there is limited information available on the reliability and validity of assessments used by States to confer certifications and licensures. For example, in some cases, an individual pays a fee to receive a license to work as an interpreter in a State, regardless of skill or competency. In other cases, assessments, such as the BEI, are State specific, and there is no information about how the specific levels of skills and competencies they assess compare with the level of skills and competencies required to pass other State-level licensure tests, let alone the national interpreter certification exam. Conversely, national certification assessments have undergone psychometric evaluation to ensure consistency, reliability, and validity of results.
Finally, the EIPA does not apply to the training we intend to be offered by the Center. The EIPA focuses on interpreting competencies that are necessary to effectively interpret in elementary and secondary general education settings. We intend for the Center to train interpreters with specific competencies that are necessary to effectively interpret for youth and adults who are deaf
Several other commenters were concerned that the requirement would limit the pool of eligible applicants because only about one-third of 44 baccalaureate interpreting programs nationwide are CCIE accredited. In addition, there are five CCIE accredited associate of the arts (AA) degree interpreting programs.
A few commenters stated that the proposed requirement would mean that programs on the path to accreditation, private entities that do not possess or have such accreditation available to them, and non-CCIE accredited programs offering rigorous, high-quality instruction in American Sign Language (ASL)-English interpretation would not be eligible to serve as a lead applicant.
Several commenters stated that CCIE accreditation standards do not include several areas that are significant to the proposed priority, including accessibility of, access to, interaction with, and immersion in the Deaf community; having an available Deaf population to promote student training; and standards such as ASL fluency.
One commenter estimated the cost of accreditation from CCIE at $10,000 or more and noted that some organizations are not in a position to support CCIE-related costs at this time.
Finally, one commenter suggested that CCIE accreditation be considered as a secondary qualification, rather than a requirement for the lead applicant.
While we recognize CCIE is not accredited by CHEA, we do not believe this will adversely impact the lead applicant's ability to effectively design and implement this Center because each accreditation has a different purpose. CHEA focuses on the quality of higher education institutions and programs in order for the public to know that an institution or program provides an overall quality education.
By contrast, the mission of CCIE is focused specifically on professionalism in the field of interpreter education through the accreditation of professional preparation programs, the development and revision of interpreter education standards, the encouragement of excellence in program development, a national and international dialogue on the preservation and advancement of standards in the field of interpreter and higher education, and the application of knowledge, skills, and ethics of the profession. There are currently 13 CCIE-accredited programs
We recognize that these standards are the minimum requirements for CCIE accreditation and a program may exceed these standards in many areas, including those indicated by the comments. One of the goals of the Center is to increase accessibility of and access to interaction and immersion in the Deaf community, having an available Deaf population to promote student training, and standards such as ASL fluency. As such, we believe the requirements in the priority support this goal.
We acknowledge that CCIE accreditation is voluntary and that attending a CCIE-accredited interpreter education program is not a requirement for becoming a credentialed interpreter. However, we believe that the interpreter education program should be accredited. The Center is then better positioned to incorporate interpreter education standards into the design and delivery of training and to evaluate its effectiveness in increasing the number of certified interpreters.
While non-CCIE accredited baccalaureate degree English-ASL programs are not eligible as the lead applicant, they may serve as members of the consortium. We respect and value
However, AA/AAS programs are not eligible lead applicants. Since July 2012, there has been an educational requirement for an individual to sit for the Registry of Interpreters for the Deaf National Interpreter Certification test. Specifically, candidates must possess, at a minimum, a bachelor's degree in any field or major, or a demonstrated educational equivalency. We want to ensure that, while the individuals served by the Center require additional skills training to be provided by the Center, they otherwise meet the requirements to sit for the National Certification examination.
Programs that prepare students to work in K-12 settings are not eligible lead applicants or members of the consortium because the focus of this program is to prepare novice interpreters to work in VR settings. We believe this focus was implied in the background section of the priority but recognize it was not clearly stated within the proposed priority. Therefore, we take this opportunity to provide further explanation to support the focus of this program.
The Workforce Innovation and Opportunity Act (WIOA) emphasizes support to transition-age youth and adults with disabilities through such activities as funding various VR services and training of qualified personnel. The final priority aligns with the WIOA framework by focusing on the training of qualified interpreters to work with transition-age youth and adults who are deaf, hard of hearing, or deaf-blind. Thus, programs that prepare students to work in K-12 settings are not eligible applicants or members of the consortium because WIOA funds do not support training of interpreters to work in K-12 settings, with the exception of transition services.
In paragraph (a) under “Establish a consortium” in the
In addition, commenters also stated that the entities participating in the consortium should be required to include individuals who are experienced and qualified interpreters, interpreter educators, trained mentors, and individuals who are deaf, as well as those who can model native (first language) fluency in ASL. One commenter stated that the most successful experiential learning programs include coaching, mentoring, and explicit instruction that focuses specifically on the skills for interacting in diverse cultural milieus.
Applicants are encouraged to include in their consortium other appropriate entities such as VR agencies, community-based organizations, and State commissions. Applicants could develop at least one partnership with a community-based entity (for example, with a Commission for the Deaf that is knowledgeable and involved in the delivery of interpreter services), at least one partnership with industry or government agencies (
We agree that training for novice interpreters must include skills for interacting in diverse cultural milieus and, as such, members of the consortium must represent diverse linguistic and cultural minority backgrounds and be qualified to provide instruction on best practices for interpreting in diverse cultural and linguistic settings.
The Department acknowledges there are interpreter-related definitions available through other Federal agencies. However, we want to ensure that any interpreter-related definitions are appropriate for the Center and align with the statute and regulations for this program.
In a notice of proposed rulemaking (NPRM) published in the
We also agree that we need to clarify the required cohort participants. We intend for the Center to train interpreters with specific competencies that are necessary to effectively interpret for adults who are deaf or hard of hearing and individuals who are deaf-blind, including those who are VR consumers, in transition from school to post-school activities, postsecondary education, employment, and community settings. Therefore, graduates of partner organizations preparing K-12 interpreters are not appropriate to participate in the pilot.
Eligible cohort participants may include deaf individuals, students in their final one or two semesters of completing their degree from a CCIE- or non-CCIE-accredited baccalaureate degree ASL-English interpreter program, recent graduates of CCIE- and non-CCIE-accredited baccalaureate degree ASL-English interpreter education programs, and working novice interpreters who intend to obtain national certification and interpret for adults who are deaf or hard of hearing and individuals who are deaf-blind, including deaf consumers of the VR system. The recruitment and selection of cohort participants will be determined by the Center.
If an applicant chooses to charge reasonable fees, it must describe in the application how this fee will be determined. If successful, upon award, the applicant must develop internal policies and procedures for collecting and effectively managing these fees. Any fees retained as a result of a participant dropping out are considered program income. Therefore, applicants should refer to 2 CFR 200.307 for applicable regulations for program income.
As we noted in the background section in the NPP, we believe the need for interpreting services continues to exceed the available supply of qualified interpreters. Interpreters must be qualified to work with both individuals with a range of linguistic competencies from a variety of cultural backgrounds and individuals with disabilities. Interpreters need additional education, training, and experience in order to meet certification standards, to bridge the graduation-to-credential gap, and to gain sufficient skills to interpret effectively. Therefore, we believe establishing a Model Demonstration Center will better prepare novice interpreters to become nationally certified sign language interpreters in order to meet the needs of individuals who are deaf and hard of hearing and individuals who are deaf-blind.
This notice contains one final priority.
The purpose of this priority is to fund a cooperative agreement for the establishment of a model demonstration center (Center) to: (1) Develop an experiential learning program that could be implemented through baccalaureate degree ASL-English programs or through partner organizations, such as community-based organizations, advocacy organizations, or commissions for the deaf or deaf-blind that work with baccalaureate degree ASL-English programs to provide work experiences and mentoring; (2) pilot the experiential learning program in three baccalaureate degree ASL-English programs and evaluate the results; and (3) disseminate practices that are promising or supported by evidence, examples, and lessons learned.
The Center must prepare novice interpreters to work in VR settings and be designed to achieve, at a minimum, the following outcomes:
(a) Increase the number of certified interpreters.
(b) Reduce the average length of time it takes for novice interpreters to become nationally certified after graduating from baccalaureate degree ASL-English interpretation programs; and
(c) Increase the average number of hours that novice interpreters, through the experiential learning program, interact with and learn from the local deaf community.
To meet the requirements of this priority, the Center must, at a minimum, conduct the following activities:
(a) The applicant must establish a consortium of training and technical assistance (TA) providers or use an existing network of providers to design and implement a model experiential learning program. An eligible consortium must be comprised of a designated lead applicant that operates a baccalaureate degree ASL-English interpretation program that is recognized and accredited by CCIE or that operates both bachelor's and master's degree programs in interpreter education that are recognized and accredited by CCIE; and
(b) Members of the consortium must be staffed by or have access to experienced and certified interpreters, interpreter educators, individuals who are deaf, trained mentors, and first language models in ASL. The consortium must also represent members with diverse linguistic and cultural minority backgrounds who are qualified to provide instruction on best practices in interpreting in diverse cultural and linguistic settings. All consortium members must demonstrate the capability to provide training, mentoring, and feedback in person or remotely to novice interpreters who are geographically dispersed across the country, including the territories.
(a) In years one and two, design and implement an experiential learning program that is based upon promising and best practices or modules in the preparation of novice interpreters to become certified interpreters. The program design must, at a minimum:
(1) Include a team that comprises native language users, qualified professionals, and trained mentors to partner with novice interpreters during and after successful completion of the experiential learning program. Applicants must describe in their application the roles and responsibilities for each team member. Roles for team members must include but are not limited to:
(i) Native language users who will serve as language models;
(ii) Qualified professionals who will act in an advisory role by observing, providing feedback, and discussing the novice interpreter's ability to accurately interpret spoken English into ASL and ASL into spoken English in a variety of situations for a range of consumers; and
(iii) Provide mentoring to novice interpreters, as needed. This may include one-on-one instruction to address specific areas identified by the advisor as needing further practice, as well as offering tools, resources, and guidance to novice interpreters to prepare them for potential challenges they may encounter as they grow and advance in the profession. One-on-one instruction may address, but is not limited to, meaning transfer (
(2) Provide multiple learning opportunities, such as an internship with a community program, mentoring, and intensive site-specific work. Intensive site-specific work may task a novice interpreter, under close direction from the advisor interpreter, with providing interpreting services to deaf individuals employed at a work site, or to deaf students taking courses at college or enrolled in an apprenticeship program. Other learning modalities may be proposed and must include adequate justification.
(3) Emphasize innovative instructional delivery methods, such as distance learning or block scheduling (
(4) Provide experiential learning that engages novice interpreters with different learning styles;
(5) Provide interpreting experiences with a variety of deaf consumers who have different linguistic and communication needs and preferences, and are located in different settings, including VR settings (
(6) Require novice interpreters to observe, discuss, and reflect on the work of the advisor interpreter;
(7) Require novice interpreters to interpret in increasingly more complex and demanding situations. The advisor interpreter must provide written and oral feedback that includes strengths and areas of improvement, as well as a discussion with the novice interpreter about interpretation options, ethical behavior, and how best to meet the communication needs of a particular consumer; and
(b) Pilot the experiential learning program in a single site by year two and expand to additional sites beginning in year three. Applicants must:
(1) Identify at least three existing baccalaureate degree ASL-English interpretation programs to host the pilot sites. The baccalaureate programs must use a curriculum design that is based upon current best practices in the ASL-English Interpreter Education profession. Applicants may identify the pilot sites in the application or describe the process and criteria they will use to identify the pilot sites upon award;
(2) Indicate in the application the number of cohorts for each pilot site and the number of participants in each cohort or provide a plan in the application for how this will be determined upon award;
(3) Provide a plan in the application to ensure that at least one cohort is completed in each pilot site prior to the end of the project period;
(4) Ensure cohort participants intend to obtain national certification and interpret for adults who are deaf or hard of hearing and individuals who are deaf-blind, including deaf consumers of the VR system. Cohort participants may include deaf individuals, students within one or two semesters of completing their interpreter education program, recent graduates of interpreter education programs, and working novice interpreters;
(5) To the extent possible, ensure diversity and inclusion among cohort participants and ensure recruitment of students of color, trilingual students, deaf and deaf-blind students, and children of deaf adults;
(6) Establish processes and procedures for recruitment and selection of cohort participants, including criteria to ensure cohort participants demonstrate the capability to successfully complete the program and obtain national certification. This may include, but is not limited to, submission of an application, relevant assessments, interviewing prospective participants, and obtaining recommendations from faculty at baccalaureate degree ASL-English interpretation programs and other appropriate entities;
(7) Establish procedures to identify and provide technical assistance to cohort participants who may be “at risk” of dropping out of the program;
(8) Determine if college credits or continuing education units will be awarded to cohort participants, as appropriate. Should applicants choose to do so, they must describe any plans for awarding college credits or continuation education units in their application;
(9) Describe any assessment tools that will be used to gauge the progress of novice interpreters. Any proposed instruments must be valid and reliable and the applicant must submit rationale to support the use of each instrument;
(10) Describe in their application how any reasonable fees that the applicant proposes to charge cohort participants will be determined. If successful, upon award, applicants must develop internal policies and procedures for collecting and effectively managing these fees, as well for waiving fees for a cohort participant if there is a financial hardship. Any fees retained as a result of a participant dropping out are considered program income. Therefore, applicants should refer to 2 CFR 200.307 for applicable regulations for program income; and
(11) Develop and effectively communicate to all cohort participants the policies and procedures related to participation in the experiential learning program.
(c) Conduct a formative and summative evaluation. Any proposed instruments must be valid and reliable and the applicant must submit rationale to support the use of each instrument. At a minimum, this must include:
(1) An assessment of participant outcomes from each cohort that
(2) Clear and specific measureable outcomes that include, but are not limited to:
(i) Improvement in specific linguistic competencies, as identified by the applicant, in English and ASL;
(ii) Improvement in specific competencies, as identified by the applicant, in ASL-English interpretation;
(iii) Outcomes in achieving national certification; and
(iv) The length of time for novice interpreters to become nationally certified sign language interpreters after participating in this project compared to the national average of 19-24 months.
Conduct TA and dissemination activities that must include:
(a) Preparing and broadly disseminating TA materials related to practices that are promising or supported by evidence and successful strategies for working with novice interpreters;
(b) Establishing and maintaining a state-of-the-art information technology (IT) platform sufficient to support Webinars, teleconferences, video conferences, and other virtual methods of dissemination of information and TA.
All products produced by the Center must meet government- and industry-recognized standards for accessibility, including section 508 of the Rehabilitation Act.
(c) Developing and maintaining a state-of-the-art archiving and dissemination system that—
(1) Provides a central location for later use of TA products, including curricula, audiovisual materials, Webinars, examples of practices that are promising or supported by evidence, and any other relevant TA products; and
(2) Is open and available to the public.
(d) Providing a minimum of two Webinars or video conferences over the course of the project to describe and disseminate information to the field about results, challenges, solutions, and practices that are promising or supported by evidence.
In meeting the requirements for paragraphs (a), (b), and (c) of this section, the Center either may develop new platforms or systems or may modify existing platforms or systems, so long as the requirements of this priority are met.
(a) Establish an advisory committee. To effectively implement the
(b) Establish one or more communities of practice
(c) Communicate, collaborate, and coordinate, on an ongoing basis, with other relevant Department-funded projects, as applicable; and
(d) Maintain ongoing communication with the RSA project officer and other RSA staff as required.
To be funded under this priority, applicants must meet the application requirements in this priority. RSA encourages innovative approaches to meet the following requirements:
(a) Demonstrate, in the narrative section of the application under “Significance of the Project,” how the proposed project will address the need for nationally certified sign language interpreters. To meet this requirement, the applicant must:
(1) Demonstrate knowledge of English/ASL competencies that novice interpreters must possess in order to enter and to complete an experiential learning program and, at the end of the program, to successfully obtain national certification;
(2) Demonstrate knowledge of practices that are promising or supported by evidence in training novice interpreters; and
(3) Demonstrate knowledge of practices that are promising or supported by evidence in providing experiential learning.
(b) Demonstrate, in the narrative section of the application under “Quality of Project Services,” how the proposed project will—
(1) Ensure equal access and treatment for members of groups that have historically been underrepresented based on race, color, national origin, gender, age, or disability in accessing postsecondary education and training;
(2) Identify the needs of intended recipients of training; and
(3) Ensure that project activities and products meet the needs of the intended recipients by creating materials in formats and languages that are accessible;
(4) Achieve its goals, objectives, and intended outcomes. To meet this requirement, the applicant must identify and provide—
(i) Measurable intended project outcomes;
(ii) Evidence of an existing Memorandum of Understanding or a Letter of Intent between the lead applicant, members of the consortium, other proposed training and TA providers, and other relevant partners to establish a consortium that includes a description of each proposed partner's anticipated commitment of financial or in-kind resources (if any), how each proposed provider's current and proposed activities align with those of the proposed project, how each proposed provider will be held accountable under the proposed structure, and evidence to demonstrate a working relationship between the applicant and its proposed partners and key stakeholders and other relevant groups; and
(iii) A plan for communicating, collaborating, and coordinating with an advisory committee; key staff in State VR agencies, such as State Coordinators for the Deaf; State and local partner programs; Registry of Interpreters for the Deaf, Inc.; RSA partners, such as the Council of State Administrators of Vocational Rehabilitation and the National Council of State Agencies for the Blind; and relevant programs within the Office of Special Education and Rehabilitative Services (OSERS).
(3) Use a conceptual framework to design experiential learning activities,
(4) Be based on current research and make use of practices that are promising or supported by evidence.
To meet this requirement, the applicant must describe—
(i) How the current research about adult learning principles and implementation science will inform the proposed TA; and
(ii) How the proposed project will incorporate current research and practices that are promising or supported by evidence in the development and delivery of its products and services.
(5) Develop products and provide services that are of high quality and sufficient intensity and duration to achieve the intended outcomes of the proposed project. To address this requirement, the applicant must describe its proposed activities to identify or develop the knowledge base for practices that are promising or supported by evidence in experiential learning for novice interpreters.
(6) Develop products and implement services to maximize the project's efficiency. To address this requirement, the applicant must describe—
(i) How the proposed project will use technology to achieve the intended project outcomes; and
(ii) With whom the proposed project will collaborate and the intended outcomes of this collaboration.
(c) In the narrative section of the application under “Quality of the Evaluation Plan,” include an evaluation plan for the project. To address this requirement, the applicant must describe—
(1) Evaluation methodologies, including instruments, data collection methods, and analyses that will be used to evaluate the project. Any proposed instruments must be valid and reliable, and the applicant must submit rationale to support the use of each instrument;
(2) Measures of progress in implementation, including the extent to which the project's activities and products have reached their target populations; intended outcomes or results of the project's activities in order to evaluate those activities; and how well the goals and objectives of the proposed project, as described in its logic model,
(3) How the evaluation plan will be implemented and revised, as needed, during the project. The applicant must designate at least one individual with sufficient dedicated time, experience in evaluation, and knowledge of the project to support the design and implementation of the evaluation. Tasks may include, but are not limited to, coordinating with the advisory committee and RSA to revise the logic model to provide for a more comprehensive measurement of implementation and outcomes, to reflect any changes or clarifications to the logic model discussed at the kick-off meeting, and to revise the evaluation design and instrumentation proposed in the grant application consistent with the logic model (
(4) The standards and targets for determining effectiveness;
(5) How evaluation results will be used to examine the effectiveness of implementation and progress toward achieving the intended outcomes; and
(6) How the methods of evaluation will produce quantitative and qualitative data that demonstrate whether the project activities achieved their intended outcomes.
(d) Demonstrate, in the narrative section of the application under “Adequacy of Project Resources,” how—
(1) The proposed project will encourage applications for employment from persons who are members of groups that have historically been underrepresented based on race, color, national origin, gender, age, or disability, as appropriate;
(2) The proposed key project personnel, consultants, and subcontractors have the qualifications and experience to provide experiential learning to novice interpreters and to achieve the project's intended outcomes;
(3) The applicant and any key partners have adequate resources to carry out the proposed activities; and
(4) The proposed costs are reasonable in relation to the anticipated results and benefits.
(e) Demonstrate, in the narrative section of the application under “Quality of the Management Plan,” how—
(1) The proposed management plan will ensure that the project's intended outcomes will be achieved on time and within budget. To address this requirement, the applicant must describe—
(i) Clearly defined responsibilities for key project personnel, consultants, and subcontractors, as applicable; and
(ii) Timelines and milestones for accomplishing the project tasks;
(2) Key project personnel and any consultants and subcontractors allocated to the project and how these allocations are appropriate and adequate to achieve the project's intended outcomes, including an assurance that such personnel will have adequate availability to ensure timely communications with stakeholders and RSA;
(3) The proposed management plan will ensure that the products and services provided are of high quality; and
(4) The proposed project will benefit from a diversity of perspectives, including the advisory committee, as well as other relevant groups in its development and operation.
(f) Address the following application requirements. The applicant must—
(1) Include, in Appendix A, a logic model that depicts, at a minimum, the goals, activities, outputs, and intended outcomes of the proposed project;
(2) Include, in Appendix A, a Memorandum of Understanding or a Letter of Intent between the lead applicant, members of the consortium, other proposed training and TA providers, and other relevant partners;
(3) Include, in Appendix A, a conceptual framework for the project;
(4) Include, in Appendix A, person-loading charts and timelines as applicable, to illustrate the management plan described in the narrative;
(5) Include, in the budget, attendance at the following:
(i) A one and one-half day kick-off meeting in Washington, DC, after receipt of the award;
(ii) An annual planning meeting in Washington, DC, with the RSA project officer and other relevant RSA staff during each subsequent year of the project period; and
(iii) A one-day intensive review meeting in Washington, DC, during the third quarter of the third year of the project period.
When inviting applications for a competition using one or more priorities, we designate the type of each priority as absolute, competitive preference, or invitational through a notice in the
This notice does not preclude us from proposing additional priorities, requirements, definitions, or selection criteria, subject to meeting applicable rulemaking requirements.
This notice does
As part of its continuing effort to reduce paperwork and respondent burden, the Department provides the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that: The public understands the Department's collection instructions, respondents can provide the requested data in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the Department can properly assess the impact of collection requirements on respondents.
This final priority contains information collection requirements that are approved by OMB under the National Interpreter Education program 1820-0018; this final priority does not affect the currently approved data collection.
Under Executive Order 12866, the Secretary must determine whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive Order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—
(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities in a material way (also referred to as an “economically significant” rule);
(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement 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 stated in the Executive order.
This final regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.
We have also reviewed this final regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—
(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;
(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and
(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.
Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”
We are issuing this final priority only on a reasoned determination that its benefits justify its costs. In choosing among alternative regulatory approaches, we selected those approaches that maximize net benefits. Based on the analysis that follows, the Department believes that this regulatory action is consistent with the principles in Executive Order 13563.
We also have determined that this regulatory action does not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions.
In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities.
Through this priority, experiential learning and TA will be provided to novice interpreters in order for them to achieve national certification. These activities will help interpreters to more effectively meet the communication needs of individuals who are deaf or hard of hearing and individuals who are deaf-blind. The training ultimately will improve the quality of VR services and the competitive integrated employment outcomes achieved by individuals with disabilities. This priority will promote the efficient and effective use of Federal funds.
You may also access documents of the Department published in the
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is finalizing a limited approval and limited disapproval of revisions to the Eastern Kern Air Pollution Control District (EKAPCD) portion of the California State Implementation Plan (SIP). These revisions concern volatile organic compounds (VOC) emitted from motor vehicle and mobile equipment refinishing operations. Under the authority of the Clean Air Act (CAA or the Act), this action simultaneously approves a local rule that regulates these emission sources and directs California to correct rule deficiencies.
This rule will be effective on August 24, 2016.
EPA has established docket number EPA-R09-OAR-2016-0105 for this action. Generally, documents in the docket for this action are available electronically at
Arnold Lazarus, EPA Region IX, (415) 972-3024,
Throughout this document, “we,” “us” and “our” refer to the EPA.
On April 15, 2016 (81 FR 22204), the EPA proposed a limited approval and limited disapproval of the following rule that was submitted for incorporation into the California SIP.
We proposed a limited approval because we determined that this rule improves the SIP and is largely consistent with the relevant CAA requirements. We simultaneously proposed a limited disapproval because some rule provisions conflict with section 110 and part D of the Act. These provisions include the following:
• Paragraph VI(A), “VOC Content Limits,” provides VOC limits for cavity wax, deadener, gasket/gasket sealing material, lubricating wax/compounds and trunk interior coatings. However, in conflict with long-standing guidance on enforceability such as discussed in the Bluebook, these terms are not defined in the rule.
Our proposed action contains more information on the basis for this rulemaking and on our evaluation of the submittal.
The EPA's proposed action provided a 30-day public comment period. During this period we received no comments.
No comments were submitted that change our assessment of the rule as described in our proposed action. Therefore, as authorized in sections 110(k)(3) and 301(a) of the Act, the EPA is finalizing a limited approval of the submitted rule. This action incorporates the submitted rule into the California SIP, including those provisions identified as deficient. As authorized under section 110(k)(3) and 301(a), the EPA is simultaneously finalizing a limited disapproval of the rule.
This final limited disapproval does not trigger sanctions or a federal implementation plan (FIP) clock. Sanctions will not be imposed under CAA 179(b) because the submittal of Rule 410.4A is discretionary (
In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the EKAPCD rule described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents available electronically through
Additional information about these statutes and Executive Orders can be found at
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 September 23, 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)).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Particulate matter, Reporting and recordkeeping requirements, Volatile organic compounds.
Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(c) * * *
(231) * * *
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(B) * * *
(
(447) * * *
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(
Environmental Protection Agency (EPA).
Final rule.
In this action, the Environmental Protection Agency (EPA) is determining that 60 days is insufficient time to complete the technical and other analyses and public notice-and-comment process required for our review of a petition submitted by the state of Connecticut pursuant to section 126 of the Clean Air Act (CAA). The petition requests that the EPA make a finding that the Brunner Island Steam Electric Station located in York County, Pennsylvania, emits air pollution that significantly contributes to nonattainment and interferes with maintenance of the 2008 ozone national ambient air quality standards (NAAQS) in Connecticut. Under section 307(d)(10) of CAA, the EPA is authorized to grant a time extension for responding to the petition if the EPA determines that the extension is necessary to afford the public, and the agency, adequate opportunity to carry out the purposes of the section 307(d)'s notice-and-comment rulemaking requirements. By this action, the EPA is making that determination. The EPA is therefore extending the deadline for acting on the petition to no later than January 25, 2017.
This final rule is effective on July 25, 2016.
The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2016-0347. All documents in the docket are listed on the
Ms. Gobeail McKinley, Office of Air Quality Planning and Standards (C504-04), U.S. EPA, Research Triangle Park, North Carolina 27709, telephone number (919) 541-5246, email:
This is a procedural action to extend the deadline for the EPA to respond to a petition from the state of Connecticut filed pursuant to CAA section 126(b). The EPA received the petition on June 1, 2016. The petition requests that the EPA make a finding under section 126(b) of the CAA that the Brunner Island Steam Electric Station located in York County, Pennsylvania is operating in a manner that emits air pollutants in violation of the provisions of section 110(a)(2)(D)(i)(I) of the CAA with respect to the 2008 ozone NAAQS.
Section 126(b) of the CAA authorizes states to petition the EPA to find that a major source or group of stationary sources in upwind states emits or would emit any air pollutant in violation of the prohibition of CAA section 110(a)(2)(D)(i)
Pursuant to CAA section 126(b), the EPA must make the finding requested in the petition, or must deny the petition, within 60 days of its receipt. Under CAA section 126(c), any existing sources for which the EPA makes the requested finding must cease operations within 3 months of the finding, except that the source may continue to operate if it complies with emission limitations and compliance schedules (containing increments of progress) that the EPA may provide to bring about compliance with the applicable requirements as expeditiously as practical but no later than 3 years from the date of the finding.
CAA section 126(b) further provides that the EPA must hold a public hearing on the petition. The EPA's action under section 126 is also subject to the procedural requirements of CAA section 307(d).
In addition, CAA section 307(d)(10) provides for a time extension, under certain circumstances, for a rulemaking subject to CAA section 307(d). Specifically, CAA section 307(d)(10) provides:
Each statutory deadline for promulgation of rules to which this subsection applies which requires promulgation less than six months after date of proposal may be extended to not more than six months after date of proposal by the Administrator upon a determination that such extension is necessary to afford the public, and the agency, adequate opportunity to carry out the purposes of the subsection.
CAA section 307(d)(10) may be applied to section 126 rulemakings because the 60-day time limit under CAA section 126(b) necessarily limits the period for promulgation of a final rule after proposal to less than 6 months.
In accordance with CAA section 307(d)(10), the EPA is determining that
This document is a final agency action, but may not be subject to the notice-and-comment requirements of the APA, 5 U.S.C. 553(b). The EPA believes that, because of the limited time provided to make a determination, the deadline for action on the CAA section 126 petition should be extended pursuant to section 307(d)(10) of CAA. Congress may not have intended a CAA section 307(d)(10) extension determination to be subject to notice-and-comment rulemaking. However, to the extent that this extension determination otherwise would require notice and opportunity for public comment, there is good cause within the meaning of 5 U.S.C. 553(b)(3)(B) not to apply those requirements here. Providing for notice and comment of this extension determination under section 307(d)(10) of CAA would be impracticable because of the limited time provided for making this determination, and would be contrary to the public interest because it would divert agency resources from the substantive review of the CAA section 126 petition.
This action is effective on July 25, 2016. Under the APA, 5 U.S.C. 553(d)(3), agency rulemaking may take effect before 30 days after the date of publication in the
This action is exempt from review by the Office of Management and Budget because it simply extends the date for the EPA to take action on a petition.
This action does not impose an information collection burden under the PRA. This good cause final action simply extends the date for the EPA to take action on a petition and does not impose any new obligations or enforceable duties on any state, local or tribal governments or the private sector. It does not contain any recordkeeping or reporting requirements.
This action is not subject to the RFA. The RFA applies only to rules subject to notice-and-comment rulemaking requirements under the APA, 5 U.S.C. 553, or any other statute. This rule is not subject to notice-and-comment requirements because the agency has invoked the APA “good cause” exemption under 5 U.S.C. 553(b).
This action does not contain any unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.
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. This good cause final action simply extends the date for the EPA to take action on a petition. Thus, Executive Order 13175 does not apply to this rule.
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 concern an environmental health risk or safety risk.
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
This rulemaking does not involve technical standards.
The EPA believes that this action is not subject to Executive Order 12898 (59 FR 7629, February 16, 1994) because it does not establish an environmental health or safety standard. This good cause final action simply extends the date for the EPA to take action on a petition and does not have any impact on human health or the environment.
This action is subject to the CRA, and the EPA will submit a rule report to
The statutory authority for this action is provided by sections 110, 126 and 307 of the CAA as amended (42 U.S.C. 7410, 7426 and 7607).
Under section 307(b)(1) of the CAA, judicial review of this final rule is available only by the filing of a petition for review in the U.S. Court of Appeals for the for the appropriate circuit by September 23, 2016. Under section 307(b)(2) of the CAA, the requirements that are the subject of this final rule may not be challenged later in civil or criminal proceedings brought by us to enforce these requirements.
Environmental protection, Administrative practices and procedures, Air pollution control, Electric utilities, Incorporation by reference, Intergovernmental relations, Sulfur dioxide.
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking final action to determine that the South Coast air quality planning area in California has attained the 1997 annual and 24-hour fine particle (PM
This rule is effective on August 24, 2016.
The EPA has established a docket for this action under Docket ID No. EPA-R09-OAR-2014-0708. All documents in the docket are listed on the
Wienke Tax, (415) 947-4192, or by email at
Throughout this document, wherever “we”, “us” or “our” are used, we mean the EPA.
On December 9, 2014 (79 FR 72999), the EPA proposed to determine that the Los Angeles-South Coast Air Basin (“South Coast”) nonattainment area had attained the 1997 annual and 24-hour national ambient air quality standards (NAAQS or “standards”) for fine particles (generally referring to particles less than or equal to 2.5 micrometers in diameter, PM
In our proposed rule, we explained that in making an attainment determination, the EPA generally relies on complete, quality-assured and certified data gathered at State and Local Air Monitoring Stations (SLAMS) and entered into the EPA's Air Quality System (AQS) database.
The EPA proposed the determination of attainment for the South Coast area based upon a review of the monitoring network operated by the South Coast Air Quality Management District (SCAQMD) and the data collected at the monitoring sites operating during the most recent three-year period from which data was available at the time of the proposed rule (
In conjunction with and based upon our proposed determination that the South Coast had attained the standard,
Please see the proposed rule for more detailed information concerning the PM
We noted in our proposed rule that, at that time, AQS included no PM
At the time of our proposed rule, the PM
With respect to the discontinued sites, SCAQMD has requested approval from the EPA to suspend monitoring at the Burbank and Riverside (Magnolia) sites until suitable replacement sites can be located.
With respect to the two newly-established near-road PM
With respect to the eligibility of data from collocated monitors for comparison with the NAAQS, our regulations provide that monitoring agencies must assess data from PM
In the South Coast, SCAQMD has designated the PM
With respect to the data, all four quarters for 2014 and 2015 have now been uploaded, and the SCAQMD has certified that 2014 and 2015 data are quality-assured.
The requirements in 40 CFR part 50, appendix L, section 8.3.6 state that post-sample conditioning and weighing shall not exceed 30 days. This refers to the amount of time between when the sample is collected and when the sample is post-weighed. This is commonly referred to as the “post-sample hold time requirement” and, per EPA guidance (“QA Handbook”), is considered a “critical criteria”.
As described in section 17.3.3 and appendix D of the QA Handbook, for PM
Unlike the data for 2014, however, the data collected during 2015 are complete (or nearly complete) for all four quarters from all monitors.
Lastly, we find further support for the conclusion that the South Coast has attained the 1997 PM
As shown in Table 1, basin-wide high-site PM
The EPA's proposed rule provided a 30-day public comment period. Upon request, we extended the comment period 14 days, from January 8th to January 22nd, 2015.
In support of their assertion, Health Advocates present annual average PM
Lastly, Health Advocates assert that, in light of 2014 data showing violations of the 1997 PM
First, CARB's AQMIS combines preliminary (real-time) data with official (historical) data. By their nature, preliminary data are subject to change and may be subject to adjustment, substitution or exclusion under applicable monitoring regulations. In this instance, the annual average PM
Second, as discussed in detail in section II of this document, a review of the only complete, quality-assured data available after the 2011-2013 period, that is, the 2015 PM
Lastly, with respect to reclassification of the South Coast to Serious, we note that the EPA has reclassified the South Coast from Moderate to Serious for the more stringent 2006 (24-hour) PM
Moreover, notwithstanding the suspension of attainment-related SIP requirements related to the
Health Advocates also cite a case pending in the Ninth Circuit Court of Appeals in which community and environmental groups are challenging the EPA's approval of the attainment demonstration for the 1997 PM
Health Advocates cite changes made by the EPA to the Agency's monitoring regulations to require states to establish near-road PM
The South Coast encompasses two such areas, the Los Angeles-Long Beach-Anaheim, CA CBSA and the Riverside-San Bernardino, CA CBSA. Given that both CBSAs exceed 2.5 million people, the first PM
Also, as noted in our proposed rule, the EPA's evaluation of whether the South Coast PM
Lastly, Health Advocates are correct that a lawsuit was filed in the Ninth Circuit Court of Appeals, in which near-road PM
In any event, on June 9, 2015, the court issued a memorandum denying the petition for review in the
For the reasons stated above, the EPA is taking final action to determine that the South Coast nonattainment area in California has attained the 1997 annual and 24-hour PM
In conjunction with and based upon our final determination that the South Coast has attained and is currently attaining the standard, the EPA is taking final action to determine that the obligation to submit any remaining attainment-related SIP revisions arising from classification of the South Coast as a Moderate nonattainment area under subpart 4 of part D (of title I of the Act) for the 1997 PM
Today's final action does not constitute a redesignation of the South Coast nonattainment area to attainment for the 1997 annual and 24-hour PM
If the South Coast nonattainment area continues to monitor attainment of the 1997 PM
This final action makes a determination of attainment based on air quality and suspends certain federal requirements, and thus, this action would not impose additional requirements beyond those imposed by state law. For this reason, the final action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide the EPA with the discretionary authority to address disproportionate human health or environmental effects with practical, appropriate and legally permissible methods under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this final action does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP obligations discussed herein do not apply to Indian Tribes, and thus this action will not impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 23, 2016. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review, nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (
Environmental protection, Air pollution control, Incorporation by reference, Nitrogen dioxide, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(g)
Environmental Protection Agency (EPA).
Direct final rule.
The Environmental Protection Agency (EPA) is taking direct final action to amend the National Emission Standards for Hazardous Air Pollutants for the Portland Cement Manufacturing Industry. This direct final rule provides, for a period of 1 year, an additional compliance alternative for sources that would otherwise be required to use an HCl CEMS to demonstrate compliance with the HCl emissions limit. This compliance alternative is needed due to the current unavailability of a calibration gas used for quality assurance purposes. This direct final rule also restores regulatory text requiring the reporting of clinker production and kiln feed rates that was deleted inadvertently.
This rule is effective on September 8, 2016 without further notice, unless the EPA receives significant adverse comment by August 24, 2016. If the EPA receives significant adverse comment, we will publish a timely withdrawal in the
Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2011-0817, to the
Ms. Sharon Nizich, Sector Policies and Programs Division (D243-02), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina, 27711; telephone number: (919) 541-2825; fax number: (919) 541-5450; and email address:
The EPA is publishing this direct final rule without a prior proposed rule because we view this as a noncontroversial action and do not anticipate significant adverse comment. However, in the “Proposed Rules” section of this
If the EPA receives significant adverse comment on all or a distinct portion of this direct final rule, we will publish a timely withdrawal in the
Categories and entities potentially regulated by this direct final rule include:
This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this direct final rule. To determine whether your facility is affected, you should examine the applicability criteria in 40 CFR 63.1340. If you have questions regarding the applicability of any aspect of this action
Do not submit information containing CBI to the EPA through
In response to a concern raised by a stakeholder regarding the availability of calibration gases for HCl continuous monitoring compliance, this direct final rule amends 40 CFR 63.1349(b)(6) of the performance testing requirements for HCl by adding an alternative method for performance testing. Under the current rule, the owner or operator of a kiln subject to the emission limits for HCl in 40 CFR 63.1343 may demonstrate compliance by one of the following methods:
• An owner or operator of a kiln may demonstrate compliance by operating a continuous emissions monitoring system (CEMS) meeting the requirements of performance specification 15 (PS-15), PS-18, or any other PS for HCl CEMS in appendix B to part 60, with compliance based on a 30-kiln operating day rolling average.
• If the kiln is controlled using a wet scrubber, tray tower, or dry scrubber, the owner or operator, as an alternative to using a CEMS, may demonstrate compliance with the HCl limit using one of two options, described below.
Under both options, a performance test must be conducted by the owner or operator using Method 321. Under the first option, while conducting the Method 321 performance test (note Method 321 is the HCl stack testing performance method required by this rule), the owner or operator simultaneously measures a control device parameter and establishes a site-specific parameter limit that will be continuously monitored to determine compliance. If the kiln is controlled using a wet scrubber or tray tower, the owner or operator would monitor the pressure drop across the scrubber and/or liquid flow rate and pH during the HCl performance test. If the kiln is controlled using a dry scrubber, the sorbent injection rate would be monitored during the performance test. Under the second option, the owner or operator may establish sulfur dioxide (SO
The current rule requires that if a source chooses to monitor HCl emissions using a CEMS, they must do so in accordance with PS-15, PS-18, or any other PS for HCl CEMS in appendix B to part 60 of this chapter. (See 40 CFR part 60 appendix B.) Quality assurance procedures for HCl CEMS require that they be capable of reading HCl concentrations that span a range of possible emission levels below as well as above expected HCl emission concentrations. These quality assurance procedures require the use of National Institute of Standards and Technology (NIST)-traceable calibration gases for HCl.
Following our decision to create PS-18 and Procedure 6 for HCl continuous monitoring in 2012, the EPA worked with NIST and commercial gas vendors on development of NIST-traceable HCl gas standards to support the PS-18 and Portland Cement Maximum Achievable Control Technology (MACT) rulemaking. While some of the low HCl concentration (<10 parts per million, or ppm) NIST-traceable gases have been available on a limited basis since 2013, the full range of HCl concentrations required to support all HCl emissions monitoring technologies (including integrated path that requires concentrations 100 times higher) are not widely available at this time.
The approach used by NIST in 2013 was to certify the Research Gas Material (RGM) cylinders as primary gas standards. These cylinders contain HCl gas and are provided to NIST by vendors for NIST certification, and subsequently used by the vendors as transfer standards to prepare the Gas Manufacturer Intermediate Standards (GMIS). The GMIS cylinders are then used to produce NIST-traceable gas cylinders that are sold commercially.
In addition, the commercial establishment of NIST-traceable gases is dependent on collaboration between NIST and the specialty gas vendors. There are a limited number of vendors providing the stable, accurate, low and high concentration cylinder gases to NIST to certify as RGMs. NIST is now receiving a regular supply of candidate RGM cylinders from these vendors and is beginning work on higher concentration HCl gas standards needed to support integrated path HCl monitors (IP-CEMS). Once the RGMs are available, the specialty gas vendors must complete a series of procedures to establish the certainty of their products which adds to the time to achieve wide commercial availability.
As a result, the EPA is providing, for a period of 1 year, an additional compliance alternative for sources that would otherwise be required to use an HCl CEMS. In this alternative, the HCl CEMS is still required to be installed and operated, but actual compliance with the HCl emissions limit is determined by a three run stack test. The HCl CEMS will still provide a continuous readout of HCl emissions, but because the CEMS will not be calibrated with the required NIST-traceable calibration gases, the HCl measurement is not considered to be sufficiently accurate on an absolute basis for compliance, but would be sufficient to indicate any relative change in HCl emissions occurring subsequent
Under this new, temporary alternative, the owner or operator would demonstrate initial compliance by conducting a performance test using Method 321 and would monitor compliance with an operating parameter limit through use of an HCl CPMS. For the HCl CPMS, the owner operator would use the average HCl CPMS indicated output, typically displayed as parts per million volume, wet basis HCl recorded at in-stack oxygen concentration during the HCl performance test to establish the operating limit. To determine continuous compliance with the operating limit, the owner or operator would record the indicated HCl CPMS output data for all periods when the process is operating and use all the HCl CPMS data, except data obtained during times of monitor malfunctions. Thus, continuous compliance with the operating limit would be demonstrated by using all valid hourly average data collected by the HCl CPMS for all operating hours to calculate the arithmetic average operating parameter in units of the operating limit (indicated ppm) on a 30-kiln operating day rolling average basis, updated at the end of each new kiln operating day. An exceedance of the kiln 30-day operating limit would trigger evaluation of the control system operation and resetting the operating limit based on a new correlation with performance testing. For kilns with inline raw mills, performance testing and monitoring HCl to establish the site specific operating limit must be conducted during both raw mill on and raw mill off conditions.
As is the case for the PM CPMS requirements (see 40 CFR 63.1349(b)(1)(i)), this alternative includes a scaling factor of 75 percent of the emission standard as a benchmark (2.25 parts per million volume, dry basis @ 7-percent oxygen). Sources that choose this option will conduct a Method 321 test to determine compliance with the HCl emissions standard and during this testing will also monitor their HCl CPMS output in indicated ppm to determine where their HCl CPMS output would intersect 75 percent of their allowed HCl emissions, and set their operating level at that ppm output. This scaling procedure alleviates re-testing concerns for sources that operate well below the emission limit and provides greater operational flexibility while assuring continuous compliance with the HCl emission standard. For sources whose Method 321 compliance tests place them at or above 75 percent of the emission standard, their operating limit is determined by the average of three Method 321 test runs (for sources with no inline raw mill) or the time weighted average of six Method 321 test runs (for kilns with inline raw mills). We believe that by adopting a scaling factor as well as the use of 30 days of averaged HCl CPMS measurements, the parametric limit in no way imposes a stringency level higher than the level of the HCl emissions standard and will avoid triggering unnecessary retests for many facilities, especially for the lower-emitting sources.
In addition to adding the interim testing and monitoring provisions for HCl, we are restoring a recordkeeping regulatory provision that was deleted inadvertently during one of the recent rule revisions. The provision in question is the former 40 CFR 63.1355(e). This provision relates to the recordkeeping requirements for clinker production and kiln feed rates. This requirement was added in the 2010 final amendments and was not removed or revised in subsequent amendments to the rule. This rulemaking restores this provision in the regulatory text to ensure that the regulated community has a clear understanding of the applicable compliance requirements.
Additional information about these statutes and Executive Orders can be found at
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 any new information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulation (40 CFR part 63, subpart RRR) and has assigned OMB control number 2060-0416. This action does not change the information collection requirements.
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. This action does not create any new requirements or burdens and no costs are associated with this direct final action.
This action does not contain an unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments or the private sector.
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. It will neither impose substantial direct compliance costs on federally recognized tribal governments, nor preempt tribal law. The EPA is aware of one tribally owned Portland cement facility currently subject to 40 CFR part 63, subpart LLL that will be subject to this direct final rule. However, the provisions of this direct final rule are not expected to impose new or substantial direct compliance costs on Tribal governments since the provisions in this direct final rule are
The EPA interprets Executive Order 13045 as applying 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 concern an environmental health risk or safety risk.
This action is not subject to Executive Order 13211 because it is not a significant regulatory action under Executive Order 12866.
This rulemaking does not involve technical standards.
The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). This action does not affect the level of protection provided to human health or the environment.
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).
Environmental protection, Administrative practice and procedures, Air pollution control, Hazardous substances, Intergovernmental relations, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Environmental Protection Agency is amending title 40, chapter I, part 63 of the Code of Federal Regulations (CFR) as follows:
42 U.S.C. 7401,
(b) * * *
(6) * * *
(v) As an alternative to paragraph (b)(6)(ii) of this section, the owner or operator may demonstrate initial compliance by conducting a performance test using Method 321 of appendix A to this part. You must also monitor continuous performance through use of an HCl CPMS according to paragraphs (b)(6)(v)(A) through (H) of this section. For kilns with inline raw mills, compliance testing and monitoring HCl to establish the site specific operating limit must be conducted during both raw mill on and raw mill off conditions.
(A) For your HCl CPMS, you must establish a 30 kiln operating day site-specific operating limit. If your HCl performance test demonstrates your HCl emission levels to be less than 75 percent of your emission limit (2.25 ppmvd @7% O
(
(
(
(B) Determine your operating limit as specified in paragraphs (b)(6)(i) or (iii) of this section. If your HCl performance test demonstrates your HCl emission levels to be below 75 percent of your emission limit, kilns with inline raw mills will use the time weighted average indicated HCl ppm concentration CPMS
(C) If the average of your three Method 321 compliance test runs (for kilns without an inline raw mill) or the time weighted average of your six Method 321 compliance test runs (for an kiln with an inline raw mill) is below 75 percent of your HCl emission limit, you must calculate an operating limit by establishing a relationship of the average HCl CPMS indicated ppm to the Method 321 test average HCl concentration using the HCl CPMS instrument zero, the average HCl CPMS indicated values corresponding to the three (for kilns without inline raw mills) or time weighted HCl CPMS indicated values corresponding to the six (for kilns with inline raw mills) compliance test runs, and the average HCl concentration (for kilns without raw mills) or average time weighted HCl concentration (for kilns with inline raw mills) from the Method 321 compliance test with the procedures in paragraphs (b)(6)(v)(C)(
(
(
(
(
(
(
(
(D) If the average of your HCl compliance test runs is at or above 75 percent of your HCl emission limit (2.25 ppmvd@7% O
(E) To determine continuous compliance with the operating limit, you must record the HCl CPMS indicated output data for all periods when the process is operating and use all the HCl CPMS data for calculations when the source is not out of control. You must demonstrate continuous compliance with the operating limit by using all quality-assured hourly average data collected by the HCl CPMS for all operating hours to calculate the arithmetic average operating parameter in units of the operating limit (ppmvw) on a 30 kiln operating day rolling average basis, updated at the end of each new kiln operating day. Use Equation 11f to determine the 30 kiln operating day average.
(F) If you exceed the 30 kiln operating day operating limit, you must evaluate the control system operation and re-set the operating limit.
(G) The owner or operator of a kiln with an inline raw mill and subject to limitations on HCl emissions must demonstrate initial compliance by conducting separate performance tests while the raw mill is on and while the raw mill is off. Using the fraction of time the raw mill is on calculate your HCl CPMS limit as a weighted average of the HCl CPMS indicated values measured during raw mill on and raw mill off compliance testing using Equation 11g.
(l) * * *
(4) If you monitor continuous performance through the use of an HCl CPMS according to paragraphs (b)(6)(v)(A) through (H) of § 63.1349, for any exceedance of the 30 kiln operating day HCl CPMS average value from the established operating limit, you must:
(i) Within 48 hours of the exceedance, visually inspect the APCD;
(ii) If inspection of the APCD identifies the cause of the exceedance, take corrective action as soon as possible and return the HCl CPMS measurement to within the established value; and
(iii) Within 30 days of the exceedance or at the time of the annual compliance test, whichever comes first, conduct an HCl emissions compliance test to determine compliance with the HCl emissions limit and to verify or reestablish the HCl CPMS operating
(iv) HCl CPMS exceedances leading to more than four required performance tests in a 12-month process operating period (rolling monthly) constitute a presumptive violation of this subpart.
(e) You must keep records of the daily clinker production rates and kiln feed rates.
Federal Communications Commission.
Final rule.
In this document, the Commission modifies its rules to permit program experimental radio licensees (program licensees) to experiment with radio frequency (RF)-based medical devices on certain restricted frequencies, if the medical device being tested is designed to comply with applicable Commission service rules. Adoption of this proposal facilitates access to spectrum that can be used under an experimental program license to improve the utility of this type of licensing scheme for those entities experimenting with RF-based medical devices, and thereby help to advance innovation in this area. This action will result in no harm to any qualified license applicant or licensee.
Effective August 24, 2016.
Rodney Small, Office of Engineering and Technology, 202-418-2452,
This is a summary of the Commission's Second Report and Order, ET Docket No. 10-236 and 06-155, FCC 16-86, adopted June 29, 2016, and released June 30, 2016. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street SW., Washington, DC 20554. The complete text of this document also may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc., 445 12th Street SW., Room, CY-B402, Washington, DC 20554. The full text may also be downloaded at:
People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to
This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13.
1. In 2013, the Commission established in the
2. The Regulatory Flexibility Act (RFA)
3. The Commission will send a copy of this Second Report and Order in a report to Congress and the Government Accountability Office pursuant to the Congressional Review Act,
4. Accordingly, IT IS ORDERED, that, pursuant to sections 301 and 303 of the Communications Act of 1934, as amended, 47 U.S.C. 301 and 303, and §§ 1.1 and 1.425 of the Commission's rules, 47 CFR 1.1, 1.425, this Second Report and Order IS ADOPTED.
5. IT IS FURTHER ORDERED that part 5 of the Commission's rules, 47 CFR part 5, IS AMENDED, as set forth in the Rule Changes. These revisions will be effective August 24, 2016.
6. IT IS FURTHER ORDERED that, if no applications for review are timely filed, this proceeding SHALL BE TERMINATED and the docket CLOSED.
Radio, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble the Federal Communications Commission amends 47 CFR part 5 as follows:
Secs. 4, 302, 303, 307, 336 48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 302, 303, 307, 336. Interpret or apply sec. 301, 48 Stat. 1081, as amended; 47 U.S.C. 301.
(a) Licensees may operate in any frequency band, including those above 38.6 GHz, except for frequency bands exclusively allocated to the passive services (including the radio astronomy service). In addition, licensees may not use any frequency or frequency band below 38.6 GHz that is listed in § 15.205(a) of this chapter.
(b) Exception: Licensees may use frequencies listed in § 15.205(a) of this chapter for testing medical devices (as defined in § 5.402(b) of this chapter), if the device is designed to comply with all applicable service rules in part 18; part 95, subpart H; or part 95, subpart I of this chapter.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish restricted area R-2306F in the vicinity of Laguna Army Airfield at Yuma Proving Ground, AZ. The proposed restricted area would allow the Department of the Army to maximize the existing fixed infrastructure to support hazardous test programs and segregate these activities from non-participating aircraft at Yuma Proving Ground (YPG). These programs include ground and airborne testing of non-eye-safe lasers, high energy radars and the development of unproven weapons systems. The restricted airspace would ensure the safe testing and evaluation of these programs without impacting non-participating aircraft and the general public.
Comments must be received on or before September 8, 2016.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, 1200 New Jersey Avenue SE., West Building Ground Floor, Room W12-140, Washington, DC 20590; telephone: 1 (800) 647-5527, or (202) 366-9826. You must identify FAA Docket No. FAA-2016-7055 and Airspace Docket No. 15-AWP-11, at the beginning of your comments. You may also submit comments through the Internet at
Paul Gallant, Airspace Policy Group, Office of Airspace Services, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone: (202) 267-8783.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.
This rulemaking is promulgated under the authority described in Subtitle VII, part A, subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish a restricted area at Yuma, AZ, to enhance aviation safety and accommodate essential Army testing requirements.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers (FAA Docket No. FAA-2016-7055 and Airspace Docket No. 15-AWP-11) and be submitted in triplicate to the Docket Office at the address listed above. You may also submit comments through the Internet at
Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2016-7055 and Airspace Docket No. 15-AWP-11.” The postcard will be date/time stamped and returned to the commenter.
All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the Internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person at the Docket Office (see
Yuma Proving Ground (YPG) is a Major Range and Test Facility Base that conducts the development and testing of emerging aviation weapon technologies. This testing includes both ground and air-to-ground propagation of non-eye-safe lasers, high power radars and developmental, unproven weapons systems. Testing includes the actual operation of these systems using various proven and unproven aircraft platforms. Due to the hazards of these systems, it is imperative that these activities be segregated within a restricted area. To safely and efficiently test and evaluate
The FAA is proposing an amendment to 14 CFR part 73 to establish a new restricted area, R-2306F, extending from the surface to 1,700 feet MSL, in the vicinity of Laguna Army Airfield at Yuma Proving Ground, AZ. The proposed area would be used for the testing of various hazardous systems including non-eye-safe lasers, high energy radars and the development of experimental weapons. Testing would include the operation of these systems from various aircraft platforms. Restricted airspace is required to effectively test these complex integrated systems without posing a hazard to non-participating aircraft and/or ground personnel. Proposed R-2306F would be completely contained over YPG-owned land. No supersonic flights would be conducted within the proposed airspace.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subjected to an environmental analysis in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” prior to any FAA final regulatory action.
Airspace, Prohibited areas, Restricted areas.
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 73 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
Bureau of the Census, Department of Commerce.
Proposed Criteria; Extension of Comment Period.
The Bureau of the Census (Census Bureau) is issuing this document to extend the comment period on the Proposed 2020 Census Residence Criteria and Residence Situations, which was published in the
Comments on the proposed criteria published on June 30, 2016 (81 FR 42577), must be received by September 1, 2016.
Direct all written comments regarding the Proposed 2020 Census Residence Criteria and Residence Situations to Karen Humes, Chief, Population Division, U.S. Census Bureau, Room 6H174, Washington, DC 20233; or Email [
Population and Housing Programs Branch, U.S. Census Bureau, 6H185, Washington, DC 20233, telephone (301) 763-2381; or Email [
The U.S. Census Bureau is committed to counting every person in the 2020 Census once, only once, and in the right place. The fundamental reason that the decennial census is conducted is to fulfill the Constitutional requirement (Article I, Section 2) to apportion the seats in the U.S. House of Representatives among the states. Thus, for a fair and equitable apportionment, it is crucial that the Census Bureau counts everyone in the right place during the decennial census.
The residence criteria are used to determine where people are counted during each decennial census. For more information on the Proposed 2020 Census Residence Criteria and Residence Situations (also referred to as the proposed “2020 Census Residence Rule and Residence Situations” in the text of the earlier document), please see the original document of proposed criteria and request for comment published in the
Because of the scope of the proposed criteria, and in response to individuals and organizations who have requested more time to review the proposed criteria, the Census Bureau has decided to extend the comment period for an additional 31 days. This document announces the extension of the public comment period to September 1, 2016.
Office of the Assistant Secretary for Community Planning and Development, HUD.
Notice; request for comments.
On July 31, 2012, HUD published an interim rule, for public comment, entitled “Homeless Emergency Assistance and Rapid Transition to Housing: Continuum of Care Program,” a program designed to address the critical problem of homelessness through a coordinated community-based process of identifying needs and building a system of housing and services to address those needs. HUD received 551 public comments on the interim rule. Approximately 42 of the public comments addressed the Continuum of Care formula, with the majority of these commenters seeking changes to the formula. With the interim rule now in place for 3 years, HUD seeks additional comment on the Continuum of Care formula.
Interested persons are invited to submit comments regarding this rule to the Regulations Division, Office of General Counsel, 451 7th Street SW., Room 10276, Department of Housing and Urban Development, Washington, DC 20410-0500. Communications must refer to the above docket number and title. There are two methods for submitting public comments. All submissions must refer to the above docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at
To receive consideration as public comments, comments must be submitted through one of the two methods specified above. Again, all submissions must refer to the docket number and title of the document.
Public Inspection of Public Comments. All properly submitted comments and communications submitted to HUD will be available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, an advance appointment to review the public comments must be scheduled by calling the Regulations Division at 202-708-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number through TTY by calling the Federal Relay Service at 800-877-8339. Copies of all comments submitted are available for inspection and downloading at
Norm Suchar, Director, Office of Special Needs Assistance Programs, Office of Community Planning and Development, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410-7000; telephone number 202-708-4300 (this is not a toll-free number). Hearing- and speech-impaired persons may access this number through TTY by calling the Federal Relay Service at 800-877-8339 (this is a toll-free number).
On July 31, 2012, at 77 FR 45422, HUD published in the
Section 427 of the McKinney Vento Act, as amended by the HEARTH Act, directs the Secretary to establish, by regulation, a funding formula that is based upon factors that are appropriate to allocate funds to meet the goals and objectives of the CoC program. As part of the interim rule, HUD codified the formula for establishing a CoC's Preliminary Pro Rata Need (PPRN formula) that had been used for many years prior to the interim rule to establish a CoC's PPRN. The PPRN formula is a combination of the formula used to award Emergency Solutions Grants (ESG) Program grant funds and Community Development Block Grant (CBDG) funds. Under the current PPRN formula, after a .2 percent set-aside for U.S. territories and insular areas, 75 percent of the total CoC allocation is distributed to ESG entitlement communities, generally comprised of large metropolitan cities and urban counties where homelessness is more concentrated, according to the CDBG formula. The remaining 25 percent of the CoC allocation is distributed to ESG non-entitlement communities according to the CDBG formula. Within this framework, the current CDBG formula is structured as a “dual formula” system. As set forth below, Formula A allocates funds to communities based on the following weighted factors: population, poverty, and overcrowding. Formula B assigns a different weighting scheme to an alternative menu of factors: population growth lag,
Pursuant to this dual formula system, HUD calculates the funding amounts for each jurisdiction under both Formulas A and B and assigns the larger of the two grant calculations, less a pro rata reduction to ensure the total amount allocated is within the amount appropriated for funding.
Section 427 of the McKinney Vento Act, as amended by the HEARTH Act also allows HUD to adjust a CoC's formula to ensure that the formula amount is sufficient to renew existing projects in each CoC for one year, which is known as the Annual Renewal Demand (ARD). In the FY 2015 Continuum of Care Program NOFA, and in several previous Continuum of Care Program NOFAs, the amount of funding that CoCs were eligible to receive was based primarily on their ARD and the PPRN formula had little impact on the amount they were eligible to apply for. Only for a minority of CoCs that had a PPRN that was larger than their ARD did the PPRN formula affect funding, and in these cases, it only affected the amount available for new projects. The PPRN formula would only have a more significant impact on CoC funding if the amount of funding available for the CoC program nationally is significantly larger than the amount needed to renew existing projects for one year.
Several stakeholders indicated that the existing PPRN formula was not representative of the number of individuals and families experiencing homelessness in their geographic area. Therefore, the interim rule specifically sought comment on the PPRN formula and the process for determining a CoC's maximum award amount. HUD solicited public comment through November 16, 2012 and of the 551 public comments that HUD received, approximately 42 public comments were directed to the PPRN formula. The majority of the comments on the PPRN formula were from western States, counties, and cities, and indicated that the CDBG formula was not the appropriate basis for the PPRN formula because the CDBG formula utilizes urban blight, as reflected in the age of housing stock, and population growth lag factors to allocate funds, which may measure community development needs generally, but are not specifically tailored to measure homelessness. Other commenters stated that they opposed reductions in funding for renewal projects.
As a result of the comments received, HUD has explored several alternative factors relevant to homelessness for potential inclusion in the PPRN formula and is re-opening the public comment period on the PPRN formula established in 24 CFR 578.17(a) of the interim rule for the purpose of seeking broader input on four proposed changes to the PPRN formula described in this section of the Notice before HUD selects the formula to include in the final rule. In developing the following proposals, HUD considered the many comments received in response to the formula in the interim rule, including those stating that the current formula utilizes factors that are not necessarily correlated with homelessness such as urban blight and population growth lag, and the request that the PPRN formula be based on updated factors that are intended to specifically measure homelessness.
In developing proposals for alternative factors to be included in the final formula, HUD sought to maintain the basic structure of the current PPRN formula, while investigating alternative data sources and measures to be included as formula factors. The characteristics of the data sources for the four proposed alternative formula factors were determined to be consistent with HUD's 2001 Report to Congress
Before considering any new factors, HUD reviewed the factors included in the existing PPRN formula—overcrowding, poverty, pre-1940s housing, and population—and their correlation to rates of homelessness. HUD conducted Pearson's Correlation analyses
Broadly speaking, the potential formula factors chosen by HUD for analysis, and described more fully below, represent important community-level determinants of homelessness identified in the research literature. Together, these factors represent three related categories of known determinants of homelessness: housing market factors, economic conditions, and housing affordability (which combines housing market and economic factors). Other categories of known community-level determinants of homelessness, such as climate factors or the robustness and quality of a community's safety net of social services for vulnerable populations, were found to lack the type of data
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After reviewing the simple (bivariate) Pearson's correlations between rates of homelessness and each of the above factors, HUD considered many different options for leveraging a combination of these factors into a formula that would better capture pro-rata need than any single factor on its own. HUD considered various factor weights as representing the relative magnitude of each factor's effect on need within a particular formula combination. The proposed weights represent what HUD views to be reasonable options for weighting the relative magnitudes of factors within each formula option based on its simple correlational analyses and the theoretical relationships between sets of factors and homelessness documented in established research literature.
HUD seeks comment on the four formula options set out in the table below. HUD believes these options are better correlated with rates of homelessness at the local level than the current PPRN formula.
None of these proposed PPRN formula options include the 75%/25% split between entitlement and non-entitlement communities that is a part of the current formula. In addition to comments on the proposed formulas set forth above, HUD welcomes comments on factors and corresponding weights that will target formula funding to urban and rural areas most in need of homeless assistance, whether by ESG entitlement designation, population density considerations, or otherwise. In addition, HUD welcomes comments on whether any of the four proposed options should be combined into a dual or multi-formula system similar to the dual calculation system utilized under the current PPRN formula.
HUD has posted, on its Web site, a listing of each CoC's existing PPRN amount (as determined using the existing formula) as well as the amount that each CoC's PPRN would be using each of these four proposed formulas. HUD has also published a tool on its
Additionally, HUD acknowledges that each of the proposed formula options will result in the PPRN amounts of some CoCs decreasing. To prevent against a CoC losing a substantial amount of PPRN in a given year, HUD is considering including language that would prevent a CoC from losing more than a certain portion of their PPRN. For example, if a CoC's current PPRN amount is $2.5 million and a newly adopted PPRN formula would result in the CoC's PPRN amount being reduced to $1.7 million, HUD could consider language that would provide the CoC with more than $1.7 million in PPRN, but less than $2.5 million. HUD seeks comment on this proposal and also, what the appropriate amount or portion to be protected should be.
HUD welcomes other comments on how the CoC formula may be improved.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to change the operating schedule that governs the US41 bridge, mile 16.0 over the Keweenaw Waterway between the towns of Houghton and Hancock, Michigan. The Michigan Department of Transportation (MDOT) has requested a review of the current operating schedule of the drawbridge due to a lack of openings during the early morning hours. They have also requested to expand and modify the current winter operating schedule.
Comments and related material must reach the Coast Guard on or before August 24, 2016.
You may submit comments identified by docket number USCG-2016-0582 using Federal eRulemaking Portal at
See the “Public Participation and Request for Comments” portion of the
If you have questions on this proposed rule, call or email Mr. Lee D. Soule, Bridge Management Specialist, U.S. Coast Guard; telephone 216-650-5408, email
MDOT has requested to change the operating schedule of the US41 bridge at mile 16.0. The US41 bridge is the only crossing over the Keweenaw Waterway and connects the towns of Houghton and Hancock, Michigan. The current operating schedule has been in place for approximately 31 years and the use of the waterway has significantly changed, prompting the request to modify the current regulation.
Keweenaw Peninsula is the northernmost part of Michigan's Upper Peninsula projecting into Lake Superior. The Keweenaw Waterway runs northwesterly to southeasterly and separates the peninsula from the mainland making the US41 bridge the only bridge crossing for residents and visitors to the peninsula.
The Keweenaw Waterway is used by recreational, commercial, inspected and uninspected passenger, and towing vessels. The US41 bridge is a vertical lift type drawbridge and provides a horizontal clearance of 250 feet, a vertical clearance of 103 feet in the fully open position, a vertical clearance of 7 feet in the closed position, and a vertical clearance of 35 feet in the intermediate position. The US41 bridge is a bi-level bridge originally designed with the upper level providing access for automobiles and the lower level providing access for rail, oversized vehicles, and snowmobiles.
The rail service to the peninsula has been discontinued and oversized vehicles must provide advance notice to the state before traveling over the road to the peninsula. Most recreational and commercial vessel traffic, including passenger vessel services, end prior to November 15 each year and do not resume services until after May 7 due to the formation of ice in the waterway. Large commercial freighter vessels do not routinely pass through the Keweenaw Waterway.
The current regulation, 33 CFR 117.635, requires the bridge to operate with a 24-hour advance notice for openings from January 1 through March 15 each year. From March 16 through December 31 the bridge opens on signal at all times.
This rule proposes to amend 33 CFR 117.635 in accordance with the below described changes. The table below shows total bridge opening data provided by MDOT, from April 16 to December 14, between the hours of midnight and 4 a.m., for the past 6 years.
This proposed rule would allow the bridge to operate with at least a 2-hour advance notice for openings from April 15 through December 14 between the hours of midnight and 4 a.m. During these hours no bridge tender will be required at the bridge. The bridge will be placed in the intermediate position during this 4-hour time period providing a vertical clearance of 35 feet. Vessels requiring a full bridge opening will still be able to obtain an opening with a 2-hour advance notice. Vessels may also go around the peninsula to avoid passing through the bridge.
The table below shows the total bridge opening data provided by MDOT, between December 15 and April 15, for the past 5 years.
This proposed rule would allow the bridge to operate with at least a 12-hour advance notice for openings from December 15 through April 14. During these hours no bridge tender will be required at the bridge. Vessels may also go around the peninsula to avoid passing under the bridge.
At all other times, the bridge will continue to open on signal.
We developed this proposed rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on these statutes and Executive Orders and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget.
This regulatory action determination is based on the infrequent requests for openings and the ability of vessels to still transit the bridge given advanced notice. Additionally, vessels may go around the peninsula.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. While some owners or operators of vessels intending to transit the bridge may be small entities, for the reasons stated in section IV.A above this proposed rule would not have a significant economic impact on any vessel owner or operator.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule will not result in such an expenditure, we do discuss the effects of this proposed rule elsewhere in this preamble.
We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This proposed rule simply promulgates the operating regulations or procedures for drawbridges. Normally such actions are categorically excluded from further review, under figure 2-1, paragraph (32)(e), of the Instruction.
Under figure 2-1, paragraph (32)(e), of the Instruction, an environmental analysis checklist and a categorical exclusion determination are not required for this rule. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this notice, and all public comments, are in our online docket at
Bridges.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05-1; Department of Homeland Security Delegation No. 0170.1.
The draw of the US41 bridge, mile 16.0 between Houghton and Hancock, shall open on signal; except that from April 15 through December 14, between midnight and 4 a.m., the draw shall be placed in the intermediate position and open on signal if at least 2 hours notice is given. From December 15 through April 14 the draw shall open on signal if at least 12 hours notice is given.
Copyright Royalty Board, Library of Congress.
Proposed rule.
The Copyright Royalty Judges publish for comment proposed regulations that set rates and terms applicable during the period beginning January 1, 2018, and ending December 31, 2022, for the section 115 statutory license for making and distributing phonorecords of nondramatic musical works.
Comments and objections, if any, are due no later than August 24, 2016.
The proposed rule is posted on the agency's Web site (
Kimberly Whittle, Attorney Advisor, by telephone at (202) 707-7658, or by email at
Section 115 of the Copyright Act, title 17 of the United States Code, requires a copyright owner of a nondramatic musical work to grant a license (also known as the “mechanical” compulsory license) to any person who wants to make and distribute phonorecords of that work, provided that the copyright owner has allowed phonorecords of the work to be produced and distributed, and that the licensee complies with the statute and regulations. In addition to the production or distribution of physical phonorecords (compact discs, vinyl, cassette tapes, and the like), section 115 applies to digital transmissions of phonorecords, including permanent digital downloads and ringtones.
Chapter 8 of the Copyright Act requires the Copyright Royalty Judges (Judges) to conduct proceedings every five years to determine the rates and terms for the section 115 license. 17 U.S.C. 801(b)(1), 804(b)(4). Accordingly, the Judges commenced the current proceeding in January 2016, by publishing notice of the commencement and a request that interested parties submit petitions to participate.
The Judges received petitions to participate in the current proceeding from Amazon Digital Services, Inc.; Apple, Inc.; American Society of Composers, Authors and Publishers (ASCAP); Broadcast Music, Inc. (BMI); Church Music Publishers Association; David Powell; Deezer S.A.; Digital Media Association (DiMA); Gear Publishing Co; GEO Music Group; Google, Inc.; Music Reports, Inc.; Nashville Songwriters Association International; National Music Publishers Association; Harry Fox Agency; Omnifone Group Limited; Pandora Media, Inc.; Recording Industry Association of America, Inc. (RIAA); Rhapsody International, Inc.; Songwriters of North America; Sony Music Entertainment; SoundCloud Limited; Spotify USA Inc.; Universal Music Group (UMG); and Warner Music Group (WMG).
The Judges gave notice to all participants of the three-month negotiation period required by 17 U.S.C. 803(b)(3) and directed that, if the participants were unable to negotiate a settlement, they should submit Written Direct Statements no later than October 3, 2016. On June 15, 2016, the Judges received a motion stating that several participants
The settlement proposes “that the royalty rates and terms presently set forth in 37 C.F.R. Part 385 Subpart A should be continued for the rate period at issue in the Proceeding, with one minor conforming update, namely, that an outdated cross reference in section 385.4 regarding statements of account be updated, and that the continued rates
Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to adopt rates and terms negotiated by “some or all of the participants in a proceeding at any time during the proceeding” provided they are submitted to the Judges for approval. This section provides that Judges shall provide notice and an opportunity to comment on the agreement to (1) those that would be bound and (2) participants in the proceeding that would be bound by the terms, rates, or other determination set by the agreement.
If the Judges adopt rates and terms reached pursuant to a negotiated settlement, those rates and terms are binding on all copyright owners of musical works and those using the musical works in the activities described in the proposed regulations.
In publishing the parties' proposed rates and terms, the Judges are making the requested change in the cross reference because it is clearly outdated. The text of the section it refers to merely says “reserved.” In addition, the Judges propose adding the dates of the five-year period to the “General” section in order to specify the applicable dates of the rates and terms.
In the event the Judges determine not to adopt the proposed regulations for all copyright owners of musical works licensed under section 115 for the making or distributing of physical or digital phonorecords, the parties have proposed the following revised definition of
Licensee is Capitol Christian Music Group, Inc., Capitol Records, LLC, UMG Recordings, Inc., Warner Music Inc., any of their respective successors, and any entity controlling, controlled by, or under common control with any such entity, when it has obtained a compulsory license under 17 U.S.C. 115, and the implementing regulations, to make and distribute phonorecords of a nondramatic musical work, including by means of a digital phonorecord delivery.
The Judges solicit comments on whether they should adopt the proposed regulations, including the change in the cross reference, as statutory rates and terms relating to the making and distribution of physical or digital phonorecords of nondramatic musical works for the participants that submitted the Motion. In addition, the Judges seek comment on whether they should apply the rates and terms in the partial settlement to all copyright owners and licensees and whether they should specify the five-year period in the regulation.
Comments and objections must be submitted no later than August 24, 2016.
Interested members of the public must submit comments to only
Copyright, Phonorecords, Recordings.
For the reasons set forth in the preamble, the Copyright Royalty Judges propose to amend 37 CFR part 385 as follows:
17 U.S.C. 115, 801(b)(1), 804(b)(4).
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to amend the National Emission Standards for Hazardous Air Pollutants for the Portland Cement Manufacturing Industry. In the “Rules and Regulations” section of this
Written comments must be received by August 24, 2016.
Submit your comments, identified by Docket ID No. EPA-HQ-
Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or withdrawn. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (
Ms. Sharon Nizich, Sector Policies and Programs Division (D243-02), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-2825; fax number: (919) 541-5450; and email address:
This document proposes to take action on amendments to the National Emission Standards for Hazardous Pollutants for the Portland Cement Manufacturing Industry. We have published a direct final rule to amend 40 CFR part 63, subpart LLL by correcting an inadvertent error and revising the testing and monitoring requirements for HCl in the “Rules and Regulations” section of this
If we receive no adverse comment, we will not take further action on this proposed rule. If we receive adverse comment on a distinct portion of the direct final rule, we will withdraw that portion of the rule and it will not take effect. In this instance, we would address all public comments in any subsequent final rule based on this proposed rule.
If we receive adverse comment on a distinct provision of the direct final rule, we will publish a timely withdrawal in the
The regulatory text for this proposal is identical to that for the direct final rule published in the “Rules and Regulations” section of this
Categories and entities potentially regulated by this proposed rule include:
This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this proposed rule. To determine whether your facility is affected, you should examine the applicability criteria in 40 CFR 63.1340. If you have any questions regarding the applicability of any aspect of this this action to a particular entity, consult either the air permitting authority for the entity or your EPA Regional representative as listed in 40 CFR 63.13.
For a complete discussion of the administrative requirements applicable to this action, see the direct final rule in the “Rules and Regulations” section of this
Environmental Protection Agency (EPA).
Notification of submission to the Secretary of Agriculture.
This document notifies the public as required by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) that the EPA Administrator has forwarded to the Secretary of the United States Department of Agriculture (USDA) a draft regulatory document concerning the certification of pesticide applicators rule revisions. The draft regulatory document is not available to the public until after it has been signed and made available by EPA.
See Unit I. under
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2011-0183, is available at
Michelle Arling, Field and External Affairs Division (7506P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; telephone number: (703) 308-5891; email address:
Section 25(a)(2)(B) of FIFRA requires the EPA Administrator to provide the Secretary of USDA with a copy of any draft final rule at least 30 days before signing it in final form for publication in the
No. This document is merely a notification of submission to the Secretary of USDA. As such, none of the regulatory assessment requirements apply to this document.
Environmental protection, Agricultural worker safety, Applicator competency, Pesticide safety training, Pesticide worker safety, Pesticides and pests, Restricted use pesticides.
Forest Service, USDA.
Notice of intent to prepare an environmental impact statement.
The Forest Service proposes to undertake motorized travel management planning to designate roads, trails, and areas open to public motorized vehicle use on the six districts of the Pike and San Isabel National Forests (PSI), pursuant to 36 CFR part 212, subpart B. The proposed road and trail environmental impact statement (EIS) evaluation and record of decision (ROD) will determine which roads and trails will be designated or re-designated for public motorized use and published on future motor vehicle use maps (MVUMs), as described in subpart B of the Travel Management Final Rule, dated November 9, 2005. The PSI's MVUMs display all roads and motorized trails open to the public for motorized use. This action is in direct response to the PSI MVUM settlement agreement (hereafter referred to as the settlement agreement), which is the culmination of a multi-year lawsuit brought against the Forest Service by The Wilderness Society, Quiet Use Coalition, Wildlands CPR, Center for Native Ecosystems and Great Old Broads for Wilderness. The Cimarron and Comanche National Grasslands, which are administered in conjunction with the Pike and San Isabel National Forests, will not be included in this EIS.
The Forest Service is seeking comments from individuals, organizations, and local, state, and federal agencies that may be interested in or affected by the proposed action (described below). Comments may pertain to the nature and scope of the environmental, social, and economic issues, and possible alternatives related to the development of the travel management plan and EIS. Scoping notices have been sent to potentially affected persons and those that have expressed a continued interest in this project. Other interested individuals, organizations, or agencies may have their names added to the mailing list for this project at any time by submitting a request to the PSI Forest Planner, John Dow at 719-553-1476 (
Comments concerning the scope of the analysis must be received by September 8, 2016. The scoping comment period commences on NOI publication date and continues for 45 days thereafter. The draft environmental impact statement is expected in early spring of 2018 and the final environmental impact statement is expected in early 2019.
Written comments concerning this notice should be addressed to Travel Management, Pike/San Isabel National Forests, 2840 Kachina Dr., Pueblo, CO 81008. Comments may also be sent via email to
All comments, including names and addresses when provided, are placed in the record and will be available for public inspection and copying. The public may inspect comments after they are received and summarized at the travel planning Web page at:
John Dow, Forest Planner at 719-553-1476. Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 p.m., Eastern Time, Monday through Friday.
The current PSI Land and Resource Management Plan (Forest Plan) dates back to 1984. Many changes have occurred since that time, in terms of type and volume of use, general population pressures, urban interface development, and other factors. Further, the improved precision of field measurements (
The settlement agreement referenced herein identified a subset of MVUM designated roads and trails that were being managed contrary to Forest Plan direction. Alternatives A and B represent the issues addressed in the settlement agreement. Alternatives C and D represent issues from the settlement agreement along with revisions to certain rotues as a result of the PSI's Travel Analysis Process (TAP).
The action's purpose and need is to improve management of motor vehicle use via evaluation of motorized route designations on National Forest System (NFS) lands within the PSI in compliance with 36 CFR parts 212, 251, 261, and 295, and all other applicable laws. The action also needs to consider effects on resources with the objective of minimizing the impacts resulting from the designated motorized trails and areas pursuant to 36 CFR 212.55(b), and to analyze the environmental impacts of all motorized routes proposed for designation, including routes in the baseline contested by the Plaintiffs as identified in the settlement agreement. The designation of roads and trails must balance the needs of the broad range of recreationalists and other legitimate users of the national forests with the need to protect natural and cultural resources.
In accordance with 36 CFR part 212, the proposed action will analyze current designated motorized roads and trails, minus certain specific routes described in the settlement agreement. The proposed action will also analyze some priority proposed changes to the transportation system, including the inclusion of some current Forest Order transportation prohibitions associated with roads and trails on NFS lands, and including appropriate road and trail seasonal restrictions within the PSI.
Per the settlement agreement dated November 16, 2015, the PSI transportation system that is open to public motorized travel consists of a total of 2,004 miles of NFS roads and 507 miles of NFS trails. That November 16, 2015 system is documented through USFS databases, spreadsheets, and reports, along with spatial data, and can be accessed from the travel planning Web page at:
Four preliminary alternatives have been identified and are described briefly below.
• 2010 Pikes Peak Ranger District MVUM
• 2010 South Park Ranger District MVUM
• 2010 Salida Ranger District MVUM
• 2012 Leadville Ranger District MVUM
• 2012 San Carlos Ranger District MVUM
• 2013 South Platte Ranger District MVUM
The Responsible Official is Erin Connelly, Forest and Grasslands Supervisor, Pike and San Isabel National Forests and Cimarron and Comanche National Grasslands, 2840 Kachina Dr., Pueblo CO. 81008.
The Forest Service will conduct scoping meetings to solicit comments from the public and interested parties on this proposed action.
Meetings are currently scheduled from 5:00 p.m. to 7:00 p.m. at the following locations and dates:
Additional information will be posted on the travel planning Web page at:
• Is the proposal consistent with the Pike and San Isabel National Forests and Cimarron and Comanche National Grasslands Resource Management Plan (PSICC RMP)?
• If the proposal is not consistent with the PSICC RMP, what is the scope and scale of any required amendments?
• What alternative or combination of alternatives ensures the PSI follows the requirements for multiple uses outlined in the Multiple Use Sustained Yield Act of 1960.
• What alternative or combination of alternatives best represents the designated motorized roads and trails network taking into consideration the travel management rule motorized trails and road designation criterion outlined in 36 CFR 212.55.
Preliminary issues identified by the PSI are:
(1) Resource damage caused by user-created (non-NFS) routes;
(2) Potential lost recreational opportunities from route closures;
(3) Safety concerns on mixed-use (highway legal and non-highway legal) routes.
Forest Service, USDA.
Notice of meeting.
The North Gifford Pinchot Resource Advisory Committee (RAC) will meet in Salkum, Washington. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act. RAC information can be found at the following Web site:
The meeting will be held on Tuesday, August 16, 2016, from 10:00 a.m. to 4:00 p.m.
All RAC meetings are subject to cancellation. For status of meeting prior
The meeting will be held at the Salkum Timberland Library, Community Room, 2480 U.S. Highway 12, Salkum, Washington.
Written comments may be submitted as described under
Gala Miller, RAC Coordinator, by phone at 360-891-5014 or via email at
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday through Friday.
The purpose of the meeting is to:
1. Elect the Chair and Vice Chair of the RAC,
2. Review submitted Title II project proposals, and
3. Make project recommendations for Title II funding.
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should request in writing by August 10, 2016, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and requests for time for oral comments must be sent to Gala Miller, RAC Coordinator, 10600 NE 51st Circle, Vancouver, Washingtonn 98682; by email to
Office of Procurement and Property Management, Departmental Management, Department of Agriculture.
Notice of public availability of FY 2015 Services Contracts Inventories.
In accordance with Section 743 of Division C of the Consolidated Appropriations Act of 2010 (Pub. L. 111-117), Department of Agriculture is publishing this notice to advise the public of the availability of the FY 2015 Services Contracts Inventory. This inventory provides information on FY 2015 service contract actions over $25,000. The information is organized by function to show how contracted resources are distributed throughout the agency. The inventory has been developed in accordance with guidance issued on November 5, 2010, by the Office of Management and Budget's Office of Federal Procurement Policy (OFPP). OFPP's guidance is available at
The Department of Agriculture has posted its inventory and a summary of the inventory on the Office of Procurement and Property Management homepage at the following link:
Crandall Watson, Office of Procurement and Property Management, at (202) 720-7529, or by mail at OPPM, MAIL STOP 9304, U.S. Department of Agriculture, 1400 Independence Avenue SW., Washington, DC 20250-9303. Please cite “2015 Service Contract Inventory” in all correspondence.
Rural Business-Cooperative Service, USDA.
Notice.
This Notice announces the solicitation of applications for funds available under the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (the Program) to provide guaranteed loans to fund the development, construction, and Retrofitting of commercial scale biorefineries using Eligible technology and of Biobased product manufacturing facilities that use technologically new commercial scale processing and manufacturing equipment to convert Renewable chemicals and other biobased outputs of biorefineries into end-user products, on a commercial scale.
With this Notice, the Agency is announcing two separate application cycles, as is provided which are established in accordance with 7 CFR 4279.260(b), with application closing dates of 4:30 p.m. Eastern Daylight Time, October 3, 2016, and 4:30 p.m. Eastern Daylight Time, April 3, 2017.
Applications must be received in the USDA Rural Business-Cooperative Service, Energy Division no later than 4:30 p.m. Eastern Daylight Time of the application closing date to compete for program funds. Any application received after 4:30 p.m. Eastern Daylight Time of the application closing date will be considered for the subsequent application cycle, provided that funding is available.
Applications and forms may be obtained from:
• USDA, Rural Business-Cooperative Service, Energy Division, Attention: Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program, 1400 Independence Avenue SW., STOP 3225, Washington, DC 20250-3225.
• Agency Web site:
Todd Hubbell, Rural Business-Cooperative Service, Energy Division, Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program, USDA, 1400 Independence Avenue SW., Mail Stop 3225, Washington, DC 20250-3225. Telephone: 202-690-2516. Email:
In accordance with the Paperwork Reduction Act of 1995, the information collection requirements associated with the Program, as covered in this Notice, have been approved by the Office of Management Budget (OMB) under OMB Control Number 0570-0065.
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The Agency's application process is divided into two phases. Phase 1 applications will provide information needed to determine Lender, Borrower, and Project eligibility; preliminary economic and technical feasibility; and the priority score of the application. Based on the priority score ranking, the Agency will invite applicants whose Phase 1 applications receive higher priority scores to submit Phase 2 applications. Phase 2 application materials will be submitted as the Project planning and engineering are finalized and will include information such as: Environmental compliance information, technical report, financial model, and the Lender's credit evaluation. Phase 1 applications must contain the information required in the Agency's Application Guide and in accordance with 7 CFR 4279.261.
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This notice also includes the solicitation of applications for funds available under the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program to specifically fund Biobased product manufacturing. The 2014 Farm Bill added Biobased product manufacturing to the Program and provided for up to 15 percent of the mandatory funds for fiscal years 2014 and 2015 to be used to support facilities producing Biobased products for end use. The 2014 Farm Bill provides the definition of “Biobased product manufacturing,” which the Agency has incorporated into the subsequent interim rule (see 7 CFR 4279.202). This definition requires that the Biobased product manufacturing facility use Renewable chemicals and other biobased outputs of biorefineries as inputs and also requires that the Borrower use technologically new commercial scale processing and manufacturing equipment and required facilities. The facility must produce end-user products.
The eligibility requirements for prospective Lenders and Borrowers will not change from those listed above for the Program, generally. For Biobased product manufacturing Projects, the Eligible Project requirement is modified to reflect that eligible Projects will use technologically new commercial scale processing and manufacturing equipment and required facilities to convert Renewable chemicals and other biobased outputs of biorefineries into end-user products on a commercial scale.
Additionally, for purposes of Biobased product manufacturing Projects, only for purposes of technical review, technical reports need to address only the technologically new commercial scale processing and manufacturing equipment and required facilities.
The application processing procedures will remain the same for Biobased product manufacturing projects as for the projects described above.
For applications submitted under this Notice, “local owner” is defined as an individual who owns any portion of an eligible Biorefinery and whose primary residence is located within 100 miles of the Biorefinery.
In lieu of the criteria listed in 7 CFR 4279.266, Biobased product manufacturing Projects will be scored using the criteria listed below:
(a) Whether the Borrower has established a market for the manufactured Biobased product, as applicable. A maximum of 16 points can be awarded. Points to be awarded will be determined as follows:
(1) Degree of commitment of contracted sales agreements. A maximum of 6 points will be awarded.
(i) If the Borrower has signed contracts for purchase for greater than 50 percent of the dollar value of manufactured Biobased product, 6 points will be awarded.
(ii) If the Borrower has signed letters of intent to enter into contracted sales agreements, or comparable documentation, for the purchase for greater than 50 percent of the dollar value of the manufactured Biobased product, or combination of signed contracts or agreements and letters of intent or comparable documentation, 4 points will be awarded.
(iii) If the Borrower has signed letters of interest to enter into contracted sales agreements, or comparable documentation, for the purchase for greater than 50 percent of the dollar value of the manufactured Biobased product, or combination of signed contracts, letters of intent or comparable documentation, 2 points will be awarded.
(2) Duration of contracted sales agreements. A maximum of 6 points will be awarded.
(i) If the Borrower commits to enter into contracted sales agreements prior to loan closing for purchase for greater than or equal to 50 percent of the dollar value of manufactured Biobased product for the period not less than the loan term, 6 points will be awarded.
(ii) If the Borrower commits to enter into contracted sales agreements prior to loan closing for purchase for greater than or equal to 50 percent of the dollar value of the manufactured Biobased product for the period not less than 5 years but less than the term of the loan, 4 points will be awarded.
(iii) If the Borrower commits to enter into contracted sales agreements prior to loan closing for purchase for greater than or equal to 50 percent of the dollar value of the manufactured Biobased product for the period not less than 1 year but less than 5 years, 2 points will be awarded.
(3) Financial strength of the contracted sales agreement counterparty. A maximum of 4 points will be awarded.
(i) If the Borrower commits to enter into contracted sales agreements prior to loan closing for purchase for greater than or equal to 50 percent of the dollar value of the manufactured Biobased product with a counterparty with a corporate credit rating not less than AA, Aa2, or equivalent, 4 points will be awarded.
(ii) If the Borrower commits to enter into contracted sales agreements prior to loan closing for purchase for greater than or equal to 50 percent of the dollar value of the manufactured Biobased product with a counterparty with a corporate credit rating less than AA, Aa2, or equivalent, but not less than
(iii) If the Borrower commits to enter into contracted sales agreements prior to loan closing for purchase for greater than or equal to 50 percent of the dollar value of the manufactured Biobased product with a counterparty with a corporate credit rating less than A−, or A3, or equivalent, but not less than BBB−, or Baa3, or equivalent, 1 point will be awarded.
(b) Whether the area in which the Borrower proposes to place the Project, defined as the area that will supply the Renewable chemicals and other biobased outputs of biorefineries to the proposed Project, has any other similar facilities. A maximum of 5 points can be awarded. Points to be awarded will be determined as follows:
(1) If the area that will supply the Renewable chemicals and other biobased outputs of biorefineries to the proposed Project does not have any other similar facilities, 5 points will be awarded.
(2) If there are other similar facilities located within the area that will supply the renewable chemicals and other biobased outputs of biorefineries to the proposed Project, 0 points will be awarded.
(c) Whether the Borrower is proposing to use Renewable chemicals and other biobased outputs of biorefineries not previously used in the Biobased product manufacturing. A maximum of 10 points can be awarded. Points to be awarded will be determined as follows:
(1) If the Borrower proposes to use Renewable chemicals and other biobased outputs of biorefineries previously used in the manufacture of a Biobased product in a commercial facility, 0 points will be awarded.
(2) If the Borrower proposes to use Renewable chemicals and other biobased outputs of biorefineries not previously used in the manufacture of a Biobased product in a commercial facility, 10 points will be awarded.
(d) Whether the Borrower is proposing to work with producer associations or cooperatives. A maximum of 5 points can be awarded. Points to be awarded will be determined as follows:
(1) If at least 50 percent of the dollar value of Renewable chemicals and other biobased outputs of biorefineries to be used by the proposed Project will be supplied by producer associations and cooperatives or biorefineries supplied by producer associations and cooperatives, 5 points will be awarded.
(2) If at least 30 percent of the dollar value of Renewable chemicals and other biobased outputs of biorefineries to be used by the proposed Project will be supplied by producer associations and cooperatives or biorefineries supplied by producer associations and cooperatives, 3 points will be awarded.
(e) The level of financial participation by the Borrower, including support from non-Federal Government sources and private sources. A maximum of 20 points can be awarded. Points to be awarded will be determined as follows:
(1) If the sum of the loan amount requested and other direct Federal funding is less than or equal to 50 percent of total Eligible project costs, 20 points will be awarded.
(2) If the sum of the loan amount requested and other direct Federal funding is greater than 50 percent but less than or equal to 55 percent of total Eligible project costs, 16 points will be awarded.
(3) If the sum of the loan amount requested and other direct Federal funding is greater than 55 percent but less than or equal to 60 percent of total Eligible project costs, 12 points will be awarded.
(4) If the sum of the loan amount and other direct Federal funding is greater than 60 percent but less than or equal to 65 percent of total Eligible project costs, 8 points will be awarded.
(5) If the sum of the loan amount and other direct Federal funding is greater than 65 percent but less than or equal to 70 percent of total Eligible project costs, 4 points will be awarded.
(f) Whether the Borrower has established that the adoption of the manufacturing process proposed in the application will have a positive effect on three impact areas: resource conservation (
(1) If process adoption will have a positive impact on any one of the three impact areas (resource conservation, public health, or the environment), 3 points will be awarded.
(2) If process adoption will have a positive impact on two of the three impact areas, 6 points will be awarded.
(3) If process adoption will have a positive impact on all three impact areas, 10 points will be awarded.
(g) Whether the Borrower can establish that, if adopted, the technology proposed in the application will not have any economically significant negative impacts on existing manufacturing plants or other facilities that use Renewable chemicals and other biobased outputs of biorefineries. A maximum of 5 points can be awarded. Points to be awarded will be determined as follows:
(1) If the Borrower has failed to establish, through an independent third-party Feasibility study, that the production technology proposed in the application, if adopted, will not have any economically significant negative impacts on existing manufacturing plants or other facilities that use similar Renewable chemicals and other biobased outputs of biorefineries, 0 points will be awarded.
(2) If the Borrower has established, through an independent third-party Feasibility study, that the production technology proposed in the application, if adopted, will not have any economically significant negative impacts on existing manufacturing plants or other facilities that use Renewable chemicals and other biobased outputs of biorefineries, 5 points will be awarded.
(h) The potential for rural economic development. A maximum of 10 points can be awarded. Points to be awarded will be determined as follows:
(1) If the Project is located in a Rural Area, 5 points will be awarded.
(2) If the Project creates jobs through direct employment with an average wage that exceeds the county median household wages where the Project will be located, 5 points will be awarded.
(i) The level of local ownership of the facility proposed in the application. For the purposes of this Notice, a Local owner is defined as “An individual who owns any portion of an eligible Advanced biofuel Biorefinery and whose primary residence is located within 100 miles of the Biorefinery.” A maximum of 5 points can be awarded. Points to be awarded will be determined as follows:
(1) If Local owners have an ownership interest in the facility of more than 20 percent but less than or equal to 50 percent, 3 points will be awarded.
(2) If Local owners have an ownership interest in the facility of more than 50 percent, 5 points will be awarded.
(j) Whether the Project can be replicated. A maximum of 10 points can be awarded. Points to be awarded will be determined as follows:
(1) If the Project can be commercially replicated regionally (
(2) If the Project can be commercially replicated nationally, 10 points will be awarded.
(k) If the Project uses a particular technology, system, or process that is not currently operating at commercial scale as of October 1 of the fiscal year for which the funding is available; October 1, 2016, 5 points will be awarded.
(l) The Administrator can award up to a maximum of 10 bonus points:
(1) To ensure, to the extent practical, there is diversity in the types of Projects approved for loan guarantees to ensure as wide a range as possible technologies, products, and approaches are assisted in the program portfolio; and
(2) To applications that promote partnerships and other activities that assist in the development of new and emerging technologies for the development of Renewable chemicals and other biobased outputs of biorefineries, so as to, as applicable, promote resource conservation, public health, and the environment; diversify markets for agricultural and forestry products and agriculture waste material; and create jobs and enhance the economic development of the rural economy. No additional information regarding partnerships is detailed in this Notice.
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For general questions about this Notice, please contact Todd Hubbell, Rural Business-Cooperative Service, Energy Division, Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program, U.S. Department of Agriculture, 1400 Independence Avenue SW., Mail Stop 3225, Washington, DC 20250-3225. Telephone: 202-690-2516. Email:
The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital status, familial or parental status, sexual orientation, or all or part of an individual's income is derived from any public assistance program, or protected genetic information in employment or in any program or activity conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or employment activities.)
If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found online at
Individuals who are deaf, hard of hearing or have speech disabilities and you wish to file either an EEO or program complaint please contact USDA through the Federal Relay Service at (800) 877-8339 or (800) 845-6136 (in Spanish).
Persons with disabilities, who wish to file a program complaint, please see information above on how to contact us by mail directly or by email. If you require alternative means of communication for program information (
Rural Business-Cooperative Service and Rural Utilities Service, USDA.
Notice.
This Notice announces the solicitation of applications for funds available under the Repowering Assistance Program to encourage the use of renewable biomass as a replacement fuel source for fossil fuels used to provide process heat or power in the operation of eligible biorefineries. To be eligible for payments, biorefineries must have been in existence on or before June 18, 2008.
Applications will be accepted from July 25, 2016 through October 24,
Applications and forms may be obtained from:
• USDA, Rural Business-Cooperative Service, Energy Division, Attention: Repowering Assistance Program, 1400 Independence Avenue SW., Room 6901-S, STOP 3225, Washington, DC 20250-3225.
• Agency Web site:
For further information on this payment program, please contact Fred Petok, USDA, Rural Business-Cooperative Service, Energy Division, 1400 Independence Avenue SW., Room 6901-S, STOP 3225, Washington, DC 20250-3225. Telephone: 202-690-0784. Email:
In accordance with the Paperwork Reduction Act of 1995, the information collection requirements associated with the Section 9004 Repowering Assistance Program, as covered in this Notice, have been approved by the Office of Management and Budget (OMB) under OMB Control Number 0570-0066.
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In accordance with 7 CFR 4288.10(a)(2), corporations and entities with more than one biorefinery can submit an application for only one of their biorefineries. However, if a corporation or entity has multiple biorefineries located at the same location, the entity may submit an application that covers such biorefineries provided the heat and power used in the multiple biorefineries are centrally produced.
The applicant must demonstrate that it has sufficient funds or has obtained commitments for sufficient funds to complete the repowering project, taking
The Agency will evaluate projects based on the cost, cost-effectiveness, and capacity of projects to reduce fossil fuels used.
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For further information about this Notice, please contact Fred Petok, USDA, Rural Business—Cooperative Service, Energy Division, 1400 Independence Avenue SW., Room 6868, STOP 3225, Washington, DC 20250-3225. Telephone: 202-690-0784. Email:
The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital status, familial or parental status, sexual orientation, or all or part of an individual's income is derived from any public assistance program, or protected genetic information in employment or in any program or activity conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or employment activities.)
If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found online at
Individuals who are deaf, hard of hearing or have speech disabilities and you wish to file either an EEO or program complaint please contact USDA through the Federal Relay Service at (800) 877-8339 or (800) 845-6136 (in Spanish).
Persons with disabilities, who wish to file a program complaint, please see information above on how to contact us by mail directly or by email. If you require alternative means of communication for program information (
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (the Department) is rescinding its administrative review of the countervailing duty (CVD) order on utility scale wind towers (wind towers) from the People's Republic of China (PRC) for the period January 1, 2015, through December 31, 2015.
Effective July 25, 2016.
Kristen Johnson, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-4793.
The Department initiated an administrative review of the CVD order on wind towers from the PRC with respect to 50 companies for the period January 1, 2015, through December 31, 2015, based on a request by the petitioner, the Wind Tower Trade Coalition (WTTC).
Pursuant to 19 CFR 351.213(d)(1), the Department will rescind an administrative review in whole or in part, if the party that requested a review withdraws its request within 90 days of the date of publication of notice of initiation of the requested review. In this case, WTTC withdrew its request for review within the 90-day deadline, and no other party requested an administrative review of the CVD order. Therefore, in accordance with 19 CFR 351.213(d)(1), we are rescinding this review in its entirety.
The Department will instruct U.S. Customs and Border Protection (CBP) to assess CVDs on all entries of wind towers from the PRC during the period January 1, 2015, through December 31, 2015, at rates equal to the cash deposit of estimated CVDs required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). The Department intends to issue appropriate assessment instructions to CBP 15 days after the publication of this notice.
This notice serves as a final reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305.(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a violation which is subject to sanction.
This notice is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act of 1930, as amended, and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
On June 24, 2016, the Department of Commerce (“Department”) published in the
Effective June 24, 2016.
Bob Palmer or Ryan Mullen, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-9068 or (202) 482-5260, respectively.
On June 24, 2016, the Department published in the
A ministerial error, as defined in section 751(h) of the Tariff Act of 1930, as amended (“the Act”), includes “errors in addition, subtraction, or other arithmetic function, clerical errors resulting from inaccurate copying, duplication, or the like, and any other type of unintentional error which the administering authority considers ministerial.”
Taian Modern alleges that, although the Department stated in the
After comparing the ministerial error allegations against record evidence, in accordance with section 751(h) of the Act, we agree that we inadvertently used only Taian Modern's sales of geogrids in our calculation instead of total sales. This resulted in a significant error within the meaning of section 735(e) of the Act and 19 CFR 351.224(g). We have corrected this error in this notice.
BOSTD Qingdao alleges that in the
Next, with respect to the electricity for LTAR calculation, BOSTD Qingdao alleges that the Department made an error in addition. In the Department's calculation worksheet, the benefit totals from each of the various electricity categories was hardcode rather than a sum formula. The actual sum of BOSTD Qingdao's electricity benefit is considerably less.
After comparing the ministerial error allegations against record evidence, in accordance with section 751(h) of the Act, we agree with BOSTD Qingdao that we inadvertently included BOSTD Qingdao's purchases of imported polypropylene in the LTAR calculation. We also agree that we miscalculated the benefit total of the various electricity categories. These errors resulted in a significant error within the meaning of section 735(e) of the Act and 19 CFR 351.224(g). We have corrected these errors in this notice.
We are amending the preliminary countervailing duty rates for Taian Modern and BOSTD Qingdao pursuant to 19 CFR 351.224(e). In addition, the preliminary “All-Others” Rate was based on the simple average of the subsidy rates calculated for Taian Modern and BOSTD Qingdao. Thus, we are also amending the “All-Others” rate to account for the change in Taian Modern's and BOSTD Qingdao's subsidy rate. Specifically, we are calculating the simple average of the corrected subsidy rate for Taian Modern and BOSTD Qingdao. Further, correcting Taian Modern's “Provision of Polypropylene for LTAR” error and BOSTD Qingdao's “Provision of Electricity for LTAR” calculation leads to a change in the adverse facts available rate.
These amended preliminary results are published in accordance with sections 751(h) and 777(i)(1) of the Act.
International Trade Administration, U.S. Department of Commerce.
Notice of establishment of the U.S. Department of Commerce Trade Finance Advisory Council.
The Secretary of Commerce (Secretary), having determined that it is in the public interest in connection with the performance of duties imposed on the Department of Commerce by law, and with the concurrence of the General Services Administration, announces establishment of the U.S. Department of Commerce Trade Finance Advisory Council. This advisory committee will advise the Secretary on the development of strategies and programs that would help expand access to trade finance for U.S. exporters. The establishment of this federal advisory committee is necessary to provide input to the Secretary regarding the challenges faced by U.S. exporters in accessing capital, innovative solutions that can address these challenges, and recommendations on strategies that can expand access to finance and educate U.S. exporters on available resources. This notice also requests nominations for membership.
Nominations for members must be received on or before 5 p.m. EDT Monday, August 22, 2016.
All nominations should be submitted to the Executive Secretary, Advisory Council on Trade Finance to: Ericka Ukrow, Office of Finance and Insurance Industries, U.S. Department of Commerce Trade Finance Advisory Council, Room 18002, 1401 Constitution Avenue NW., Washington, DC 20230, or via email at:
Ericka Ukrow, Office of Finance and Insurance Industries, Room 18002, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-0405, email:
The U.S. Department of Commerce Trade Finance Advisory Council (TFAC) is established in accordance with the provisions of the Federal Advisory Committee Act, as amended, 5 U.S.C. App., to advise the Secretary on matters relating to private sector trade financing for U.S. exporters. The Department affirms that the creation of the TFAC is necessary and in the public interest.
The Department of Commerce, International Trade Administration, Office of Finance and Insurance Industries, is accepting nominations for membership on the TFAC. The TFAC functions solely as an advisory committee. The TFAC shall advise the Secretary in identifying effective ways to help expand access to finance for U.S. exporters, especially small- and medium-sized enterprises (SMEs), and their foreign buyers.
The TFAC shall provide a necessary forum to facilitate the discussion between a diverse group of stakeholders such as banks, non-bank financial institutions, other trade finance related organizations, and exporters to gain a better understanding regarding current challenges facing U.S. exporters in accessing finance.
The TFAC shall draw upon the experience of its members in order to obtain ideas and suggestions for innovative solutions to these challenges.
The TFAC shall develop recommendations on programs or activities that the Department of Commerce could incorporate as part of its export promotion and trade finance education efforts.
The TFAC shall report to the Secretary on its activities and recommendations. In creating its reports, the TFAC should: (1) Evaluate current credit conditions and specific financing challenges faced by U.S. exporters, especially SMEs, and their foreign buyers, (2) examine other noteworthy issues raised by stakeholders represented by the membership, (3) identify emerging financing sources that would address these gaps, and (4) recommend specific activities by which these recommendations could be incorporated and implemented.
The TFAC shall consist of no more than twenty members appointed by the Secretary. Members may be drawn from:
• U.S. companies that are exporters of goods and services;
• U.S. commercial banks that provide trade finance products, cross-border payment services, or foreign exchange solutions;
• Non-bank U.S. financial institutions that provide trade finance products, cross-border payment services, or foreign exchange solutions;
• Associations that represent: (a) U.S. exporters and SMEs; and (b) U.S. commercial banks or non-bank financial institutions or other professionals that facilitate international trade transactions;
• U.S. companies or entities whose business includes trade-finance-related activities or services;
• U.S. scholars, academic institutions, or public policy organizations with expertise in global business, trade finance, and international banking related subjects; and
• Economic development organizations and other U.S. regional, state and local governmental and non-governmental organizations whose missions or activities include the analysis, provision, or facilitation of trade finance products/services.
Membership shall include a broad range of companies and organizations in terms of products and services, company size, and geographic location of both the source and destination of trade finance. Members will be selected based on their ability to carry out the objectives of the TFAC, in accordance with applicable Department of Commerce guidelines, in a manner that
Members, with the exception of those from academia and public policy organizations, serve in a representative capacity, representing their own views and interests and those of their particular sector, not as Special Government Employees. The members from academia and public policy organizations serve as experts and therefore are Special Government Employees (SGEs), pursuant to 18 U.S.C. 202, and will be required to comply with certain ethics laws and rules, including filing a Confidential Financial Disclosure form. Additionally, a member serving as an expert must not be a Federally Registered Lobbyist.
Prospective nominees should designate the capacity in which they are applying to serve and identify either their area of expertise or the U.S. industry sector they wish to represent. Members of the TFAC will not be compensated for their services or reimbursed for their travel expenses. Appointments to the TFAC shall be made without regard to political affiliation.
Each member shall be appointed for a term of two years and will serve at the pleasure of the Secretary. The Secretary may at his/her discretion reappoint any member to an additional term or terms, provided that the member proves to work effectively on the TFAC and his/her knowledge and advice are still needed.
The TFAC chair and vice chair or vice chairs shall be selected from the members of the TFAC by the Assistant Secretary for Industry & Analysis after consulting with the members. Their term of service will not exceed the duration of the current charter term and they may be reselected for additional periods should the charter be renewed and should they remain on the TFAC.
Members will not be paid for their engagement in the performance of their duties as members of the Council. Members will not receive per diem and travel expenses.
The Department of Commerce will consider nominations of all qualified individuals to ensure that the TFAC includes representatives of the viewpoints and members with the areas of subject matter expertise noted above (see “Structure, Membership and Operation”). Individuals may nominate themselves or other individuals, and a company, institution, trade association, or organization may nominate a qualified representative for membership on the TFAC.
Nominations shall state that the nominee is willing to serve as a member of the TFAC. All nomination packages should include the following information for each nominee: (1) Name and title of the individual requesting consideration. (2) Nominations shall state that the nominee is willing to serve as a member of the TFAC. The potential candidate's personal resume and short biography (less than 300 words). (3) A brief statement describing how the potential candidate will contribute to the work of the TFAC based on his/her unique experience and perspective (not to exceed 100 words). (4) All relevant contact information, including mailing address, fax, email, phone number, and support staff information where relevant. (5) An affirmative statement that the potential candidate meets all eligibility criteria, including an affirmative statement that the potential candidate is not required to register as a foreign agent under the Foreign Agents Registration Act of 1938, as amended.
In addition, for a potential candidate to serve in a representative capacity: (a) A sponsor letter on the sponsoring entity's letterhead containing a brief statement of why the potential candidate should be considered for membership on the TFAC. This sponsor letter should also address the potential candidate's experience and leadership related to trade finance; (b) A brief description of the company, institution, trade association, or organization to be represented and its business activities and export market(s) served, if applicable; (c) Information regarding the ownership and control of the sponsoring entity, including the stock holdings as appropriate; and (d) The sponsoring entity's size (number of employees and annual sales), place of incorporation, product or service line, major markets in which the entity operates, and the entity's export or import experience.
In addition, for a potential candidate to serve as an expert: A statement that the potential candidate is not a Federally registered lobbyist and that the potential candidate understands that, if appointed, the potential candidate will not be allowed to continue to serve as a Committee member if the potential candidate becomes a Federally registered lobbyist.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Based on affirmative final determinations by the Department of Commerce (“Department”) and the International Trade Commission (“ITC”), the Department is issuing a countervailing duty order on certain corrosion-resistant steel products (“corrosion-resistant steel”) from India, Italy, Republic of Korea (“Korea”), and the People's Republic of China (“PRC”).
Effective July 25, 2016.
Myrna Lobo at (202) 482-2371 (the Republic of Korea); Emily Halle at (202) 482-0176 (the People's Republic of China); Matt Renkey at (202) 482-2312 (India); Robert Palmer at (202) 482-9068 (Italy); AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
In accordance with sections 705(d) of the Tariff Act of 1930, as amended (“Act”), on June 2, 2016, the Department published its affirmative final determinations that countervailable subsidies are being provided to producers and exporters of corrosion-resistant steel from India, Italy, Korea, and the PRC.
The products covered by this investigation are certain corrosion-resistant steel products. For a complete description of the scope of the order,
In accordance with sections 705(b)(1)(A)(i) and 705(d) of the Act, the ITC has notified the Department of its final determinations that the industry in the United States producing corrosion-resistant steel is materially injured by reason of subsidized imports of corrosion-resistant steel from India, Italy, Korea, and the PRC, and that critical circumstances do not exist with respect to imports of subject merchandise from Italy, Korea, and the PRC that are subject to the Department's affirmative critical circumstances finding, in part. Therefore, in accordance with section 705(c)(2) of the Act, we are publishing these countervailing duty orders.
As a result of the ITC's final determinations, in accordance with section 706(a) of the Act, the Department will direct U.S. Customs and Border Protection (“CBP”) to assess, upon further instruction by the Department, countervailing duties on unliquidated entries of corrosion-resistant steel from India, Italy, Korea, and the PRC entered, or withdrawn from warehouse, for consumption on or after November 6, 2015, the date on which the Department published its preliminary countervailing duty determinations in the
In accordance with section 706 of the Act, the Department will direct CBP to reinstitute the suspension of liquidation of corrosion-resistant steel from India, Italy, Korea, and the PRC, effective on the date of publication of the ITC's notice of final determinations in the
With
This notice constitutes the countervailing duty orders with respect to corrosion-resistant steel from Italy, India, Korea, and the PRC pursuant to section 706(a) of the Act. Interested parties may contact the Department's Central Records Unit, Room B8024 of the main Commerce Building, for copies of an updated list of countervailing duty orders currently in effect.
These orders are issued and published in accordance with section 706(a) of the Act and 19 CFR 351.211(b).
The products covered by this order are certain flat-rolled steel products, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys, whether or not corrugated or painted, varnished, laminated, or coated with plastics or other non-metallic substances in addition to the metallic coating. The products covered include coils that have a width of 12.7 mm or greater, regardless of form of coil (
(1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above, and
(2) where the width and thickness vary for a specific product (
Steel products included in the scope of this order are products in which: (1) iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:
Unless specifically excluded, products are included in this scope regardless of levels of boron and titanium.
For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (“IF”)) steels and high strength low alloy (“HSLA”) steels. IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum.
Furthermore, this scope also includes Advanced High Strength Steels (“AHSS”) and Ultra High Strength Steels (“UHSS”), both of which are considered high tensile strength and high elongation steels.
Subject merchandise also includes corrosion-resistant steel that has been further processed in a third country, including but not limited to annealing, tempering painting, varnishing, trimming, cutting, punching and/or slitting or any other processing that would not otherwise remove the merchandise from the scope of the order if performed in the country of manufacture of the in-scope corrosion resistant steel.
All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of this order unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of this order:
• Flat-rolled steel products either plated or coated with tin, lead, chromium, chromium oxides, both tin and lead (“terne plate”), or both chromium and chromium oxides (“tin free steel”), whether or not painted, varnished or coated with plastics or other non-metallic substances in addition to the metallic coating;
• Clad products in straight lengths of 4.7625 mm or more in composite thickness and of a width which exceeds 150 mm and measures at least twice the thickness; and
• Certain clad stainless flat-rolled products, which are three-layered corrosion-resistant flat-rolled steel products less than 4.75 mm in composite thickness that consist of a flat-rolled steel product clad on both sides with stainless steel in a 20%-60%-20% ratio.
The products subject to the order are currently classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) under item numbers: 7210.30.0030, 7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0091, 7210.49.0095, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, and 7212.60.0000.
The products subject to the order may also enter under the following HTSUS item numbers: 7210.90.1000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060, 7217.90.5090, 7225.91.0000, 7225.92.0000, 7225.99.0090, 7226.99.0110, 7226.99.0130, 7226.99.0180, 7228.60.6000, 7228.60.8000, and 7229.90.1000.
The HTSUS subheadings above are provided for convenience and customs purposes only. The written description of the scope of the order is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Based on affirmative final determinations by the Department of Commerce (the “Department”) and the International Trade Commission (the “ITC”), the Department is issuing antidumping duty orders on certain corrosion-resistant steel products from India, Italy, the People's Republic of China (“PRC”), the Republic of Korea (“Korea”), and Taiwan. In addition, the Department is amending its final determinations of sales at less-than-fair-value (“LTFV”) from India and Taiwan, as a result of ministerial errors.
Effective July 25, 2016.
Julia Hancock or Susan Pulongbarit at (202) 482-1394 and (202) 482-4031, respectively (Italy), Kabir Archuletta at (202) 482-2593 (India); Elfi Blum or Lingjun Wang (Korea) at (202) 482-0197 or (202) 482-2316, respectively; Nancy Decker or Andrew Huston at (202) 482-0196 or (202) 482-4261, respectively (PRC); or Shanah Lee or Paul Stolz at (202) 482-6386 and (202) 482-4474, respectively (Taiwan), AD/CVD Operations, Enforcement and Compliance, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
In accordance with sections 735(d) and 777(i)(1) of the Tariff Act of 1930, as amended (the “Act”), and 19 CFR 351.210(c), on June 2, 2016, the Department published its affirmative final determinations in the LTFV investigations of certain corrosion-resistant steel products from India, Italy, Korea, the PRC, and Taiwan.
The products covered by these orders are certain flat-rolled steel products, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys, whether or not corrugated or painted, varnished, laminated, or coated with plastics or other non-metallic substances in addition to the metallic coating. The products covered include coils that have a width of 12.7 mm or greater, regardless of form of coil (
(1) Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above, and
(2) where the width and thickness vary for a specific product (
Steel products included in the scope of these orders are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:
• 2.50 percent of manganese, or
• 3.30 percent of silicon, or
• 1.50 percent of copper, or
• 1.50 percent of aluminum, or
• 1.25 percent of chromium, or
• 0.30 percent of cobalt, or
• 0.40 percent of lead, or
• 2.00 percent of nickel, or
• 0.30 percent of tungsten (also called wolfram), or
• 0.80 percent of molybdenum, or
• 0.10 percent of niobium (also called columbium), or
• 0.30 percent of vanadium, or
• 0.30 percent of zirconium
For example, specifically included in this scope are vacuum degassed, fully stabilized (commonly referred to as
Furthermore, this scope also includes Advanced High Strength Steels (AHSS) and Ultra High Strength Steels (UHSS), both of which are considered high tensile strength and high elongation steels.
Subject merchandise also includes corrosion-resistant steel that has been further processed in a third country, including but not limited to annealing, tempering, painting, varnishing, trimming, cutting, punching and/or slitting or any other processing that would not otherwise remove the merchandise from the scope of the orders if performed in the country of manufacture of the in-scope corrosion resistant steel.
All products that meet the written physical description, and in which the chemistry quantities do not exceed any one of the noted element levels listed above, are within the scope of these orders unless specifically excluded. The following products are outside of and/or specifically excluded from the scope of these orders:
• Flat-rolled steel products either plated or coated with tin, lead, chromium, chromium oxides, both tin and lead (“terne plate”), or both chromium and chromium oxides (“tin free steel”), whether or not painted, varnished or coated with plastics or other non-metallic substances in addition to the metallic coating;
• Clad products in straight lengths of 4.7625 mm or more in composite thickness and of a width which exceeds 150 mm and measures at least twice the thickness; and
• Certain clad stainless flat-rolled products, which are three-layered corrosion-resistant flat-rolled steel products less than 4.75 mm in composite thickness that consist of a flat-rolled steel product clad on both sides with stainless steel in a 20%-60%-20% ratio.
The products subject to the orders are currently classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) under item numbers: 7210.30.0030, 7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0091, 7210.49.0095, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, and 7212.60.0000.
The products subject to the orders may also enter under the following HTSUS item numbers: 7210.90.1000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060, 7217.90.5090, 7225.91.0000, 7225.92.0000, 7225.99.0090, 7226.99.0110, 7226.99.0130, 7226.99.0180, 7228.60.6000, 7228.60.8000, and 7229.90.1000.
The HTSUS subheadings above are provided for convenience and customs purposes only. The written description of the scope of the orders is dispositive.
On May 31, 2016, JSW Steel Ltd. and JSW Steel Coated Products Limited (collectively “JSW”) alleged that the Department made ministerial errors in the
The Department reviewed the record and agrees that three of the errors referenced in JSW's allegation constitute ministerial errors within the meaning of 19 CFR 351.224(f).
On June 7, 2016, AK Steel Corporation (“Petitioner”) submitted to the Department a timely allegation that the Department made ministerial errors in the margin calculations in the
The Department reviewed the record and agrees that the errors referenced in Petitioner's allegation constitute ministerial errors within the meaning of 19 CFR 351.224(f).
As stated above, on July 15, 2016, in accordance with sections 735(b)(1)(A)(i) and 735(d) of the Act, the ITC notified the Department of its final determinations in these investigations, in which it found that an industry in the
Therefore, in accordance with section 736(a)(1) of the Act, the Department will direct U.S. Customs and Border Protection (“CBP”) to assess, upon further instruction by the Department, antidumping duties equal to the amount by which the normal value of the merchandise exceeds the export price (or constructed export price) of the merchandise, for all relevant entries of certain corrosion-resistant steel products from India, Italy, Korea, the PRC, and Taiwan. Antidumping duties will be assessed on unliquidated entries of certain corrosion-resistant steel products from India, Italy, Korea, the PRC, and Taiwan entered, or withdrawn from warehouse, for consumption on or after January 4, 2016, the date of publication of the preliminary determinations,
In accordance with section 735(c)(1)(B) of the Act, the Department will instruct CBP to continue to suspend liquidation on all relevant entries of certain corrosion-resistant steel products from India, Italy, Korea, the PRC, and Taiwan. These instructions suspending liquidation will remain in effect until further notice.
The Department will also instruct CBP to require cash deposits equal to the amounts as indicated below, which are adjusted for certain countervailable subsidies, where appropriate, as described below. Accordingly, effective on the date of publication of the ITC's final affirmative injury determinations, CBP will require, at the same time as importers would normally deposit estimated duties on this subject merchandise, a cash deposit equal to the cash deposit rates listed below.
Section 733(d) of the Act states that instructions issued pursuant to an affirmative preliminary determination may not remain in effect for more than four months, except where exporters representing a significant proportion of exports of the subject merchandise request the Department to extend that four-month period to no more than six months. At the request of exporters that account for a significant proportion of certain corrosion-resistant steel products from India, Italy, Korea, the PRC, and Taiwan, the Department extended the four-month period to six months in each case.
Therefore, in accordance with section 733(d) of the Act and our practice, the Department will instruct CBP to terminate the suspension of liquidation and to liquidate, without regard to antidumping duties, unliquidated entries of certain corrosion-resistant steel products from India, Italy, Korea, the PRC, and Taiwan entered, or withdrawn from warehouse, for consumption after July 3, 2016, the date on which the provisional measures expired, until and through the day preceding the date of publication of the ITC's final injury determinations in the
With regard to the ITC's negative critical circumstances determination on imports of subject merchandise from Korea, the PRC, and Taiwan, the Department will instruct CBP to lift suspension and to refund any cash deposits made to secure the payment of estimated antidumping duties with respect to entries of subject merchandise entered, or withdrawn from warehouse, for consumption on or after October 6, 2015 (
The weighted-average antidumping duty margin percentages and cash deposit rates are as follows:
This notice
These orders are published in accordance with section 736(a) of the Act and 19 CFR 351.211(b).
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Currently, under 50 CFR part 660.707, HMS permits are issued to vessels that fish for HMS off or land HMS in the States of California, Oregon, and Washington. Permits are issued for a 2-year term and remain valid until the first date of renewal. The Inter-American Tropical Tuna Commission (IATTC) adopted amended Resolution C-11-06 which requires a vessel on the IATTC regional vessel registry to add a photograph of the vessel showing its identifying vessel markings. NMFS proposed to revise OMB Control Number 0648-0204 to require new and renewing applicants to submit a vessel photo with their application. Owners can email or mail photographs to the Long Beach Permits Office, which in turn will be submitted to the IATTC vessel database manager. Online submission option is expected to be available through the National Permits System (NPS) by 2016 year-end.
NMFS estimates this revision could affect up to 1639 respondents, which is the total number of permitted HMS vessels. Currently, HMS renewal forms are mailed to permit holders within 60 days prior to expiration. To reduce the expected burden from photo submission, pre-filled renewal forms with basic data will substitute the current renewal application. Forms can be completed by signing and dating a statement of acknowledgement that all current information is correct.
The basic information collected from applicants will remain the same. There will be minimal expected public burden to submit photographs, which will not apply after the initial photo is submitted. There will be no additional burden beyond the estimated application processing time or recordkeeping/reporting costs.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application.
Notice is hereby given that the BBC Natural History Unit, 23 Whiteladies Road, Bristol BS8 2LR, United Kingdom, has applied in due form for a permit to conduct commercial and educational photography of California sea lions (
Written, telefaxed, or email comments must be received on or before August 24, 2016.
These documents are available upon written request or by appointment in the Permits and Conservation Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 427-8401; fax (301) 713-0376.
Written comments on this application should be submitted to the Chief, Permits and Conservation Division, at the address listed above. Comments may also be submitted by facsimile to (301) 713-0376, or by email to
Those individuals requesting a public hearing should submit a written request to the Chief, Permits and Conservation Division at the address listed above. The request should set forth the specific reasons why a hearing on this application would be appropriate.
Rosa González or Jennifer Skidmore, (301) 427-8401.
The subject permit is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361
The applicant proposes to film California sea lions (
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Concurrent with the publication of this notice in the
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Caribbean Fishery Management Council's Scientific and Statistical Committee (SSC) will hold a three-day meeting.
The meetings will be held on August 17-19, 2016.
The meetings will be held at the Council Office: 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico.
Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico 00918-1903, telephone (787) 766-5926.
The Caribbean Fishery Management Council's Scientific and Statistical Committee (SSC) will hold a three-day meeting to discuss the items contained in the following agenda:
These meetings are physically accessible to people with disabilities. For more information or request for sign language interpretation and other auxiliary aids, please contact Mr. Miguel A. Rolón, Executive Director, Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico, 00918-1903, telephone (787) 766-5926, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
This notice announces the date, time, and location of the public meeting to be held prior to the 66th International Whaling Commission (IWC) meeting.
The public meeting will be held October 3, 2016, at 9:30 a.m.
The public meeting will be held in the NOAA Science Center Room, 1301 East-West Highway, Silver Spring, MD 20910.
Jordan Carduner at
The Secretary of Commerce is responsible for discharging the domestic obligations of the United States under the International Convention for the Regulation of Whaling, 1946. The U.S. IWC Commissioner has responsibility for the preparation and negotiation of U.S. positions on international issues concerning whaling and for all matters involving the IWC. The U.S. IWC Commissioner is staffed by the Department of Commerce and assisted by the Department of State, the Department of the Interior, the Marine Mammal Commission, and other U.S. Government agencies.
A draft agenda for the upcoming IWC meeting will be posted on the IWC Secretariat's Web site at
NOAA will a hold public meeting to discuss the tentative U.S. positions for the October 2016 IWC meeting in Slovenia. Because the NOAA public meeting will address U.S. positions, the substance of the meeting must be kept confidential. Any U.S. citizen with an identifiable interest in U.S. whale conservation policy may participate, but NOAA reserves the authority to inquire about the interests of any person who appears at the meeting and to determine the appropriateness of that person's participation. In particular, persons who represent foreign interests may not attend. Persons deemed by NOAA to be ineligible to attend will be asked to leave the meeting. These stringent measures are necessary to protect the confidentiality of U.S. negotiating positions.
The October 3, 2016, meeting will be held in the NOAA Science Center Room, 1301 East-West Highway, Silver Spring, MD 20910. Photo identification is required to enter the building.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Jordan Carduner,
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Caribbean Fishery Management Council's ABC Control Rule Group will hold a two-day meeting.
The meetings will be held on August 15 and 16, 2016.
The meetings will be held at the Caribbean Fishery Management Council Headquarters, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico 00918.
Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico 00918-1903, telephone: (787) 766-5926.
The Caribbean Fishery Management Council's ABC Control Rule Group will hold a two-day meeting to discuss the items contained in the following agenda:
These meetings are physically accessible to people with disabilities. For more information or request for sign language interpretation and other auxiliary aids, please contact Mr. Miguel A. Rolón, Executive Director, Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico, 00918-1903, telephone (787) 766-5926, at least 5 days prior to the meeting date.
Department of Defense, Defense Security Cooperation Agency.
Notice.
The Department of Defense is publishing the unclassified text of a section 36(b)(1) arms sales notification. This is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996.
Chandelle K. Parker, DSCA/LMO, (703) 697-9027.
The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 16-47 with attached Policy Justification and Sensitivity of Technology.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
* as defined in Section 47(6) of the Arms Export Control Act
The Government of Japan has requested a possible sale of up to two hundred forty-six (246) Standard Missile (SM-2), Block IIIB Vertical Launching Tactical All-Up Rounds, RIM-66M-09. This request also includes MK 13 MOD 0 Vertical Launching System Canisters, operator manuals and technical documentation, U.S. Government and contractor engineering, technical and logistics support services. The total estimated value of Major Defense Equipment (MDE) is $685 million. The total overall estimated value is $821 million.
Japan is one of the major political and economic powers in East Asia and the Western Pacific, a key democratic partner of the United States in ensuring regional peace and stability, a close coalition ally in regional contingency operations, and a close cooperative and international exchange agreement partner. It is vital to U.S. national interests that Japan develops and maintains a strong and ready self-defense capability. This transaction is consistent with U.S. foreign policy and national security objectives and the 1960 Treaty of Mutual Cooperation and Security.
These SM-2 Block IIIB missiles will be used for anti-air warfare at sea. Japan currently fields four Kongo-class and two Atago-class destroyers, all of which are equipped with the Aegis Combat system and SM-2 Block IIIA/IIIB missiles. Japan is also building two new Aegis-equipped destroyers based on a modified Atago-class hull. The SM-2 Block IIIB missiles proposed in this sale will be used on these two future destroyers as well as supplementing Japan's missile inventory. Combined with the Aegis combat system, the SM-2 Block IIIB provides significantly enhanced area defense capabilities over critical East Asian and Western Pacific air and sea-lines of communication. Japan has two Intermediate-Level Maintenance Facilities capable of maintaining the SM-2 Block IIIB and will have no difficulty absorbing these new missiles into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractors will be Raytheon Missile Systems Company, Tucson, Arizona; Raytheon Company, Camden, Arkansas; and BAE of Minneapolis and Aberdeen, South Dakota. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this sale will not require the assignment of any U.S. or contractor representatives to Japan.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. A completely assembled Standard Missile-2 (SM-2) Block IIIB with or without a conventional warhead, whether a tactical, telemetry or inert (training) configuration, is classified CONFIDENTIAL. Missile component hardware includes: Guidance Section (classified CONFIDENTIAL), Target Detection Device (classified CONFIDENTIAL), Warhead (UNCLASSIFIED), Rocket Motor (UNCLASSIFIED), Steering Control Section (UNCLASSIFIED), Safe and Arming Device (UNCLASSIFIED), Autopilot Battery Unit (classified CONFIDENTIAL), and if telemetry missiles, AN/DKT-71 Telemeters (UNCLASSIFIED).
2. SM-2 operator and maintenance documentation is usually CONFIDENTIAL. Shipboard operation/firing guidance is generally CONFIDENTIAL. Pre-firing missile assembly/pedigree information is UNCLASSIFIED.
3. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
4. A determination has been made that Japan can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
5. All defense articles and services listed in this transmittal have been authorized for release and export to the Government of Japan.
Office of the Under Secretary of Defense for Personnel and Readiness, DoD.
Notice.
In compliance with the
Consideration will be given to all comments received by September 23, 2016.
You may submit comments, identified by docket number and title, by any of the following methods:
•
•
Any associated forms for this collection may be located within this same electronic docket and downloaded for review/testing. Follow the instructions at
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Office of the Joint Personnel Adjudication System, ATTN: Defense Manpower Data Center (DMDC) Boyers, ATTN: JPAS PM, P.O. Box 168, Boyers, PA 16020-0168.
The Joint Personnel Adjudication System (JPAS) is a DoD personnel security system and is the authoritative source for clearance information resulting in access determinations to sensitive/classified information and facilities. Collection and maintenance of personal data in JPAS is required to facilitate the initiation, investigation and adjudication of information relevant to DoD security clearances and employment suitability determinations for active duty military, civilian employees, and contractors requiring such credentials. Facility Security Officers (FSOs) working in private companies that contract with DoD and who need access to the JPAS system to update security-related information about their company's employees must complete DD Form 2962. Once granted access, the FSOs maintain employee personal information, submit requests for investigations, and submit other relevant personnel security information into JPAS on over 1,000,000 contract employees annually.
Defense Security Cooperation Agency, Department of Defense.
Notice.
The Department of Defense is publishing the unclassified text of a section 36(b)(1) arms sales notification. This is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996.
Chandelle K. Parker, DSCA/LMO, (703) 697-9027.
The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 16-40 with attached Policy Justification and Sensitivity of Technology.
(i)
(ii)
(iii)
Twelve (12) T-700 GE 401C engines (ten (10) installed and two (2) spares)
This request also includes the following non-MDE items: eight (8) AN/APN-194(V) Radar Altimeters, eight (8) AN/APN-217A Doppler Radar Navigation Sets, eight (8) AN/ARN-15l (V)2 Global Positioning Systems, eight (8) AN/APX-100(V) Identification Friend or Foe (IFF) Transponder Sets, eight (8) OA-8697 A/ARD Direction Finding Groups, eight (8) AN/ARN-118(V) NAV Receivers, eight (8) AN/ARN-146 On Top Position Indicators, sixteen (16) IP-1544A/ASQ-200 Horizontal Situation Video Displays (HSVD), eight (8) AN/ARC-174A (V)2 HF Radios, sixteen (16) AN/ARC182(V) UHF/UHF Radios, eight (8) PIN 70600-81010-011 Communication System Controllers, eight (8) GAU-16 50 Caliber Machine Guns, eight (8) M-60D/M-240 Machine Guns, eight (8) Internal Auxiliary Fuel Tanks, sixteen (16) External Auxiliary Fuel Tanks, and
(iv)
(v)
(vi)
(vii)
(viii)
* as defined in Section 47(6) of the Arms Export Control Act.
The Government of Israel has requested to procure twelve (12) T-700 GE 401C engines (ten (10) installed and two (2) spares), eight (8) AN/APN-194(V) Radar Altimeters; eight (8) AN/APN-217A Doppler Radar Navigation Sets; eight (8) AN/ARN-15l (V)2 Global Positioning Systems; eight (8) AN/APX-100(V) Identification Friend or Foe (IFF) Transponder Sets; eight (8) OA-8697 A/ARD Direction Finding Groups; eight (8) AN/ARN-118(V) NAV Receivers; eight (8) AN/ARN-146 On Top Position Indicators; sixteen (16) IP-1544A/ASQ-200 Horizontal Situation Video Displays (HSVD); eight (8) AN/ARC-174A (V)2 HF Radios; sixteen (16) AN/ARC182(V) UHF/UHF Radios; eight (8) PIN 70600-81010-011 Communication System Controllers; eight (8) GAU-16 50 Caliber Machine Guns; eight (8) M-60D/M-240 Machine Guns; eight (8) Internal Auxiliary Fuel Tanks; sixteen (16) External Auxiliary Fuel Tanks; and eight (8) C-11822/AWQ Controllers, Armament System. Also included are spares and repair parts, support and test equipment, communication equipment, ferry support, publications and technical documentation, U.S. Government and contractor engineering, technical and logistics support services, and other related elements of logistical and program support. The estimated cost is $300 million.
This proposed sale will contribute to the foreign policy and national security of the United States by helping to improve the security of a strategic regional partner, which has been, and continues to be, an important force for political stability and economic progress in the Middle East.
Israel has been approved to receive eight (8) SH-60F Sea Hawk Helicopters via the Excess Defense Articles (EDA) Program under a separate notification. That separate notification included only the SH-60 airframes, thus this transmittal includes all the major components and customer-unique requirements requested to supplement the EDA grant transfer.
Israel has purchased four new frigates to secure the Leviathan Natural Gas Field. The SH-60F helicopters will be used onboard these new frigates to patrol and protect these gas fields as well as other areas under threat.
The proposed sale will improve Israel's capability to meet current and future threats. The SH-60F Sea-Hawk Helicopters along with the parts, systems, and support enumerated in this notification will provide the capability to perform troop/transport deployment, communications relay, gunfire support, and search and rescue. Secondary missions include vertical replenishment, combat search and rescue, and humanitarian missions. Israel will use the enhanced capability as a deterrent to regional threats and to strengthen its homeland defense. Israel will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractors will be Science and Engineering Services, LLC, Huntsville, Alabama, and General Electric (GE) of Lynn, Massachusetts. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will require the assignment of additional U.S. Government and/or contractor representatives to Israel.
(vii)
1. The U.S. Navy primarily employed the SH-60F as an aircraft carrier based anti-submarine warfare aircraft and a search and rescue support aircraft during carrier flight operations. Unless otherwise noted below, SH-60F hardware and support equipment, test equipment and maintenance spares are UNCLASSIFIED.
2. Global Positioning System (GPS)/Precise Positioning Service (PPS)/Selective Availability Anti-spoofing Module (SAASM). The GPS/PPS/SAASM provides a Space-based Global Navigation Satellite System (GNSS) that provides reliable location and time information in all weather at all times and anywhere on or near the Earth when the signal is unobstructed line of site to four or more GPS satellites.
3. The AN/ARC-182-electronic counter-countermeasures (ECCM) Radio is a combined Very High Frequency (VHF)/Ultra High Frequency (UHF) military communications system designed for all types of fixed-wing aircraft and helicopters. Small and light enough to be especially attractive for installation in the lighter aircraft classes, it covers the frequency bands from 30 to 88 MHz in FM, 116 to 156 MHz in AM, 156 to 174 MHz in FM and for the UHF band 225 to 400 MHz in both AM and FM modes. Additionally, a receiver-only facility covering the band 108 to 116 MHz is provided for navigation purposes. Channel spacing throughout the range is at 25 KHz intervals.
4. The AN/ARC-174A (V)2 HF Radio provides capability to transmit and receive on Upper Sideband (USB), Lower Sideband (LSB), and Amplitude Modulation (AM).
5. A determination has been made that Government of Israel can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
6. All defense articles and services listed in this transmittal have been authorized for release and export to Israel.
Department of Defense, Defense Security Cooperation Agency.
Notice.
The Department of Defense is publishing the unclassified text of a section 36(b)(1) arms sales notification. This is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996.
Chandelle K. Parker, DSCA/LMO, (703) 697-9027.
The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 16-27 with attached Policy Justification and Sensitivity of Technology.
(i)
(ii)
(iii)
Seven thousand seven hundred (7,700) GBU-10 guidance kits
Seven thousand seven hundred (7,700) Mk-84/BLU-117 bombs
Five thousand nine hundred forty (5,940) GBU-12 guidance kits
Five thousand nine hundred forty (5,940) Mk-82/BLU-111 bombs
Five hundred (500) GBU-31V1 guidance kits
Five hundred (500) Mk-84/BLU-117 bombs
Five hundred (500) GBU-31V3 guidance kits
Five hundred (500) BLU-109 bombs
Fourteen thousand six hundred forty (14,640) FMU-152 fuzes
Also included is munitions support. The estimated value of this possible sale is $785 million.
(iv)
(v)
(vi)
(vii)
(viii)
* as defined in Section 47(6) of the Arms Export Control Act.
The Government of the United Arab Emirates (UAE) requests approval to procure seven thousand seven hundred (7,700) GBU-10 guidance kits with seven thousand seven hundred (7,700) Mk-84/BLU-117 bombs, five thousand nine hundred forty (5,940) GBU-12 guidance kits with five thousand nine hundred forty (5,940) Mk-82/BLU-111 bombs, five hundred (500) GBU-31V1 guidance kits with five hundred (500) Mk-84/BLU-117 bombs, five hundred (500) GBU-31V3 guidance kits with five hundred (500) BLU-109 bombs, and fourteen thousand six hundred forty (14,640) FMU-152 fuzes. This sale also includes non-MDE munitions items. The total estimated value of MDE is $740 million. The overall total estimated value is $785 million.
This proposed sale contributes to the foreign policy and national security of the United States by helping the UAE remain an active member of the OPERATION INHERENT RESOLVE (OIR) coalition working to defeat the Islamic State in Iraq and the Levant (ISIL). These munitions will sustain the UAE's efforts and support a key partner that remains an important force for political stability and economic progress in the Middle East.
The proposed sale provides the UAE additional precision guided munitions to meet current and future threats. The UAE continues to provide host-nation support of vital U.S. forces stationed at Al Dhafra Air Base and plays a vital role in supporting U.S. regional interests. The UAE was a valued partner and active participant in OPERATION IRAQI FREEDOM (OIF), OPERATION ENDURING FREEDOM (OEF), OPERATION UNIFIED PROTECTOR (OUP), and now is a valued partner in OIR coalition operations.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The UAE will have no difficulties absorbing these munitions into its inventory.
The munitions will be sourced through procurement and the contractor determined during contract negotiations. There are no known offset agreements proposed in connection with this potential sale.
There are no additional U.S. Government or contractor representatives anticipated to be stationed in the UAE as a result of this potential sale.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The GBU-31 2,000-pound Joint Direct Attack Munition (JDAM) is a guidance tail kit that converts unguided free-fall bombs into accurate, Global Positioning System (GPS) guided adverse weather “smart” munitions. With the addition of a new tail section that contains an inertial navigational system (INS) and a GPS guidance control unit, JDAM improves the accuracy of unguided, general-purpose bombs in an all-weather condition. JDAM can be launched from very low to high altitudes in a dive, toss and loft, or in straight and level flight with an on-axis or off-axis delivery. JDAM enables multiple weapons to be directed against single or multiple targets on a single pass.
a. The GBU-31V1 contains the standard 2,000-pound BLU-117 or Mk-84 bomb body. The GBU-31V3 contains the 2,000-pound BLU-109 penetrator bomb body. The highest classification for the JDAM, its components, and technical data is SECRET.
b. Weapon accuracy depends on target coordinates and present position as entered into the guidance control unit. After weapon release, movable tail fins guide the weapon to the target coordinates. In addition to the tail kit, other elements in the overall system that are essential for successful employment include: Access to accurate target coordinates, INS/GPS capability, and Operational Test and Evaluation Plan.
2. The GBU-12 is a 500-pound laser-guided ballistic bomb (LGB). The LGB is a maneuverable, free-fall weapon that guides to a spot of laser energy reflected off of the target. The LGB is delivered like a normal general-purpose (GP) warhead and the semi-active guidance corrects for many of the normal errors inherent in any delivery system. Laser designation for the weapon can be provided by a variety of laser target markers or designators.
a. The LGB consists of a laser guidance kit, a computer control group (CCG), and a warhead specific Air Foil Group (AFG), that attach to the nose and tail of Mk-82 or BLU-111 bomb bodies. The overall weapon is CONFIDENTIAL.
3. The GBU-10 is a 2,000-pound laser-guided ballistic bomb (LGB). The LGB is a maneuverable, free-fall weapon that guides to a spot of laser energy reflected off of the target.
The LGB is delivered like a normal GP warhead and the semi-active guidance corrects for many of the normal errors inherent in any delivery system. Laser designation for the weapon can be provided by a variety of laser target markers or designators.
a. The LGB consists of a laser guidance kit, a CCG, and a warhead AFG that attach to the nose and tail of Mk-84 or BLU-117 bomb body. The overall weapon is CONFIDENTIAL.
4. The FMU-152 is a multi-delay, multi-arm fuze and proximity sensor compatible with GP blast, fragmentation, and hardened-target penetrator warheads. The fuze is cockpit selectable in-flight (prior to release) when used with JDAM weapons. The FMU-152 interfaces with the GBU-10, GBU-12, and GBU-31 weapons among others. The hardware is UNCLASSIFIED.
5. A determination has been made that the UAE can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government.
6. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification. Moreover, the benefits to be derived from this sale outweigh the potential damage that could result if the sensitive technology were revealed to unauthorized persons.
7. All defense articles and services listed in this transmittal have been authorized for release and export to the UAE.
Defense Logistics Agency (DLA), DoD.
Notice of Availability (NOA) for a Finding of No Significant Impact (FONSI) for the Environmental Assessment (EA) addressing the Closure of Former Defense Fuel Support Point (DFSP) Moffett Field located in Santa Clara County, CA.
On May 16, 2016, DLA published a NOA in the
Stacey Christenbury at 703-767-6557 during normal business hours Monday through Friday, from 8:00 a.m. to 4:30 p.m. (EST) or by email:
DLA completed an EA to address the potential environmental consequences associated with the proposed closure of DFSP Moffett Field in Santa Clara County, CA. This FONSI incorporates the EA by reference and summarizes the results of the analyses in the EA. The final EA is available in hardcopy at the Mountain View Public Library, located at 585 Franklin Street, Mountain View, California 94041, Phone: (650) 903-6337 or electronically at
Office of the Assistant to the Secretary of Defense for Public Affairs, DoD.
Notice.
In compliance with the
Consideration will be given to all comments received by September 23, 2016.
You may submit comments, identified by docket number and title, by any of the following methods:
•
•
Any associated form(s) for this collection may be located within this same electronic docket and downloaded for review/testing. Follow the instructions at
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to: The Office of the Assistant to the Secretary of Defense for Public Affairs, ATTN: CPO (Adrien F. Creecy-Starks), 1400 Defense, The Pentagon, Washington, DC 20301-1400, or call the Directorate for Community and Public Outreach at (703) 695-3845.
Respondents are individuals or representatives of Federal and non-Federal government agencies, community groups, for-profit and non-profit organizations, and civic organizations requesting Armed Forces support for patriotic events conducted in the civilian domain. DD Forms 2535 and 2536 record the type of military support requested, event data, and sponsoring organization information. The completed forms provide the Armed Forces the minimum information necessary to determine whether an event is eligible for military participation and whether the desired support is permissible and/or available. If the forms are not provided, the review process is greatly increased because the Armed Forces must make additional written and telephonic inquiries with the event sponsor. In addition, use of the forms reduces the event sponsor's preparation time because the forms provide a detailed outline of information required, eliminate the need for a detailed letter, and contain concise information necessary for determining appropriateness of military support. Use of the forms is essential to reduce preparation and processing time, increase productivity, and maximize responsiveness to the public.
Defense Security Cooperation Agency, Department of Defense.
Notice.
The Department of Defense is publishing the unclassified text of a section 36(b)(1) arms sales notification. This is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996.
Chandelle K. Parker, DSCA/LMO, (703) 697-9027.
The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 16-39 with attached Policy Justification and Sensitivity of Technology.
(i)
(ii)
(iii)
Thirty-three (33) Evolved Seasparrow Missiles (ESSMs)
Six (6) Evolved Seasparrow Telemetry Missiles
Three (3) MK 41 Vertical Launching Systems (VLS), tactical version, baseline VII
This request also includes the following Non-MDE: Five (5) ESSM Shipping Containers, Five (5) MK-73 Continuous Wave Illumination Transmitters, Ten (10) MK25 Quad Pack Containers, One (1) Inertial Missile Initializer Power Supply (IMIPS), canisters, spare and repair parts, support and test equipment, publications and technical documentation, personnel training, U.S. Government and contractor engineering, technical and logistics support services, technical assistance, installation and integration oversight support, logistics, program management, packaging and transportation.
(iv)
(v)
(vi)
(vii)
(viii)
The Government of Chile has requested a possible sale of:
Thirty-three (33) Evolved Seasparrow Missiles (ESSMs)
Six (6) Evolved Seasparrow Telemetry Missiles
Three (3) MK 41 Vertical Launching Systems (VLS), tactical version, baseline VII
This request also includes the following Non-MDE: Ten (10) MK25 Quad Pack Canisters; Five (5) ESSM Shipping Containers; Five (5) MK-73 Continuous Wave Illumination Transmitters, One (1) Inertial Missile Initializer Power Supply (IMIPS); spare and repair parts, support and test equipment, publications and technical documentation, personnel training, U.S. Government and contractor engineering, technical and logistics support services, technical assistance, installation and integration oversight support, logistics, program management, packaging and transportation.
The total estimated value of MDE is $73.2 million. The total overall estimated value is $140.1 million.
This proposed sale will contribute to the foreign policy and national security of the United States by increasing Chile's ability to contribute to regional security and promoting interoperability with the U.S. forces. The sale will provide upgraded air defense capabilities on Chile's type 23 frigates. The proposed sale improves Chile's capability to deter regional threats and strengthen its homeland defense. Chile will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The prime contractors will be Raytheon Missile Systems, Tucson, Arizona, BAE Systems, Aberdeen, South Dakota, and Lockheed Martin, Bethesda, MD. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Chile.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The sale of Evolved Seasparrow missiles (ESSM) under this proposed FMS case will result in the transfer of classified missile equipment to Chile. Both classified and unclassified defense equipment and technical data will be transferred. The missile includes the guidance section, warhead section, transition section, propulsion section, control section and Thrust Vector Control (TVC), of which the guidance section and transition section are classified CONFIDENTIAL. Standard missile documentation to be provided under this FMS case will include:
a. Parametric documents classified CONFIDENTIAL.
b. Missile Handling/Maintenance Procedures.
c. General Performance Data classified CONFIDENTIAL.
d. Firing Guidance classified CONFIDENTIAL.
e. Dynamics Information classified CONFIDENTIAL.
2. The MK 41 Vertical Launching Systems (VLS) is a fixed, vertical, multi-missile launching system with the capability to store and launch multiple missile variants depending on the warfighting mission. MK 41 VLS is a modular, below-deck configuration with each module consisting of 8 missile cells with an associated gas management and deluge system. The highest classification of the hardware to be exported is UNCLASSIFIED. The highest classification of the technical documentation to be exported is UNCLASSIFIED. The highest classification of software to be exported is CONFIDENTIAL.
3. The proposed sale of ESSM under this FMS case will result in the transfer of sensitive technological information and or restricted information contained in the missile guidance section. Certain operating frequencies and performance characteristics are classified SECRET because they could be used to develop tactics and/or countermeasures to reduce or defeat missile effectiveness.
4. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, primarily performance characteristics, engagement algorithms, and transmitter specific frequencies, the information could be used to develop countermeasures that might reduce weapon system effectiveness.
5. A determination has been made that the recipient country can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
6. All defense articles and services listed in this transmittal have been authorized for release and export to Chile.
Defense Logistics Agency, DoD.
Notice.
In compliance with the
Consideration will be given to all comments received by September 23, 2016.
You may submit comments, identified by docket number and title, by any of the following methods:
•
•
Any associated form(s) for this collection may be located within this same electronic docket and downloaded for review/testing. Follow the instructions at
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the Defense Logistics Agency Headquarters, ATTN: Mr. Robert Bednarcik, J33, 8725 John J. Kingman Rd., Ft. Belvoir, VA 22060-6221; or call (703)767-1178.
Respondents are individuals/businesses/contractors who receive defense property identified as U.S. Munitions List Items and Commerce Control List Items through: Purchase, exchange/trade sale, authorized transfer or donation. They are checked to determine if they are responsible, not debarred bidders, Specially Designated Nationals or Blocked Persons, or have not violated U.S. export laws.
The form is available on the DOD DEMIL/Trade Security Controls Web page, DLA Disposition Services usable property sales Web page, General Services Administration (GSA) auction Web page, and Defense Contract Management Agency offices, FormFlow and ProForm.
Notice.
The Department of Defense has submitted to OMB for clearance, the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by August 24, 2016.
Fred Licari, 571-372-0493.
Comments and recommendations on the proposed information collection should be emailed to Ms. Jasmeet Seehra, DoD Desk Officer, at
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
• Federal eRulemaking Portal:
Written requests for copies of the information collection proposal should be sent to Mr. Licari at WHS/ESD Directives Division, 4800 Mark Center Drive, East Tower, Suite 02G09, Alexandria, VA 22350-3100.
Department of the Navy, Department of Defense.
Notice.
The Department of the Navy (DoN) is extending the public comment period for the Environmental Assessment (EA) assessing the potential environmental impacts from the consolidation of approximately 55 full-time active duty and 549 reserve staff and their equipment from the Armed Forces Reserve Center Farmingdale and Marine Forces Reserve Center Garden City to Marine Corps Reserve Center Brooklyn published on June 29, 2016 (81 FR 42338). The comment period scheduled to end July 15, 2016 is extended to August 15, 2016. This action will allow interested persons additional time to analyze the issues and prepare their comments. The EA can be viewed at:
The EA public review period is extended to August 15, 2016.
Mr. Christopher Hurst, NEPA Project Manager, U.S. Marine Corps Forces Reserve, 2000 Opelousas Avenue, New Orleans, LA 70114, or by email at
Office of Special Education and Rehabilitative Services, Department of Education.
Notice.
Catalog of Federal Domestic Assistance (CFDA) Number: 84.160C.
Applications Available: July 25, 2016.
Deadline for Transmittal of Applications: August 24, 2016.
This priority is:
1.
2.
1.
You can contact ED Pubs at its Web site, also:
If you request an application package from ED Pubs, be sure to identify this program or competition as follows: CFDA number 84.160C.
Individuals with disabilities can obtain a copy of the application package in an accessible format (
2.
• A “page” is 8.5″ × 11″, on one side only, with 1” margins at the top, bottom, and both sides.
• Double space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions, as well as all text in charts, tables, figures, and graphs.
• Use a font that is either 12 point or larger or no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial. An application submitted in any other font (including Times Roman or Arial Narrow) will not be accepted.
In addition to the page-limit guidance on the application narrative section, we recommend that you adhere to the following page limits, using the standards listed above: (1) The abstract should be no more than one page, (2) the resumes of key personnel should be no more than two pages per person, and (3) a bibliography should be no more than three pages. Appendix A must include: (1) A logic model; (2) a Memorandum of Understanding or a Letter of Intent between the lead applicant, members of the consortium, other proposed training and TA providers, and other relevant partners; (3) a conceptual framework for the project; and (4) person-loading charts and timelines. There are no page limits or standards for materials in Appendix A. The only optional materials that will be accepted are letters of support. Please note that our reviewers are not required to read optional materials.
Please note that any funded applicant's application abstract will be made available to the public.
3.
Date of Pre-Application: Interested parties are invited to submit questions to the following email address:
Applications for grants under this competition must be submitted electronically using the
We do not consider an application that does not comply with the deadline requirements.
Individuals with disabilities who need an accommodation or auxiliary aid in connection with the application process should contact the person listed under
4.
5.
6.
a. Have a Data Universal Numbering System (DUNS) number and a Taxpayer Identification Number (TIN);
b. Register both your DUNS number and TIN with the System for Award Management (SAM), the Government's primary registrant database;
c. Provide your DUNS number and TIN on your application; and
d. Maintain an active SAM registration with current information while your application is under review by the Department and, if you are awarded a grant, during the project period.
You can obtain a DUNS number from Dun and Bradstreet at the following Web site:
If you are a corporate entity, agency, institution, or organization, you can obtain a TIN from the Internal Revenue Service. If you are an individual, you can obtain a TIN from the Internal Revenue Service or the Social Security Administration. If you need a new TIN, please allow two to five weeks for your TIN to become active.
The SAM registration process can take approximately seven business days, but may take upwards of several weeks, depending on the completeness and accuracy of the data you enter into the SAM database. Thus, if you think you might want to apply for Federal financial assistance under a program administered by the Department, please allow sufficient time to obtain and register your DUNS number and TIN. We strongly recommend that you register early.
If you are currently registered with SAM, you may not need to make any changes. However, please make certain that the TIN associated with your DUNS number is correct. Also note that you will need to update your registration
Information about SAM is available at
In addition, if you are submitting your application via
7.
a.
Applications for grants under the
We will reject your application if you submit it in paper format unless, as described elsewhere in this section, you qualify for one of the exceptions to the electronic submission requirement
You may access the electronic grant application for the Training of Interpreters for Individuals Who Are Deaf or Hard of Hearing and Individuals Who Are Deaf-Blind Program at
Please note the following:
• When you enter the
• Applications received by
• The amount of time it can take to upload an application will vary depending on a variety of factors, including the size of the application and the speed of your Internet connection. Therefore, we strongly recommend that you do not wait until the application deadline date to begin the submission process through
• You should review and follow the Education Submission Procedures for submitting an application through
• You will not receive additional point value because you submit your application in electronic format, nor will we penalize you if you qualify for an exception to the electronic submission requirement, as described elsewhere in this section, and submit your application in paper format.
• You must submit all documents electronically, including all information you typically provide on the following forms: the Application for Federal Assistance (SF 424), the Department of Education Supplemental Information for SF 424, Budget Information—Non-Construction Programs (ED 524), and all necessary assurances and certifications.
• You must upload any narrative sections and all other attachments to your application as files in a read-only, non-modifiable Portable Document Format (PDF). Do not upload an interactive or fillable PDF file. If you upload a file type other than a read-only, non-modifiable PDF (
• Your electronic application must comply with any page-limit requirements described in this notice.
• After you electronically submit your application, you will receive from
Once your application is successfully validated by
These emails do not mean that your application is without any disqualifying errors. While your application may have been successfully validated by
• We may request that you provide us original signatures on forms at a later date.
If you are prevented from electronically submitting your application on the application deadline date because of technical problems with the
If you submit an application after 4:30:00 p.m., Washington, DC time, on the application deadline date, please contact the person listed under
• You do not have access to the Internet; or
• You do not have the capacity to upload large documents to the
• No later than two weeks before the application deadline date (14 calendar days or, if the fourteenth calendar day before the application deadline date falls on a Federal holiday, the next business day following the Federal holiday), you mail or fax a written statement to the Department, explaining which of the two grounds for an exception prevents you from using the Internet to submit your application.
If you mail your written statement to the Department, it must be postmarked no later than two weeks before the application deadline date. If you fax your written statement to the Department, we must receive the faxed statement no later than two weeks before the application deadline date.
Address and mail or fax your statement to: Kristen Rhinehart-Fernandez, U.S. Department of Education, 400 Maryland Avenue SW., Room 5062, Potomac Center Plaza, Washington, DC 20202-2800. FAX: (202) 245-7591.
Your paper application must be submitted in accordance with the mail or hand-delivery instructions described in this notice.
b.
If you qualify for an exception to the electronic submission requirement, you may mail (through the U.S. Postal Service or a commercial carrier) your application to the Department. You must mail the original and two copies of your application, on or before the application deadline date, to the Department at the following address: U.S. Department of Education, Application Control Center, Attention: (CFDA Number 84.160C), LBJ Basement Level 1, 400 Maryland Avenue SW., Washington, DC 20202-4260.
You must show proof of mailing consisting of one of the following:
(1) A legibly dated U.S. Postal Service postmark.
(2) A legible mail receipt with the date of mailing stamped by the U.S. Postal Service.
(3) A dated shipping label, invoice, or receipt from a commercial carrier.
(4) Any other proof of mailing acceptable to the Secretary of the U.S. Department of Education.
If you mail your application through the U.S. Postal Service, we do not accept either of the following as proof of mailing:
(1) A private metered postmark.
(2) A mail receipt that is not dated by the U.S. Postal Service.
We will not consider applications postmarked after the application deadline date.
c.
If you qualify for an exception to the electronic submission requirement, you (or a courier service) may deliver your paper application to the Department by hand. You must deliver the original and two copies of your application by hand, on or before the application deadline date, to the Department at the following address: U.S. Department of Education, Application Control Center, Attention: (CFDA Number 84.160C), 550 12th Street SW., Room 7039, Potomac Center Plaza, Washington, DC 20202-4260.
The Application Control Center accepts hand deliveries daily between 8:00 a.m. and 4:30:00 p.m., Washington, DC time, except Saturdays, Sundays, and Federal holidays.
(1) You must indicate on the envelope and—if not provided by the Department—in Item 11 of the SF 424 the CFDA number, including suffix letter, if any, of the competition under which you are submitting your application; and
(2) The Application Control Center will mail to you a notification of receipt of your grant application. If you do not receive this notification within 15 business days from the application deadline date, you should call the U.S. Department of Education Application Control Center at (202) 245-6288.
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2.
In addition, in making a competitive grant award, the Secretary requires various assurances including those applicable to Federal civil rights laws
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4.
Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
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If your application is not evaluated or not selected for funding, we notify you.
2.
We identify administrative and national policy requirements in the application package and reference these and other requirements in the
We reference the regulations outlining the terms and conditions of an award in the
3.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
(c) Under 34 CFR 75.250(b), the Secretary may provide a grantee with additional funding for data collection analysis and reporting. In this case, the Secretary establishes a data collection period.
4.
The performance measures for this program are as follows:
(1) The number of individuals enrolled in the experiential learning program, by cohort.
(2) The average length of time each individual interacted with the local deaf community, by cohort.
(3) The number and percentage of individuals who successfully complete the experiential learning program, by cohort.
(4) The number and percentage of individuals who successfully pass the National Interpreter Certification test, by cohort.
(5) The average length of time for each individual to successfully pass the National Interpreter Certification test, by cohort.
5.
In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
Kristen Rhinehart-Fernandez, U.S. Department of Education, 400 Maryland Avenue SW., Room 5062, Potomac Center Plaza, Washington, DC 20202-2800. Telephone: (202) 245-6103 or by email:
If you use a TDD or a TTY, call the Federal Relay Service, toll free, at 1-800-877-8339.
You may also access documents of the Department published in the
Office of Fossil Energy, Department of Energy.
Notice of orders.
The Office of Fossil Energy (FE) of the Department of Energy gives notice that during June 2016, it issued orders granting authority to import and export natural gas, to import and export liquefied natural gas (LNG), to vacate authority, and errata. These orders are summarized in the attached appendix and may be found on the FE Web site at
They are also available for inspection and copying in the U.S. Department of Energy (FE-34), Division of Natural Gas Regulation, Office of Regulation and International Engagement, Office of Fossil Energy, Docket Room 3E-033, Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585, (202) 586-9478. The Docket Room is open between the hours of 8:00 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments should be submitted on or before August 24, 2016. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts below as soon as possible.
Direct all PRA comments to Nicholas A. Fraser, OMB, via email
For additional information or copies of the information collection, contact Cathy Williams at (202) 418-2918. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the Web page <
47 CFR 74.783(b) requires licensees of television translators whose station identification is made by the television station whose signals are being rebroadcast by the translator, must secure agreement with this television station licensee to keep in its file, and available to FCC personnel, the translator's call letters and location, giving the name, address and telephone number of the licensee or his service representative to be contacted in the event of malfunction of the translator. It shall be the responsibility of the translator licensee to furnish current information to the television station licensee for this purpose.
47 CFR 73.1201(b)(1) requires that the official station identification consist of the station's call letters immediately followed by the community or communities specified in its license as the station's location. The name of the licensee, the station's frequency, the station's channel number, as stated on the station's license, and/or the station's network affiliation may be inserted between the call letters and station location. Digital Television (DTV) stations, or DAB Stations, choosing to include the station's channel number in the station identification must use the station's major channel number and may distinguish multicast program streams. For example, a DTV station with major channel number 26 may use 26.1 to identify a High Definition Television (HDTV) program service and 26.2 to identify a Standard Definition Television (SDTV) program service. A radio station operating in DAB hybrid mode or extended hybrid mode shall identify its digital signal, including any free multicast audio programming streams, in a manner that appropriately alerts its audience to the fact that it is listening to a digital audio broadcast. No other insertion between the station's call letters and the community or communities specified in its license is permissible. A station may include in its official station identification the name of any additional community or communities, but the community to which the station is licensed must be named first.
47 CFR 74.783(e) permits low power TV permittees or licensees to request to be assigned four-letter call signs in lieu of the five-character alpha-numeric call signs.
47 CFR 74.1283(c)(1) requires a FM translator station licensee whose identification is made by the primary station must arrange for the primary station licensee to furnish the translator's call letters and location (name, address, and telephone number of the licensee or service representative) to the FCC. The licensee must keep this information in the primary station's files.
The FCC Form 602 is comprised of the Main Form containing information regarding the filer and the Schedule A is used to collect ownership data pertaining to the Disclosable Interest Holder(s). Each Disclosable Interest Holder will have a separate Schedule A. Thus, a filer will submit its FCC Form 602 with multiple copies of Schedule A, as necessary, to list each Disclosable Interest Holder and associated information.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments should be submitted on or before August 24, 2016. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts below as soon as possible.
Direct all PRA comments to Nicholas A. Fraser, OMB, via email
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the Web page
In the
• Whether they received the alert message during the designated test;
• whether they retransmitted the alert;
• if they were not able to receive and/or transmit the alert, their `best effort' diagnostic analysis regarding the cause(s) for such failure;
• a description of their station identification and level of designation (PEP, LP-1, etc.);
• the date/time of receipt of the EAN message by all stations; the date/time of PEP station acknowledgement of receipt of the EAN message to FOC;
• the date/time of initiation of actual broadcast of the Presidential message;
• the date/time of receipt of the EAT message by all stations;
• who they were monitoring at the time of the test, and the make and
• model number of the EAS equipment that they utilized.
The
The FCC is submitting this information collection to the Office of Management and Budget (OMB) as a revision of the previously approved information collection that established the mandatory Electronic Test Reporting System (ETRS) that EAS Participants must utilize to file identifying and test result data as part of their participation in nationwide EAS testing. Specifically, the
• A description of any actions taken by the EAS Participant (acting individually, in conjunction with other EAS Participants in the geographic area, and/or in consultation with state and local emergency authorities), to make EAS alert content available in languages other than English to its non-English speaking audience(s);
• A description of any future actions planned by the EAS Participant, in consultation with state and local emergency authorities, to provide EAS alert content in languages other than English to its non-English speaking audience(s), along with an explanation for the EAS Participant's decision to plan or not plan such actions; and
• Any other relevant information that the EAS Participant may wish to provide.
In addition, in the event that there is a material change to any of the information that EAS Participants are required to furnish their respective SECCs, EAS Participants must, within 60 days of the occurrence of such material change, submit aa letter to their respective SECCs, copying the Commission's Public Safety and Homeland Security Bureau (Bureau) that describe such change. The SECCs are required to incorporate the information in such letters as amendments to the State EAS Plans on file with the Bureau.
This information will be used by FCC staff to gauge the effectiveness of the EAS's capacity to disseminate in-language EAS emergency alert content to persons who communicate in a language other than English or may have a limited understanding of the English language; to determine whether private and local efforts to disseminate EAS multilingual content might be incorporated into the overall national EAS structure; and to confirm that private and local EAS multilingual operations are consistent with national plans, FCC regulations, and EAS operation.
The Commission expects that the costs to EAS Participants to comply with these reporting requirements will be minimal, and largely limited to internal administrative charges associated with drafting a brief statement, and submitting that statement, and any other relevant information that the EAS Participant may wish to provide to their SECC for inclusion into the State EAS Plan for the state in which the EAS Participant operates. The Commission further expects that the vast majority of EAS Participants are not engaged in multilingual EAS activities and therefore will need to submit nothing more than a very brief statement to their SECC explaining their decision to plan or not plan future actions to provide EAS alert content in languages other than English to their non-English speaking audience(s). For the presumably small percentage of EAS Participants that actually are engaged in multilingual EAS activities, the filing will merely require that they supply a summary of actions they already have taken in this regard. Accordingly, the FCC estimates that complying with the reporting requirement will take EAS Participants, on average, approximately one hour. The FCC estimates that compiling the EAS Participant summaries of multilingual EAS activities and incorporating such information into the State EAS Plan will take SECCs, on average, approximately 20 hours.
The following information collection contained in Part 11 may be impacted by these rule amendments:
Section 11.21 requires that state and local EAS plans be reviewed and approved by the Chief, Public Safety and Homeland Security, prior to implementation to ensure that they are consistent with national plans, FCC regulations, and EAS operation.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments should be submitted on or before August 24, 2016. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts below as soon as possible.
Direct all PRA comments to Nicholas A. Fraser, OMB, via email
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the Web page <
Sections 201, 202, and 203 of the Communications Act of 1934, as amended (the Act) require common carriers to establish just and reasonable charges, practices, and regulations for their interstate telecommunications services provided. For services that are still covered under Section 203, tariff schedules containing charges, rates, rules, and regulations must be filed with the Commission. Part 61 of the Commission's Rules, 47 CFR part 61, prescribes the framework for the establishment of and subsequent revisions to tariffs. Certain local exchange carriers are required to submit a biennial or annual Tariff Review Plan (TRP) in partial fulfillment of cost support material required by Part 61. The Commission developed the TRP to minimize reporting burdens on reporting incumbent local exchange carriers (ILECs). TRPs set forth the summary material ILECs file to support revisions to the rates in their interstate access service tariffs. For those services still requiring cost support, TRPs assist the Commission in determining whether ILEC access charges are just and reasonable as required under the Act.
Also, respondents may request materials or information submitted to the Commission or to the Universal Service Administrative Company (USAC or Administrator) be withheld from public inspection under 47 CFR 0.459 of the FCC's rules. We note that USAC must preserve the confidentiality of all data obtained from respondents; must not use the data except for purposes of administering the universal service programs; and must not disclose data in company-specific form unless directed to do so by the Commission.
On April 27, 2016, the Commission released an order reforming its low-income universal service support mechanisms. Lifeline and Link Up Reform and Modernization; Telecommunications Carriers Eligible for Universal Service Support; Connect America Fund, WC Docket Nos. 11-42, 09-197, 10-90, Third Further Notice of Proposed Rulemaking, Order on Reconsideration, and Further Report and Order, (
Based upon the foregoing, the Receiver has determined that the continued existence of the receivership will serve no useful purpose. Consequently, notice is given that the receivership shall be terminated, to be effective no sooner than thirty days after the date of this Notice. If any person wishes to comment concerning the termination of the receivership, such comment must be made in writing and sent within thirty days of the date of this Notice to: Federal Deposit Insurance Corporation, Division of Resolutions and Receiverships, Attention: Receivership Oversight Department 34.6, 1601 Bryan Street, Dallas, TX 75201.
No comments concerning the termination of this receivership will be
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than August 10, 2016.
A. Federal Reserve Bank of Kansas City (Dennis Denney, Assistant Vice President) 1 Memorial Drive, Kansas City, Missouri 64198-0001:
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The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than August 22, 2016.
A. Federal Reserve Bank of Richmond (Adam M. Drimer, Assistant Vice President) 701 East Byrd Street, Richmond, Virginia 23261-4528. Comments can also be sent electronically to or
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B. Federal Reserve Bank of Minneapolis (Jacquelyn K. Brunmeier, Assistant Vice President) 90 Hennepin Avenue, Minneapolis, Minnesota 55480-0291:
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The companies listed in this notice have given notice under section 4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and Regulation Y, (12 CFR part 225) to engage
Each notice is available for inspection at the Federal Reserve Bank indicated. The notice also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the question whether the proposal complies with the standards of section 4 of the BHC Act.
Unless otherwise noted, comments regarding the applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than August 15, 2016.
A. Federal Reserve Bank of Minneapolis (Jacquelyn K. Brunmeier, Assistant Vice President) 90 Hennepin Avenue, Minneapolis, Minnesota 55480-0291:
1.
Federal Trade Commission (“Commission” or “FTC”).
Notice.
The information collection requirements described below will be submitted to the Office of Management and Budget (“OMB”) for review, as
Comments must be submitted on or before August 24, 2016.
Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the
Requests for additional information or copies of the proposed information requirements for the TSR should be addressed by mail to Craig Tregillus, Staff Attorney, Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission, Room CC-8607, 600 Pennsylvania Ave. NW., Washington, DC 20580, or by telephone to (202) 326-2970.
On April 14, 2016, the Commission requested public comment on the information collection requirements and related PRA burden estimates associated with the TSR. 81 FR 22082 (“April 14, 2016 Notice”). Pursuant to the OMB regulations, 5 CFR part 1320, that implement the PRA, 44 U.S.C. 3501
In response to its prior request for public comment, the Commission received ten comments, most of which were either non-germane or not directly responsive to the nature of the public comments sought. As required by the PRA, the Commission had sought public comments specifically on the following:
(1) Whether the recordkeeping, disclosure, and reporting requirements are necessary, including whether the resulting information will be practically useful; (2) the accuracy of the FTC's burden estimates, including whether the methodology and assumptions used are valid; (3) how to improve the quality, utility, and clarity of the disclosure requirements; and (4) how to minimize the burden of providing the required information to consumers.
None of the public comments directly addressed the above and, lacking independent reason thus far to revise its burden estimates, the FTC will submit for OMB review, contemporaneous with this published Notice, its previously published burden estimates on the TSR's disclosure, recordkeeping, and reporting requirements. For more details about the Rule requirements, the background behind these information collection provisions, and the FTC's burden estimates and methodology behind them, see the April 14, 2016 Notice.
To clarify for purposes of receiving public comments for this second Notice, the disclosure, recordkeeping, and reporting requirements for which the Commission sought public comment concern such requirements imposed upon telemarketers and/or other sellers who are subject to, and not otherwise exempted under, the TSR. Some types of businesses are not covered by the TSR even though they conduct telemarketing campaigns that may involve some interstate telephone calls to sell goods or services. These three types of entities are not subject to the FTC's jurisdiction, and not covered by the TSR:
• Banks, federal credit unions, and federal savings and loans
• common carriers—such as long-distance telephone companies and airlines—when they are engaging in common carrier activity
• non-profit organizations—those entities that are not organized to carry on business for their own, or their members,' profit.
The above types of entities are not covered by the TSR because they are specifically exempt from the FTC's jurisdiction. Nevertheless, any other for profit individual or company that contracts with one of these three types of entities to provide telemarketing services must comply with the TSR. Moreover, some types of calls also are not covered by the TSR, regardless of whether the entity making or receiving the call is covered. These include:
• Unsolicited calls from consumers
• calls placed by consumers in response to a catalog
• business-to-business calls that do not involve retail sales of nondurable office or cleaning supplies
• calls made in response to general media advertising (with some important exceptions)
• calls made in response to direct mail advertising (with some important exceptions)
• Political campaign calls protected by the First Amendment.
Public comments on the April 14, 2016 Notice ranged from a complaint about receiving repeated unsolicited “junk” telefaxes—to a complaint that the FTC fails to enforce the TSR—to a suggestion that the FTC consider ways to pro-actively thwart unsolicited calls to mobile phones in a vein similar to which “NoMoRobo” (
In response, the FTC notes that Federal Communication Commission rules, not the FTC's TSR, address “junk” telefaxes. (See
To reiterate, pursuant to its obligations under the PRA, the FTC seeks public comment on the necessity of its TSR recordkeeping, disclosure,
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which is . . . privileged or confidential” as provided in Section 6(f) of the FTC Act 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c).
Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at
If you file your comment on paper, write “TSR PRA Comment, FTC File No. P094400” on your comment and on the envelope, mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex J), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex J), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service.
The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before August 24, 2016. For information on the Commission's privacy policy, including routine uses permitted by the Privacy Act, see
Comments on the recordkeeping, disclosure, and reporting requirements subject to review under the PRA should additionally be submitted to OMB. If sent by U.S. mail, they should be addressed to Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for the Federal Trade Commission, New Executive Office Building, Docket Library, Room 10102, 725 17th Street NW., Washington, DC 20503. Comments sent to OMB by U.S. postal mail, however, are subject to delays due to heightened security precautions. Thus, comments instead should be sent by facsimile to (202) 395-5806.
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice of request for extension of an existing OMB clearance.
Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division will be submitting to the Office of Management and Budget (OMB) a request to review and approve an extension of a previously approved information collection requirement concerning limitation of costs/funds.
Submit comments on or before August 24, 2016.
Submit comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Office of Information and Regulatory Affairs of OMB, Attention: Desk Officer for GSA, Room 10236, NEOB, Washington, DC 20503. Additionally submit a copy to GSA by any of the following methods:
•
•
Ms. Kathlyn Hopkiins, Procurement Analyst, Office of Governmentwide Acquisition Policy, GSA 202-969-7226 or email
Firms performing under incrementally funded, cost-reimbursement Federal contracts are required to notify the contracting officer in writing whenever they have reason to believe—
(1) The costs the contractors expect to incur under the contracts in the next 60 days, when added to all costs previously incurred, will exceed 75 percent of the estimated cost of the contracts; or (2) The total cost for the performance of the contracts will be greater or substantially less than estimated.
As a part of the notification, the contractors must provide a revised estimate of total cost. The frequency of this collection of information is variable, contingent upon both funding and spending patterns.
A notice was published in the
Accordingly, the number of contract actions has been reduced. Secondly, the number of responses per respondent has been reassessed at one per year in lieu of five; this is consistent with updated data, based on consultation with subject matter experts within the Government. Third, the estimated time to produce each funding letter was reduced from
Centers for Medicare & Medicaid Services, HHS.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the
Comments must be received by September 23, 2016.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786-1326.
Reports Clearance Office at (410) 786-1326.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
The purpose of this notice is to request an extension of the Office of Management and Budget Control Number 0907-0307 permitting continued use of the information collections required by ACF-CB-PI-12-02. The burden estimates are provided below. The Administration on Children, Youth, and Families anticipates issuing a new Program Instruction for federal fiscal year 2017.
Following the publication of the first
The annual submission will include: (1) A self-assessment, and (2) a strategic plan. The self-assessment requires the grantees to identify the topical work areas of the last year, identify strengths, challenges and need for technical assistance. The self-assessment has been designed with user/grantee input with the intention of minimizing burden and maximizing usefulness of the process and product to the grantee. The strategic plan identifies projects and activities and intended results for the coming year. The strategic plan was also developed with grantee input.
A full application will be due once every five years. The full application will require a five year strategic plan, letters of commitment from the highest court of appeal and state title IV-E/IV-B agency, a budget narrative, and a list of all statewide task force members.
Taken together, the changes reduce the overall burden hours from years past and those anticipated in the previous
Copies of the proposed collection may be obtained by writing to the Administration for Children and Families, Office of Planning, Research and Evaluation, 330 C Street SW., Washington, DC 20201. Attention Reports Clearance Officer. All requests should be identified by the title of the information collection. Email address:
OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this document in the
Health Resources and Services Administration, HHS.
Notice of class deviations from the requirements for competition and application period for the health center program.
The Bureau of Primary Health Care (BPHC) is awarding funds to health centers transitioning to value-based models of care, improving the use of information in decision making, and increasing engagement in delivery system transformation.
Section 330 of the Public Health Service Act, as amended (42 U.S.C. 254b, as amended).
The fiscal year (FY) 2016 Health Center Program Delivery System Health Information Investment (DSHII) funding will provide formula-based, one-time support for the purchase of health information technology (health IT) enhancements to accelerate health centers' transition to value-based models of care, improve efforts to share and use information to support better decisions, and increase engagement in delivery system transformation efforts. Grant funds will help health centers make strategic investments to enhance their health IT, implement new clinical and administrative workflows, develop new reports, and better prepare providers and staff to use health IT and data to achieve the quality, cost, and patient-centered goals of delivery system reforms. In addition, health centers that do not currently have a certified electronic health record (EHR) at all sites and in use by all providers must propose at a minimum to use DSHII funding to initiate and/or increase the number of sites and providers using a certified EHR. The investments will help health centers improve the quality and safety of services provided to the nation's most vulnerable populations.
Olivia Shockey, Expansion Division Director, Office of Policy and Program Development, Bureau of Primary Health Care, Health Resources and Services Administration at 301-443-9282 or
Office of the Secretary, HHS.
Notice.
Notice is hereby given that the Office of Research Integrity (ORI) has taken final action in the following case:
The
ORI found that the Respondent intentionally, knowingly, and recklessly engaged in research misconduct by falsely claiming to have generated recombinant
Specifically, Respondent trimmed and used portions of Figure 6 (right panel) of a draft R21 CA120017-01 grant application, representing an image of liver tumor two (2) days after injection of
Respondent trimmed and used portions of Figure 6C of R21 CA120017-02, representing pancreatic tumor five (5) days after injection of
Respondent trimmed and used a portion of a figure that was reported as mouse pancreatic tumor tissue treated with control liposomes in four (4) figures (Figure 6D in R21 CA120017 Final Progress Report, Figure 10D in R01 CA130897-01 A1, Figure 7D in R01 CA130897-01 A2, and Figure 5D in R01 CA148697-01), to represent results from mouse pancreatic tumor tissue not treated with control liposomes in:
Respondent falsified at least four (4) and possibly eight (8) images by using and relabeling Figures 4A (left panel), 4B (right panel), and 4B (left panel) in
Respondent trimmed and used portions of Figure 4E (right panel) in
The Respondent also fabricated the resulting quantitative data in nineteen (19) summary bar-graphs based on the false histopathological images in:
(1) Respondent is debarred from any contracting or subcontracting with any agency of the United States Government and from eligibility for, or involvement in, nonprocurement programs of the United States Government referred to as “covered transactions” pursuant to HHS' Implementation (2 CFR part 376
(2) Respondent is prohibited from serving in any advisory capacity to the U.S. Public Health Service (PHS) including, but not limited to, service on any PHS advisory committee, board, and/or peer review committee, or as a consultant.
Director, Office of Research Integrity, 1101 Wootton Parkway, Suite 750, Rockville, MD 20852, (240) 453-8800.
The Indian Health Service (IHS) Office of Direct Service and Contracting Tribes (ODSCT) and the Office of Resource Access and Partnerships (ORAP) is accepting cooperative agreement applications for the National Indian Health Outreach and Education III (NIHOE-III)-Health Reform funding opportunity that includes outreach and education activities on the following: The Patient Protection and Affordable Care Act, Public Law 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, Public Law 111-152, collectively known as the Affordable Care Act (ACA), and the Indian Health Care Improvement Act (IHCIA), as amended. This program is authorized under the Snyder Act, codified at 25 U.S.C. 13, and the Transfer Act, codified at 42 U.S.C. 2001(a). This program is described in the Catalog of Federal Domestic Assistance under 93.933.
The NIHOE III—Health Reform program carries out health program
The purpose of this IHS cooperative agreement announcement is to encourage national Indian organizations, IHS, and Tribal partners to work together to conduct ACA/IHCIA training and technical assistance throughout Indian Country. Under the Limited Competition NIHOE Health Reform Cooperative Agreement program, the overall program objective is to improve Indian health care by conducting training and technical assistance across AI/AN communities to ensure that the Indian health care system and all AI/ANs are prepared to take advantage of the new health insurance coverage options which will improve the quality of and access to health care services and increase resources for AI/AN health care. The goal of this program announcement is to coordinate and conduct training and technical assistance on a national scale for the 567 Federally-recognized Tribes and Tribal organizations on the changes, improvements and authorities of the ACA and IHCIA and the health insurance options available to AI/AN through the Health Insurance Marketplace.
Competition for the award included in this announcement is limited to national Indian organizations with at least ten years of experience providing training, education and outreach on a national scale. This limitation ensures that the awardee will have (1) a national information-sharing infrastructure which will facilitate the timely exchange of information between the HHS, Tribes, and Tribal organizations on a broad scale; (2) a national perspective on the needs of AI/AN communities that will ensure that the information developed and disseminated through the projects is culturally appropriate, useful and addresses the most pressing needs of AI/AN communities; and (3) established relationships with Tribes and Tribal organizations that will foster open and honest participation by AI/AN communities. Regional and local organizations will not have the mechanisms in place to conduct communication on a national level, nor will they have an accurate picture of the health care needs facing AI/ANs nationwide. Organizations with less experience will lack the established relationships with Tribes and Tribal organizations throughout the country that will facilitate participation and the open and honest exchange of information between Tribes and HHS. However, awardees will be expected to work with regional and local organizations to achieve the goals herein. With the limited funds available for these health reform projects, HHS must ensure that the training, education and outreach efforts described in this announcement reach the widest audience possible in a timely fashion, are appropriately tailored to the needs of AI/AN communities throughout the country, and come from a source that AI/ANs recognize and trust. For these reasons, this is a limited competition announcement.
Cooperative Agreement.
The total amount of funding identified for the current funding cycle which covers fiscal years (FY) 2016-2018 is approximately $600,000. Individual award amounts are anticipated to be $200,000 per FY, respectively, if awarded to two entities applying separately. Further details are provided in the applicable section components. The amount of funding available for both competing and continuation awards issued under this announcement is subject to the availability of appropriations and budgetary priorities of the Agency. The IHS is under no obligation to make awards that are selected for funding under this announcement.
Two entities applying separately to accomplish appropriately divided program activities:
1. One entity will apply for $75,000 per FY or $225,000 total.
2. The second entity will apply for the remaining $125,000 per FY or $375,000 total.
Approximately two awards will be issued under this program announcement.
The project period will be for three years and will run consecutively from September 15, 2016 to September 14, 2019.
Cooperative agreements awarded by the HHS are administered under the same policies as a grant. The funding agency (IHS) is required to have substantial programmatic involvement in the project during the entire award segment. Below is a detailed description of the level of involvement required for both IHS and the grantee. IHS will be responsible for activities listed under section A and the grantee will be responsible for activities listed under section B as stated:
(1) The IHS assigned program official will work in partnership with the awardee in all decisions involving strategy, hiring of consultants, deployment of resources, release of public information materials, quality assurance, coordination of activities, any training activities, reports, budget and evaluation. Collaboration includes data analysis, interpretation of findings and reporting.
(2) The IHS assigned program official will approve the training curriculum content, facts, delivery mode, pre- and post-assessments, and evaluation before any materials are printed and the training is conducted.
(3) The IHS assigned program official will review and approve all of the final draft products before they are published and distributed.
The awardee must comply with relevant Office of Management and Budget (OMB) Circular provisions regarding lobbying, any applicable lobbying restrictions provided under
(1) Foster collaboration across the Indian health care system to encourage and facilitate an open exchange of ideas and open communication regarding training and technical assistance on the ACA and IHCIA provisions.
(2) Conduct training and technical assistance on the ACA and IHCIA and the changes and requirements that will affect AI/ANs either independently or jointly via a partnership as described previously. The purpose of this IHS cooperative agreement announcement is to encourage national and regional Indian organizations and IHS and Tribal (I/T) partners to work together to conduct ACA/IHCIA training and technical assistance throughout Indian Country. The project goals are three-fold for the IHS and the selected entities:
(i) Materials—Develop and disseminate (upon IHS approval) training materials about the ACA/IHCIA impact on the Indian health care system including: Educating consumers on the health care insurance options available, educating the I/T system on the process for enrollment (with a special focus on the Certified Application Counselor (CAC) and Hardship Exemption requirements) and eligibility determinations, and maximizing revenue opportunities.
(ii) Training—Develop and implement an ACA/IHCIA implementation training plan and individual training sessions aimed at educating all Indian health care system stakeholders on health care system impact and changes, specifically implementation in the different types of marketplaces, the role of Health Insurance Marketplace assisters (special emphasis on CAC), Navigators, and the Hardship Exemption for AI/ANs. Collaborate and partner with other national organizations to identify ways to take full advantage of the health care coverage options offered through the Health Insurance Marketplace.
(iii) Technical Assistance—Provide technical assistance to I/T on the ACA/IHCIA implementation. Work with these entities to assess the training needs, identify innovations in ACA/IHCIA implementation, including technology, and promote the dissemination and replication of solutions to the challenges faced by I/T in implementing the ACA/IHCIA through the identification and promotion of best practices.
The project will conduct the following major activities:
1. Develop and implement a communications strategy for each FY as follows:
a. Applicant 1—$75,000 per FY totaling $225,000 for all three years.
i. Educate AI/ANs on the available health coverage options under the ACA;
ii. Focus on the needs of Direct Services Tribes, including: Providing policy review and analysis of health care issues, training Tribal leaders on the health insurance options available under the ACA and sharing outreach and education best practices among Direct Service Tribes.
iii. Develop a technical assistance plan and provide technical assistance to NIHOE Health Reform partners, Tribal leaders, Tribal employers and Direct Service Tribes on ACA/IHCIA implementation across the Indian health care system.
iv. Work with NIHOE Health Reform partners and Direct Service Tribes to achieve economies of scale and reduce duplication of AI/AN training and outreach and education materials, including the development of cross-cutting ACA/IHCIA content specific to the Indian health care system.
v. Work with NIHOE Health Reform partners and Direct Service Tribes to enhance collaboration with other Federal agency programs, local, state, Tribal and national partners.
b. Applicant 2—$125,000 per FY totaling $375,000 for all three years.
i. Educate Tribal leaders and Tribal employers on the health insurance options under the ACA including the Small Business Health Options Program and Tribal self-insurance; and
ii. Develop a technical assistance plan and provide technical assistance to NIHOE Health Reform partners, Tribal leaders, Tribal employers and Direct Service Tribes on ACA/IHCIA implementation across the Indian health care system.
The following key components need to be addressed in the work plan:
Develop a national coordination strategy for the Health Reform project to ensure a shared vision and mission amongst all partners and convene partners on a regular basis.
Applicants should describe plans for addressing the following:
• The awardee shall coordinate and develop a multiple strategy education and outreach training approach for I/T that reaches the widest audience possible in a timely fashion, appropriately tailored to the needs of AI/AN communities.
• The awardee shall conduct regional and national ACA/IHCIA education and outreach focusing on four consumer groups: (1) Consumers; (2) Tribal Leadership and Membership; (3) Tribal Employers; and (4) Indian Health Facility Administrators.
• The awardee shall provide measurable outcomes and performance improvement activities for ACA/IHCIA outreach and education actions.
• The awardee shall share information, innovative ideas, challenges and solutions, and provide progress reports.
• The awardee shall develop, monitor and review ACA review metrics that provide indicators of AI/AN participation in marketplace plans and I/T participation as network providers in the marketplace and disseminate ACA policy information at national conferences and through IHS advisory committees.
• The awardee shall review and coordinate ACA/IHCIA policy recommendations and strategies by the I/T.
• The awardee shall ensure the training curriculum content addresses all new regulations and operations for implementing the ACA/IHCIA requirements.
• The awardee shall collaborate and coordinate to ensure training and educational materials are widely distributed to Tribal leaders and frontline enrollment personnel.
• The awardee shall conduct and record monthly meetings with NIHOE Health Reform national and regional principals to share information, share best practices, and provide progress reports.
• The awardee shall plan communication around key moments or events through the grant period to increase education efforts.
• The awardees shall identify I/T audiences that may have challenges with enrollments and tailor outreach efforts accordingly.
• The awardees shall develop communications vehicles to showcase positive impact stories of I/T with ACA/IHCIA.
• The awardee shall develop and provide templates for Tribal, IHS, and community outreach and education.
• The awardee shall conduct workshops and/or presentations including, but not limited to, the successes of the ACA/IHCIA promising practices and/or best practices of I/T programs at three national conferences (venue and content of presentations to
• The awardee will provide postings on ACA/IHCIA outreach and education related information for appropriate Web site dissemination.
• The awardee will develop and/or maintain a comprehensive list of ACA/IHCIA outreach and education program development and business practice guidelines for use by I/T programs.
• The awardee shall act as a resource broker and identify subject matter experts to conduct trainings and technical assistance for implementation of the ACA enrollments.
• The awardee shall provide quarterly articles for national and local media outlets and I/T news information sources, focusing on the successful impact and outcomes of ACA/IHCIA in Tribal communities, available resources, and funding opportunities.
• The awardee shall meet with stakeholders to identify their needs from a community level and monitor level of access to education and outreach materials (
• The awardee shall re-evaluate all ACA/IHCIA training material available for AI/AN, present findings to IHS, and mutually decide on new materials.
• The awardee shall record training sessions and make the recordings available to the I/T and AI/AN community on the Web sites of the national Indian organizations and partners.
• The awardee shall provide focused ACA/IHCIA education that translates in everyday language explaining the benefits of the ACA and the special provisions for Indians. The awardee, because involvement of community based partners and local leadership from all I/T levels is an important factor in the success of any enrollment process, shall develop modified training briefs for Tribal health directors, chief executive officers, health care professionals, and Tribal leaders to assist with outreach efforts.
• The awardee shall provide ongoing AI/AN consumers training on tools developed for State Based Marketplace (SBM) implementation.
• The awardee shall provide semi-annual reports documenting and describing progress and accomplishment of the activities specified above, attaching any necessary documentation to adequately document accomplishments.
• The awardee shall attend regularly scheduled, in-person and conference call meetings with the IHS assigned program official team to discuss the awardee's services and outreach and education related issues. The awardee must provide meeting minutes that highlight the awardee's specific involvement and participation.
• The awardee shall obtain approval from the IHS assigned program official for all PowerPoint presentations, electronic content, and other materials, including mass emails, developed by awardee pursuant to this award and any supplemental awards prior to the presentation or dissemination of such materials to any party, allowing for a reasonable amount of time for IHS review.
• The awardee shall conduct and record monthly meetings with NIHOE national and regional principals to share information and provide progress reports.
• The awardee shall assess and provide measurable outcomes and performance improvement activities for ACA/IHCIA outreach and education actions both quantitative and qualitative.
1. The awardee shall monitor and track I/T facility enrollment data and identify challenges and opportunities for outreach and education activities and report findings on a regular basis.
2. Identify successes and gaps in enrollment and develop future enrollment campaigns and report findings on a regular basis.
• Attendance at regularly scheduled meetings between awardee and the IHS assigned program official, evidenced by meeting minutes which highlight the awardee's specific involvement and participation.
• Participation on outreach and education conference calls identified by the IHS assigned program official, evidenced by meeting agenda and minutes as needed.
• Report of outcomes at conferences (meeting booths, workshops and/or presentations provided):
1. National Advisory Committee conference calls and meetings.
2. IHS area conference calls.
3. IHS area and national webinars.
4. Other AI/AN national conferences.
• Completed programmatic reviews of semi and annual progress reports of outreach and education projects, in order to identify projects that require technical assistance. [Note: This review is not to replace IHS review of outreach and education programs. The programmatic reviews to be conducted by grantee are secondary reviews intended solely to identify programs in need of technical assistance.]
○ The awardee shall help the IHS assigned program official identify challenges faced by participating I/T and assist in developing solutions.
• Copies of educational and practice-based information provided to I/T programs (electronic form and one hard copy).
• Copies of all promotional and educational materials provided to I/T programs and other projects (electronic form and one hard copy).
• Copies of all promotional materials provided to media and other outlets (electronic form and one hard copy).
• Copies of all articles published (electronic form and one hard copy). Submit semi-annual and annual progress reports to ORAP and ODSCT, due no later than 30 days after the reporting cycle, attaching any necessary documentation. For example: Meeting minutes, correspondence with I/T programs, samples of all written materials developed including brochures, news articles, videos, and radio and television ads to adequately document accomplishments.
• The awardee will submit a deliverable schedule to the program official not later than 30 days after the start date.
The IHS will provide guidance and assistance as needed. Copies of all requirements must be submitted to the IHS ODSCT; IHS ORAP; and IHS Deputy Director.
1. Evaluate all available ACA/IHCIA training material available for AI/AN and create additional materials as needed that are related to ACA/IHCIA.
2. Record, track, and coordinate information sharing activities (enrollments, trainings, information shared, meetings, updates, etc.) with IHS Offices: ODSCT, ORAP and 11 IHS area offices including Albuquerque Area, Bemidji Area, Billings Area, California Area, Great Plains Area, Nashville Area, Navajo Area, Oklahoma City Area, Phoenix Area, Portland Area and Tucson Area.
3. Record training sessions and describe how they will be made available on the Web sites of the national Indian organizations and partners.
4. Describe how to ensure the training curriculum content addresses all new regulations implementing the ACA and IHCIA requirements.
5. Participate in monthly meetings with NIHOE Health Reform national and regional principals to share information and provide progress reports.
6. Provide ongoing training on tools developed for SBM implementation.
7. Because involvement of community based partners and local leadership from all I/T levels is an important factor in the success of any enrollment process, develop modified training briefs for other community leaders to assist with outreach efforts.
1. Provide a Work Plan that describes the sequence of specific activities and steps that will be used to carry out each of the objectives, including updates about progress implementing the ACA.
2. Report the number of CAC staff trained and employed, network contracts, additional consumers enrolled in Medicaid, Children's Health Insurance Program (CHIP) or marketplace plan, and in-network contracts with a Qualified Health Plans (QHP) in the Marketplace using the Model QHP Addendum for Indian Health Care Providers. Describe outreach and enrollment activities, partnerships, and planning.
3. Include a detailed time line that links activities to project objectives for every 12-month budget period for the three years of funding.
4. Identify challenges, both opportunities and barriers that are likely to be encountered in designing and implementing the activities and approaches that will be used to address such challenges.
5. Describe communication methods with partners including plans for improving communication.
1. Provide a plan for assessing the achievement of the project's objectives and for evaluating changes in the specific problems and contributing factors.
2. Identify performance measures by which the project will track its progress over time.
3. Secure agreement with IHS on evaluation methods and deadlines.
Provide a functional categorically itemized budget and program narrative justification that supports accomplishing the program objectives, activities, and outcomes within the timeframes specified.
I.
To be eligible for this “New Limited competition Announcement”, an applicant must be a 501(c)(3) non-profit entity who meets the following criteria:
Eligible applicants that can apply for this funding opportunity are national Indian organizations.
The national Indian organizations must have the infrastructure in place to accomplish the work under the proposed program.
Eligible entities must have demonstrated expertise in the following areas:
• Representing all Tribal governments and providing a variety of services to Tribes, area health boards, Tribal organizations, and Federal agencies, and playing a major role in focusing attention on Indian health care needs, resulting in improved health outcomes for AI/ANs.
• Promoting and supporting Indian health care education and coordinating efforts to inform AI/AN of Federal decisions that affect Tribal government interests including the improvement of Indian health care.
• Administering national health policy and health programs.
• Maintaining a national AI/AN constituency and clearly supporting critical services and activities within the IHS mission of improving the quality of health care for AI/AN people.
• Supporting improved health care in Indian Country.
• Providing education and outreach on a national scale (the applicant must provide evidence of at least ten years of experience in this area).
The IHS does not require matching funds or cost sharing for grants or cooperative agreements.
If application budgets exceed the highest dollar amount outlined under the “Estimated Funds Available” section within this funding announcement, the application will be considered ineligible and will not be reviewed for further consideration. If deemed ineligible, IHS will not return the application. The applicant will be notified by email by the Division of Grants Management (DGM) of this decision.
The following documentation is required:
Organizations claiming non-profit status must submit proof. A copy of the 501(c)(3) Certificate must be received with the application submission by the Application Deadline Date listed under the Key Dates section on page one of this announcement.
An applicant submitting any of the above additional documentation after the initial application submission due date is required to ensure the information was received by the IHS by obtaining documentation confirming delivery (
The application package and detailed instructions for this announcement can be found at
Questions regarding the electronic application process may be directed to Mr. Paul Gettys at (301) 443-2114 or (301) 443-5204.
The applicant must include the project narrative as an attachment to the application package. Mandatory documents for all applicants include:
• Table of contents.
• Abstract (one page) summarizing the project.
• Application forms:
○ SF-424, Application for Federal Assistance.
○ SF-424A, Budget Information—Non-Construction Programs.
○ SF-424B, Assurances—Non-Construction Programs.
• Budget Justification and Narrative (must be single spaced and not exceed five pages).
• Project Narrative (must be single spaced and not exceed ten pages for each of the two components).
○ Background information on the organization.
○ Proposed scope of work, objectives, and activities that provide a description of what will be accomplished, including a one-page Timeframe Chart.
• Tribal letters of support (Optional).
• Letter of support from organization's board of directors.
• 501(c)(3) Certificate (if applicable).
• Position descriptions of key personnel.
• Resumes of key personnel.
• Contractor/Consultant resumes or qualifications and scope of work.
• Disclosure of Lobbying Activities (SF-LLL).
• Certification Regarding Lobbying (GG-Lobbying Form).
• Copy of current Negotiated Indirect Cost rate (IDC) agreement (required) in order to receive IDC.
• Organizational Chart (optional).
• Documentation of current OMB A-133 required Financial Audit (if applicable).
Acceptable forms of documentation include:
○ Email confirmation from Federal Audit Clearinghouse (FAC) that audits were submitted; or
○ Face sheets from audit reports. These can be found on the FAC Web site:
All Federal-wide public policies apply to IHS grants and cooperative agreements with exception of the discrimination policy.
A. Project Narrative: This narrative should be a separate Word document that is no longer than ten pages for each of the two components for a total of 20 pages: $600,000 to conduct ACA/IHCIA education and outreach training and technical assistance for three consecutive years. Project narrative must: Be single-spaced, be type written, have consecutively numbered pages, use black type not smaller than 12 characters per one inch, and be printed on one side only of standard size 8
Be sure to succinctly address and answer all questions listed under the narrative and place them under the evaluation criteria (refer to Section V.1, Evaluation criteria in this announcement) and place all responses and required information in the correct section (noted below), or they shall not be considered or scored. These narratives will assist the Objective Review Committee (ORC) in becoming familiar with the applicant's activities and accomplishments prior to this cooperative agreement award. If the narrative exceeds the page limit, only the first ten pages of each component will be reviewed. The ten-page limit for the narrative does not include the work plan, standard forms, table of contents, budget, budget justifications, narratives, and/or other appendix items.
There are three parts to the narrative: Part A—Program Information; Part B—Program Planning and Evaluation; and Part C—Program Report. See below for additional details about what must be included in the narrative.
Section 1: Needs
Describe how the national Indian organization(s) has the experience to provide outreach and education efforts regarding the pertinent changes and updates in health care listed herein.
Section 1: Program Plans
Describe fully and clearly the direction the national Indian organization plans to address the NIHOE III Health Reform requirements, including how the national Indian organization plans to demonstrate improved health education and outreach services to all 567 Federally-recognized Tribes. Include proposed timelines as appropriate and applicable.
Section 2: Program Evaluation
Describe fully and clearly how the outreach and education efforts will impact changes in knowledge and awareness in Tribes and Tribal organizations to encourage appropriate changes by increasing knowledge and awareness resulting in informed choices. Identify anticipated or expected benefits for the Tribal constituency.
Section 1: Describe major accomplishments over the last 36 months.
Identify and describe significant program achievements associated with the delivery of quality health outreach and education. Provide a comparison of the actual accomplishments to the goals established for the project period, or if applicable, provide justification for the lack of progress.
Section 2: Describe major activities over the last 36 months.
Please provide an overview of significant program activities and impacts (meaningful changes made), associated with the delivery of quality health outreach and education. This section should address significant program activities and impacts including those related to the accomplishments listed in the previous section.
B. Budget Narrative: This narrative must include a line item budget with a narrative justification for all expenditures identifying reasonable and allowable costs necessary to accomplish the goals and objectives as outlined in the project narrative. Budget should match the scope of work described in the project narrative. The budget narrative should not exceed five pages.
Applications must be submitted electronically through Grants.gov by 11:59 p.m. Eastern Daylight Time (EDT) on the Application Deadline Date listed in the Key Dates section on page one of this announcement. Any application received after the application deadline will not be accepted for processing, nor will it be given further consideration for funding. Grants.gov will notify the applicant via email if the application is rejected.
If technical challenges arise and assistance is required with the electronic application process, contact
If the applicant needs to submit a paper application instead of submitting electronically through Grants.gov, a waiver must be requested. Prior approval must be requested and obtained from Mr. Robert Tarwater, Director, DGM, (see Section IV.6 below for additional information). The waiver must: (1) Be documented in writing (emails are acceptable),
Executive Order 12372 requiring intergovernmental review is not applicable to this program.
• Pre-award costs are not allowable.
• The available funds are inclusive of direct and appropriate indirect costs.
• Only one grant/cooperative agreement will be awarded per applicant.
• IHS will not acknowledge receipt of applications.
All applications must be submitted electronically. Please use the
If the applicant receives a waiver to submit paper application documents, they must follow the rules and timelines that are noted below. The applicant must seek assistance at least ten days prior to the Application Deadline Date listed in the Key Dates section on page one of this announcement.
Applicants that do not adhere to the timelines for System for Award Management (SAM) and/or
Please be aware of the following:
• Please search for the application package in
• If you experience technical challenges while submitting your application electronically, please contact
• Upon contacting
• If it is determined that a waiver is needed, the applicant must submit a request in writing (emails are acceptable) to
• If the waiver is approved, the application should be sent directly to the DGM by the Application Deadline Date listed in the Key Dates section on page one of this announcement.
• Applicants are strongly encouraged not to wait until the deadline date to begin the application process through
• Please use the optional attachment feature in
• All applicants must comply with any page limitation requirements described in this funding announcement.
• After electronically submitting the application, the applicant will receive an automatic acknowledgment from
• Email applications will not be accepted under this announcement.
All IHS applicants and grantee organizations are required to obtain a DUNS number and maintain an active registration in the SAM database. The DUNS number is a unique 9-digit identification number provided by D&B which uniquely identifies each entity. The DUNS number is site specific; therefore, each distinct performance site may be assigned a DUNS number. Obtaining a DUNS number is easy, and there is no charge. To obtain a DUNS number, please access it through
All HHS recipients are required by the Federal Funding Accountability and Transparency Act of 2006, as amended (“Transparency Act”), to report information on sub-awards. Accordingly, all IHS grantees must notify potential first-tier sub-recipients that no entity may receive a first-tier sub-award unless the entity has provided its DUNS number to the prime grantee organization. This requirement ensures the use of a universal identifier to enhance the quality of information available to the public pursuant to the Transparency Act.
Organizations that were not registered with Central Contractor Registration and have not registered with SAM will need to obtain a DUNS number first and then access the SAM online registration through the SAM home page at
Additional information on implementing the Transparency Act, including the specific requirements for DUNS and SAM, can be found on the IHS Grants Management, Grants Policy Web site:
The instructions for preparing the application narrative also constitute the evaluation criteria for reviewing and scoring the application. Weights assigned to each section are noted in parentheses. The ten page narrative for each component should include only the first year of activities; information for multi-year projects should be included as an appendix. See “Multi-year Project Requirements” at the end of this section for more information. The narrative section should be written in a manner that is clear to outside reviewers unfamiliar with prior related activities of the applicant. It should be well organized, succinct, and contain all information necessary for reviewers to understand the project fully. Points will be assigned to each evaluation criteria adding up to a total of 100 points. A minimum score of 60 points is required for funding. Points are assigned as follows:
(1) Describe the individual entity's and/or partnering entities' (as applicable) current health, education and technical assistance operations as related to the broad spectrum of health needs of the AI/AN community. Include what programs and services are currently provided (
(2) Describe the organization's current technical assistance ability. Include what programs and services are currently provided, programs and services projected to be provided, etc.
(3) Describe the population to be served by the proposed project. Include a description of the number of Tribes and Tribal members who currently benefit from the technical assistance provided by the applicant.
(4) State how previous cooperative agreement funds facilitated education, training and technical assistance nation-wide for AI/ANs and relate the progression of health care information delivery and development relative to the current proposed project. (Copies of reports will not be accepted.)
(5) Describe collaborative and supportive efforts with national, area and local Indian health boards.
(6) Describe how the project relates to the purpose of the cooperative agreement by addressing the following: Identify how the proposed project will address the changes and requirements of the Acts.
(1) Proposed project objectives must be:
a. Measurable and (if applicable) quantifiable.
b. Results oriented.
c. Time-limited.
(2) Submit a work plan in the appendix which includes the following information:
a. Provide the action steps on a timeline for accomplishing the proposed project objective(s).
b. Identify who will perform the action steps.
c. Identify who will supervise the action steps taken.
d. Identify what tangible products will be produced during and at the end of the proposed project objective(s).
e. Identify who will accept and/or approve work products during the duration of the proposed project and at the end of the proposed project.
f. Include any training that will take place during the proposed project and who will be attending the training.
g. Include evaluation activities planned.
(3) If consultants or contractors will be used during the proposed project, please include the following information in their scope of work (or note if consultants/contractors will not be used):
a. Educational requirements.
b. Desired qualifications and work experience.
c. Expected work products to be delivered on a timeline.
d. If a potential consultant/contractor has already been identified, please include a resume in the Appendix.
Each proposed objective requires an evaluation component to assess its progression and ensure its completion. Also, include the evaluation activities in the work plan. Describe the proposed plan to evaluate both outcomes and process. Outcome evaluation relates to the results identified in the objectives, and process evaluation relates to the work plan and activities of the project.
(1) For outcome evaluation, describe:
a. What the criteria will be for determining success of each objective.
b. What data will be collected to determine whether the objective was met.
c. At what intervals will data be collected.
d. Who will collect the data and their qualifications.
e. How the data will be analyzed.
f. How the results will be used.
(2) For process evaluation, describe:
a. How the project will be monitored and assessed for potential problems and needed quality improvements.
b. Who will be responsible for monitoring and managing project improvements based on results of ongoing process improvements and their qualifications.
c. How ongoing monitoring will be used to improve the project.
d. Any products, such as manuals or policies, that might be developed and how they might lend themselves to replication by others.
(3) Describe how the project will document what is learned throughout the project period. Describe any evaluation efforts that are planned to occur after the grant periods ends.
(4) Describe the ultimate benefit for the AI/ANs that will be derived from this project.
(1) Describe the organizational structure of the organization.
(2) Describe the ability of the organization to manage the proposed project. Include information regarding similarly sized projects in scope and financial assistance as well as other cooperative agreements/grants and projects successfully completed.
(3) Describe what equipment (
(4) List key personnel who will work on the project. Include title used in the work plan. In the appendix, include position descriptions and resumes for all key personnel. Position descriptions should clearly describe each position and duties, indicating desired qualifications and experience requirements related to the proposed project. Resumes must indicate that the proposed staff member is qualified to carry out the proposed project activities. If a position is to be filled, indicate that information on the proposed position description.
(1) Provide a categorical budget for 12-month budget period requested.
(2) If indirect costs are claimed, indicate and apply the current negotiated rate to the budget. Include a copy of the rate agreement in the appendix.
(3) Provide a narrative justification explaining why each line item is necessary/relevant to the proposed project. Include sufficient cost and other details to facilitate the determination of cost allowability (
Projects requiring a second and/or third year must include a brief project narrative and budget (one additional page per year) addressing the
Additional documents can be uploaded as Appendix Items in
• Work plan, logic model and/or time line for proposed objectives.
• Position descriptions for key staff.
• Resumes of key staff that reflect current duties.
• Consultant or contractor proposed scope of work and letter of commitment (if applicable).
• Current Indirect Cost Agreement.
• Organizational chart.
• Map of area identifying project location(s).
• Additional documents to support narrative (
Each application will be prescreened by the DGM staff for eligibility and completeness as outlined in the funding announcement. Applications that meet the eligibility criteria shall be reviewed for merit by the ORC based on evaluation criteria in this funding announcement. The ORC could be composed of both Tribal and Federal reviewers appointed by the IHS program to review and make recommendations on these applications. The technical review process ensures selection of quality projects in a national competition for limited funding. Incomplete applications and applications that are non-responsive to the eligibility criteria will not be referred to the ORC. The applicant will be notified via email of this decision by the Grants Management Officer of the DGM. Applicants will be notified by DGM, via email, to outline minor missing components (
To obtain a minimum score for funding by the ORC, applicants must address all program requirements and provide all required documentation.
The Notice of Award (NoA) is a legally binding document signed by the grants management officer and serves as the official notification of the grant award. The NoA will be initiated by the DGM in our grant system, GrantSolutions (
Applicants who received a score less than the recommended funding level for approval, 60 points or more, and were deemed to be disapproved by the ORC, will receive an Executive Summary Statement from the ODSCT within 30 days of the conclusion of the ORC outlining the strengths and weaknesses of their application submitted. The ODSCT will also provide additional contact information as needed to address questions and concerns as well as provide technical assistance if desired.
Approved but unfunded applicants that met the minimum scoring range and were deemed by the ORC to be “Approved,” but were not funded due to lack of funding, will have their applications held by DGM for a period of one year. If additional funding becomes available during the course of FY 2016, the approved but unfunded application may be re-considered by the awarding program office for possible funding. The applicant will also receive an Executive Summary Statement from the IHS program office within 30 days of the conclusion of the ORC.
Cooperative agreements are administered in accordance with the following regulations, policies, and OMB cost principles:
A. The criteria as outlined in this program announcement.
B. Administrative Regulations for Grants:
• Uniform Administrative Requirements for HHS Awards located at 45 CFR part 75.
C. Grants Policy:
• HHS Grants Policy Statement, Revised 01/07.
D. Cost Principles:
• Uniform Administrative Requirements for HHS Awards, “Cost Principles,” located at 45 CFR part 75, subpart E.
E. Audit Requirements:
• Uniform Administrative Requirements for HHS Awards, “Audit Requirements,” located at 45 CFR part 75, subpart F.
This section applies to all grant recipients that request reimbursement of indirect costs (IDC) in their grant application. In accordance with HHS Grants Policy Statement, Part II-27, IHS requires applicants to obtain a current IDC rate agreement prior to award. The rate agreement must be prepared in accordance with the applicable cost principles and guidance as provided by the cognizant agency or office. A current rate covers the applicable grant activities under the current award's budget period. If the current rate is not on file with the DGM at the time of award, the IDC portion of the budget will be restricted. The restrictions remain in place until the current rate is provided to the DGM.
Generally, IDC rates for IHS grantees are negotiated with the Division of Cost Allocation (DCA)
The grantee must submit required reports consistent with the applicable deadlines. Failure to submit required reports within the time allowed may result in suspension or termination of an active grant, withholding of additional awards for the project, or other enforcement actions such as withholding of payments or converting to the reimbursement method of payment. Continued failure to submit required reports may result in one or both of the following: (1) The imposition of special award provisions; and (2) the non-funding or non-award of other eligible projects or activities. This requirement applies whether the delinquency is attributable to the failure of the grantee organization or the individual responsible for preparation of the reports. Per DGM policy, all reports are required to be submitted electronically by attaching them as a “Grant Note” in GrantSolutions. Personnel responsible for submitting reports will be required to obtain a login
The reporting requirements for this program are noted below.
Program progress reports are required semi-annually within 30 days after the budget period ends. These reports must include a brief comparison of actual accomplishments to the goals established for the period, or, if applicable, provide sound justification for the lack of progress and other pertinent information as required. A final report must be submitted within 90 days of expiration of the budget/project period.
Federal Financial Report FFR (SF-425), Cash Transaction Reports are due 30 days after the close of every calendar quarter to the Payment Management Services, HHS at:
Grantees are responsible and accountable for accurate information being reported on all required reports: the Progress Reports and Federal Financial Report.
This award may be subject to the Transparency Act sub-award and executive compensation reporting requirements of 2 CFR part 170.
The Transparency Act requires the OMB to establish a single searchable database, accessible to the public, with information on financial assistance awards made by Federal agencies. The Transparency Act also includes a requirement for recipients of Federal grants to report information about first-tier sub-awards and executive compensation under Federal assistance awards.
IHS has implemented a Term of Award into all IHS Standard Terms and Conditions, NoAs and funding announcements regarding the FSRS reporting requirement. This IHS Term of Award is applicable to all IHS grant and cooperative agreements issued on or after October 1, 2010, with a $25,000 sub-award obligation dollar threshold met for any specific reporting period. Additionally, all new (discretionary) IHS awards (where the project period is made up of more than one budget period) and where: (1) The project period start date was October 1, 2010 or after and (2) the primary awardee will have a $25,000 sub-award obligation dollar threshold during any specific reporting period will be required to address the FSRS reporting. For the full IHS award term implementing this requirement and additional award applicability information, visit the DGM Grants Policy Web site at:
Recipients of federal financial assistance (FFA) from HHS must administer their programs in compliance with federal civil rights law. This means that recipients of HHS funds must ensure equal access to their programs without regard to a person's race, color, national origin, disability, age and, in some circumstances, sex and religion. This includes ensuring your programs are accessible to persons with limited English proficiency. HHS provides guidance to recipients of FFA on meeting their legal obligation to take reasonable steps to provide meaningful access to their programs by persons with limited English proficiency. Please see
The HHS Office for Civil Rights (OCR) also provides guidance on complying with civil rights laws enforced by HHS. Please see
Pursuant to 45 CFR 80.3(d), an individual shall not be deemed subjected to discrimination by reason of his/her exclusion from benefits limited by federal law to individuals eligible for benefits and services from the Indian Health Service.
Recipients will be required to sign the HHS-690 Assurance of Compliance form which can be obtained from the following Web site:
The IHS is required to review and consider any information about the applicant that is in the Federal Awardee Performance and Integrity Information System (FAPIIS) before making any award in excess of the simplified acquisition threshold (currently $150,000) over the period of performance. An applicant may review and comment on any information about itself that a federal awarding agency previously entered. IHS will consider any comments by the applicant, in addition to other information in FAPIIS in making a judgment about the applicant's integrity, business ethics, and record of performance under federal awards when completing the review of risk posed by applicants as described in 45 CFR 75.205.
As required by 45 CFR part 75 Appendix XII of the Uniform Guidance, non-federal entities (NFEs) are required to disclose in FAPIIS any information about criminal, civil, and administrative proceedings, and/or affirm that there is no new information to provide. This applies to NFEs that receive federal awards (currently active grants, cooperative agreements, and procurement contracts) greater than $10,000,000 for any period of time during the period of performance of an award/project.
As required by 2 CFR part 200 of the Uniform Guidance, and the HHS implementing regulations at 45 CFR part 75, effective January 1, 2016, the IHS must require a non-federal entity or an applicant for a federal award to disclose, in a timely manner, in writing to the IHS or pass-through entity all violations of federal criminal law involving fraud, bribery, or gratutity violations potentially affecting the federal award.
Submission is required for all applicants and recipients, in writing, to the IHS and to the HHS Office of Inspector General all information related to violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award. 45 CFR 75.113.
Disclosures must be sent in writing to: U.S. Department of Health and Human Services, Indian Health Service, Division of Grants Management, ATTN: Robert Tarwater, Director, 5600 Fishers Lane, Mailstop: 09E70, Rockville, Maryland 20852. (Include “Mandatory Grant Disclosures” in subject line). Ofc: (301) 443-5204. Fax: (301) 594-0899. Email:
U.S. Department of Health and Human Services, Office of Inspector General, ATTN: Mandatory Grant Disclosures, Intake Coordinator, 330 Independence Avenue SW., Cohen Building, Room 5527, Washington, DC 20201, URL:
Failure to make required disclosures can result in any of the remedies described in 45 CFR 75.371 Remedies for noncompliance, including suspension or debarment (See 2 CFR parts 180 & 376 and 31 U.S.C. 3321).
1. Questions on the programmatic issues may be directed to: Ms. Michelle EagleHawk, Deputy Director, ODSCT, 5600 Fishers Lane, Mail Stop: O8E17, Rockville, Maryland 20857, Telephone: (301) 443-1104, E-Mail:
2. Questions on grants management and fiscal matters may be directed to: Ms. Patience Musikikongo, Grants Management Specialist, DGM, 5600 Fishers Lane, Mail Stop: 09E70, Rockville, MD 20857, Telephone: (301) 443-2059, Fax: (301) 594-0899, E-Mail:
3. Questions on systems matters may be directed to: Mr. Paul Gettys, Grant Systems Coordinator, 5600 Fishers Lane, Mail Stop: 09E70, Rockville, MD 20857, Phone: (301) 443-2114; or the DGM main line (301) 443-5204, Fax: (301) 594-0899, E-Mail:
The Public Health Service strongly encourages all cooperative agreement and contract recipients to provide a smoke-free workplace and promote the non-use of all tobacco products. In addition, Pub. L. 103-227, the Pro-Children Act of 1994, prohibits smoking in certain facilities (or in some cases, any portion of the facility) in which regular or routine education, library, day care, health care, or early childhood development services are provided to children. This is consistent with the HHS mission to protect and advance the physical and mental health of the American people.
Indian Health Service, HHS.
Notice
In compliance with the Paperwork Reduction Act of 1995 which requires 60 days advance opportunity for public comment on proposed information collection projects, the Indian Health Service (IHS) is publishing for comment a summary of proposed information collection to be submitted to the Office of Management and Budget (OMB) for review.
C
Send your written comments, requests for more information on the collection, or requests to obtain a copy of the data collection instrument and instructions to Ms. Celeste Davis by one of the following methods:
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The Division is submitting the proposed information collection to OMB for review, as required by the Paperwork Reduction Act of 1995. This Notice is soliciting comments from members of the public and affected agencies concerning the proposed collection of information to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility: (2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Enhance the quality, utility, and clarity of the information to be collected; and (4) Minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques of other forms of information technology,
IHS and EPA will also incorporate follow-up outreach and education with facilities to explain results and suggest corrective actions to remediate or reduce exposures from lead, allergens, pesticides, and PCBs that are detected in the facilities. The principal purpose of this project is to provide valuable data about the levels of lead, allergens, pesticides, and PCBs in child care facilities located in Portland Area Indian Country. This project will help prioritize services and funding based on known needs and risks in order to help facilities obtain needed services. This data may help tribes secure funding from the federal Head Start program and other funding sources for repairs, rehabilitations or other corrective action. This study may also provide federal Head Start and Tribal Programs with data to improve standards and initiate policy changes, if necessary. IHS will also provide indoor air quality kits to the facilities and environmental health training to center staff to provide methods and practices for preventing and controlling indoor environmental hazards. This project may be replicated in other IHS areas.
There are no direct costs to respondents other than their time to voluntarily complete the forms and submit them for consideration.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in section 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, HHS.
Notice.
The invention listed below is owned by an agency of the U.S. Government and is available for licensing and/or co-development in the U.S. in accordance with 35 U.S.C. 209 and 37 CFR part 404 to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing and/or co-development.
Invention Development and Marketing Unit, Technology Transfer Center, National Cancer Institute, 9609 Medical Center Drive, Mail Stop 9702, Rockville, MD, 20850-9702.
Information on licensing and co-development research collaborations, and copies of the U.S. patent applications listed below may be obtained by contacting: Attn. Invention Development and Marketing Unit, Technology Transfer Center, National Cancer Institute, 9609 Medical Center Drive, Mail Stop 9702, Rockville, MD 20850-9702, Tel. 240-276-5515 or email
Technology description follows.
NCI CAPR has developed Tri-allelic K18-T121
• These models serve as a foundation for preclinical research and evaluation of efficacy of novel therapeutics for ovarian cancer.
• The GEM models described here can be used to develop cell lines and allograft models for evaluating drug potency relative to Brca1 mutation status.
• These mouse models provide the opportunity for evaluation of effective therapeutics, including prediction of differential responses in Brca1-wild type and Brca1-deficient tumors and development of relevant biomarkers.
• Novel resource for evaluating disease etiology and biomarkers, therapeutic evaluation, and improved imaging strategies in epithelial ovarian cancer
• Similarity to human ovarian cancer based on transcriptional profiling
• Suitable preclinical cancer models with high predictive value.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Heart, Lung, and Blood Advisory Council.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Periodically, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish a summary of information collection requests under OMB review, in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35). To request a copy of these documents, call the SAMHSA Reports Clearance Officer on (240) 276-1243.
The Substance Abuse and Mental Health Services Administration's (SAMHSA) Center for Mental Health Services (CMHS) is requesting approval from the Office of Management and Budget (OMB) for new data collection activities associated with its Mental Health First Aid (MHFA) program.
This information is needed to evaluate implementation of MHFA and Youth Mental Health First Aid in three distinct grant programs: Project Advancing Wellness and Resilience in Education (AWARE) State Education Agency (SEA) Cooperative Agreements, which provide funding to support MHFA and YMHFA training to state education agencies; Project AWARE Local Education Agency (LEA) Grants, which provide funding to school districts; and Project AWARE Community (C), a new funding opportunity in fiscal year 2015 that is intended to support MHFA and YMHFA training through a wide range of community organizations.
The MHFA/YMHFA evaluation will address both overarching and program-specific questions related to the implementation and effectiveness of widespread dissemination of mental health literacy programs through these three distinct funding mechanisms and increase SAMHSA's understanding of training, referral benefits, and issues in varied milieu (
This data collection is covered under the requirements of Public Law 103-62, the Government Performance and Results Act (GPRA) of 1993, Title 38, section 527, Evaluation and Data Collection, as well as 38 CFR 1.15, Standards for Program Evaluation.
SAMHSA is requesting clearance for four data collection instruments:
(1) MHFA/YMHFA Pre-Training Survey
(2) MHFA/YMHFA Post-Training Survey
(3) MHFA/YMHFA 3-Month and 6-Month Follow-Up Survey
(4) Qualitative protocol for interviews with site coordinators
The table below reflects the annualized hourly burden.
Written comments and recommendations concerning the proposed information collection should be sent by August 24, 2016 to the SAMHSA Desk Officer at the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB). To ensure timely receipt of comments, and to avoid potential delays in OMB's receipt and processing of mail sent through the U.S. Postal Service, commenters are encouraged to submit their comments to OMB via email to:
Substance Abuse and Mental Health Services Administration, HHS.
Notice.
The Department of Health and Human Services (HHS) notifies federal agencies of the laboratories and Instrumented Initial Testing Facilities (IITF) currently certified to meet the standards of the Mandatory Guidelines for Federal Workplace Drug Testing Programs (Mandatory Guidelines). The Mandatory Guidelines were first published in the
A notice listing all currently HHS-certified laboratories and IITFs is published in the
If any laboratory or IITF has withdrawn from the HHS National Laboratory Certification Program (NLCP) during the past month, it will be listed at the end and will be omitted from the monthly listing thereafter.
This notice is also available on the Internet at
Giselle Hersh, Division of Workplace Programs, SAMHSA/CSAP, 5600 Fishers Lane, Room 16N03A, Rockville, Maryland 20857; 240-276-2600 (voice).
The Mandatory Guidelines were initially developed in accordance with Executive Order 12564 and section 503 of Public Law 100-71. The “Mandatory Guidelines for Federal Workplace Drug Testing Programs,” as amended in the revisions listed above, requires strict standards that laboratories and IITFs must meet in order to conduct drug and specimen validity tests on urine specimens for federal agencies.
To become certified, an applicant laboratory or IITF must undergo three rounds of performance testing plus an on-site inspection. To maintain that certification, a laboratory or IITF must participate in a quarterly performance testing program plus undergo periodic, on-site inspections.
Laboratories and IITFs in the applicant stage of certification are not to be considered as meeting the minimum requirements described in the HHS Mandatory Guidelines. A HHS-certified laboratory or IITF must have its letter of certification from HHS/SAMHSA (formerly: HHS/NIDA), which attests that it has met minimum standards.
In accordance with the Mandatory Guidelines dated November 25, 2008 (73 FR 71858), the following HHS-certified laboratories and IITFs meet the minimum standards to conduct drug and specimen validity tests on urine specimens:
* The Standards Council of Canada (SCC) voted to end its Laboratory Accreditation Program for Substance Abuse (LAPSA) effective May 12, 1998. Laboratories certified through that program were accredited to conduct forensic urine drug testing as required by U.S. Department of Transportation (DOT) regulations. As of that date, the certification of those accredited Canadian laboratories will continue under DOT authority. The responsibility for conducting quarterly performance testing plus periodic on-site inspections of those LAPSA-accredited laboratories was transferred to the U.S. HHS, with the HHS' NLCP contractor continuing to have an active role in the performance testing and laboratory inspection processes. Other Canadian laboratories wishing to be considered for the NLCP may apply directly to the NLCP contractor just as U.S. laboratories do.
Upon finding a Canadian laboratory to be qualified, HHS will recommend that DOT certify the laboratory (
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, Department of Housing and Urban Development (HUD).
Notice of a Federal Advisory Committee Meeting: Manufactured Housing Consensus Committee (MHCC).
This notice sets forth the schedule and proposed agenda for a teleconference meeting of the MHCC. The teleconference meeting is open to the public. The agenda provides an opportunity for citizens to comment on the business before the MHCC.
The teleconference meeting will be held on August 9, 2016, 10:00 a.m. to 5:00 p.m. Eastern Daylight Time (EDT). The teleconference numbers are: US toll-free: 1-866-813-5287. Participant Code: 4325433. Webinar:
Pamela Beck Danner, Administrator and Designated Federal Official (DFO), Department of Housing and Urban Development, Office of Manufactured Housing Programs, 451 7th Street SW., Room 9168, Washington, DC 20410, telephone (202) 708-6423 (this is not a toll-free number). Persons who have difficulty hearing or speaking may access this number via TTY by calling the toll-free Federal Information Relay Service at 800-877-8339.
Notice of this meeting provided in accordance with the Federal Advisory Committee Act, 5. U.S.C. App. 10(a)(2) through implementing regulations at 41 CFR § 102-3.150. The MHCC was established by the National Manufactured Housing Construction and Safety Standards Act of 1974, 42 U.S.C. 5403 (a)(3), as amended by the Manufactured Housing Improvement Act of 2000, (Pub. L. 106-569). According to 42 U.S.C. 5403, as amended, the purposes of the MHCC are to:
• Provide periodic recommendations to the Secretary to adopt, revise, and interpret the Federal manufactured housing construction and safety standards in accordance with this subsection;
• Provide periodic recommendations to the Secretary to adopt, revise, and interpret the procedural and enforcement regulations, including
• Be organized and carry out its business in a manner that guarantees a fair opportunity for the expression and consideration of various positions and for public participation.
The MHCC is deemed an advisory committee not composed of Federal employees.
Bureau of Ocean Energy Management (BOEM), Interior.
Final Notice of Sale.
On Wednesday, August 24, 2016, the Bureau of Ocean Energy Management (BOEM) will open and publicly announce bids for blocks offered in the Western Gulf of Mexico Planning Area (WPA) Lease Sale 248 (WPA Sale 248), in accordance with the provisions of the Outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. 1331-1356, as amended) and the implementing regulations issued pursuant thereto (30 CFR parts 550 and 556). The WPA Sale 248 Final Notice of Sale (NOS) Package (Final NOS Package) contains information essential to potential bidders. Bidders are charged with knowing the contents of the documents contained in the Final NOS Package.
Interested parties, upon request, may obtain a compact disc (CD-ROM) containing the Final NOS Package by contacting the BOEM Gulf of Mexico (GOM) Region at the following address: Gulf of Mexico Region Public Information Office, Bureau of Ocean Energy Management, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394, (504) 736-2519 or (800) 200-GULF, or by visiting the BOEM Web site at
This Final NOS includes the following sections:
• Whole and partial blocks that lie within the boundaries of the Flower Garden Banks National Marine Sanctuary (Sanctuary) in the East and West Flower Garden Banks and Stetson Bank. The following list identifies all blocks affected by the Sanctuary boundaries:
W
• The following blocks whose lease status is currently under appeal:
A CD-ROM (in ArcGIS and Acrobat (.pdf) format) containing all of the GOM Region leasing maps and official protraction diagrams (OPDs), is available from the BOEM Gulf of Mexico Region Public Information Office for a price of $15.00. The GOM Region leasing maps and OPDs also are available online for free in .pdf and .gra formats at
For the current status of all WPA leasing maps and OPDs, please refer to 66 FR 28002 (May 21, 2001), 67 FR 60701 (September 26, 2002), 72 FR 27590 (May 16, 2007), 76 FR 54787 (September 2, 2011), 79 FR 32572 (June 5, 2014), and 80 FR 3251 (January 22, 2015).
In addition, Supplemental Official OCS Block Diagrams (SOBDs) for blocks containing the U.S. 200-Nautical Mile Limit line and the U.S.-Mexico Maritime and Continental Shelf Boundary line are available. These SOBDs are available from the BOEM Gulf of Mexico Region Public Information Office and on BOEM's Web site at
For additional information, or to order the above referenced maps or diagrams, please call the Mapping and Automation Section at (504) 731-1457.
All blocks being offered in the lease sale are shown on these leasing maps and OPDs. The available Federal acreage of each whole and partial block in this lease sale is shown in the document “List of Blocks Available for Leasing” included in the Final NOS Package. Some of these blocks may be partially leased or transected by administrative lines, such as the Federal/State jurisdictional line, or may not be offered. A bid on a block must include all of the available Federal acreage of that block. Information on the unleased portions of such blocks can be found in the document entitled “Western Planning Area, Lease Sale 248, August 24, 2016—Unleased Split Blocks and Available Unleased Acreage of Blocks with Aliquots and Irregular Portions under Lease or Deferred,” which is included in this Final NOS Package.
For additional information, please call Mr. Lenny Coats, Chief of the Mapping and Automation Section, at (504) 731-1457.
Each lease is issued pursuant and subject to OCSLA, implementing regulations promulgated pursuant thereto, and other applicable statutes and regulations in existence upon the effective date of the lease, as well as those applicable statutes enacted and regulations promulgated thereafter, except to the extent that the after-enacted statutes and regulations explicitly conflict with an express provision of the lease. Each lease is subject to amendments to the applicable statutes and regulations, including, but not limited to, OCSLA, that do not explicitly conflict with an express provision of the lease. The lessee expressly bears the risk that such new or amended statutes and regulations (
BOEM will use Form BOEM-2005 (October 2011) to convey leases resulting from this sale. This lease form may be viewed on the BOEM Web site at
Initial periods are summarized in the following table:
(1) The standard initial period for a lease in water depths less than 400 meters issued as a result of this sale is 5 years. If the lessee spuds a well targeting hydrocarbons below 25,000 feet TVD SS within the first 5 years of the lease, then the lessee may earn an additional 3 years, resulting in an 8-year extended initial period. The lessee will earn the 8-year extended initial period when the well is drilled to a target below 25,000 feet TVD SS, or the lessee may earn the 8-year extended initial period in cases where the well targets, but does not reach, a depth below 25,000 feet TVD SS due to mechanical or safety reasons, where sufficient evidence is provided.
In order to earn the 8-year extended initial period, the lessee is required to submit to the BOEM Gulf of Mexico Regional Supervisor for Leasing and Plans, as soon as practicable, but in any instance not more than 30 days after completion of the drilling operation, a letter providing the well number, spud date, information demonstrating a target below 25,000 feet TVD SS and whether that target was reached, and if applicable, any safety, mechanical, or other problems encountered that prevented the well from reaching a depth below 25,000 feet TVD SS. This letter must request confirmation that the lessee earned the 8-year extended initial period. The extended initial period is not effective unless and until the lessee receives confirmation from BOEM. The Regional Supervisor for Leasing and Plans will confirm in writing, within 30 days of receiving the lessee's letter, whether the lessee has earned the extended initial period and update BOEM records accordingly.
A lessee that has earned the 8-year extended initial period by spudding a well with a hydrocarbon target below 25,000 feet TVD SS during the standard 5-year initial period of the lease will not be granted a suspension for that same period under the regulations at 30 CFR 250.175 because the lease is not at risk of expiring.
(2) The standard initial period for a lease in water depths ranging from 400 to less than 800 meters issued as a result
In order to earn the 8-year extended initial period, the lessee is required to submit to the BOEM Gulf of Mexico Regional Supervisor for Leasing and Plans, as soon as practicable, but in no case more than 30 days after spudding a well, a letter providing the well number and spud date, and requesting confirmation that the lessee earned the 8-year extended initial period. Within 30 days of receipt of the request, the Regional Supervisor for Leasing and Plans will provide written confirmation of whether the lessee has earned the extended initial period and update BOEM records accordingly.
(3) The standard initial period for a lease in water depths ranging from 800 to less than 1,600 meters issued as a result of this sale will be 7 years. If the lessee spuds a well within the standard 7-year initial period of the lease, the lessee will earn an additional 3 years, resulting in a 10-year extended initial period.
In order to earn the 10-year extended initial period, the lessee is required to submit to the BOEM Gulf of Mexico Regional Supervisor for Leasing and Plans, as soon as practicable, but in no case more than 30 days after spudding a well, a letter providing the well number and spud date, and requesting confirmation that the lessee earned the 10-year extended initial period. Within 30 days of receipt of the request, the Regional Supervisor for Leasing and Plans will provide written confirmation of whether the lessee has earned the extended initial period and update BOEM records accordingly.
(4) The standard initial period for a lease in water depths 1,600 meters or deeper issued as a result of this sale will be 10 years.
• $25.00 per acre or fraction thereof for blocks in water depths less than 400 meters; and
• $100.00 per acre or fraction thereof for blocks in water depths 400 meters or deeper.
BOEM will not accept a bonus bid unless it provides for a cash bonus in the amount equal to, or exceeding, the specified minimum bid of $25.00 per acre or fraction thereof for blocks in water depths less than 400 meters, and $100.00 per acre or fraction thereof for blocks in water depths 400 meters or deeper.
Annual rental rates are summarized in the following table:
Any lessee with a lease in less than 400 meters water depth who earns an 8-year extended initial period will pay an escalating rental rate as shown above. The rental rates after the fifth year for blocks in less than 400 meters water depth will become fixed and no longer escalate, if another well is spudded targeting hydrocarbons below 25,000 feet TVD SS after the fifth year of the lease, and BOEM concurs that such a well has been spudded. In this case, the rental rate will become fixed at the rental rate in effect during the lease year in which the additional well was spudded.
• 18.75%.
• $7.00 per acre or fraction thereof per year for blocks in water depths less than 200 meters; and
• $11.00 per acre or fraction thereof per year for blocks in water depths 200 meters or greater.
The issuance of leases with royalty suspension volumes (RSVs) or other forms of royalty relief is authorized under existing BOEM regulations at 30 CFR part 560. The specific details relating to eligibility and implementation of the various royalty relief programs, including those involving the use of RSVs, are codified in BSEE regulations at 30 CFR part 203. In this sale, the only royalty relief program being offered, which involves the provision of RSVs, relates to the drilling of ultra-deep wells in water depths of less than 400 meters, as described below.
Leases issued as a result of this sale may be eligible for RSVs incentives on gas produced from ultra-deep wells pursuant to 30 CFR part 203. These regulations implement the requirements of the Energy Policy Act of 2005. Under this program, wells on leases in less than 400 meters water depth and completed to a drilling depth of 20,000 feet TVD SS or deeper receive a RSV of 35 billion cubic feet on the production of natural gas. This RSVs incentive is subject to applicable price thresholds set forth in the regulation at 30 CFR part 203.
One or more of the following stipulations may be applied to leases issued as a result of this sale. The detailed text of these stipulations is contained in the “Lease Stipulations” section of this Final NOS Package.
(1) Topographic Features;
(2) Military Areas;
(3) United Nations Convention on the Law of the Sea Royalty Payment;
(4) Protected Species; and
(5) Agreement between the United States of America and the United Mexican States Concerning Transboundary Hydrocarbon Reservoirs in the Gulf of Mexico.
The following Information to Lessees (ITL) clauses provide detailed information on certain issues pertaining to this oil and gas lease sale. The detailed text of the following ITL clauses is contained in the “Information to Lessees” section of this Final NOS Package.
(1) Navigation Safety;
(2) Ordnance Disposal Areas in the WPA;
(3) Existing and Proposed Artificial Reefs/Rigs-to-Reefs;
(4) Lightering Zones;
(5) Indicated Hydrocarbons List;
(6) Military Areas in the WPA;
(7) BSEE Inspection and Enforcement of Certain U.S. Coast Guard Regulations;
(8) Potential Sand Dredging Activities in the WPA;
(9) Notice of Arrival on the Outer Continental Shelf;
(10) Bidder/Lessee Notice of Obligations Related to Criminal/Civil Charges and Offenses, Suspension, or Debarment;
(11) Protected Species; and
(12) Proposed Flower Garden Banks Expansion.
The maps pertaining to this lease sale may be found on the BOEM Web site at
The lease terms, economic conditions, and the blocks to which these terms and conditions apply are shown on the map entitled “Final, Western Planning Area, Lease Sale 248, August 24, 2016, Lease Terms and Economic Conditions.”
The blocks to which one or more lease stipulations may apply are shown on the map entitled “Final, Western Planning Area, Lease Sale 248, August 24, 2016, Stipulations and Deferred Blocks Map.”
Bids may be submitted in person or by mail at the address below. Instructions on how to submit a bid, secure payment of the advance bonus bid deposit (if applicable), and what information must be included with the bid are as follows:
For each block bid upon, a separate sealed bid must be submitted in a sealed envelope (as described below) and include the following:
• Total amount of the bid in whole dollars only;
• sale number;
• sale date;
• each bidder's exact name;
• each bidder's proportionate interest, stated as a percentage, using a maximum of five decimal places (
• typed name and title, and signature of each bidder's authorized officer;
• each bidder's qualification number;
• map name and number or OPD name and number;
• block number; and
• statement acknowledging that the bidder(s) understands that this bid legally binds the bidder(s) to comply with all applicable regulations, including payment of one-fifth of the bonus bid amount on all apparent high bids.
The information required on the bid(s) is specified in the document “Bid Form” contained in the Final NOS Package. A blank bid form is provided in the Final NOS Package for convenience and may be copied and completed with the necessary information described above.
Each bid must be submitted in a separate sealed envelope labeled as follows:
• “Sealed Bid for Oil and Gas Lease Sale 248, not to be opened until 9:00 a.m. Wednesday, August 24, 2016;”
• map name and number or OPD name and number;
• block number for block bid upon; and
• the exact name and qualification number of the submitting bidder only.
If bids are mailed, please address the envelope containing the sealed bid envelope(s) as follows: Attention: Leasing and Financial Responsibility Section, BOEM Gulf of Mexico Region, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394, Contains Sealed Bids for WPA Oil and Gas Lease Sale 248, Please Deliver to Ms. Cindy Thibodeaux, 2nd Floor, Immediately.
Bidders mailing bid(s) are advised to call Ms. Cindy Thibodeaux at (504) 736-2809 or Mr. Carrol Williams at (504) 736- 2803, immediately after putting their bid(s) in the mail. If BOEM receives bids later than the Bid Submission Deadline, the BOEM Regional Director (RD) will return those bids unopened to bidders. Please see “Section XI. Delay of Sale” regarding BOEM's discretion to extend the Bid Submission Deadline in the case of an unexpected event (
Bidders that are not currently an OCS oil and gas lease record title holder or designated operator, or those that ever have defaulted on a one-fifth bonus bid deposit, by Electronic Funds Transfer (EFT) or otherwise, must guarantee (secure) the payment of the one-fifth bonus bid deposit prior to bid submission using one of the following four methods:
• Provide a third-party guarantee;
• amend an areawide development bond via bond rider;
• provide a letter of credit; or
• provide a lump sum payment in advance via EFT.
Prior to bidding, each bidder should file Equal Opportunity Affirmative Action Representation Form BOEM-2032 (October 2011) and Equal Opportunity Compliance Report Certification Form BOEM-2033 (October 2011) with the BOEM GOM Region Adjudication Section. This certification is required by 41 CFR part 60 and Executive Order No. 11248, issued September 24, 1965, as amended by Executive Order No. 11375, issued October 13, 1967. Both forms must be on file for the bidder(s) in the GOM Region Adjudication Section prior to the execution of any lease contract.
The Geophysical Data and Information Statement (GDIS) is composed of three parts:
(1) The “Statement” page includes the company representatives' information and lists of blocks bid on that used proprietary data and those blocks bid on that did not use proprietary data;
(2) the “Table” listing the required data about each proprietary survey used (see below); and
(3) the “Maps” being the live trace maps for each survey that are identified in the GDIS statement and table.
Every bidder submitting a bid on a block in WPA Sale 248, or participating as a joint bidder in such a bid, must submit at the time of bid submission all three parts of the GDIS. A bidder must submit the GDIS
The GDIS must be submitted in a separate and sealed envelope, and identify all proprietary data; reprocessed speculative data, and/or any Controlled Source Electromagnetic surveys, Amplitude Versus Offset, Gravity, or Magnetic data; or other information used as part of the decision to bid or participate in a bid on the block.
The GDIS statement must include the name, phone number, and full address of a contact person and an alternate who are
The GDIS table should have columns that clearly state the sale number; the bidder company's name; the block area and block number bid on; the owner of the original data set (
The GDIS maps are live trace maps (in .pdf and ArcGIS shape files) that should be submitted for each
Pursuant to 30 CFR 551.12 and 30 CFR 556.501, as a condition of the sale, the BOEM Gulf of Mexico RD requests that all bidders and joint bidders submit the proprietary data identified on their GDIS within 30 days after the lease sale (unless they are notified after the lease sale that BOEM has withdrawn the request). This request only pertains to proprietary data that is not commercially available. Commercially available data is not required to be submitted to BOEM, and reimbursement will not be provided if such data is submitted by a bidder. The BOEM Gulf of Mexico RD will notify bidders and joint bidders of any withdrawal of the request, for all or some of the proprietary data identified on the GDIS, within 15 days of the lease sale. Pursuant to 30 CFR part 551 and 30 CFR 556.501 as a condition of this sale, all bidders required to submit data must ensure that the data is received by BOEM no later than the 30th day following the lease sale, or the next business day if the submission deadline falls on a weekend or Federal holiday. The data must be submitted to BOEM at the following address: Bureau of Ocean Energy Management, Resource Studies, MS 881A, 1201 Elmwood Park Blvd., New Orleans, LA 70123-2304.
BOEM recommends that bidders mark the submission's external envelope as “Deliver Immediately to DASPU.” BOEM also recommends that the data be submitted in an internal envelope, or otherwise marked, with the following designation: “Proprietary Geophysical Data Submitted Pursuant to Lease Sale 248 and used during evaluation of Block.”
In the event a person supplies any type of data to BOEM, that person must meet the following requirements to qualify for reimbursement:
(1) Persons must be registered with the System for Award Management (SAM), formerly known as the Central Contractor Registration (CCR). CCR usernames will not work in SAM. A new SAM User Account is needed to register or update an entity's records. The Web site for registering is
(2) Persons must be enrolled in the Department of the Treasury's Internet Payment Platform (IPP) for electronic invoicing. The person must enroll in the IPP at
(3) Persons must have a current On-line Representations and Certifications Application at
The GDIS Information Table must be submitted digitally, preferably as an Excel spreadsheet, on a CD or DVD along with the seismic data map(s). If bidders have any questions, please contact Ms. Dee Smith at (504) 736-2706, or Mr. John Johnson at (504) 736-2455.
Bidders should refer to Section X of this document, “The Lease Sale: Acceptance, Rejection, or Return of Bids,” regarding a bidder's failure to comply with the requirements of the Final NOS, including any failure to submit information as required in this Final NOS or Final NOS Package.
BOEM requests that bidders provide this information in the suggested format prior to or at the time of bid submission. The suggested format is included in the Final NOS Package. The form must not be enclosed inside the sealed bid envelope.
BOEM may require bidders to submit other documents in accordance with 30 CFR 556.501.
On May 17, 2016, BOEM published the most recent List of Restricted Joint Bidders in the
All signatories executing documents on behalf of bidder(s) must execute the same in conformance with the BOEM qualification records. Bidders are advised that BOEM considers the signed bid to be a legally binding obligation on the part of the bidder(s) to comply with all applicable regulations, including payment of one-fifth of the bonus bid on all high bids. A statement to this effect must be included on each bid form (see the document “Bid Form” contained in the Final NOS Package).
BOEM warns bidders against violation of 18 U.S.C. 1860, prohibiting unlawful combination or intimidation of bidders.
Bids may be withdrawn only by written request delivered to BOEM prior to the Bid Submission Deadline. The withdrawal request must be on company letterhead and must contain the bidder's name, its BOEM qualification number, the map name/number, and the block number(s) of the bid(s) to be withdrawn. The withdrawal request must be executed by an authorized signatory of the bidder and must be executed in conformance with the BOEM qualification records. Signatories must be authorized to bind their respective legal business entities (
The bonus bid amount must be stated in whole dollars. Minimum bonus bid calculations, including all rounding, for all blocks are shown in the document entitled “List of Blocks Available for Leasing,” which is included in this Final NOS Package. If the acreage of a block contains a decimal figure, then prior to calculating the minimum bonus bid, BOEM has rounded up to the next whole acre. The appropriate minimum rate per acre was then applied to the whole (rounded up) acreage. If this calculation resulted in a fractional dollar amount, the minimum bonus bid was rounded up to the next whole dollar amount. The bonus bid amount must be greater than or equal to the minimum bonus bid in whole dollars.
The Final NOS Package includes instructions, samples, and/or the preferred format for the following items. BOEM strongly encourages bidders to use these formats; should bidders use another format, they are responsible for including all the information specified for each item in this Final NOS Package.
(1) Bid Form;
(2) Sample Completed Bid;
(3) Sample Bid Envelope;
(4) Sample Bid Mailing Envelope;
(5) Telephone Numbers/Addresses of Bidders Form;
(6) GDIS Form; and
(7) GDIS Envelope Form.
Sealed bids received in response to the Final NOS will be opened at the place, date, and hour specified in the “DATE AND TIME” and “LOCATION” sections of this document. The opening of the bids is for the sole purpose of publicly announcing and recording the bids received; no bids will be accepted or rejected at that time.
Each bidder submitting an apparent high bid must submit a bonus bid deposit to the U.S. Department of the Interior's Office of Natural Resources Revenue (ONRR) equal to one-fifth of the bonus bid amount for each such bid. A copy of the notification of the high bidder's one-fifth bonus bid amount may be obtained on the BOEM Web site at
BOEM requires bidders to use EFT procedures for payment of one-fifth bonus bid deposits for WPA Sale 248, following the detailed instructions contained on the ONRR Payment Information Web page at
The United States reserves the right to withdraw any block from this lease sale prior to issuance of a written acceptance of a bid for the block.
The United States reserves the right to reject any and all bids. No bid will be accepted, and no lease for any block will be awarded to any bidder, unless:
(1) the bidder has complied with all requirements of the Final NOS Package and applicable regulations;
(2) the bid submitted is the highest valid bid; and
(3) the amount of the bid has been determined to be adequate by the authorized officer.
Any bid submitted that does not conform to the requirements of the Final NOS and Final NOS Package, OCSLA, BOEM regulations, or other applicable statutes or regulations, may be rejected and returned to the bidder. The U.S. Department of Justice and the Federal Trade Commission will review the results of the lease sale for antitrust issues prior to the acceptance of bids and issuance of leases.
To ensure that the U.S. Government receives a fair return for the conveyance of leases from this sale, high bids will be evaluated in accordance with BOEM's bid adequacy procedures which are available at
BOEM requires each bidder awarded a lease to:
(1) execute all copies of the lease (Form BOEM-2005 [October 2011], as amended);
(2) pay by EFT the balance of the bonus bid amount and the first year's rental for each lease issued in accordance with the requirements of 30 CFR 218.155 and 556.520; and
(3) satisfy the bonding requirements of 30 CFR part 556, subpart I, as amended.
ONRR requests that only one transaction be used for payment of the four-fifths bonus bid amount and the first year's rental.
The BOEM Gulf of Mexico RD has the discretion to change any date, time, and/or location specified in the Final NOS Package in case of an event that the BOEM Gulf of Mexico RD deems may interfere with the carrying out of a fair and orderly lease sale process. Such events could include, but are not limited to, natural disasters (
Bureau of Ocean Energy Management (BOEM), Interior.
Notice of availability of a record of decision
BOEM is announcing the availability of a Record of Decision for proposed oil and gas WPA Lease Sale 248. This Record of Decision identifies the Bureau's selected alternative for proposed WPA Lease Sale 248, which is analyzed in the
For more information on the Record of Decision, you may contact Mr. Gary D. Goeke, Bureau of Ocean Energy Management, Gulf of Mexico OCS Region, 1201 Elmwood Park Boulevard (GM 623E), New Orleans, Louisiana 70123-2394. You may also contact Mr. Goeke by telephone at 504-736-3233.
In the WPA 248 Supplemental EIS, BOEM evaluated three alternatives, which are summarized below with regard to proposed WPA Lease Sale 248:
All unleased whole and partial blocks in the WPA that BOEM will offer for leasing in proposed WPA Lease Sale 248 are listed in the document “List of Blocks Available for Leasing,” which is included in the Final Notice of Sale for WPA Lease Sale 248 being published contemporaneously. The proposed WPA lease sale area encompasses nearly all of the WPA's 28.58 million acres. As of June 2016, approximately 23.7 million acres of the proposed WPA lease sale area are unleased. The estimated amount of resources projected to be developed as a result of the proposed WPA lease sale is 0.116-0.200 billion barrels of oil (BBO) and 0.538-0.938 trillion cubic feet (Tcf) of gas.
After careful consideration, BOEM has selected the proposed action, which is identified as BOEM's preferred alternative (Alternative A) in the WPA 248 Supplemental EIS. BOEM's selection of the preferred alternative meets the purpose and need for the proposed action, as identified in the WPA 248 Supplemental EIS, and reflects an orderly resource development with protection of the human, marine, and coastal environments while also ensuring that the public receives an equitable return for these resources and that free-market competition is maintained.
This Notice of Availability of a Record of Decision is published pursuant to the regulations (40 CFR part 1503) implementing the provisions of the National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321
Notice is hereby given that, on June 22, 2016, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, MOG Solutions SA, Maia, PORTUGAL; and National TeleConsultants, Glendale, CA, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and Advanced Media Workflow Association, Inc. intends to file additional written notifications disclosing all changes in membership.
On March 28, 2000, Advanced Media Workflow Association, Inc. filed its original notification pursuant to section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on March 23, 2016. A notice was published in the
Notice is hereby given that, on June 16, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Pursuant to Section 6(b) of the Act, the identities of the parties to the venture are: The Research Foundation for the State University of New York, acting on behalf of the State University of New York Polytechnic Institute, Albany, NY; The Trustees of Columbia University in the City of New York, New York, NY; The Regents of the University of California, on behalf of its Santa Barbara campus, Santa Barbara, CA; Massachusetts Institute of Technology, Cambridge, MA; Arizona Board of Regents on behalf of the University of Arizona, Tucson, AZ; The Rector and Visitors of the University of Virginia, Charlottesville, VA; and SunEdison Semiconductor Limited, St. Peters, MO.
The general area of AIM Photonics' planned activity is research, development and demonstration in the manufacture of integrated photonics. AIM Photonics seeks to (1) advance integrated photonic circuit manufacturing technology development while simultaneously providing access to state-of-the-art fabrication, packaging, and testing capabilities for commercial enterprises, academia and the government; (2) create an adaptive integrated photonic circuit workforce capable of meeting industry needs and thus further increasing domestic competitiveness; and (3) meet participating commercial, defense and civilian agency needs in this burgeoning technology area. AIM Photonics became the sixth Institute for Manufacturing Innovation. Its objective is to increase manufacturing in the United States.
Notice is hereby given pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, Stipulation, and Competitive Impact Statement have been filed with the United States District Court for the Northern District of California in
Copies of the Complaint, proposed Final Judgment, and Competitive Impact Statement are available for inspection on the Antitrust Division's Web site at
Public comment is invited within 60 days of the date of this notice. Such comments, including the name of the submitter, and responses thereto, will be posted on the Antitrust Division's Web site, filed with the Court, and, under certain circumstances, published in the
The United States of America, acting under the direction of the Attorney General of the United States, brings this civil action to obtain civil penalties and equitable relief against the Defendants (collectively, “ValueAct”) for failing to comply with the premerger notification and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), and alleges as follows:
1. The Hart-Scott-Rodino Act, 15 U.S.C. 18a, is an essential part of modern antitrust enforcement. It requires purchasers of voting securities in excess of a certain value to notify the Department of Justice and the Federal Trade Commission and to observe a waiting period before consummating the transaction. These obligations extend to acquisitions of minority interests. One limited exemption to these obligations applies if the purchaser's holdings constitute less than ten percent of the stock of the company and the acquisition is “solely for the purpose of investment”—that is, the purchaser has no intention of participating in the company's business decisions.
2. ValueAct promotes itself as having a strategy of “active, constructive involvement” in the management of the companies in which it invests. This case concerns recent acquisitions by two ValueAct investment funds of over $2.5 billion of voting securities of Halliburton Company and Baker Hughes Incorporated. Halliburton and Baker Hughes are head-to-head competitors and two of the largest providers of oilfield products and services in the world. On November 17, 2014, Halliburton and Baker Hughes announced their intent to merge. Their proposed merger is the subject of an ongoing antitrust review in the United States and several other countries.
3. ValueAct began acquiring significant holdings of the two companies on the heels of the Halliburton/Baker Hughes merger announcement. From the beginning, ValueAct anticipated influencing the business decisions of the companies as the merger process unfolded. ValueAct sent memoranda to its investors outlining this strategy and explaining that purchasing a stake in each of these firms would allow it to “be a strong advocate for the deal to close,” which would in turn “[i]ncrease probability of deal happening.” If the deal encountered “regulatory issues,” ValueAct “would be well positioned as an owner of both companies to help develop the new terms.” ValueAct executives also discussed internally a back-up plan to “sell at least some of Baker's pieces” if the deal were blocked or abandoned.
4. ValueAct's purchases of Halliburton and Baker Hughes shares did not qualify for the narrow exemption from the requirements of the HSR Act for acquisitions made solely for the purpose of investment. ValueAct planned from the outset to take steps to influence the business decisions of both companies, and met frequently with executives of both companies to execute those plans.
5. These HSR Act violations allowed ValueAct to become one of the largest shareholders of both Halliburton and Baker Hughes, without providing the government its statutory right to notice and prior review of the stock purchases. ValueAct established these positions as Halliburton and Baker Hughes were being investigated for agreeing to a merger that threatens to substantially lessen competition in numerous markets. ValueAct intended to use its position as a major shareholder of these companies to obtain access to management, to learn information about the merger and the companies' strategies in private conversations with senior executives, to influence those executives to improve the chances that the merger would be completed, and to influence other business decisions whether or not the merger went forward.
6. The Court should assess a civil penalty of at least $19 million to address ValueAct's violations of the HSR Act, and should restrain ValueAct from further violations.
7. This Complaint is filed and these proceedings are instituted under Section 7A of the Clayton Act, 15 U.S.C. 18a, added by Title II of the HSR Act, to recover civil penalties and equitable relief for violations of that section.
8. This Court has jurisdiction over the Defendants and over the subject matter of this action pursuant to Section 7A(g) of the Clayton Act, 15 U.S.C. 18a(g), and pursuant to 28 U.S.C. 1331, 1337(a), 1345 and 1355. Each of the Defendants is engaged in commerce, or in activities affecting commerce, within the meaning of Section 1 of the Clayton Act, 15 U.S.C. 12, and Section 7A(a)(1) of the Clayton Act, 15 U.S.C. 18a(a)(1).
9. Venue is properly based in this District under Section 12 of the Clayton Act, 15 U.S.C. 22, and under 28 U.S.C. 1391(b)(2), (c)(2). Each of the Defendants transacts or has transacted business in this district and has its principal place of business here.
10. Assignment to the San Francisco Division is proper because this action arose primarily in San Francisco County. Many of the events that gave rise to the claims occurred in San Francisco, and Defendants' headquarters and principal places of business were during the relevant events, and continue to be, located in San Francisco.
11. This case arises from acquisitions of stock over several months by two investment funds—ValueAct Master Capital Fund, L.P. (“Master Fund”) and ValueAct Co-Invest International, L.P. (“Co-Invest Fund”). Though separate entities for purposes of the HSR Act, both funds have the same general partner—VA Partners I, LLC (“VA Partners”). Master Fund and Co-Invest Fund are organized under the laws of the British Virgin Islands, and VA Partners is organized under the laws of Delaware. Master Fund, Co-Invest Fund, and VA Partners (collectively, “ValueAct” or “Defendants”) all have the same principal office and place of business in San Francisco, California.
12. ValueAct is well known as an activist investor. In contrast to other large funds that focus on passive investment strategies to generate returns, ValueAct's Web site explains that it pursues a strategy of “active, constructive involvement” in the management of the companies in which it invests. The Web site further states, “The goal in each investment is to work constructively with management and/or the company's board to implement a strategy or strategies that maximize returns for all shareholders.”
13. ValueAct tracks its “activism” in these investments by various metrics, such as success in changing executive compensation, and touts these statistics in its presentations to potential investors as illustrated by the following slide from ValueAct's June 2015 presentation:
14. In presentations, ValueAct has explained that it likes “disciplined oligopolies” and looks to invest in businesses in “[o]ligopolistic markets, high barriers-to-entry.”
15. ValueAct funds have previously violated the HSR Act by acquiring voting securities without making the required notifications. In 2003, ValueAct Capital Partners, L.P. filed corrective notifications for three prior acquisitions of voting securities. ValueAct outlined steps it would take to ensure future compliance with the HSR Act. No enforcement action was taken at that time. Master Fund then failed to make required filings with respect to three acquisitions that it made in 2005. ValueAct agreed to pay a $1.1 million civil penalty to settle an HSR Act enforcement action based on these violations.
16. The HSR Act requires parties to file a notification with the Federal Trade Commission and the Department of Justice and to observe a waiting period before consummating acquisitions of voting securities or assets that exceed certain value thresholds. These requirements give the antitrust enforcement agencies prior notice of, and information about, proposed transactions. The waiting period also provides the antitrust enforcement agencies with an opportunity to investigate and to seek an injunction to prevent the consummation of anticompetitive transactions.
17. The HSR Act contains certain limited exemptions to the notification and waiting period requirements. The acquirer of voting securities has the burden of showing eligibility for an exemption. One such exemption applies narrowly to acquisitions made “solely for the purpose of investment” if the voting securities held do not exceed ten percent of the outstanding voting securities of the issuer. 15 U.S.C. 18a(c)(9). The regulations implementing the Act explain that, to qualify for this exemption, the acquiring party must have “no intention of participating in the formulation, determination, or direction of the basic business decisions of the issuer.” 16 CFR 801.1(i)(1).
18. After Halliburton and Baker Hughes announced their intent to merge on November 17, 2014, ValueAct began purchasing stock in each company through its Master Fund and Co-Invest Fund. ValueAct continued to make purchases in both companies for several months, eventually acquiring over $2.5 billion in securities of the two companies combined.
19. As ValueAct was acquiring stock in these two companies in December 2014 and early January 2015, its executives were developing strategies to use ValueAct's ownership position to influence management of each firm as necessary to increase the probability of the deal being completed. ValueAct's Master Fund crossed the applicable HSR Act reporting thresholds for Baker Hughes and Halliburton on December 1 and December 5, 2014, respectively, and Master Fund continued to build up its position as its executives discussed strategy. These discussions culminated in the drafting of memoranda that ValueAct sent to its investors on January 16, 2015. These memoranda—one about Baker Hughes and one about Halliburton—explained ValueAct's decision to acquire stakes in these competitors through its Master Fund, and offered investors the opportunity to increase their stakes in these firms through additional share purchases by ValueAct's Co-Invest Fund.
20. These memoranda and other contemporaneous documents show that ValueAct's most senior executives planned from the outset to play an active role at Halliburton and Baker Hughes. The lead ValueAct partner responsible for the Baker Hughes investment internally circulated a draft of an investor memorandum explaining that “our activist approach limits our downside in the unlikely case that the merger does not close.” The draft further noted that if the merger were not completed, ValueAct “would likely seek to take a more active role in overseeing the company.” ValueAct's CEO then
21. Although the memoranda ultimately shared with investors watered down the words used to describe ValueAct's activist strategy, they still emphasized that purchasing a stake in Halliburton and Baker Hughes would “increase probability of deal happening” and would allow ValueAct to be “a strong advocate for the deal to close.” ValueAct identified this as one of three “key considerations” supporting its investment decision. A contemporaneous email among ValueAct partners remarked that if Halliburton's shareholders threatened to vote against the deal, ValueAct's “position in HAL should be meaningful enough to have a substantial role in those conversations.”
22. ValueAct also intended to help restructure the merger if it hit roadblocks. On December 16, 2014, ValueAct's CEO emailed his partners: “if we own both we can drive new terms to get the deal done if weird [expletive] is happening.” ValueAct also expressed this view in its memos to investors: “In the event of further fundamental dislocation or regulatory issues, it is possible the deal would need to be restructured and we believe ValueAct Capital would be well positioned as an owner of both companies to help develop the new terms.”
23. In a December 2014 internal email, a ValueAct partner observed that “[i]f the deal failed, the back-up plan would seem to be to sell at least some of Baker's pieces, and we think that we could get up to 12x EBITDA for just 2 of BHI's businesses—artificial lift and chemicals.” ValueAct's memoranda to investors noted, “Recent transactions in each of those industries [specialty chemicals and artificial lift] suggest that these businesses are worth north of 10 times EBITDA.” Moreover, the Baker Hughes memorandum explained that there are “numerous levers for the company to pull to drive margin expansion,” and identified Baker Hughes's pressure pumping business as a good candidate for margin improvement.
24. Regardless of how the merger process unfolded, ValueAct intended to influence the business decisions of both companies. For example, on December 5, 2014, the day Master Fund's holdings in Halliburton crossed the HSR Act threshold, a ValueAct partner wrote an email to ValueAct's CEO about Halliburton: “Wonder if it would be possible to get the VRX [Valeant Pharmaceuticals] comp plan in from outside the board room?” The CEO responded “Yes. Good idea.” (ValueAct had recently convinced management to change the executive compensation plan at another of its investments, Valeant Pharmaceuticals.)
25. ValueAct also intended to play a role in Halliburton's efforts to integrate the two firms. ValueAct told its investors that its stake in Halliburton “helps to further enhance our relationship with management and the board of directors as they work to complete the merger and integrate the business into Halliburton's existing operations.”
26. Consistent with its investment strategy of “active, constructive involvement,” ValueAct established a direct line to senior management at both Halliburton and Baker Hughes and met with them frequently from the time it started acquiring stock. From December 2014 through January 2016, ValueAct met in person or had teleconferences more than fifteen times with senior management of Halliburton or Baker Hughes, including meeting multiple times with the CEOs of both companies. ValueAct partners also exchanged a number of emails with management at both firms about the merger and the companies' respective operations.
27. ValueAct reached out to Baker Hughes immediately after it began purchasing shares. On December 1, 2014, the day Master Fund's holdings crossed the HSR Act threshold for Baker Hughes, a ValueAct partner told a Baker Hughes executive that ValueAct was positive on the merger but also liked “that 20% of [Baker Hughes's] revenue comes from non-capital intensive business lines which could command a big multiple if sold.” A few days later, ValueAct's CEO met in person with the CFO of Baker Hughes. According to Baker Hughes's notes of the meeting, ValueAct's CEO “highlighted that it was critical that BHI continued focused [
28. On January 16, 2015, ValueAct filed a Beneficial Ownership Report (Schedule 13D) with the Securities and Exchange Commission publicly disclosing its substantial stake in Baker Hughes and reporting that it might discuss “competitive and strategic matters” with Baker Hughes management, and might “propos[e] changes in [Baker Hughes's] operations.” Before submitting the Schedule 13D, ValueAct's CEO notified Halliburton's CEO of the impending filing on Baker Hughes, explaining that the filing “gives us the flexibility to engage with the company [Baker Hughes] on all issues.” Later the same day, ValueAct's CEO emailed Halliburton's CEO a copy of its investment memoranda for both Halliburton and Baker Hughes.
29. By February, after ValueAct had completed its outreach to investors seeking capital for additional share purchases, ValueAct began acquiring stock in Halliburton and Baker Hughes through Co-Invest Fund. On March 10, 2015, Co-Invest Fund's holdings in Halliburton crossed the applicable HSR Act reporting threshold.
30. Also in early March, ValueAct contacted Halliburton to offer assistance in advance of the shareholder vote on the merger. ValueAct offered Halliburton “to speak with any of [Halliburton's] top shareholders about [ValueAct's] view of the merger prior to the vote.” Halliburton responded that it would let ValueAct know if ValueAct's help became necessary.
31. In May 2015, ValueAct further engaged with Halliburton on the company's plans for post-merger integration. On May 13, ValueAct met with Halliburton's CEO to discuss actions that Halliburton could take in an attempt to achieve its target merger synergies. On May 27, a ValueAct partner called Halliburton's Chief Integration Officer to recommend a firm for real estate integration services. In a subsequent email exchange, another ValueAct partner emphasized the need to engage on these issues at the executive level, and stated that Halliburton's plan was “a traditional approach likely to leave value on the table.” Instead, the partner identified alternative ways the real estate firm could work with Halliburton to help achieve the synergy goals.
32. ValueAct also followed through on its idea for changing Halliburton's executive compensation plan. On July 14, 2015, ValueAct contacted Halliburton's CEO to schedule a meeting to discuss executive compensation. At
33. ValueAct carefully monitored the status of the antitrust review process and intended to intervene with the management of each firm as necessary to increase the probability of the deal being completed. ValueAct met with Baker Hughes's CEO in May 2015 and according to ValueAct's notes of that meeting, Baker Hughes's CEO “seemed pretty worried about anti-trust, and implied odds deal goes through 70% or lower in his mind.” ValueAct then continued to push management of both companies to preserve the deal or, if these efforts failed, to sell off pieces of Baker Hughes.
34. On August 31, 2015, ValueAct met with Baker Hughes's CEO “to plant the seed to seek alternative options with other buyers if the deal falls through.” In its initial investment analysis, the ValueAct partners had discussed selling individual Baker Hughes businesses as a back-up plan if the merger failed. ValueAct presented an updated analysis to argue this case to Baker Hughes. ValueAct also proposed restructuring the deal with Halliburton, suggesting that Baker Hughes should sell its pressure pumping, artificial lift, and specialty chemical businesses to Halliburton at a premium in lieu of receiving the merger termination fee.
35. According to ValueAct notes from the meeting, Baker Hughes's CEO was “very committed to running BHI stand-alone if the deal fails and did not seem to entertain the idea of shopping the business piecemeal to other buyers.” The notes explain that ValueAct agreed that the Baker Hughes CEO's plan to “focus on technology-based product lines, and grow the business organically in these areas seems like the right areas to focus for the stand-alone company.” But this plan was not what the ValueAct executives hoped for: “the problem is that this story seems like a 4-5 year period with the stock not generating a great return over that period.” According to Baker Hughes's notes of the meeting, the ValueAct executives registered disappointment with Baker Hughes's CEO, and informed him that Halliburton and Baker Hughes were “the only investment ValueAct had where they did not have board seats.”
36. On September 18, 2015, ValueAct pitched its restructuring plan to Halliburton's CEO, advocating that Halliburton pursue selective acquisitions of Baker Hughes's production chemicals and artificial lift businesses. According to Halliburton's notes of the call, ValueAct suggested that Halliburton should offer a substantial sum to acquire these businesses and settle the $3.5 billion merger break-up fee at the same time.
37. During this conversation with the CEO of Halliburton, ValueAct shared Baker Hughes's plans if the merger could not close. According to Halliburton's notes of the call, ValueAct stated that if the merger could not be consummated, Baker Hughes's CEO intended to “run the company like he did before.” Halliburton's CEO then asked whether Baker Hughes's CEO was “listening to VA.” A ValueAct partner replied that Baker Hughes's CEO “realize [
38. ValueAct and Halliburton's willingness to discuss the competitive future of Baker Hughes in the absence of a merger is further confirmed by notes contained in ValueAct's files. These notes list “3 options that Lazard [presumably Halliburton's CEO, David Lesar] discussed” with respect to Baker Hughes. One of those options was “Cripple a competitor.”
39. On November 5, 2015, ValueAct made a detailed fifty-five page presentation to Baker Hughes's CEO proposing operational and strategic changes to the company. The same day, ValueAct lobbied Halliburton's senior management to pursue alternative ways to get the deal done.
40. Plaintiff alleges and incorporates paragraphs 1 through 39 as if set forth fully herein.
41. The HSR Act provides that any person, or any officer, director, or partner thereof, who fails to comply with any provision of the HSR Act is liable to the United States for a civil penalty for each day during which such person is in violation. Master Fund and Co-Invest Fund are each considered a separate person under the Act and are each obligated to comply with its requirements.
42. The HSR Act and applicable implementing regulations required that Master Fund file a notification and report form with the antitrust enforcement agencies and observe a waiting period before acquiring any voting securities in Halliburton that would result in Master Fund holding an aggregate total amount of voting securities in excess of the $50 million threshold, as adjusted ($75.9 million in December 2015, and $76.3 million beginning in February 2016).
43. On or about December 4, 2014, Master Fund began purchasing Halliburton voting securities. On or about December 5, 2014, Master Fund's aggregate value of Halliburton voting securities exceeded the $75.9 million threshold. Master Fund continued to purchase Halliburton voting securities until June 30, 2015, by which time Master Fund's aggregate value of Halliburton voting securities exceeded $1.4 billion.
44. Master Fund failed to file the required notification or to observe the required waiting period.
45. On or about January 27, 2016, Master Fund had sold a sufficient quantity of voting securities of Halliburton such that its holdings were no longer in excess of $76.3 million.
46. Master Fund was in violation of the requirements of the HSR Act related to its purchase of Halliburton voting securities each day beginning December 5, 2014, and ending on or about January 27, 2016.
47. The HSR Act and applicable implementing regulations required that Co-Invest Fund file a notification and report form with the antitrust enforcement agencies and observe a waiting period before acquiring any voting securities in Halliburton that would result in Co-Invest Fund holding an aggregate total amount of voting securities in excess of the $50 million threshold, as adjusted ($76.3 million beginning in February 2016).
48. On or about February 24, 2015, Co-Invest Fund began purchasing Halliburton voting securities. On or about March 10, 2015, Co-Invest Fund's aggregate value of Halliburton voting securities exceeded the $76.3 million threshold. Co-Invest Fund continued to purchase Halliburton voting securities until March 12, 2015, by which time Co-Invest Fund's aggregate value of
49. Co-Invest Fund failed to file the required notification or observe the required waiting period.
50. On or about January 22, 2016, Co-Invest Fund had sold a sufficient quantity of voting securities of Halliburton such that its holdings were no longer in excess of $76.3 million.
51. Co-Invest Fund was in violation of the requirements of the HSR Act related to its purchase of Halliburton voting securities each day beginning March 10, 2015, and ending on or about January 22, 2016.
52. The HSR Act and applicable implementing regulations required that Master Fund file a notification and report form with the antitrust enforcement agencies and observe a waiting period before acquiring any voting securities in Baker Hughes that would result in Master Fund holding an aggregate total amount of voting securities in excess of the $50 million threshold, as adjusted ($75.9 million in December 2015, and $76.3 million beginning in February 2016).
53. On or about November 28, 2014, Master Fund began purchasing Baker Hughes voting securities. On or about December 1, 2014, Master Fund's aggregate value of Baker Hughes voting securities exceeded the $75.9 million threshold. Master Fund continued to purchase Baker Hughes voting securities until January 15, 2015, by which time Master Fund's aggregate value of Baker Hughes voting securities exceeded $1.2 billion.
54. Master Fund failed to file the required notification or to observe the required waiting period.
55. Master Fund was in violation of the requirements of the HSR Act related to its purchase of Baker Hughes voting securities each day beginning on December 1, 2014, and remains in violation of the HSR Act to the present.
(a) That the Court adjudge and decree that Defendant Master Fund's acquisitions of voting securities of Halliburton, without having filed a notification and report form and observing a waiting period, violated the HSR Act;
(b) That the Court adjudge and decree that Defendant Co-Invest Fund's acquisitions of voting securities of Halliburton, without having filed a notification and report form and observing a waiting period, violated the HSR Act;
(c) That the Court adjudge and decree that Defendant Master Fund's acquisitions of voting securities of Baker Hughes, without having filed a notification and report form and observing a waiting period, violated the HSR Act;
(d) That the Court order Defendants to pay to the United States an appropriate civil penalty as provided by the HSR Act, 15 U.S.C. § 18a(g)(1), the Debt Collection Improvement Act of 1996, Pub. L. 104-134, § 31001(s) (amending the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461 note), and Federal Trade Commission Rule 1.98, 16 CFR § 1.98, 74 Fed. Reg. 858 (Jan. 9, 2009);
(e) That the Court enjoin Defendants from any future violations of the HSR Act;
(f) That the Court order such other and further relief as the Court may deem just and proper; and,
(g) That the Court award the Plaintiff its costs of this suit.
Dated:
The United States, pursuant to the Antitrust Procedures and Penalties Act (“APPA”), 15 U.S.C. § 16(b)-(h), files this Competitive Impact Statement to set forth the information necessary to enable the Court and the public to evaluate the proposed Final Judgment that would terminate this civil antitrust proceeding.
On April 4, 2016, the United States filed a Complaint against VA Partners I, LLC, (“VA Partners I”), ValueAct Capital Master Fund, L.P. (“Master Fund”), and ValueAct Co-Invest International, L.P. (“Co-Invest Fund”) (collectively, “ValueAct” or “Defendants”), related to Master Fund's and Co-Invest Fund's acquisition of voting securities of Halliburton Co. (“Halliburton”) and Baker Hughes Incorporated (“Baker Hughes”) in 2014 and 2015.
The Complaint alleges that ValueAct violated Section 7A of the Clayton Act, 15 U.S.C. 18a, commonly known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). The HSR Act states that “no person shall acquire, directly or
This case arises because ValueAct, an investment manager that is well known for actively involving itself in the management of the companies in which it invests, made substantial purchases of stock in two direct competitors with the intent to participate in those companies' business decisions, without complying with the notification and waiting period requirements of the HSR Act. Through these purchases, ValueAct simultaneously became one of the largest shareholders of both Halliburton and Baker Hughes. ValueAct established these positions as Halliburton and Baker Hughes—the second and third largest providers of oilfield services in the world—were being investigated for agreeing to a merger that threatened to substantially lessen competition in over twenty product markets in the United States. After the United States challenged that merger on April 6, 2016, Halliburton and Baker Hughes abandoned their anticompetitive plan to merge. ValueAct's failure to comply with the HSR Act prevented the agencies from reviewing ValueAct's acquisitions in advance, compromising the agencies' ability to protect competition and consumers.
The Complaint alleges that the Defendants could not rely on the HSR Act's limited exemption for acquisitions made “solely for the purpose of investment” (the “investment-only exemption”). 15 U.S.C. 18a(c)(9) exempts “acquisitions, solely for the purpose of investment, of voting securities, if, as a result of such acquisition, the securities acquired or held do not exceed 10 per centum of the outstanding voting securities of the issuer.” Voting securities are held “solely for the purpose of investment” if the acquirer has “no intention of participating in the formulation, determination, or direction of the basic business decisions of the issuer.” 16 CFR § 801.1(i)(1). As explained in the Complaint, ValueAct did not qualify for the investment-only exemption because it intended to participate in the business decisions of both companies.
The Complaint seeks a ruling that the Defendants' acquisitions of voting securities of Halliburton and Baker Hughes, without filing and observing the mandatory waiting period, violated the HSR Act. The Complaint asks the Court to issue an appropriate injunction and order the Defendants to pay an appropriate civil penalty to the United States.
On July 12, 2016, the United States filed a Stipulation and proposed Final Judgment that eliminates the need for a trial in this case. The proposed Final Judgment is designed to prevent and restrain Defendants' HSR Act violations. Under the proposed Final Judgment, which is explained more fully below, Defendants must pay a civil penalty of $11 million. Further, Defendants are prohibited from engaging in future conduct of the sort alleged in the Complaint.
The United States and the Defendants have stipulated that the proposed Final Judgment may be entered after compliance with the APPA, unless the United States first withdraws its consent. Entry of the proposed Final Judgment would terminate this case, except that the Court would retain jurisdiction to construe, modify, or enforce the provisions of the proposed Final Judgment and punish violations thereof.
Master Fund and Co-Invest Fund are offshore funds organized under the laws of the British Virgin Islands, with each having a principal place of business in San Francisco, California. VA Partners I is the general partner of the Defendant Funds. VA Partners I is a limited liability company organized under the laws of Delaware, with its principal place of business in San Francisco, California.
ValueAct is well known as an activist investor. ValueAct's website explains that it pursues a strategy of “active, constructive involvement” in the management of the companies in which it invests. The website further elaborates: “[t]he goal in each investment is to work constructively with management and/or the company's board to implement a strategy or strategies that maximize returns for all shareholders.”
ValueAct entities have previously violated the HSR Act by acquiring voting securities without making the required notifications. In 2003, ValueAct Capital Partners, L.P. filed corrective notifications for three prior acquisitions of voting securities. ValueAct outlined steps it would take to ensure future compliance with the HSR Act. No enforcement action was taken at that time. Master Fund then failed to make required filings with respect to three acquisitions that it made in 2005. ValueAct Capital Partners, L.P. agreed to pay a $1.1 million civil penalty to settle an HSR Act enforcement action based on these violations.
The Complaint in this case alleges that ValueAct violated the HSR Act in connection with acquisitions of voting securities of Halliburton and Baker Hughes in 2014 and 2015. In making these acquisitions, ValueAct improperly relied on the limited investment-only exemption from HSR filing requirements despite the fact that ValueAct intended from the outset to play an “active role” at both Halliburton and Baker Hughes. ValueAct's failure to file the necessary notifications prevented the Department from timely reviewing ValueAct's stock acquisitions, which risked harming competition given that they resulted in ValueAct's becoming one of the largest shareholders in two direct competitors that were pursuing an anticompetitive merger.
The Complaint alleges that ValueAct committed three distinct violations of the HSR Act. First, Defendant Master Fund acquired voting securities of Halliburton in excess of the HSR Act's thresholds without complying with the notification and waiting period requirements. Second, Defendant Co-Invest Fund acquired voting securities of Halliburton in excess of the HSR Act's thresholds without complying with the notification and waiting period requirements. Third, Defendant Master Fund acquired voting securities of Baker Hughes in excess of the HSR Act's thresholds without complying with the notification and waiting period requirements.
As described in more detail in the Complaint, ValueAct intended from the time it made these stock purchases to use its position as a major shareholder of both Halliburton and Baker Hughes to obtain access to management, to learn information about the companies and the merger in private conversations with senior executives, to influence those executives to improve the chances that the Halliburton-Baker Hughes merger
The proposed Final Judgment contains injunctive relief and requires payment of civil penalties, which are designed to prevent future violations of the HSR Act. The proposed Final Judgment sets forth prohibited conduct, and provides access and inspection procedures to enable the United States to determine and ensure compliance with the proposed Final Judgment.
Section IV of the proposed Final Judgment is designed to prevent future HSR violations of the sort alleged in the Complaint. Under this provision, the Defendants may not rely on the HSR Act's investment-only exemption if they intend to take, or their investment strategy identifies circumstances in which they may take, the following actions: (1) proposing a merger, acquisition, or sale to which the issuer of the acquired voting securities is a party; (2) proposing to another person in which the Defendant has an ownership stake the potential terms for a merger, acquisition, or sale between the person and the issuer; (3) proposing new or modified terms for a merger or acquisition to which the issuer is a party; (4) proposing an alternative to a merger or acquisition to which the issuer is a party, either before consummation or upon abandonment; (5) proposing changes to the issuer's corporate structure that require shareholder approval; or (6) proposing changes to the issuer's strategies regarding pricing, production capacity, or production output of the issuer's products and services.
The HSR Act exempts acquisitions made “
ValueAct did not have a passive intent when it acquired stock in Halliburton and Baker Hughes. The proposed merger of these competitors was central to ValueAct's investment strategy. As described in the Complaint, ValueAct intended from the outset to use its ownership stake in each firm to influence the firm's management, as necessary, to increase the probability of the merger being consummated or propose alternatives if it could not be completed. An investor who is considering influencing basic business decisions—such as merger and acquisition strategy, corporate restructuring, and other competitively significant business strategies (
The prohibited conduct provision of the proposed Final Judgment is aimed at deterring future HSR violations of the sort alleged in the Complaint, in particular, those that pose the greatest threat to competition. This provision does not represent a comprehensive list of all conduct that would disqualify an acquirer of voting securities from relying on the investment-only exemption of the HSR Act. Other actions, including but not limited to those described in the Statement of Basis and Purpose accompanying the HSR Rules to implement the Act, may disqualify an acquirer from relying on the investment-only exemption. Premerger Notification: Reporting and Waiting Period Requirements, 43 Fed. Reg. 33,450, 34,465 (July 31, 1978) (identifying conduct that may be inconsistent with the investment-only exemption).
In light of ValueAct's conduct at issue in this case and its past violations, this injunction is an appropriate means to ensure that ValueAct is deterred from violating the HSR Act again. If ValueAct does violate any of the provisions of the proposed Final Judgment, the Court may impose additional sanctions for contempt, if appropriate.
Section V of the proposed Final Judgment sets forth required compliance procedures. Section V requires the Defendants to designate a compliance officer, who is required to distribute a copy of the Final Judgment to each person who has responsibility for, or authority over, each Defendant's acquisitions of voting securities. The compliance officer is also required to obtain a certification form from each such person verifying that he or she has received a copy of the Final Judgment and understands his or her obligations.
To help ensure that the Defendants comply with the Final Judgment, Section VI grants duly authorized representatives of the United States Department of Justice (“DOJ”) access, upon reasonable notice, to each Defendant's records and documents relating to matters contained in the Final Judgment. The Defendants must also make their personnel available for interviews or depositions regarding such matters. In addition, the Defendants must, upon written request from duly authorized representatives of the Assistant Attorney General in charge of the DOJ's Antitrust Division, submit written reports relating to matters contained in the Final Judgment.
The HSR Act currently provides a maximum civil penalty of $16,000 per day for each day a defendant is in violation of the Act. This maximum penalty will be adjusted to $40,000 per day as of August 1, 2016, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Public Law 114-74 § 701 (further amending the Federal Civil Penalties Inflation Adjustment Act of 1990), and Federal Trade Commission Rule 1.98, 16 CFR 1.98, 81 Fed. Reg. 42,476 (June 30, 2016). The proposed Final Judgment imposes an $11 million civil penalty for the Defendants' failure to comply with the notice and waiting requirements of the HSR Act.
The Department considered several factors in assessing what penalty would be appropriate in this case. First, the facts as described in the Complaint make clear that ValueAct intended to take an active role in the business decisions of both Halliburton and Baker Hughes, and ValueAct should have recognized its filing obligation. To the extent that ValueAct had any doubt about its obligations, it could have sought the advice of the Federal Trade Commission's Premerger Notification Office, but did not do so. Second, as discussed above, ValueAct has previously violated the HSR Act six times. Finally, although the HSR Act is a strict liability statute, the Department considers it an aggravating factor that the transactions at issue raised substantive competitive concerns. ValueAct became one of the largest shareholders of two direct competitors,
Together, these factors call for a substantial penalty. However, the Department did adjust the penalty downward from the maximum because the Defendants are willing to resolve the matter by consent decree and avoid prolonged litigation. Despite the downward adjustment, the penalty in this case will be the largest penalty ever imposed for a violation of the HSR Act. Such a penalty appropriately reflects the gravity of the conduct at issue, and will deter ValueAct and other companies from violating the HSR Act.
There is no private antitrust action for HSR Act violations; therefore, entry of the proposed Final Judgment will neither impair nor assist the bringing of any private antitrust action.
The United States and Defendant have stipulated that the proposed Final Judgment may be entered by this Court after compliance with the provisions of the APPA, provided that the United States has not withdrawn its consent. The APPA conditions entry of the decree upon this Court's determination that the proposed Final Judgment is in the public interest.
The APPA provides a period of at least sixty (60) days preceding the effective date of the proposed Final Judgment within which any person may submit to the United States written comments regarding the proposed Final Judgment. Any person who wishes to comment should do so within sixty (60) days of the date of publication of this Competitive Impact Statement in the
The proposed Final Judgment provides that this Court retains jurisdiction over this action, and the parties may apply to this Court for any order necessary or appropriate for the modification, interpretation, or enforcement of the Final Judgment.
As an alternative to the proposed Final Judgment, the United States considered pursuing a full trial on the merits against the Defendants. The United States is satisfied, however, that the proposed relief is an appropriate remedy in this matter. Given the facts of this case, the United States is satisfied that the injunction coupled with the proposed civil penalty is sufficient to address the violations alleged in the Complaint and to deter violations by similarly situated entities in the future, without the time, expense, and uncertainty of a full trial on the merits.
The APPA requires that remedies contained in proposed consent judgments in antitrust cases brought by the United States be subject to a sixty (60) day comment period, after which the court shall determine whether entry of the proposed Final Judgment is “in the public interest.” 15 U.S.C. 16(e)(1). In making that determination, the court, in accordance with the statute as amended in 2004, is required to consider:
(A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and
(B) the impact of entry of such judgment upon competition in the relevant market or markets, upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial.
As the United States Court of Appeals for the District of Columbia Circuit has held, under the APPA a court considers, among other things, the relationship between the remedy secured and the specific allegations set forth in the government's complaint, whether the decree is sufficiently clear, whether enforcement mechanisms are sufficient, and whether the decree may positively harm third parties.
Courts have greater flexibility in approving proposed consent decrees than in crafting their own decrees following a finding of liability in a litigated matter. “[A] proposed decree must be approved even if it falls short of the remedy the court would impose on its own, as long as it falls within the range of acceptability or is `within the reaches of public interest.' ”
Moreover, the court's role under the APPA is limited to reviewing the remedy in relationship to the violations that the United States has alleged in its Complaint, and does not authorize the court to “construct [its] own hypothetical case and then evaluate the decree against that case.”
In its 2004 amendments, Congress made clear its intent to preserve the practical benefits of utilizing consent decrees in antitrust enforcement, adding the unambiguous instruction that “[n]othing in this section shall be construed to require the court to conduct an evidentiary hearing or to require the court to permit anyone to intervene.” 15 U.S.C. § 16(e)(2);
There are no determinative materials or documents within the meaning of the APPA that were considered by the United States in formulating the proposed Final Judgment.
Date: July 12, 2016
Respectfully Submitted,
WHEREAS, Plaintiff, the United States of America (“United States”) filed its Complaint on April 4, 2016, alleging that VA Partners I, LLC, ValueAct Capital Master Fund, L.P., and ValueAct Co-Invest International, L.P. (collectively, “ValueAct” or “Defendants”) violated Section 7A of the Clayton Act, 15 U.S.C. § 18a, commonly known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), and Plaintiff and Defendants, by their respective attorneys, having consented to the entry of this Final Judgment without trial or adjudication of any issue of fact or law, and without this Final Judgment constituting any evidence against, or an admission by, the Defendants with respect to any such issue of fact or law;
AND WHEREAS Defendants agree to be bound by the provisions of this Final Judgment pending its approval by the Court;
NOW, THEREFORE, before any testimony is taken, and without trial or adjudication of any issue of fact or law, and upon consent of the parties, it is hereby ORDERED, ADJUDGED, AND DECREED:
The Court has jurisdiction over the subject matter of this action. The Defendants consent solely for the purpose of this action and the entry of this Final Judgment that this Court has jurisdiction over each of the parties to this action and that the Complaint states a claim upon which relief can be granted against the Defendants under Section 7A of the Clayton Act, 15 U.S.C. § 18a.
As used in this Final Judgment:
(A) “Covered Acquisition” means an acquisition of Voting Securities of an Issuer that is subject to the reporting and waiting requirements of the HSR Act, 15 U.S.C. § 18a, and that is not otherwise exempt from the requirements of the HSR Act, but for which Defendant have not reported under the HSR Act, in reliance on the exemption pursuant to Section (c)(9) of the HSR Act, 15 U.S.C. § 18a(c)(9).
(B) “Issuer” means a legal entity that issues Voting Securities.
(C) “Officer or Director” means (1) the members of the Issuer's board of directors; (2) those persons whose positions are designated by the bylaws or articles of incorporation of the Issuer, its parent, or any subsidiary of the Issuer; or (3) those persons whose positions are appointed by the board of the Issuer, its parent, or any subsidiary of the Issuer. If there are no persons who meet the criteria listed above, “Officer or Director” means those individuals whose capacities and duties are similar to the officers or directors of a corporation, including deciding whether to make the acquisition or sale of a business. Notwithstanding the foregoing, Officer or Director shall not include any persons whose job responsibilities primarily relate to investor relations.
(D) The terms “Person(s)” and “Voting Securities” have the meanings as defined in the HSR Act and Regulations promulgated thereunder, 16 CFR §§ 801-803.
(E) “Propose” means communicating a plan of action for consideration, discussion or adoption.
(F) “ValueAct Partners I, LLC” means Defendant ValueAct Partners I, LLC, a limited liability company and general partner of Defendants ValueAct Master Capital Fund, L.P. and ValueAct Co-Invest International, L.P., organized under the laws of Delaware, with its principal place of business at One Letterman Drive, San Francisco, CA 94129.
(G) “ValueAct Master Capital Fund, L.P.” means Defendant ValueAct Master Capital Fund, L.P., an offshore fund organized under the laws of the British Virgin Islands, with its principal place of business at One Letterman Drive, San Francisco, CA 94129.
(H) “ValueAct Co-Invest International, L.P.” means Defendant ValueAct Co-Invest International, L.P., an offshore fund organized under the laws of the British Virgin Islands, with its principal place of business at One Letterman Drive, San Francisco, CA 94129.
This Final Judgment applies to all Defendants, including each of their directors, officers, general partners, managers, agents, parents, subsidiaries, successors, and assigns, all in their capacities as such, and to all other Persons and entities that are in active concert or participation with any of the foregoing with respect to conduct prohibited in Section IV when the relevant Persons or entities have received actual notice of this Final Judgment by personal service or otherwise.
Each Defendant is enjoined from making a Covered Acquisition, without filing and observing the waiting period as required by the HSR Act, 15 U.S.C. § 18a, if at the time of such Covered Acquisition (i) the Defendant intends to take any of the below actions, or (ii) the Defendant's investment strategy specific to such Covered Acquisition identifies circumstances in which the Defendant may take any of the below actions:
(A) Propose to an Officer or Director of the Issuer that the Issuer merge with, acquire, or sell itself to another Person;
(B) Propose to an Officer or Director of any other Person in which the Defendant owns Voting Securities or an equity interest the potential terms on which that Person might merge with, acquire, or sell itself to the Issuer;
(C) Propose to an Officer or Director of the Issuer new or modified terms for any publicly announced merger or acquisition to which the Issuer is a party;
(D) Propose to an Officer or Director of the Issuer an alternative to a publicly announced merger or acquisition to which the Issuer is a party, either before consummation of the publicly announced merger or acquisition or upon its abandonment;
(E) Propose to an Officer or Director of the Issuer changes to the Issuer's corporate structure that require shareholder approval; or,
(F) Propose to an Officer or Director of the Issuer changes to the Issuer's strategies regarding the pricing of the Issuer's product(s) or service(s), its production capacity, or its production output.
(A) Defendants shall maintain a compliance program that shall include designating, within thirty (30) days of the entry of this Final Judgment, a Compliance Officer with responsibility for achieving compliance with this Final Judgment. The Compliance Officer
(1) Distributing, within thirty (30) days of the entry of this Final Judgment, a copy of this Final Judgment to any Person who has responsibility for or authority over acquisitions by Defendants of Voting Securities;
(2) Distributing, within thirty (30) days of succession, a copy of this Final Judgment to any Person who succeeds to a position described in Section V.A.1; and
(3) Obtaining within sixty (60) days from the entry of this Final Judgment, and once within each calendar year after the year in which this Final Judgment is entered during the term of this Final Judgment, and retaining for the term of this Final Judgment, a written certification from each Person designated in Sections V.A.1 and V.A.2 that he or she: (a) has received, read, understands, and agrees to abide by the terms of this Final Judgment; (b) understands that failure to comply with this Final Judgment may result in conviction for criminal contempt of court; and (c) is not aware of any violation of the Final Judgment.
(B) Within sixty (60) days of the entry of this Final Judgment, Defendants shall certify to Plaintiff that they have (1) designated a Compliance Officer, specifying his or her name, business address and telephone number; and (2) distributed the Final Judgment in accordance with Section V.A.1.
(C) If any of Defendants' directors or officers or the Compliance Officer learns of any violation of this Final Judgment, Defendants shall within ten (10) business days make a corrective filing under the HSR Act.
(A) For the purpose of determining or securing compliance with this Final Judgment, and subject to any legally recognized privilege, duly authorized representatives of the United States Department of Justice shall, upon written request of a duly authorized representative of the Assistant Attorney General in charge of the Antitrust Division, and on reasonable notice to Defendants, be permitted:
(1) Access during Defendants' office hours to inspect and copy, or at Plaintiff's option, to require Defendants to provide copies of all records and documents in their possession or control relating to any matters contained in this Final Judgment; and
(2) To interview, informally or on the record, Defendants' directors, officers, employees, agents or other Persons, who may have their individual counsel present, relating to any matters contained in this Final Judgment. The interviews shall be subject to the reasonable convenience of the interviewee and without restraint or interference by Defendants.
(B) Upon written request of a duly authorized representative of the Assistant Attorney General in charge of the Antitrust Division, Defendants shall submit written reports, under oath if requested, relating to any of the matters contained in this Final Judgment as may be requested.
(C) No information or documents obtained by the means provided in this Final Judgment shall be divulged by the Plaintiff to any person other than an authorized representative of the executive branch of the United States or of the Federal Trade Commission, except in the course of legal proceedings to which the United States is a party (including grand jury proceedings), or for the purpose of securing compliance with this Final Judgment, or as otherwise required by law.
(D) If, at the time information or documents are furnished by Defendants to Plaintiff, Defendants represent and identify in writing the material in any such information or documents to which a claim of protection may be asserted under Rule 26(c)(1) of the Federal Rules of Civil Procedure, and Defendants mark each pertinent page of such material, “Subject to claim of protection under Rule 26(c)(1) of the Federal Rules of Civil Procedure,” then the United States shall give ten (10) calendar days' notice prior to divulging such material in any legal proceeding (other than a grand jury proceeding) to which Defendants are not a party.
Judgment is hereby entered in this matter in favor of Plaintiff United States of America and against Defendants, and, pursuant to Section 7A(g)(1) of the Clayton Act, 15 U.S.C. § 18a(g)(1), the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Pub. L. 114-74 § 701 (amending the Federal Civil Penalties Inflation Adjustment Act of 1990), and Federal Trade Commission Rule 1.98, 16 CFR 1.98, 81 FR 42,476 (June 30, 2016), Defendants are hereby ordered to pay a civil penalty in the amount of eleven million dollars ($11,000,000). Payment of the civil penalty ordered hereby shall be made by wire transfer of funds or cashier's check. If the payment is made by wire transfer, Defendants shall contact Janie Ingalls of the Antitrust Division's Antitrust Documents Group at (202) 514-2481 for instructions before making the transfer. If the payment is made by cashier's check, the check shall be made payable to the United States Department of Justice and delivered to:
Defendants shall pay the full amount of the civil penalties within thirty (30) days of entry of this Final Judgment. In the event of a default in payment, interest at the rate of eighteen (18) percent per annum shall accrue thereon from the date of default to the date of payment.
This Court retains jurisdiction to enable any party to this Final Judgment to apply to this Court at any time for such further orders and directions as may be necessary or appropriate to carry out or construe this Final Judgment, to modify or terminate any of its provisions, to enforce compliance, and to punish any violations of its provisions.
This Final Judgment shall expire ten (10) years from the date of its entry.
Each party shall bear its own costs.
The entry of this Final Judgment is in the public interest. The parties have complied with the requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16, including making copies available to the public of this Final Judgment, the Competitive Impact Statement, and any comments thereon and the United States' responses to comments. Based upon the record before the Court, which includes the Competitive Impact Statement and any comments and response to comments filed with the Court, entry of this Final Judgment is in the public interest.
Notice is hereby given that, on June 27, 2016 pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and OpenDaylight intends to file additional written notifications disclosing all changes in membership.
On May 23, 2013, OpenDaylight filed its original notification pursuant to section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on April 4, 2016. A notice was published in the
On July 20, 2016, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the Western District of Michigan in the lawsuit entitled
The Complaint in this action asserts claims against Enbridge Energy, Limited Partnership and eight related Enbridge entities (“Enbridge”) arising from two separate oil transmission pipeline failures that resulted in discharges of oil to waters of the United States and adjoining shorelines. One of these pipeline failures occurred on July 25, 2010, near Marshall, Michigan on a pipeline known as Line 6B, and resulted in discharges of oil to Talmadge Creek, a large stretch the Kalamazoo River, and their adjoining shorelines. The other pipeline failure occurred on or about September 9, 2010, in Romeoville, Illinois on a pipeline known as Line 6A, and resulted in discharges of oil primarily to an unnamed tributary to the Des Plaines River, a retention pond, and their adjoining shorelines. The Complaint seeks injunctive relief and civil penalties under Sections 309 and 311 of the Clean Water Act, as amended, 33 U.S.C. 1319 and 1321, for both the Marshall, Michigan and the Romeoville, Illinois oil spills. In addition, under Section 1002 of the Oil Pollution Act, as amended, 33 U.S.C. 2702, the Complaint seeks to recover from Enbridge all unreimbursed removal costs incurred and to be incurred by the United States in connection with the Marshall, Michigan oil spill.
Under the proposed Consent Decree, Enbridge will pay a civil penalty of $61 million for the Marshall, Michigan oil spill, and an additional $1 million for the Romeoville, Illinois oil spill. In addition, Enbridge will pay over $5.4 million in unreimbursed federal removal costs that the Oil Spill Liability Trust Fund (“Fund”) paid in connection with the Marshall, Michigan oil spill through October 1, 2015, and Enbridge will pay all additional removal costs consistent with the National Contingency Plan that are paid by the Fund after October 1, 2015, in connection with the Marshall, Michigan oil spill. Prior to the Consent Decree, the United States billed Enbridge for additional federal removal costs incurred in connection with both the Marshall, Michigan oil spill and the Romeoville, Illinois oil spill, and Enbridge paid all such amounts billed. Finally, the proposed Consent Decree includes an extensive program of injunctive relief, including a series of measures designed to (1) reduce the potential for future pipeline failures that could result in unlawful discharges from Enbridge's Lakehead System pipelines, (2) improve leak detection capabilities and Enbridge's response to situations that could indicate potential pipeline failures, and (3) improve Enbridge's emergency response and preparedness capabilities to better address any future spills that might occur.
The publication of this notice opens a period for public comment on the proposed Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the proposed Consent Decree may be examined and downloaded at this Justice Department Web site:
You may request a paper copy of the Consent Decree with or without Appendices. If requesting a copy of the proposed Consent Decree with Appendices, please enclose a check or money order for $52.25 (25 cents per page reproduction cost) payable to the United States Treasury. If requesting a copy of the proposed Consent Decree without Appendices, please enclose a check or money order for $42.25 payable to the United States Treasury.
Department of Justice.
Notice.
This notice announces the opening of the public comment period on the Proposed Uniform Language for Testimony and Reports (Proposed Uniform Language) documents for the forensic disciplines of anthropology, explosive chemistry, explosive devices, geology, hair, handwriting analysis, metallurgy, mitochondrial DNA and Y chromosome typing, and paints and polymers.
Written public comment regarding the Proposed Uniform Language should be submitted through
The Office of Legal Policy, 950 Pennsylvania Avenue NW., Washington, DC 20530, by phone at 202-514-4601 or via email at
As part of the Department's continued efforts to advance the practice of forensic science by ensuring Department forensic examiners are testifying and reporting consistent with applicable scientific standards and across Department components including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Drug Enforcement Administration (DEA), and the Federal Bureau of Investigation (FBI), the Department is developing Proposed Uniform Language that would apply to all Department forensic laboratory personnel. The Proposed Uniform Language documents are based on the Federal Bureau of Investigation's (FBI) Approved Scientific Standards for Testimony and Reports (ASSTRs) but differ substantially. As a primary matter, the ASSTRs are currently in effect for FBI personnel, while the Proposed Uniform Language documents are merely proposed and have not been adopted. After adjudication of public comment and the incorporation of appropriate edits, it is anticipated that each Proposed Uniform Language document will be forwarded to the Deputy Attorney General. If one or more are adopted by the Deputy Attorney General, they would become effective for Department forensic laboratory personnel.
In accordance with the Federal Records Act, please note that all comments received are considered part of the public record, and shall be made available for public inspection online at
The Department will post all comments received on
National Archives and Records Administration (NARA).
Charter Renewal of the Advisory Committee on Presidential Library-Foundation Partnerships.
In accordance with the provisions of section 9(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.), the National Archives and Records Administration (NARA) is renewing the Advisory Committee on Presidential Library-Foundation Partnerships, a federal advisory committee that advises the Archivist of the United States on matters relating to the public-private partnership of the Presidential Libraries operated by NARA.
The charter renewal was effective on July 16, 2016 and remains in effect for two years from that date.
Please submit any questions on this notice by email to
Denise LeBeck by phone at 301-837-1724, by email at
July 25, August 1, 8, 15, 22, 29, 2016.
Commissioners' Conference Room, 11555 Rockville Pike, Rockville, Maryland.
Public and Closed.
This meeting will be webcast live at the Web address—
This meeting will be webcast live at the Web address—
There are no meetings scheduled for the week of August 1, 2016.
There are no meetings scheduled for the week of August 8, 2016.
There are no meetings scheduled for the week of August 15, 2016.
There are no meetings scheduled for the week of August 22, 2016.
There are no meetings scheduled for the week of August 29, 2016.
The schedule for Commission meetings is subject to change on short notice. For more information or to verify the status of meetings, contact Denise McGovern at 301-415-0681 or via email at
The NRC Commission Meeting Schedule can be found on the Internet at:
The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings, or need this meeting notice or the transcript or other information from the public meetings in another format (
Members of the public may request to receive this information electronically. If you would like to be added to the distribution, please contact the Nuclear Regulatory Commission, Office of the Secretary, Washington, DC 20555 (301-415-1969), or email
The RRB invites comments on the proposed collection of information to determine (1) the practical utility of the collection; (2) the accuracy of the estimated burden of the collection; (3) ways to enhance the quality, utility, and clarity of the information that is the subject of collection; and (4) ways to minimize the burden of collections on respondents, including the use of automated collection techniques or other forms of information technology. Comments to the RRB or OIRA must contain the OMB control number of the ICR. For proper consideration of your comments, it is best if the RRB and OIRA receive them within 30 days of the publication date.
When the Railroad Retirement Board (RRB) determines that an overpayment of Railroad Retirement Act or Railroad Unemployment Insurance Act benefits has occurred, it initiates prompt action to notify the annuitant of the overpayment and to recover the money owed the RRB. To effect payment of a debt by credit card, the RRB utilizes Form G-421F, Repayment by Credit Card. The RRB's procedures pertaining to benefit overpayment determinations and the recovery of such benefits are prescribed in 20 CFR 255 and 340.
One form is completed by each respondent. Completion is voluntary.
Comments regarding the information collection should be addressed to Charles Mierzwa, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois, 60611-2092 or
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to expand the Trade Reporting and Compliance Engine (“TRACE”) reporting rules to include most secondary market transactions in marketable U.S. Treasury securities.
The text of the proposed rule change is available on FINRA's Web site at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The market in U.S. Treasury securities—or “Treasuries”
On October 15, 2014, the market for Treasuries (as well as for Treasury futures and other closely-related financial markets) experienced an unusually high level of volatility and a rapid round-trip in prices. In response to the unexplained volatility, an existing interagency working group (“IAWG”) led by the U.S. Department of the Treasury (“Treasury Dept.”) analyzed both the conditions that contributed to the events of October 15 and the structure of the U.S. Treasury market more generally.
Following publication of the JSR, on January 19, 2016, the Treasury Dept. published a Request for Information (“RFI”) seeking public comment on structural changes in the U.S. Treasury market and their implications for market functioning.
The RFI included four sections, each of which expanded upon one of the four “next steps” identified in the JSR, and each section included numerous questions for public consideration, ranging from broad high-level questions to detailed and specific questions on discrete issues. Section I requested comment on the evolution of the U.S. Treasury market, the primary drivers of that evolution, and implications for market functioning and liquidity. Section II asked for information on risk management practices and market conduct across the U.S. Treasury market and on implications for operational risks and risks to market functioning and integrity. Section III requested comment on official sector access to data regarding the cash market for Treasuries. Section IV focused on whether dissemination of U.S. Treasury market transaction data to the public would be beneficial.
The comment period on the RFI closed on April 22, 2016, and 52 comment letters were submitted. As discussed below, approximately 30 of the letters addressed reporting to the official sector or public dissemination. Following receipt and review of the comment letters, on May 16, 2016, the Treasury Dept. and the SEC announced that “they are working together to explore efficient and effective means of collecting U.S. Treasury cash market transaction information[, and that as] part of those efforts, the agencies are requesting that [FINRA] consider a proposal to require its member brokers and dealers to report Treasury cash market transactions to a centralized repository.”
As described below, the proposed rule change would require all FINRA members involved in transactions in U.S. Treasury Securities, as defined in the TRACE rules, to report most transactions in those securities to TRACE.
The TRACE reporting rules apply to “Reportable TRACE Transactions,” as defined in Rule 6710(c), involving “TRACE-Eligible Securities,” as defined in Rule 6710(a). Any “U.S. Treasury Security,” as defined in Rule 6710(p), is currently excluded from the definition of TRACE-Eligible Security; consequently, no trading activity by FINRA members in U.S. Treasury Securities is required to be reported to TRACE. Rule 6710(p) defines “U.S. Treasury Security” as “a security issued by the U.S. Department of the Treasury to fund the operations of the federal government or to retire such outstanding securities.”
FINRA is proposing to amend the TRACE rules to require the reporting of transactions in all Treasuries with the exception of savings bonds.
In general, any transaction in a TRACE-Eligible Security is a “Reportable TRACE Transaction” unless the transaction is subject to an exemption.
Rule 6730(e) currently includes six exemptions from the TRACE trade reporting requirements for certain types of transactions. The proposed rule change amends Rule 6730(e) to exempt from the reporting requirement purchases by a member from the Treasury Dept. as part of an auction. All U.S. Treasury Securities reportable to TRACE are offered to the public by the Treasury Dept. through an auction process.
The proposed rule change includes three new definitions for “Auction,” “Auction Transaction,” and “When-Issued Transaction” to address members' reporting obligations involving when-issued trading activity and purchases directly from the Treasury Dept. as part of an auction. The proposed rule change amends Rule 6730(e) to exempt an “Auction Transaction,” defined as the purchase of a U.S. Treasury Security in an Auction,
The proposed rule change also amends the list of exempted transactions in Rule 6730(e) to codify a long-standing interpretation for all TRACE-Eligible Securities that repurchase and reverse repurchase transactions are not reportable to TRACE.
The proposed rule change would require Reportable TRACE Transactions in U.S. Treasury Securities generally to be reported on the same day as the transaction on an end-of-day basis. Because FINRA is not currently proposing to disseminate any trade-level information to the public regarding transactions in U.S. Treasury Securities, the proposed rule change generally imposes a same-day reporting requirement as opposed to a more immediate requirement, such as 15 minutes. Under the proposed amendments to Rule 6730, Reportable TRACE Transactions in U.S. Treasury Securities executed on a business day at or after 12:00:00 a.m. Eastern Time through 5:00:00 p.m. Eastern Time must be reported the same day during TRACE System Hours.
Rule 6730(c) lists the following transaction information that must be
(1) CUSIP number or, if a CUSIP number is not available at the Time of Execution, a similar numeric identifier or a FINRA symbol;
(2) The size (volume) of the transaction, as required by Rule 6730(d)(2);
(3) Price of the transaction (or the elements necessary to calculate price, which are contract amount and accrued interest) as required by Rule 6730(d)(1);
(4) A symbol indicating whether the transaction is a buy or a sell;
(5) Date of Trade Execution (for “as/of” trades only);
(6) Contra-party's identifier (MPID, customer, or a non-member affiliate, as applicable);
(7) Capacity—Principal or Agent (with riskless principal reported as principal);
(8) Time of Execution;
(9) Reporting side executing broker as “give-up” (if any);
(10) Contra side Introducing Broker in case of “give-up” trade;
(11) The commission (total dollar amount);
(12) Date of settlement; and
(13) Such trade modifiers as required by either the TRACE rules or the TRACE users guide.
The proposed rule change would generally apply the existing information requirements for Reportable TRACE Transactions to trade reports in Reportable TRACE Transactions in U.S. Treasury Securities; however, FINRA is proposing several amendments to Rule 6730 to clarify how some of this information would be reported if the transaction involves a U.S. Treasury Security. First, the proposed rule change amends Rule 6730 to clarify that, because when-issued trading is based on yield rather than on price as a percentage of face or par value, members should report the yield in lieu of the price when the transaction is a When-Issued Transaction, as defined in the TRACE rules. The proposed amendments also make clear that, as is the case whenever price is reported for a transaction executed on a principal basis, the yield reported by a member for a When-Issued Transaction must include any mark-up or mark-down. If the member, however, is acting in an agency capacity, the total dollar amount of any commission must be reported separately.
Second, the proposed rule change would require reporting of a more precise time of execution for transactions in U.S. Treasury Securities that are executed electronically. A significant portion of the trading activity in the U.S. Treasury cash market is conducted on electronic platforms. As noted in the RFI, inter-dealer trading in the cash market increasingly makes use of electronic platforms operated by inter-dealer brokers, and “a significant portion of trading in the dealer-to-customer market occurs on platforms that facilitate the matching of buy and sell orders primarily through request for quote (“RFQ”) systems.”
Finally, FINRA is proposing a new trade indicator and two new trade modifiers that reflect unique attributes of the U.S. Treasury cash market. The proposed rule change would establish a new trade indicator for any Reportable TRACE Transaction in a U.S. Treasury Security that meets the definition of “When-Issued Transaction.” Such an indicator is necessary so that FINRA can readily determine whether price is being reported on the transaction based on a percentage of face or par value or whether, as required for When-Issued Transactions, the member is reporting the yield. The indicator would also be used to validate trades in a U.S. Treasury Security that are reported with an execution date before the auction for the security has taken place.
In addition to the new indicator, the proposed rule change would require the use of two new modifiers when applicable to reported transactions. Because individual transactions in U.S. Treasury Securities are often executed as part of larger trading strategies, individual transactions undertaken as part of these strategies can often be priced away from the current market for legitimate reasons. FINRA is proposing two new modifiers to indicate particular transactions that are part of larger trading strategies. First, the proposed rule change would require that members append a “.B” modifier to a trade report if the transaction being reported is part of a series of transactions where at least one of the transactions involves a futures contract (
The proposed rule change amends Rule 6750 regarding the dissemination of transaction information reported to TRACE. As indicated by numerous commenters to the RFI, there is substantial disagreement as to the potential benefits of public dissemination of information on transactions in U.S. Treasury Securities. Many commenters expressed concerns about public dissemination of these transactions, and these concerns are heightened when some, but not all, market participants are reporting transactions. Consequently, at this time, FINRA is not proposing to disseminate information on transactions in U.S. Treasury Securities, and the proposed rule change amends Rule 6750(b) to add transactions in U.S. Treasury Securities to the list of transactions for which information will not be disseminated.
The proposed rule change also amends two fee provisions in the FINRA rules to reflect the fact that, initially, FINRA will not be charging transaction-level fees on transactions in U.S. Treasury Securities reported to TRACE. First, the proposed rule change amends Section 1(b)(2) of Schedule A to the FINRA By-Laws to exclude transactions in U.S. Treasury Securities from the Trading Activity Fee (“TAF”). Second,
Finally, the proposed rule change amends Rule 0150 to add the FINRA Rule 6700 Series to the list of FINRA rules that apply to “exempted securities,” except municipal securities.
If the Commission approves the proposed rule change, FINRA will announce the effective date of the proposed rule change in a
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
As discussed above, the official sector does not currently receive any regular reporting of Treasury cash market transactions following auction. There is no central database reflecting the trading activities in the market of Treasuries. Recent events such as the anomalous price behavior of October 15, 2014 have showcased the need for a thorough review of the market structure by the official sector. The data collected under the proposed rule change will enable FINRA to enhance monitoring and enforcement of best execution and other broker-dealer obligations regarding transactions in Treasuries. The data will also be necessary for the official sector to conduct comprehensive market surveillance for Treasuries. As summarized by the RFI: “The need for more comprehensive official sector access to data, particularly with respect to U.S. Treasury cash market activity, is clear.”
The proposed rule change would impose reporting requirements on Treasury cash market participants that are FINRA members, extending with some modification the TRACE reporting requirements to transactions in U.S. Treasury Securities.
Broadly, the secondary markets for Treasuries can be categorized into two segments: Cash and futures. The Treasury cash market has been bifurcated between the inter-dealer market, in which dealers trade with one another, and the dealer-to-customer market, where customers may include asset managers, pension funds, insurance companies, and corporations.
The inter-dealer market is dominated by automated trading, sometimes in large volumes and at high speed. The primary locations for price discovery in the Treasury cash market are the electronic trading platforms BrokerTec and eSpeed, which utilize a central limit order book (“CLOB”) protocol.
The dealer-to-customer market has less visibility to regulators and many market participants. In contrast to the inter-dealer market, a significant portion of trading in the dealer-to-customer market occurs on platforms that facilitate the matching of buy and sell orders primarily through request for quote (“RFQ”) systems. These platforms are increasingly electronic, but are generally not conducive to high frequency trading strategies.
As reported by the JSR, participants of the inter-dealer market can be grouped into several broad categories based on their business model and corporate structure: Bank-dealer, non-bank dealer, hedge fund, asset manager, and PTFs.
When asked, market participants offer a wide range of estimates of the percentage of cash market activities conducted by FINRA members in the Treasury market. These estimates range from 25%-65% of the dollar volume, with most participants indicating that broker-dealers remain particularly active in on-the-run trading.
While bank-dealers may account for a minority share of trading volume in the inter-dealer market, they trade significant volume directly with their customers. The Federal Reserve Bank of New York designated 23 primary dealers to serve as trading counterparties in its implementation of monetary policy.
To assess the potential impact of the proposed rule change, it may also be useful to examine the proportion of government securities brokers (“GSBs”) or government securities dealers (“GSDs”) that would be subject to the proposed reporting requirements. GSBs and GSDs are designations used by FINRA and bank regulators for regulated entities acting as brokers or dealers in the government securities markets. Approximately 1,260 FINRA members identified themselves as GSBs or GSDs
The primary benefits from the proposed rule change arise from better monitoring of the Treasuries markets and participants by regulators. As discussed above, the primary locations for price discovery in the Treasury cash market are FINRA members, and transactions on those platforms would be subject to the proposed reporting requirements. Therefore, the proposed data collection is expected to capture a significant portion of transactions in the inter-dealer Treasury cash market. Further, since 21 of the 23 primary dealers are FINRA members, the data collection will shed light on the less transparent dealer-to-customer market and the trading of less liquid off-the-run securities. The data will improve the official sector's general monitoring and surveillance capabilities, including those designed to detect disruptive trading practices or risks to market stability. The proposed rule change will assist in the analysis of specific market events or trends, and provide regulators with the data to better evaluate how policy decisions may be expected to impact the market. Collectively, these should strengthen the Treasury cash market microstructure, reduce manipulative activities, and enhance investor protection. Moreover, the proposed data collection will permit FINRA to better monitor for compliance with its own rules. FINRA believes that using the existing TRACE reporting infrastructure is an efficient and cost effective mechanism to collect the data.
FINRA understands that the proposed rule change is associated with potential direct and indirect costs. Direct costs would be born primarily by FINRA-member firms with new reporting obligations or the clearing firms or other service providers who would report on their behalf.
The technical and operational costs associated with reporting Treasury cash market transactions are likely to vary across firms. For FINRA-member firms that are already reporting to TRACE, the costs associated with reporting U.S. Treasury Security transactions may be more limited. Within FINRA members that would be required to report Treasury cash market transactions, some are already reporting transactions in TRACE-Eligible Securities. These firms may be able to use or otherwise leverage the TRACE infrastructure and the associated compliance framework for U.S. Treasury Securities and reduce costs associated with the proposed rule change. For example, out of the FINRA members that identified themselves as GSBs or GSDs on Form BD, more than 70% had TRACE reporting activities between June 2015 and May 2016. Based on conversations with market participants, some current TRACE reporters will have much higher volume of reported transactions.
Based on the review of TRACE reporting for the year June 2015 through May 2016, FINRA identified 338 FINRA-member firms registered as GSBs or GSDs with no reported TRACE transactions. FINRA does not have any data to measure the extent of these firms' activities in the Treasury market today. For these firms that are active in the Treasury cash market but currently not subject to TRACE reporting requirements, the costs may be more significant as the firms will need to develop new reporting systems or enter into agreements with third parties to report and to develop and maintain regulatory compliance programs with respect to the new reporting requirements.
The larger inter-dealer platforms have indicated to FINRA that the operational challenges with collecting and delivering trade reporting may be material but not unduly large. A potential challenge for some platforms may be to update and maintain counterparty identification systems to meet the reporting requirements.
For introducing firms, FINRA understands that clearing firms and service providers will be able to offer regulatory reporting in U.S. Treasury Securities as they do currently for TRACE-Eligible Securities. Introducing firms may need to enhance their systems to provide the additional information necessary to complete a trade report. FINRA understands that these firms will also incur additional service costs, typically based on the trade volume reported on their behalf.
The new modifiers may introduce additional complexity to the proposed reporting, as traders at FINRA-member firms must apply the modifiers correctly and consistently to ensure meaningful data collection. Larger firms indicated that Treasuries are typically traded across many desks within the firm and this increases compliance costs because the new modifiers need to be identified by individual traders, as they are uniquely situated to know whether a specific trade is associated with a cross-instrument strategy that would require the modifier. Some firms also suggested that it may be difficult for a trader to know at the time of a trade whether it is part of a cross-instrument strategy, thus increasing complexity and their regulatory risk. Moreover, some firms indicated to FINRA that the costs associated with the expansion of current systems to accommodate the proposed new trade indicator and modifiers may be substantial. FINRA notes that it plans to phase in the modifiers to simplify the immediate implementation of the proposed rule change and provide firms additional time to make the necessary changes to implement the new modifiers.
Based on conversations with market participants, another potential challenge for some firms is to update their systems to meet the requirement that the yield reported by a member for a When-Issued Transaction must include any mark-up or mark-down. FINRA understands that there may be differences in current practices as to whether mark-ups and mark-downs are captured at the time of a When-Issued Transaction. Those firms that do not currently capture this information will incur additional costs in meeting this condition of the proposed rule.
Finally, all FINRA-member firms subject to the proposed rule change would need to establish policies and procedures and monitor ongoing reporting activities to ensure compliance with the reporting requirements.
The proposed rule change does not contemplate any direct assessments to firms reporting U.S. Treasury Security transactions to TRACE, as is required for other TRACE reportable events. But FINRA notes that it may seek to collect transaction or other forms of fees from reporting firms in the future, subject to a separate rule filing with the SEC.
FINRA has identified several sources of potential indirect costs. Although the data collection is expected to capture a significant portion of the Treasury cash market, not all participants in this market are FINRA members, and this fact may impact the proposed rule
Second, the proposed reporting requirements may create competitive disadvantage for FINRA members. This disadvantage may arise in several related contexts. First, the proposed rule change would impose operational and compliance costs avoided by some competitors. Second, regulators will have a greater ability to monitor the Treasury cash market activity of those firms uniquely identified in TRACE reporting. These firms' Treasury trading may face higher regulatory scrutiny than firms not so identified or lacking a primary prudential regulator. These firms may incur greater costs in responding to regulators' inquiries and other compliance-related activities. Firms reporting to TRACE might also find that dealers that are not required to report their transactions in U.S. Treasury Securities may try to leverage the lack of reporting as a competitive advantage with customers. Customers may migrate their business from FINRA-member firms to other dealers if they believe there is value to avoiding surveillance. Further, even FINRA-member firms may seek to migrate their government securities business to affiliates that are not FINRA members if they determine there is a net benefit to do so.
However, as noted above, the Treasury Dept. stated that it would develop a plan for collecting similar data from non-FINRA members active in the Treasury cash market. In addition, FINRA understands from market participants that these competitive impacts are likely small. For instance, market participants do not generally believe that regulatory reporting, by itself, would lead non-reporters to shift inter-dealer trading out of the large inter-dealer platforms in order to avoid reporting. The access to deep liquidity and the ability to transact when desired are deemed to be more valuable than the gain from anonymity.
The proposed rule change may also have other indirect impacts on the Treasury cash market. If the reporting costs are significant, they potentially may raise barriers to entry and reduce participation of FINRA members in the Treasury cash market. The depth of the “on the run” Treasury market, in particular, suggests that dealers face low margins in these securities, and any material additional regulatory costs may be a more significant impediment where the firm does not have extensive activity in Treasuries or can mutualize the regulatory costs through a third party provider. Moreover, depending on the competitiveness of the Treasury cash market, some FINRA-member firms may transfer the costs to customers and thereby increase transaction costs.
FINRA evaluated various options around implementing reporting as proposed. FINRA reviewed its existing reporting facilities as well as alternative options such as periodic batch-reporting and file submissions.
Given the intended coverage, FINRA determined that TRACE provided the most efficient and cost effective way of implementing the requirement for several reasons. First, the reporting structure that has been developed and implemented for other fixed income securities can be extended to U.S. Treasury Securities with minor modifications. Second, the infrastructure supporting TRACE is already in use by a significant portion of FINRA members affected by the proposal such that these members have connectivity established and currently report to the facility. In addition to the transaction reporting infrastructure itself, FINRA as well as member firms have developed supporting processes around the TRACE facility that can be leveraged, such as monitoring tools, compliance processes, and alerts.
Among other alternatives, FINRA considered other existing FINRA trade reporting facilities, including the OTC Reporting Facility and the Alternative Display Facility, that support transaction reporting for equity securities and concluded these facilities were not suitable for reporting of transactions in U.S. Treasury Securities and that TRACE, with its existing reporting protocols and framework, was preferable. FINRA also considered developing an alternative processes of collecting the information (such as batch file submissions); however, such a process would require creation and maintenance of an additional, parallel infrastructure by all affected firms as well as FINRA, providing for a costlier implementation and ongoing support. Some firms may find it more cost effective to report trades singularly throughout the day, while others may prefer providing trade reports at fixed intervals, allowing firms sufficient time to ensure the accuracy of the transaction information prior to submitting the information to FINRA. FINRA notes that much of the benefits of batch-reporting can be achieved by providing an end-of-day reporting timeframe.
The existing TRACE reporting framework requires that if there are two FINRA members executing a trade (one as the buyer and one as the seller), both FINRA members must report. Several commenters to the RFI advocated for one-sided reporting rather than two-sided reporting. FINRA determined that maintaining the two-sided reporting framework is preferable and will allow FINRA to compare the information reported by each party to identify discrepancies or potential non-reporting by one party. Moreover, accommodating one-sided reporting would necessitate significant changes to the existing TRACE infrastructure that could affect all TRACE reporting firms and significantly reduce the benefits to using an existing system described above. In addition, FINRA believes the burdens to firms of two-sided reporting can be reduced because TRACE allows for one participant to report on behalf of another, provided the two parties have proper agreements in place to allow the party to report on the other party's behalf. Any such arrangements are voluntary, and each participant (including ATSs) can determine if they would like to provide this service to its trading partners or subscribers.
Written comments on the proposed rule change were neither solicited nor received; however, the Treasury Dept. received numerous comments in response to the RFI addressing reporting requirements for transactions in Treasuries. Fifty-two comments were submitted. Approximately 30 letters addressed reporting to the official sector or public dissemination.
As noted above, Section III of the RFI emphasized the need for more comprehensive official sector access to transaction data for Treasuries and requested comment on the types of data that should be made available to the official sector regarding the Treasury cash securities market and on numerous practical considerations associated with gathering that data. The RFI noted that “[t]he need for more comprehensive official sector access to data, particularly with respect to U.S. Treasury cash market activity, is clear.”
Approximately 26 commenters expressed some level of support for official sector reporting. As the Treasury Dept. noted, “[t]he responses to the RFI expressed broad support for more comprehensive reporting to regulators, including nearly unanimous support for reporting additional information on Treasury cash market activity.”
Several commenters to the RFI provided views on specific reporting requirements. Industry participants expressed the view that a single-side reporting obligation was preferable to having multiple counterparties or venues report the same transaction;
As noted above, the proposed rule change follows the current TRACE reporting structure requiring that any Party to the Transaction that is a FINRA Member report the transaction to TRACE; therefore, if two or more FINRA members are Parties to the Transaction, each member will have an independent obligation to report the transaction to TRACE. FINRA believes that this reporting structure helps to ensure the accuracy of reported transactions and, as a result, significantly enhances the quality of the audit trail. Although requiring multiple reports for some transactions may increase the overall number of errors, it also provides FINRA with a means to validate reports that does not exist if a single party reports the transaction. FINRA believes that the overall benefits to the audit trail of requiring multiple reports outweigh the costs, particularly since FINRA is proposing to initially exempt reports in U.S. Treasury Securities from the TRACE trade reporting fees.
There was widespread support among the commenters to extend reporting obligations to all Treasury securities rather than a defined subset.
As discussed above, FINRA is proposing to impose reporting obligations on all Treasuries with the exception of savings bonds, which are not generally traded in the secondary market; thus, the proposed reporting requirements would apply to all marketable Treasuries and all transactions in those securities with the exceptions of purchases in the initial auction, repurchase transactions, and reverse repurchase transactions.
Relatively few commenters provided views on specific elements that should be reported to the official sector. In addition to the general transaction information necessary for effective transaction reporting (
• Trading venue;
• settlement date;
• category of counterparty;
• type of trading protocol;
• whether the transaction was cleared;
• whether the trade was part of a package transaction.
As discussed above, the proposed rule change largely extends to transactions in U.S. Treasury Securities the existing TRACE reporting fields, which include settlement date, category of counterparties, and in some cases the trading venue (
Multiple commenters suggested that any reporting requirement should span across all market participants, and some commenters specifically noted the importance of regulatory cooperation, as a benefit for both regulators and for reporting firms.
Regulatory coordination will enhance the ability of Treasury, as well as other regulators, to conduct more comprehensive analysis and surveillance of trading in the Treasury markets by obtaining a broader view of these integrated markets, and increase regulators' ability to obtain higher quality and more consistent data. A coordinated rulemaking effort will help minimize compliance costs for market participants, to the extent they can utilize existing reporting infrastructures and requirements to meet any new reporting obligations that Treasury may impose. ICI, at 5.
As noted above, after reviewing the comments, the Treasury Dept. and the SEC requested that FINRA consider a proposal to require its members to report Treasury cash market transactions to a centralized repository. FINRA has filed the proposed rule change in response to that request. Although the proposed rule change would apply only to FINRA members, the Treasury Dept. noted that it “will continue working with other agencies and authorities to develop a plan for collecting similar data from institutions who actively trade U.S. Treasury securities but are not FINRA members.”
Within 45 days of the date of publication of this notice in the
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to make adjustments to its Options Regulatory Fee (“ORF”) by amending NASDAQ Options Market LLC (“NOM”) Rules at Chapter XV, Section 5.
While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on August 1, 2016.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to increase the ORF from $0.0019 to $0.0021 as of August 1, 2016 to account for a reduction in market volume the Exchange has experienced. The Exchange's proposed change to the ORF should balance the Exchange's regulatory revenue against the anticipated revenue [sic].
The ORF is assessed to each member for all options transactions executed or cleared by the member that are cleared at The Options Clearing Corporation (“OCC”) in the Customer range (
The ORF is designed to recover a portion of the costs to the Exchange of the supervision and regulation of its
The Exchange is proposing to increase the ORF from $0.0019 to $0.0021 as of August 1, 2016. In light of recent market volumes, the Exchange is proposing to change the amount of ORF that will be collected by the Exchange. The Exchange regularly reviews its ORF to ensure that the ORF, in combination with its other regulatory fees and fines, does not exceed regulatory costs. The Exchange believes this adjustment will permit the Exchange to cover a material portion of its regulatory costs, while not exceeding regulatory costs.
The Exchange notified members of this ORF adjustment thirty (30) calendar days prior to the proposed operative date.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The Exchange believes that increasing the ORF from $0.0019 to $0.0021 as of August 1, 2016 is reasonable because the Exchange's collection of ORF needs to be balanced against the amount of regulatory revenue collected by the Exchange. The Exchange believes that the proposed adjustments noted herein will serve to balance the Exchange's regulatory revenue against the anticipated regulatory costs. While these adjustments result in an increase, the increase is modest and within the range of ORFs assessed by other options exchanges.
The Exchange believes that amending the ORF from $0.0019 to $0.0021 as of August 1, 2016 is equitable and not unfairly discriminatory because this adjustment would be applicable to all members on all of their transactions that clear as Customer at OCC. In addition, the ORF seeks to recover the costs of supervising and regulating members, including performing routine surveillances, investigations, examinations, financial monitoring, and policy, rulemaking, interpretive, and enforcement activities.
The ORF is not charged for member proprietary options transactions because members incur the costs of owning memberships and through their memberships are charged transaction fees, dues and other fees that are not applicable to non-members. Moreover, the Exchange believes the ORF ensures fairness by assessing higher fees to those members that require more Exchange regulatory services based on the amount of Customer options business they conduct.
Regulating Customer trading activity is more labor intensive and requires greater expenditure of human and technical resources than regulating non-Customer trading activity. Surveillance, regulation and examination of non-Customer trading activity generally tends to be more automated and less labor intensive. As a result, the costs associated with administering the Customer component of the Exchange's overall regulatory program are anticipated to be higher than the costs associated with administering the non-Customer component of its regulatory program. The Exchange proposes assessing higher fees to those members that will require more Exchange regulatory services based on the amount of Customer options business they conduct.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. [sic] In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited.
The Exchange does not believe that increasing its ORF creates an undue burden on intra-market competition because the adjustment will apply to all members on all of their transactions that clear as Customer at OCC. The Exchange is obligated to ensure that the amount of regulatory revenue collected from the ORF, in combination with its other regulatory fees and fines, does not exceed regulatory costs. Additionally, the dues and fees paid by members go into the general funds of the Exchange, a portion of which is used to help pay the costs of regulation. The Exchange's members are subject to ORF on other options markets.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend NYSE Arca Equities Rule 1.1(ggP) to establish an Official Closing Price for Exchange-listed securities if the Exchange is unable to conduct a Closing Auction. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange is proposing to amend its rules to specify back-up procedures for determining an Official Closing Price for Exchange-listed securities if it is unable to conduct a Closing Auction in one or more securities due to a systems or technical issue.
The proposed changes are based on approved rules of the New York Stock Exchange, LLC (“NYSE”) and NYSE MKT LLC (“NYSE MKT”).
• Providing a pre-determined, consistent solution that would result in a closing print to the applicable securities information processor (“SIP”) within a reasonable time frame from the normal closing time;
• Minimizing the need for industry participants to modify their processing of data from the SIPs; and
• Providing advance notification of the applicable closing contingency plan to provide sufficient time for industry participants to route any closing interest to an alternate venue to participate in that venue's closing auction.
The Exchange also proposes to amend Rule 1.1(ggP) to specify that, for a UTP Security,
Current Rule 1.1(ggP) describes how the Exchange establishes the “Official Closing Price,” which is the reference price to determine the closing price in a security for purposes of Rule 7 Equities Trading. Rule 1.1(ggP) provides that the Official Closing Price is determined as follows:
• As provided for in Rule 1.1(ggP)(1), for securities listed on the Exchange, the Official Closing Price is the price established in a Closing Auction of one round lot or more on a trading day. If there is no Closing Auction or if a Closing Auction trade is less than a round lot on a trading day, the Official Closing Price is the most recent consolidated last sale eligible trade during Core Trading Hours on that trading day. If there were no consolidated last sale eligible trades during Core Trading Hours on that trading day, the Official Closing Price will be the prior trading day's Official Closing Price.
• As provided for in Rule 1.1(ggP)(2), for securities listed on an exchange other than the Exchange, the Official Closing Price is the official closing price disseminated by the primary listing market for that security via a public data feed on a trading day. If the primary listing market does not disseminate an official closing price on a trading day, the Official Closing Price is the most recent consolidated last sale eligible trade during Core Trading Hours on that trading day. If there were no consolidated last sale eligible trades during Core Trading Hours on that trading day, the Official Closing Price will be the prior trading day's Official Closing Price.
The rule further provides that an Official Closing Price may be adjusted to reflect corporate actions or a correction to a closing price, as disseminated by the primary listing market for the security.
In Rule 7, the Exchange uses the Official Closing Price for three purposes: (1) To determine the Auction Reference Price for a security, as provided for in Rule 7.35P(a)(8)(A); (2) to determine the Trading Collar for a security if there is no consolidated last sale price on the same trading day, as provided for in Rule 7.31P(a)(1)(B)(i); and (3) for securities listed on the Exchange only, for purposes of determining whether to trigger a Short Sale Price Test, as defined under Rule 7.16P(f)(2).
The Exchange proposes to amend Rule 1.1(ggP) to establish how the Exchange would determine an Official Closing Price if the Exchange is unable to conduct a Closing Auction in an NYSE Arca-listed security or securities due to a systems or technical issue. To reflect this change, the Exchange proposes to add new rule text as proposed Rules 1.1(ggP)(2)-(4) and re-number current Rule 1.1(ggP)(2) as proposed Rule 1.1ggP(5), as described in greater detail below.
Proposed Rules 1.1(ggP)(2)-(4) are based on NYSE Rules 123C(1)(e)(ii)-(iv) and NYSE MKT Rules 123C(1)(e)(ii)-(iv)—Equities with non-substantive differences to use NYSE Arca Equities terminology instead of NYSE terminology, as follows: “Corporation” or “NYSE Arca Marketplace” instead of “Exchange,” “Closing Auction” instead of “closing transaction,” “Core Trading Hours” instead of “regular trading hours,” and “ETP Holder” instead of “member organization.”
As proposed, Rule 1.1(ggP)(2) would provide that if the Exchange determines at or before 3:00 p.m. Eastern Time that it is unable to conduct a Closing Auction in one or more NYSE Arca-listed securities due to a systems or technical issue, the Exchange would designate an alternate exchange for such security or securities. The Exchange would publicly announce the exchange designated as the alternate exchange via Trader Update. In such case, the Official Closing Price of each security would be determined on the following hierarchy:
• Proposed Rule 1.1(ggP)(2)(A) would provide that the Official Closing Price would be the official closing price for such security under the rules of the designated alternate exchange. For example, if the Exchange designates Nasdaq as the alternate exchange, the Official Closing Price would be based on Nasdaq Rule 4754, which defines how Nasdaq establishes an official closing price.
The proposed 3:00 p.m. cut off time was selected in part based on discussions with market participants regarding their capability to re-direct closing-only interest in Exchange-listed securities in time to participate in the closing auction of an alternate venue. By designating an alternate exchange before 3:00 p.m. Eastern Time, the Exchange believes that market participants would be more likely to have sufficient notice to direct any closing-only interest in Exchange-listed securities to the designated alternate exchange. By providing market participants sufficient time, when possible, to route closing-only interest to an alternate venue for participation in that exchange's closing auction process, that alternate exchange's closing auction would be more likely to result in a closing price that reflects market value for such security.
If there were insufficient interest for a closing auction on the designated alternate exchange, the Exchange believes that the rules of Nasdaq provide for an appropriate hierarchy of which price to use to determine the Official Closing Price.
• Proposed Rule 1.1(ggP)(2)(B) would provide if the designated alternate exchange does not have an official closing price in a security, the Official
As discussed above, the manner by which exchanges calculate their respective official closing prices provide for an official closing price in the absence of a closing transaction. Accordingly, the Exchange believes that in circumstances when the Exchange designates an alternate exchange, the VWAP calculation would rarely be used to determine the Official Closing Price for an Exchange-listed security.
• Proposed Rule 1.1(ggP)(2)(C) would provide that if the designated alternate exchange does not have an official closing price in a security and there were no consolidated last-sale eligible trades in the last five minutes of trading during Core Trading Hours in such security, the Official Closing Price would be the last consolidated last-sale eligible trade during Core Trading Hours on that trading day.
• Proposed Rule 1.1(ggP)(2)(D) would provide that if the designated alternate exchange does not have an official closing price in a security and there were no consolidated last-sale eligible trades in a security on a trading day in such security, the Official Closing Price would be the prior day's Official Closing Price.
• Finally, proposed [sic] 1.1(ggP)(2)(E) would provide that if an Official Closing Price for a security cannot be determined under (A), (B), or (C) of proposed Rule 1.1(ggP)(2) and there is no prior day's Official Closing Price, the Exchange would not publish an Official Closing Price for such security.
The Exchange would use the hierarchy set forth in proposed Rule 1.1(ggP)(2)(B)-(E) only if the designated alternate exchange did not disseminate an official closing price in a security. In addition, the Exchange proposes to add as paragraph (E) of Rule 1.1(ggP)(2) what would happen if there were no Official Closing Price published on the prior trading day (
If the Corporation determines that it is impaired at or before 3:00 p.m. and the Official Closing Price for an Exchange-listed security is determined pursuant to proposed Rule 1.1(ggP)(2), the SIP would publish the Official Closing Price for such security no differently than how the SIP publishes the Official Closing Price for an Exchange-listed security pursuant to Rule 1.1(ggP)(1).
As further proposed, Rule 1.1(ggP)(3) would describe how the Corporation would determine the Official Closing Price for a security if the Corporation determines after 3:00 p.m. Eastern Time that it is unable to conduct a Closing Auction in one or more NYSE Arca-listed securities due to a systems or technical issue. Based on input from market participants, the Exchange believes that, if the Exchange were to announce after 3:00 p.m. Eastern Time that it is impaired and unable to conduct a Closing Auction, market participants would not have sufficient time to re-direct closing-only orders to an alternate venue. Accordingly, in such scenario, the Exchange proposes to use the following hierarchy for determining the Official Closing Price for a security:
• Proposed Rule 1.1(ggP)(3)(A) would provide that the Official Closing Price would be the VWAP of the consolidated last-sale eligible prices of the last five minutes of trading during Core Trading Hours up to the time that the VWAP is processed, including any closing transactions on an exchange. The VWAP would take into account any trade breaks or corrections up to the time of [sic] the VWAP is processed. This VWAP would be calculated in the same manner as set forth in proposed in Rule 1.1(ggP)(2)(B), described above. However, if the Exchange's determination that it is unable to conduct a Closing Auction is after 3:00 p.m. ET, the proposed VWAP calculation would be the primary means for determining the Official Closing Price for a security. In such case, the Exchange believes that the VWAP would appropriately reflect the pricing of a security because it would include, in a volume-weighted manner, the price and volume of closing transactions on other exchanges if market participants are able to route closing interest in Exchange-listed securities to an alternate venue for participation in a closing auction.
• Proposed Rule 1.1(ggP)(3)(B) would provide that if there were no consolidated last-sale eligible trades in the last five minutes of trading during Core Trading Hours in such security, the Official Closing Price would be the last consolidated last-sale eligible trades [sic] during Core Trading Hours on that trading day. This proposed rule text is the same as proposed Rule 1.1(ggP)(2)(C).
• Proposed Rule 1.1(ggP)(3)(C) would provide that if there were no consolidated last-sale eligible trades in such security on a trading day, the Official Closing Price would be the prior day's Official Closing Price. This proposed rule text is the same as proposed Rule 1.1(ggP)(2)(D).
• Finally, proposed Rule 1.1(ggP)(3)(D) would provide that if an Official Closing Price for a security cannot be determined under (A), (B), or (C) of proposed Rule 1.1(ggP)(3) and there is no prior day's Official Closing Price, the Exchange would not publish an Official Closing Price for such security. This proposed rule text is based on proposed Rule 1.1(ggP)(2)(E).
Similar to how the Official Closing Price would be published under proposed Rule 1.1(ggP)(2), if the Exchange determines that it is impaired after 3:00 p.m. and the Official Closing Price is determined pursuant to proposed Rule 1.1(ggP)(3), the SIP would publish the Official Closing Price for such security no differently than how the SIP publishes the Official Closing Price for an Exchange-listed security pursuant to Rule 1.1(ggP)(1). Accordingly, if the Official Closing Price is determined pursuant to proposed Rule 1.1(ggP)(3), recipients of SIP data would not have to make any changes to their systems because the SIP would publish the “M” last sale condition as an Exchange Official Closing Price for
For purposes of Rule 7.16P(f)(2) and determining whether to trigger a Short Sale Price Test under that rule, the Official Closing Price for Exchange-listed securities would still be determined based on Rule 1.1(ggP)(1). If the Exchange is impaired and cannot conduct a Closing Auction, similar to NYSE and NYSE MKT, the Official Closing Price as defined in proposed Rules 1.1(ggP)(2) and (3) would be used for purposes of determining whether a Short Sale Price Test is triggered under Rule 7.16P(f)(2) in an Exchange-listed security the next trading day.
Proposed Rule 1.1(ggP)(4) would provide that if the Exchange determines the Official Closing Price under paragraphs (2) or (3) of proposed Rule 1.1(ggP), the Exchange would publicly announce the manner by which it would determine its Official Closing Price and the designated alternate exchange, if applicable, and all open interest designated for the Exchange close residing in the NYSE Arca Marketplace would be deemed cancelled to give ETP Holders the opportunity to route their closing interest to alternate execution venues. This proposed rule would make clear that any determination that the Exchange would make under proposed Rules 1.1(ggP)(2) or (3) would be publicly announced so that market participants would have an opportunity to route their closing interest accordingly. In addition, the proposed rule change would make clear that any interest designated for the Exchange close,
To reflect that the Exchange could be designated as an alternate exchange by another primary listing market, the Exchange proposes to amend Rule 1.1(ggP)(1) to specify that the rule would be applicable to Auction-Eligible Securities, as defined in Rule 7.35P(a)(1), rather than only be applicable for securities listed on NYSE Arca. With this proposed change, if NYSE, NYSE MKT, or Nasdaq designate the Exchange as its designated alternate exchange under their respective back-up rules, Rule 1.1(ggP)(1) would govern how the Exchange would determine the Official Closing Price for Auction-Eligible Securities.
The Exchange also proposes to amend Rule 1.1(ggP)(1) to specify how the Exchange would determine the Official Closing Price for a security that has transferred its listing to the Exchange or is a new listing and does not have any consolidated last-sale eligible trades on its first day of trading on the Exchange. This proposed rule change is based on NYSE Rule 123C(1)(e)(i) and NYSE MKT Rule 123C(1)(e)(i)—Equities. As proposed, for a security that has transferred its listing to the Exchange and does not have any consolidated last-sale eligible trades on its first trading day, the Official Closing Price would be the prior day's closing price disseminated by the primary listing market that previously listed such security. In addition, for a security that is a new listing and does not have any consolidated last-sale eligible trades on its first trading day, the Official Closing Price would be based on a derived last sale associated with the price of such security before it begins trading on the Exchange. The Exchange believes the proposed rule text would provide transparency in Exchange rules of how the Exchange would determine the Official Closing Price for a security that has transferred its listing to the Exchange, and thus did not have a prior day's Official Closing Price on the Exchange, or is a new listing that did not have any trades on its first trading day.
Finally, the Exchange proposes to amend proposed Rule 1.1(ggP)(5) (which is current Rule 1.1(ggP)(2)) to clarify that this rule text would continue to specify how the Exchange would determine the Official Closing Price for UTP Securities for purposes of establishing Trading Collars if there is no consolidated last sale price on the same trading day, or Auction Reference Prices. For these purposes only, the Exchange would continue to use the official closing price as disseminated by the primary listing market for that security via a public data feed on a trading day for these purposes. The proposed change to the rule text is designed to make clear that the Exchange would continue to use the official closing price of the primary listing market as the Official Closing Price for UTP Securities for these specific purposes, while at the same time, providing for the Exchange to publish a “M” value for Auction-Eligible Securities based on an Official Closing Price determined pursuant to 1.1(ggP)(1), as proposed. In addition, if another primary listing market designates the Exchange as its designated alternate exchange under its official closing price rules, any Official Closing Price published by the Exchange in such securities would be published by the SIP as the official closing price of the primary listing exchange. Accordingly, proposed Rule 1.1(ggP)(5) would use that Official Closing Price as well.
To effect this amendment, the Exchange proposes to delete the phrase “For securities listed on an exchange other than NYSE Arca,” and replace it with “For purposes of Rules 7.31P(a)(1)(B)(i) and 7.35P(a)(8)(A) for UTP Securities only”. The remaining text of the rule would be unchanged. The Exchange believes that for UTP Securities, the official closing price as disseminated by the primary listing market would be a better price to use to determine the next day's Trading Collars or Auction Reference Price rather than using the Exchange-determined Official Closing Price under Rule 1.1(ggP)(1).
Because of the technology changes associated with this proposed rule change, the Exchange will implement the proposed back-up procedures for determining an Official Closing Price no later than 120 days after the operative date of this proposed rule change and will announce the implementation date via Trader Update.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed rule change would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would provide transparency in how the Exchange would determine the Official Closing Price in Exchange-listed securities when the Exchange is unable to conduct a Closing Auction due to a systems or technical issue. The Exchange believes that the proposed amendments would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed determination of an Official Closing Price was crafted in response to input from industry participants and would:
• Provide a pre-determined, consistent solution that would result in a closing print to the SIP within a reasonable time frame from the normal closing time;
• minimize the need for industry participants to modify their processing of data from the SIP; and
• provide advance notification of the applicable closing contingency plan to provide sufficient time for industry participants to route any closing interest to an alternate venue to participate in that venue's closing auction
More specifically, the Exchange believes the proposed hierarchy for determining the Official Closing Price if the Exchange determines that it is impaired at or before 3:00 p.m. Eastern Time would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposal, which is based on input from market participants and the approved rules of NYSE and NYSE MKT, would provide sufficient time for market participants to direct closing-only interest to a designated alternate exchange in time for such interest to participate in a closing auction on such alternate venue in a meaningful manner. The Exchange further believes that relying on the official closing price of a designated alternate exchange would provide for an established hierarchy for determining an Official Closing Price for an Exchange-listed security if there is insufficient interest to conduct a closing auction on the alternate exchange. In such case, the rules of Nasdaq already provide a mechanism for determining an official closing price for securities that trade on that market.
The Exchange further believes that if the Exchange determines after 3:00 p.m. that it is impaired and unable the conduct a Closing Auction, the proposed VWAP calculation would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would provide for a mechanism to determine the value of an affected security for purposes of determining an Official Closing Price. By using a volume-weighted calculation that would include the closing transactions on an affected security on alternate exchanges as well as any busts or corrections that were reported up to the time that the SIP calculates the value, the Exchange believes that the proposed calculation would reflect the correct price of a security. In addition, by using a VWAP calculation rather than the last consolidated last-sale eligible price as of the end of Core Trading Hours, the Exchange would reduce the potential for an anomalous trade that may not reflect the true price of a security from being set as the Official Closing Price for a security.
The Exchange further believes that the proposed rule change would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposal would have minimal impact on market participants. As proposed, from the perspective of market participants, even if the Exchange were impaired, the SIP would publish an Official Closing Price for Exchange-listed securities on behalf of the Exchange in a manner that would be no different than if the Exchange were not impaired. If the Exchange determines that it is impaired after 3:00 p.m., market participants would not have to make any system changes. If the Exchange determines that it is impaired before 3:00 p.m. Eastern Time and designates an alternate exchange, market participants may have to do systems work to re-direct closing-only orders to the alternate exchange. However, the Exchange understands, based on input from market participants, that such changes would be feasible based on the amount of advance notice. In addition, the Exchange believes that designating an alternate exchange when there is sufficient time to do so would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would allow for the price-discovery mechanism of a closing auction to be available for impacted Exchange-listed securities.
In addition, the Exchange believes that the proposed amendments to Rule 1.1(ggP)(1) would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed rule change would enable the Exchange to serve as a designated alternate exchange under the respective rules of NYSE, NYSE MKT, or Nasdaq. Specifically, by expanding the reach of Rule 1.1(ggP)(1) to all Auction-Eligible Securities on the Exchange, and not just Exchange-listed securities, the hierarchy for determining an Official Closing Price specified in Rule 1.1(ggP) would be available to all securities that trade on the Exchange. Because the Exchange would be determining an Official Closing Price for UTP Securities under the proposed amendments to Rule 1.1(ggP)(1) for purposes of disseminating an “M” value to the SIPs, the Exchange further believes that the proposed amendments to Rule 1.1(ggP)(5) would be consistent with the protection of investors and the public interest by using the official closing price as determined by the primary listing market for UTP Securities for purposes of determining the next day's first Trading Collar (in the absence of a consolidated last sale price) or Auction Reference Price.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not designed to address any competitive issues, but rather to provide for how the Exchange would determine an Official Closing Price for Exchange-listed securities if it is impaired and cannot conduct a closing transaction due to a systems or technical issue. The proposal has been crafted with input from market participants, Nasdaq, and the SIPs, and is designed to reduce the burden on competition by having similar back-up procedures across all primary listing exchanges if such exchange is impaired and cannot conduct a closing auction.
No written comments were solicited or received with respect to the proposed rule change.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission,
On June 3, 2016, The Depository Trust Company (“DTC”) filed with the Securities and Exchange Commission (“Commission”) proposed rule change SR-DTC-2016-004 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The following is a description of the proposed rule change, as provided primarily by DTC:
The proposed rule change consists of amendments to the Rules, By-Laws and Organization Certificate of The Depository Trust Company (the “Rules”)
New and enhanced regulatory requirements are leading derivative and financing counterparties to seek increased efficiency in the availability and deployment of collateral and streamlined margin processing. More specifically, the phase-in period of the Basel III liquidity rules,
These regulatory changes further include requirements for initial margin for counterparties as well as a reduction or removal of thresholds for variation margin.
DEGCL is a United Kingdom (“UK”) joint venture of DTCC and Euroclear S.A./N.V. (“Euroclear”), authorized by the Financial Conduct Authority (“FCA”) in the UK as a “service company”
In particular, DEGCL IMS will address the increased demand for cross-border availability of securities collateral, some of which may be held at DTC. The purpose of DEGCL IMS is to offer to its users a more global view of their collateral assets and support cross-border mobility and to integrate information and record keeping for collateral use of Securities held at DTC and EB.
DEGCL IMS will be operated by EB and other entities in the Euroclear group, as the service provider to DEGCL, in accordance with appropriate agreements among these parties and in compliance with applicable regulatory requirements. There is no direct relationship between DTC and DEGCL IMS. DEGCL IMS will be offered to any financial institution that is both a DTC Participant and a participant of EB that has elected to use EB CMS (“EB Collateral Participant”).
The proposed rule change will establish the EB Link between DTC and EB through which a CP Participant could Deliver Securities from its Account to its CP Sub-Account and, from there, to the EB Account at DTC. The object is for EB to then credit the Securities to an account of the CP Participant on the books of EB for use in EB CMS.
For purposes of the EB Link, EB has become a Participant of DTC,
The CP Participant will authorize EB as its CP Representative, to provide instructions on its behalf, and to receive the CP Securities Report and Delivery Information. Both the CP Securities Report and Delivery Information will include, with respect to the CP Securities specified therein, the following information: (i) The CUSIP, ISIN, or other identification number of the CP Securities; and (ii) the number of shares or other units or principal amount of the CP Securities.
The CP Participant will instruct DTC to Deliver the CP Securities from the CP Participant's Account to its CP Sub-Account. After the CP Securities have been credited to the CP Sub-Account, EB, as CP Representative, may instruct DTC to make a Free Delivery of the appropriate CP Securities from the CP Sub-Account to the EB Account.
After CP Securities have been credited to the EB Account, it will then be EB's responsibility to credit them to an account at EB maintained for the CP Participant, as an EB Collateral Participant. The originating CP Participant, as an EB Collateral Participant, may then choose to hold the CP Securities in an account at EB, pending use in any EB Collateral Transaction, or transfer the CP Securities on the books of EB to one or more other EB Collateral Participants in connection with EB Collateral Transactions.
EB may instruct DTC to Deliver CP Securities from the EB Account to the CP Sub-Account from which such CP Securities originated. This may occur if: (i) The CP Participant as a DEGCL IMS user changes its DEGCL IMS inventory profile in a way that renders the CP Securities credited to the EB Account no longer eligible for DEGCL IMS; (ii) the CP Participant submits a Delivery instruction for such CP Securities;
EB may also instruct DTC to Deliver CP Securities from the EB Account to the Securities Account of a Participant that EB has designated as its global custodian (“EB Global Custodian”).
The proposed rule change will add Rule 34 to the DTC Rules, to provide for:
1. The establishment and maintenance of a CP Sub-Account for each CP Participant;
2. The establishment and maintenance of the EB Account for the purpose of Collateral Positioning Deliveries;
3. Free Deliveries of CP Securities by a CP Participant from an Account of the CP Participant to its CP Sub-Account, and back to (A) the originating Account of the CP Participant; (B) another Non-CP Account of the CP Participant; or (C) the Account of another Participant;
4. Free Deliveries of CP Securities as instructed by EB, as CP Representative of the CP Participant, from the CP Sub-Account of the CP Participant to the EB Account;
5. Free Deliveries of CP Securities as instructed by EB from the EB Account to (A) the CP Sub-Account from which such CP Securities originated, or (B) the Account of the EB Global Custodian;
6. Information to be provided by DTC to EB, as CP Representative of the CP Participant, specifically, the CP Securities Report and the Delivery Information;
7. The requirement that Deliveries provided in the proposed rule change must be Free Deliveries, and shall be subject to the terms and provisions of the DTC Rules and the Procedures applicable to the Deliveries of Securities, including DTC risk management controls; and
8. DTC's disclaimer of liability to: (A) Any CP Participant as a result of acting on instructions from EB or providing EB the Delivery Information or the CP Securities Report pursuant to Rule 34; (B) EB as a result of acting on instructions from a CP Participant pursuant to Rule 34; (C) EB or any CP Participant as a result of any loss relating to Rule 34, unless caused directly by DTC's gross negligence, willful misconduct, or violation of Federal securities laws for which there is a private rights of action; and (D) to any third party for any reason, including without limitation, DEGCL.
This proposed rule change will be implemented on the later of: (i) The date of Commission approval of this filing; and (ii) the date of a Commission order approving the EB CA-1 Amendment, authorizing EB to offer EB CMS to U.S. EB Collateral Participants for U.S. equities. Participants will be advised of the implementation date through the issuance of a DTC Important Notice.
Section 19(b)(2)(C) of the Act
Section 17A(b)(3)(F) of the Act
Rule 17Ad-22(d)(7) under the Act
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to make adjustments to its Options Regulatory Fee (“ORF”) by amending BX Rules at Chapter XV, Section 5.
While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on August 1, 2016.
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to increase the ORF from $0.0003 to $0.0004 as of August 1, 2016 to account for a reduction in market volume the Exchange has experienced. The Exchange's change to the ORF should balance the Exchange's regulatory revenue against the anticipated revenue [sic].
The ORF is assessed to each member for all options transactions executed or cleared by the member that are cleared at The Options Clearing Corporation (“OCC”) in the Customer range (
The ORF is designed to recover a portion of the costs to the Exchange of the supervision and regulation of its members, including performing routine surveillances, investigations, examinations, financial monitoring, and policy, rulemaking, interpretive, and enforcement activities. The Exchange believes that revenue generated from the ORF, when combined with all of the Exchange's other regulatory fees, will cover a material portion, but not all, of the Exchange's regulatory costs. The Exchange will continue to monitor the amount of revenue collected from the ORF to ensure that it, in combination with its other regulatory fees and fines, does not exceed regulatory costs. If the Exchange determines regulatory revenues exceed regulatory costs, the Exchange will adjust the ORF by submitting a fee change filing to the Commission.
The Exchange is proposing to increase the ORF from $0.0003 to $0.0004 as of August 1, 2016. In light of recent market volumes, the Exchange proposes to change the amount of ORF that will be collected by the Exchange. The Exchange regularly reviews its ORF to ensure that the ORF, in combination with its other regulatory fees and fines, does not exceed regulatory costs. The Exchange believes this adjustment will permit the Exchange to cover a material portion of its regulatory costs, while not exceeding regulatory costs.
The Exchange notified members of this ORF adjustment thirty (30) calendar days prior to the proposed operative date.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The Exchange believes that increasing the ORF from $0.0003 to $0.0004 as of August 1, 2016 is reasonable because the Exchange's collection of ORF needs to be balanced against the amount of regulatory revenue collected by the Exchange. The Exchange believes that the proposed adjustments noted herein will serve to balance the Exchange's regulatory revenue against the anticipated regulatory costs. It is further reasonable because this adjustment results in a price increase. While these adjustments result in an increase, the increase is modest and within the range of ORFs assessed by other options exchanges.
The Exchange proposes to amend the ORF from $0.0003 to $0.0004 as of August 1, 2016 is [sic] equitable and not unfairly discriminatory because this adjustment would be applicable to all members on all of their transactions that clear as Customer at OCC. In addition, the ORF seeks to recover the costs of supervising and regulating members, including performing routine surveillances, investigations, examinations, financial monitoring, and policy, rulemaking, interpretive, and enforcement activities.
The ORF is not charged for member proprietary options transactions because members incur the costs of owning memberships and through their memberships are charged transaction fees, dues and other fees that are not applicable to non-members. Moreover, the Exchange believes the ORF ensures fairness by assessing higher fees to those members that require more Exchange regulatory services based on the amount of Customer options business they conduct.
Regulating Customer trading activity is more labor intensive and requires greater expenditure of human and technical resources than regulating non-Customer trading activity. Surveillance, regulation and examination of non-Customer trading activity generally tends to be more automated and less labor intensive. As a result, the costs associated with administering the Customer component of the Exchange's overall regulatory program are anticipated to be higher than the costs associated with administering the non-Customer component of its regulatory program. The Exchange proposes assessing higher fees to those members that will require more Exchange regulatory services based on the amount of Customer options business they conduct.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. [sic] In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited.
The Exchange does not believe that increasing its ORF creates an undue burden on intra-market competition because the adjustment will apply to all members on all of their transactions that clear as Customer at OCC. The Exchange is obligated to ensure that the amount of regulatory revenue collected from the ORF, in combination with its other regulatory fees and fines, does not exceed regulatory costs. Additionally, the dues and fees paid by members go into the general funds of the Exchange, a portion of which is used to help pay the costs of regulation. The Exchange's members are subject to ORF on other options markets.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Nasdaq is proposing changes to amend Nasdaq Rule 7018(a) to: (i) Amend the consolidated volume (“Consolidated Volume”) requirement for a credit tier for providing liquidity in securities of all three Tapes; (ii) delete a credit tier for providing liquidity in securities of all three Tapes; and (iii) provide a new credit for providing liquidity in securities of all three Tapes.
The text of the proposed rule change is available at
In its filing with the Commission, Nasdaq included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The purpose of the proposed rule change is to amend certain credits for the use of the order execution and routing services of the Nasdaq Market Center by members for all securities priced at $1 or more that it trades.
Specifically, the Exchange proposes to amend Nasdaq Rule 7018(a)(1), (2), and (3) to: (i) Amend the Consolidated Volume requirement for a credit tier for providing liquidity in securities of all three Tapes;
The purpose of the first change is to increase the Consolidated Volume requirement for accessing liquidity in an existing credit tier. Currently, the credit tier requires a member to access more than 0.65% of Consolidated Volume through one or more of its Nasdaq Market Center MPIDs, provided that the member also provides a daily average of
Increasing the Consolidated Volume criteria will require members to access more liquidity to receive the $0.0029 per share executed credit tier, but the Exchange believes that the members that want to avail themselves of this credit tier will be able to meet the increased Consolidated Volume requirement. Increasing the amount of liquidity accessed should be beneficial to other members as more of their resting limit orders may be accessed by members seeking to attain this credit tier.
The purpose of the second change is to delete the credit tier of $0.0030 per share executed for a member with shares of liquidity provided in all securities during the month representing more than 0.20% of Consolidated Volume during the month, through one or more of its Nasdaq Market Center MPIDs and that qualifies for the additional $0.05 per contract credit under Note c(3) of Nasdaq Options Market (“NOM”) Chapter XV Section 2(1) in securities of all three Tapes.
No market participants qualified for this credit tier recently, thus rendering it ineffective as acting as an incentive. However, since the Exchange is limited in the amount of credits that it can provide to market participants and even though no market participants currently qualify for this credit tier, this can easily shift from month to month so Nasdaq is proposing to delete it. Nasdaq must be selective in providing credits to members, and allocates credits to where it believes it will receive the best result in terms of improvement to market quality. The Exchange believes that eliminating this credit tier for all three Tapes is the only way to ensure that it will not going forward impact the overall balance of credits and fees.
The purpose of the third change is to provide an additional credit to members that provide liquidity. Currently, the Exchange provides several credits under Rules 7018(a)(1), (2), and (3), each of which apply to securities of a different Tape, in return for market-improving behavior. The Exchange is proposing to add a new credit tier of $0.0027 per share executed for a member that has shares of liquidity provided in all securities during the month representing more than 0.10% of Consolidated Volume during the month, through one or more of its Nasdaq Market Center MPIDs, and that adds Customer,
As a general principle, the Exchange chooses to offer credits to members in return for market improving behavior. Under Rule 7018(a), the various credits the Exchange provides for members require them to significantly contribute to market quality by providing certain levels of Consolidated Volume through one or more of its Nasdaq Market Center MPIDs, and volume on NOM. The Exchange believes that by adding more in Non-Penny names on NOM that the market for these options on NOM will improve and the Exchange seeks to encourage such behavior.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange believes that this proposed amendment to the requirements of an existing credit tier provided in securities of all three Tapes is reasonable because it amends a measure of activity with another, both of which represent a significant contribution to that market. Specifically, the Exchange is increasing the requirement that a member with shares of liquidity accessed in all securities through one or more of its Nasdaq Market Center MPIDs representing more than 0.65% of Consolidated Volume during the month. The Exchange is proposing to increase the monthly Consolidated Volume requirement from more than 0.65% to more than 0.80%. The member must also provide a daily average of at least 2 million shares of liquidity in all securities through one or more of its Nasdaq Market Center MPIDs during the month along with the required shares of liquidity accessed.
The Exchange believes that the proposed amendment to the requirements of an existing credit tier provided in securities of all three Tapes is an equitable allocation and is not unfairly discriminatory because the Exchange will apply the same $0.0029 per share executed credit to all similarly situated members. Thus, if a member meets the requirements, it will receive the credit. Also, and as previously discussed, Nasdaq believes that although increasing the Consolidated Volume criteria will require members to access more liquidity to receive the $0.0029 per share executed credit tier, members seeking to achieve this credit tier will be able to meet the increased Consolidated Volume requirement. Increasing the amount of liquidity accessed should be beneficial to other members as their resting limit orders may be accessed by members seeking to attain this credit tier.
The Exchange believes that the proposed changes to delete a credit tier for a member with shares of liquidity provided in all securities during the month representing more than 0.20% of Consolidated Volume during the month, through one or more of its Nasdaq Market Center MPIDs and that qualifies for the additional $0.05 per contract credit under Note c(3) of NOM Chapter XV Section 2(1) in securities of all three Tapes is reasonable because the Exchange must, from time to time, adjust the level of credits provided, and
Specifically, with regard to the eliminated $0.0030 per share executed credit tier, as discussed previously, Nasdaq observed that no market participants qualified for this credit tier recently, thus rendering it ineffective as acting as an incentive. The Exchange is limited in the amount of credits that it can provide to market participants so even though no market participants currently qualified for this credit tier, this can easily shift from month to month. Nasdaq must be selective in providing credits to members, and allocates credits to where it believes it will receive the best result in terms of improvement to market quality. The Exchange believes that it is reasonable to eliminate this credit tier as the only way to ensure that it will not going forward impact the overall balance of credits and fees.
The Exchange believes that the proposed change to delete the credit tier described above in Rule 7018(a) is an equitable allocation and is not unfairly discriminatory because the Exchange will eliminate the same credit for all similarly situated members. The credits Nasdaq provides are designed to improve market quality for all market participants, and Nasdaq allocates its credits in a manner that it believes are the most likely to achieve that result. Elimination of the existing credit tier under the rule is an equitable allocation and is not unfairly discriminatory because no participants qualified under this credit tier, therefore, its elimination will not impact any members.
The Exchange believes that the proposed rule change to add a new credit tier of $0.0027 per share executed is reasonable because it is consistent with other credits that the Exchange provides to members that provide liquidity. As discussed previously, as a general principle the Exchange chooses to offer credits to members in return for market improving behavior. Under Rule 7018(a), the various credits the Exchange provides for members require them to significantly contribute to market quality by providing certain levels of Consolidated Volume through one or more of its Nasdaq Market Center MPIDs, and volume on NOM. The proposed credit will be provided to members that not only contribute to the Exchange by providing more than 0.10% of Consolidated Volume through one or more of its Nasdaq Market Center MPIDs during the month, but also adds Customer, Professional, Firm, Non-NOM Market Maker and/or Broker-Dealer liquidity in Non-Penny Pilot Options of 0.40% or more of total industry ADV in the customer clearing range for Equity and ETF option contracts per day in a month on the NOM.
The Exchange believes that the proposed new credit tier is reasonable because although it provides for a lower credit than some other NOM-linked credit tiers, it also has a corresponding lower Consolidated Volume threshold of 0.10%. Also, the proposed new credit tier specifically requires adding liquidity in Non-Penny Pilot Options.
The Exchange believes that the proposed $0.0027 per share executed credit is an equitable allocation and is not unfairly discriminatory because the Exchange will apply the same credit to all similarly situated members. Thus, if a member meets the requirements, it will receive the credit. A member achieving this credit tier will be providing liquidity in less liquid options classes (
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited.
In this instance, the changes to the credits provided for the use of the order execution and routing services of the Nasdaq Market Center by members for all securities priced at $1 or more that it trades are reflective of the intense competition among trading venues in capturing order flow. Moreover, the proposed changes do not impose a burden on competition because Exchange membership is optional and is also the subject of competition from other trading venues. For these reasons, the Exchange does not believe that any of the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. Moreover, because there are numerous competitive alternatives to the use of the Exchange, it is likely that the Exchange will lose market share as a result of the changes if they are unattractive to market participants.
Written comments were neither solicited nor received.
The foregoing change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of Oklahoma (FEMA-4274-DR), dated 07/15/2016.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416.
Notice is hereby given that as a result of the President's major disaster declaration on 07/15/2016, Private Non-Profit organizations that provide essential services of governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 14775B and for economic injury is 14776B.
In accordance with the Code of Federal Regulations 13—Business Credit and Assistance § 123.512, the following interest rate is effective for Military Reservist Economic Injury Disaster Loans approved on or after July 22, 2016.
Federal Aviation Administration (FAA), DOT.
Notice.
This notice contains a summary of a petition seeking relief from specified requirements of Title 14 of the Code of Federal Regulations. The purpose of this notice is to improve the public's awareness of, and participation in, the FAA's exemption process. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before August 15, 2016.
Send comments identified by docket number FAA-2016-7045 using any of the following methods:
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Brent Hart (202) 267-4034, Office of Rulemaking, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591.
This notice is published pursuant to 14 CFR 11.85.
Federal Aviation Administration (FAA), DOT.
Notice.
This notice contains a summary of a petition seeking relief from specified requirements of Title 14 of the Code of Federal Regulations. The purpose of this notice is to improve the public's awareness of, and participation in, the FAA's exemption process. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before August 15, 2016.
Send comments identified by docket number FAA-2016-3686 using any of the following methods:
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Alphonso W. Pendergrass II, (202) 267-4713, Office of Rulemaking, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591.
This notice is published pursuant to 14 CFR 11.85.
Federal Highway Administration (FHWA), DOT.
Notice of Limitation of Claims for Judicial Review of Actions by FHWA, U.S. Army Corps of Engineers (USACE), and Other Federal Agencies.
This notice announces actions taken by FHWA and other Federal Agencies since September 17, 2014, that are final within the meaning of 23 U.S.C. 139(
By this notice, FHWA is advising the public of final agency actions subject to 23 U.S.C. 139(
For FHWA: Ms. Cathy Kendall, AICP, Senior Environmental Specialist, FHWA Florida Division, 3500 Financial Plaza, Suite 400, Tallahassee, Florida 32312; telephone: (850) 553-2225; email:
Notice is hereby given that FHWA and other Federal Agencies have taken final agency action by issuing licenses, permits, and approvals for the projects listed below. The actions by the Federal agencies on a project, and the laws under which such actions were taken, are described in the documented environmental assessment (EA) or environmental impact statement (EIS) issued in connection with the project, and in other project records for the listed projects. The EA or FEIS, Record of Decision (ROD), and other documents from FHWA and other Federal Agency project records for the listed projects are available by contacting the FHWA or by using the links provided below.
This notice applies to all Federal agency decisions by issuing licenses, permits, and approvals as of the issuance date of this notice and all laws under which such actions were taken, including but not limited to:
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The projects subject to this notice are:
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23 U.S.C. 139(
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to exempt 28 individuals from the vision requirement in the Federal Motor Carrier Safety Regulations (FMCSRs). They are unable to meet the vision requirement in one eye for various reasons. The exemptions will enable these individuals to operate commercial motor vehicles (CMVs) in interstate commerce without meeting the prescribed vision requirement in one eye. The Agency has concluded that granting these exemptions will provide a level of safety that is equivalent to or greater than the level of safety maintained without the exemptions for these CMV drivers.
The exemptions were granted February 12, 2016. The exemptions expire on February 12, 2018.
Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
You may see all the comments online through the Federal Document Management System (FDMS) at
On January 12, 2016, FMCSA published a notice of receipt of exemption applications from certain individuals, and requested comments from the public (81 FR 1474). That notice listed 28 applicants' case histories. The 28 individuals applied for exemptions from the vision requirement in 49 CFR 391.41(b)(10), for drivers who operate CMVs in interstate commerce.
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption for a 2-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” The statute also allows the Agency to renew exemptions at the end of the 2-year period. Accordingly, FMCSA has evaluated the 28 applications on their merits and made a determination to grant exemptions to each of them.
The vision requirement in the FMCSRs provides:
A person is physically qualified to drive a commercial motor vehicle if that person has distant visual acuity of at least 20/40 (Snellen) in each eye without corrective lenses or visual acuity separately corrected to 20/40 (Snellen) or better with corrective lenses, distant binocular acuity of a least 20/40 (Snellen) in both eyes with or without corrective lenses, field of vision of at least 70° in the horizontal meridian in each eye, and the ability to recognize the colors of traffic signals and devices showing red, green, and amber (49 CFR 391.41(b)(10)).
FMCSA recognizes that some drivers do not meet the vision requirement but have adapted their driving to accommodate their vision limitation and demonstrated their ability to drive safely. The 28 exemption applicants listed in this notice are in this category. They are unable to meet the vision requirement in one eye for various reasons, including age-related macular degeneration, amblyopia, complete loss of vision, corneal scar, embryonic cataract, macular scar, optic atrophy, optic nerve damage, prosthetic eye, reduced vision, refractive amblyopia, retinal detachment, and strabismic amblyopia. In most cases, their eye conditions were not recently developed. Nineteen of the applicants were either
The 9 individuals that sustained their vision conditions as adults have had it for a range of 6 to 44 years.
Although each applicant has one eye which does not meet the vision requirement in 49 CFR 391.41(b)(10), each has at least 20/40 corrected vision in the other eye, and in a doctor's opinion, has sufficient vision to perform all the tasks necessary to operate a CMV. Doctors' opinions are supported by the applicants' possession of valid commercial driver's licenses (CDLs) or non-CDLs to operate CMVs. Before issuing CDLs, States subject drivers to knowledge and skills tests designed to evaluate their qualifications to operate a CMV.
All of these applicants satisfied the testing requirements for their State of residence. By meeting State licensing requirements, the applicants demonstrated their ability to operate a CMV, with their limited vision, to the satisfaction of the State.
While possessing a valid CDL or non-CDL, these 28 drivers have been authorized to drive a CMV in intrastate commerce, even though their vision disqualified them from driving in interstate commerce. They have driven CMVs with their limited vision in careers ranging for 3 to 59 years. In the past three years, no drivers were involved in crashes, and 3 drivers were convicted of moving violations in a CMV.
The qualifications, experience, and medical condition of each applicant were stated and discussed in detail in the January 12, 2016 notice (81 FR 1474).
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the vision requirement in 49 CFR 391.41(b)(10) if the exemption is likely to achieve an equivalent or greater level of safety than would be achieved without the exemption. Without the exemption, applicants will continue to be restricted to intrastate driving. With the exemption, applicants can drive in interstate commerce. Thus, our analysis focuses on whether an equal or greater level of safety is likely to be achieved by permitting each of these drivers to drive in interstate commerce as opposed to restricting him or her to driving in intrastate commerce.
To evaluate the effect of these exemptions on safety, FMCSA considered the medical reports about the applicants' vision as well as their driving records and experience with the vision deficiency.
To qualify for an exemption from the vision requirement, FMCSA requires a person to present verifiable evidence that he/she has driven a commercial vehicle safely with the vision deficiency for the past 3 years. Recent driving performance is especially important in evaluating future safety, according to several research studies designed to correlate past and future driving performance. Results of these studies support the principle that the best predictor of future performance by a driver is his/her past record of crashes and traffic violations. Copies of the studies may be found at Docket Number FMCSA-1998-3637.
FMCSA believes it can properly apply the principle to monocular drivers, because data from the Federal Highway Administration's (FHWA) former waiver study program clearly demonstrate the driving performance of experienced monocular drivers in the program is better than that of all CMV drivers collectively (See 61 FR 13338, 13345, March 26, 1996). The fact that experienced monocular drivers demonstrated safe driving records in the waiver program supports a conclusion that other monocular drivers, meeting the same qualifying conditions as those required by the waiver program, are also likely to have adapted to their vision deficiency and will continue to operate safely.
The first major research correlating past and future performance was done in England by Greenwood and Yule in 1920. Subsequent studies, building on that model, concluded that crash rates for the same individual exposed to certain risks for two different time periods vary only slightly (See Bates and Neyman, University of California Publications in Statistics, April 1952). Other studies demonstrated theories of predicting crash proneness from crash history coupled with other factors. These factors—such as age, sex, geographic location, mileage driven and conviction history—are used every day by insurance companies and motor vehicle bureaus to predict the probability of an individual experiencing future crashes (See Weber, Donald C., “Accident Rate Potential: An Application of Multiple Regression Analysis of a Poisson Process,” Journal of American Statistical Association, June 1971). A 1964 California Driver Record Study prepared by the California Department of Motor Vehicles concluded that the best overall crash predictor for both concurrent and nonconcurrent events is the number of single convictions. This study used 3 consecutive years of data, comparing the experiences of drivers in the first 2 years with their experiences in the final year.
Applying principles from these studies to the past 3-year record of the 28 applicants, no drivers were involved in crashes, and 3 drivers were convicted of moving violations in a CMV. All the applicants achieved a record of safety while driving with their vision impairment, demonstrating the likelihood that they have adapted their driving skills to accommodate their condition. As the applicants' ample driving histories with their vision deficiencies are good predictors of future performance, FMCSA concludes their ability to drive safely can be projected into the future.
We believe that the applicants' intrastate driving experience and history provide an adequate basis for predicting their ability to drive safely in interstate commerce. Intrastate driving, like interstate operations, involves substantial driving on highways on the interstate system and on other roads built to interstate standards. Moreover, driving in congested urban areas exposes the driver to more pedestrian and vehicular traffic than exists on interstate highways. Faster reaction to traffic and traffic signals is generally required because distances between them are more compact. These conditions tax visual capacity and driver response just as intensely as interstate driving conditions. The veteran drivers in this proceeding have operated CMVs safely under those conditions for at least 3 years, most for much longer. Their experience and driving records lead us to believe that each applicant is capable of operating in interstate commerce as safely as he/she has been performing in intrastate commerce. Consequently, FMCSA finds that exempting these applicants from the vision requirement in 49 CFR 391.41(b)(10) is likely to achieve a level of safety equal to that existing without the exemption. For this reason, the Agency is granting the exemptions for the 2-year period allowed by 49 U.S.C. 31136(e) and 31315 to the 28 applicants listed in the notice of January 12, 2016 (81 FR 1474).
We recognize that the vision of an applicant may change and affect his/her ability to operate a CMV as safely as in the past. As a condition of the exemption, therefore, FMCSA will impose requirements on the 28 individuals consistent with the grandfathering provisions applied to drivers who participated in the Agency's vision waiver program.
Those requirements are found at 49 CFR 391.64(b) and include the following: (1) That each individual be
FMCSA received no comments in this proceeding.
Based upon its evaluation of the 28 exemption applications, FMCSA exempts the following drivers from the vision requirement in 49 CFR 391.41(b)(10), subject to the requirements cited above (49 CFR 391.64(b)):
In accordance with 49 U.S.C. 31136(e) and 31315, each exemption will be valid for 2 years unless revoked earlier by FMCSA. The exemption will be revoked if: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136 and 31315.
If the exemption is still effective at the end of the 2-year period, the person may apply to FMCSA for a renewal under procedures in effect at that time.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice; extension of exemption.
FMCSA announces the extension of the hours-of-service (HOS) exemption granted to the U.S. Department of Energy (DOE) on June 30, 2015, for certain commercial motor vehicle (CMV) drivers. The Agency extends the expiration date of the exemption to June 29, 2020 in response to section 5206(b)(2)(A) of the “Fixing America's Surface Transportation Act” (FAST Act). That section extends the expiration date of all HOS exemptions in effect on the date of enactment to 5 years from the date of issuance of the exemptions. The DOE exemption from the Agency's 30-minute rest break requirement is limited to DOE's contract motor carriers and their employee-drivers engaged in the transportation of security-sensitive radioactive materials. The Agency previously determined that CMV operations under this exemption would likely achieve a level of safety equivalent to or greater than the level of safety that would be obtained in the absence of the exemption.
This limited exemption is effective from June 30, 2015, through June 29, 2020.
Mr. Thomas Yager, Chief, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: 614-942-6477. Email:
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain parts of the Federal Motor Carrier Safety Regulations. FMCSA must publish a notice of each exemption request in the
Section 5206(b)(2)(A) of the FAST Act requires FMCSA to extend all exemptions from the HOS regulations (49 CFR part 395) that were in effect on the date of enactment of the Act to a period of 5 years from the date the exemption was granted. The exemption may be renewed. Because this action merely implements a statutory mandate that took effect on the date of enactment of the FAST Act, notice and comment are not required.
From 2013 to 2015, DOE held a limited exemption from the mandatory 30-minute rest break requirement of 49 CFR 395.3(a)(3)(ii) that allowed DOE contract carriers and their drivers transporting security-sensitive radioactive materials to be treated the same as drivers transporting explosives pursuant to § 395.1(q). As that exemption neared expiration, DOE applied for its renewal.
FMCSA reviewed DOE's request and the public comments and reaffirmed its previous conclusion that allowing these drivers to count on-duty time “attending” their CMVs toward the required 30-minute break, would promote safety at least as effectively as the break itself. The notice renewing the DOE exemption was published on June 22, 2015 [80 FR 35703].
The substance of the 2015 exemption is not affected by this extension. The DOE exemption covers only the 30-minute break requirement [49 CFR 395.3(a)(3)(ii)] and is restricted to contract motor carriers and their drivers employed by DOE transporting security-sensitive radioactive materials. On each trip, the drivers are allowed to use 30 minutes or more of “attendance time” to meet the requirements for a rest break in the manner provided in 49 CFR 395.1(q), provided they perform no other on-duty activities during the rest break.
The FMCSA does not believe the safety record of any driver operating under this exemption will deteriorate. However, should deterioration in safety occur, FMCSA will take all steps necessary to protect the public interest, including revocation of the exemption. The FMCSA has the authority to terminate the exemption at any time the Agency has the data/information to
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice; extension of exemption.
FMCSA announces the extension of the exemption granted to WestRock, formerly known as RockTenn, on April 17, 2014, for short trips to their loading docks. The Agency extends the expiration date from April 17, 2014 to April 16, 2019, in response to the “Fixing America's Surface Transportation Act” (FAST Act). That Act extends the expiration date of hours-of-service (HOS) exemptions in effect on the date of enactment of the FAST Act to 5 years from the date of issuance of the exemptions. The WestRock exemption from the Agency's 14 hour rule is limited to WestRock drivers operating commercial motor vehicles (CMVs) between WestRock shipping and receiving departments only, on the public road (Compress Street). The Agency previously determined that the CMV operations of WestRock's drivers under this exemption would likely achieve a level of safety equivalent to or greater than the level of safety that would be obtained in the absence of the exemption.
This limited exemption is effective from April 17, 2014 through April 16, 2019.
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain parts of the Federal Motor Carrier Safety Regulations. FMCSA must publish a notice of each exemption request in the
Section 5206(b)(2)(A) of the FAST Act requires FMCSA to extend any exemption from any provision of the HOS regulations under 49 CFR part 395 that was in effect on the date of enactment of the Act to a period of 5 years from the date the exemption was granted. The exemption may be renewed. Because this action merely implements a statutory mandate that took effect on the date of enactment of the FAST Act, notice and comment are not required.
WestRock, a motor carrier formerly known as RockTenn, applied for a limited exemption from the prohibition from operating a CMV on a public road after the end of the 14th hour after coming on duty following 10 or more consecutive hours off duty [49 CFR 395.3(a)(2)] on behalf of their shipping department employees operating CMVs.
FMCSA reviewed WestRock's application and the public comments and concluded that limiting the exemption to CDL holders employed by WestRock who are exclusively assigned to a specific route, and may operate a CMV on a public road past the 14-hour limit, will promote safety at least as effectively as the “14-hour rule.” These drivers operate like certain short-haul drivers, who are already permitted a 16-hour driving “window” once a week and other non-CDL short-haul drivers who are allowed two 16-hour duty periods per week. WestRock held a similar 2-year exemption from 2012-2014. A Notice of Final Determination granting the WestRock exemption was published on April 22, 2014 [79 FR 22571].
The substance of the exemption is not affected by this extension. The exemption covers only the “14 hour rule” [49 CFR 395.3(a)(3)(ii)]. The exemption is restricted to drivers employed by WestRock operating CMVs on a specified route. On each trip, the CMV must only travel on the public road (Compress Street)—approximately 275 feet in one direction—between WestRock's shipping and receiving departments. The exemption enables WestRock's shipping department drivers and occasional substitute CDL holders who transport paper mill products between WestRock's shipping and receiving locations on Compress Street to work up to 16 hours in a day and return to work with a minimum of at least 8 hours off duty.
The FMCSA does not believe the safety record of any driver operating under this exemption will deteriorate. However, should deterioration in safety occur, FMCSA will take all steps necessary to protect the public interest, including revocation of the exemption. The FMCSA has the authority to terminate the exemption at any time the Agency has the data/information to conclude that safety is being compromised.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition; grant of application for exemption.
FMCSA announces its decision to grant an exemption to Daimler Trucks North America (Daimler) for one of its commercial motor vehicle (CMV) drivers. Daimler requested a 5-year exemption from the Federal requirement to hold a U.S. commercial driver's license (CDL) for Mr. Sebastian Boehm, a project engineer for the Daimler Trucks and Bus Division. Mr. Boehm holds a valid German commercial license and wants to test drive Daimler vehicles on U.S. roads to better understand product requirements in “real world” environments, and verify results. Daimler believes the requirements for a German commercial license ensure that operation under the exemption will likely achieve a level of safety equivalent to or greater than the level that would be obtained in the absence of the exemption.
This exemption is effective July 25, 2016 and expires July 25, 2021.
For information concerning this notice, contact Ms. Pearlie Robinson, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: 202-366-4325. Email:
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from the Federal Motor Carrier Safety Regulations. FMCSA must publish a notice of each exemption request in the
The Agency reviews the safety analyses and the public comments, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
Section 5206(a)(3) of the “Fixing America's Surface Transportation Act,” (FAST Act) [Pub. L. 114-94, 129 Stat. 1312, 1537, Dec. 4, 2015], amended 49 U.S.C. 31315(b) by adding a new paragraph (2) which permits exemptions for no longer than 5 years from their dates of inception, instead of the previous 2 years. This statutory provision will be codified in 49 CFR part 381 in a forthcoming rulemaking.
On behalf of Sebastian Boehm, Daimler has applied for a 5-year exemption from 49 CFR 383.23, which prescribes licensing requirements for drivers operating CMVs in interstate or intrastate commerce. Mr. Boehm is unable to obtain a CDL in any of the States due to his lack of residency in the United States. A copy of the application is in Docket No. FMCSA-2012-0032.
The exemption would allow Mr. Boehm to operate CMVs in interstate or intrastate commerce to support Daimler field tests designed to meet future vehicle safety and environmental requirements and to promote technological advancements in vehicle safety systems and emissions reductions. Mr. Boehm needs to drive Daimler vehicles on public roads to better understand “real world” environments in the U.S. market. According to Daimler, Mr. Boehm will typically drive for no more than 6 hours per day, and that 10 percent of the test driving will be on two-lane state highways, while 90 percent will be on interstate highways. The driving will consist of no more than 200 miles per day, for one to two weeks on a quarterly basis. He will in all cases be accompanied by a holder of a U.S. CDL who is familiar with the routes to be traveled.
Mr. Boehm would be required to comply with all applicable Federal Motor Carrier Safety Regulations (FMCSRs) (49 CFR parts 350-399) except the CDL provisions described in this notice.
Mr. Boehm holds a valid German commercial license, and as explained by Daimler in its exemption request, the requirements for that license ensure that the same level of safety is met or exceeded as if this driver had a U.S. CDL. Furthermore, according to Daimler, Mr. Boehm is familiar with the operation of CMVs worldwide.
FMCSA has previously determined that the process for obtaining a German commercial license is comparable to, or as effective as, the requirements of part 383, and adequately assesses the driver's ability to operate CMVs in the U.S. Since 2012, FMCSA has granted Daimler drivers similar exemptions [May 25, 2012 (77 FR 31422); July 22, 2014 (79 FR 42626); March 27, 2015 (80 FR 16511); October 5, 2015 (80 FR 60220); December 7, 2015 (80 FR 76059); December 21, 2015 (80 FR 79410)].
On May 4, 2016, FMCSA published notice of this application and requested public comments (81 FR 26866). No comments were submitted.
Based upon the merits of this application, including Mr. Boehm's extensive driving experience and safety record, FMCSA has concluded that the exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption, in accordance with § 381.305(a).
FMCSA grants Daimler and Sebastian Boehm an exemption from the CDL requirement in 49 CFR 383.23 to allow Mr. Boehm to drive CMVs in this country without a U.S. State-issued CDL, subject to the following terms and conditions: (1) The driver and carrier must comply with all other applicable provisions of the FMCSRs (49 CFR parts 350-399); (2) the driver must be in possession of the exemption document and a valid German commercial license; (3) the driver must be employed by and operate the CMV within the scope of his duties for Daimler; (4) at all times while operating a CMV under this exemption, the driver must be accompanied by a holder of a U.S. CDL who is familiar with the routes traveled; (5) Daimler must notify FMCSA in writing within 5 business days of any accident, as defined in 49 CFR 390.5, involving this driver; and (6) Daimler must notify FMCSA in writing if this driver is convicted of a disqualifying offense under § 383.51 or § 391.15 of the FMCSRs.
In accordance with 49 U.S.C. 31315 and 31136(e), the exemption will be valid for 5 years unless revoked earlier by the FMCSA. The exemption will be revoked if: (1) Mr. Boehm fails to comply with the terms and conditions of the exemption; (2) the exemption results in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would be inconsistent with the goals and objectives of 49 U.S.C. 31315 and 31136.
In accordance with 49 U.S.C. 31315(d), as implemented by 49 CFR 381.600, during the period this exemption is in effect, no State shall enforce any law or regulation applicable to interstate or intrastate commerce that conflicts with or is inconsistent with this exemption with respect to a firm or person operating under the exemption.
Federal Transit Administration (FTA), DOT.
Notice.
This notice announces final environmental actions taken by the Federal Transit Administration (FTA) for a project in Hennepin County, MN. The purpose of this notice is to announce publicly the environmental decisions by FTA on the subject project and to activate the limitation on any claims that may challenge these final environmental actions.
By this notice, FTA is advising the public of final agency actions subject to Section 139(l) of Title 23, United States Code (U.S.C.). A claim seeking judicial review of FTA actions announced herein for the listed public transportation project will be barred unless the claim is filed on or before December 22, 2016.
Jay M. Fox, Acting Assistant Chief Counsel, Office of Chief Counsel, (215) 656-7258 or Terence Plaskon, Environmental Protection Specialist, Office of Environmental Programs, (202) 366-0442. FTA is located at 1200 New Jersey Avenue SE., Washington, DC 20590. Office hours are from 9:00 a.m. to 5:00 p.m., Monday through Friday, except Federal holidays.
Notice is hereby given that FTA has taken final agency actions by issuing certain approvals for the public transportation project listed below. The actions on the project, as well as the laws under which such actions were taken, are described in the documentation issued in connection with the project to comply with the National Environmental Policy Act (NEPA) and in other documents in the FTA administrative record for the project. Interested parties may contact either the project sponsor or the relevant FTA Regional Office for more information. Contact information for FTA's Regional Offices may be found at
This notice applies to all FTA decisions on the listed project as of the issuance date of this notice and all laws under which such actions were taken, including, but not limited to, NEPA [42 U.S.C. 4321-4375], Section 4(f) of the Department of Transportation Act of 1966 [49 U.S.C. 303], Section 106 of the National Historic Preservation Act [16 U.S.C. 470f], and the Clean Air Act [42 U.S.C. 7401-7671q]. This notice does not, however, alter or extend the limitation period for challenges of project decisions subject to previous notices published in the
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on a new information collection as required by the Paperwork Reduction Act of 1995 (PRA).
An agency may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number.
The OCC is soliciting comment concerning a new information collection titled “Reduction of Permanent Capital Notice.” The OCC also is giving notice that it has sent the collection to OMB for review.
Comments must be received by August 24, 2016.
Because paper mail in the Washington, DC area and at the OCC is subject to delay, commenters are encouraged to submit comments by email, if possible. Comments may be sent to: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, Attention: 1557-NEW, 400 7th Street SW., Suite 3E-218, Mail Stop 9W-11, Washington, DC 20219. In addition, comments may be sent by fax to (571) 465-4326 or by electronic mail to
All comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that
Additionally, please send a copy of your comments by mail to: OCC Desk Officer, 1557-NEW, U.S. Office of Management and Budget, 725 17th Street NW., #10235, Washington, DC 20503 or by email to:
Shaquita Merritt, OCC Clearance Officer, at (202) 649-5490 or, for persons who are deaf or hard of hearing, TTY, (202) 649-5597, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW., Washington, DC 20219.
The OCC is seeking approval for a proposed new information collection:
On April 26, 2016, the OCC issued a 60-day notice soliciting comment on this proposed information collection, 81 FR 24690. No comments were received. Comments continue to be solicited on:
(a) Whether the proposed collection of information is necessary for the proper performance of the functions of the OCC;
(b) The accuracy of OCC's estimate of the burden of the proposed information collection;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the information collection on respondents, including through the use of information technology.
Office of the Comptroller of the Currency, Department of the Treasury.
Notice.
The Comptroller of the Currency has determined that the renewal of the charter of the OCC Minority Depository Institutions Advisory Committee (MDIAC) is necessary and in the public interest to provide advice and information about the current circumstances and future development of minority depository institutions, in accordance with the goals established by section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Pub. L. 101-73, Title III, 103 Stat. 353, 12 U.S.C. 1463 note.
The charter of the OCC MDIAC is renewed for a two-year period that began on June 28, 2016.
Beverly F. Cole, Deputy Comptroller for Compliance Supervision and Designated Federal Officer, (202) 649-5420, Office of the Comptroller of the Currency, 400 7th Street SW., Washington, DC 20219.
Notice of the renewal of the MDIAC charter is hereby given under section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988), and with the approval of the Secretary of the Treasury. The Comptroller of the Currency has determined that the renewal of the MDIAC charter is necessary and in the public interest to provide advice and information about the current circumstances and future development of minority depository institutions, in accordance with the goals established by section 308 of FIRREA. The goals of section 308 are to preserve the present number of minority depository institutions, preserve the minority character of minority depository institutions in cases involving mergers or acquisitions, provide technical assistance, and encourage the creation of new minority depository institutions.
Office of the Comptroller of the Currency, Treasury.
Notice and request for comment.
The Office of the Comptroller of the Currency (OCC), as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA).
An agency may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid OMB control number.
The OCC is soliciting comment concerning the renewal of its information collection titled, “Disclosure and Reporting of CRA-Related Agreements.” The OCC also is giving notice that it has sent the collection to OMB for review.
Comments must be received by August 24, 2016.
Because paper mail in the Washington, DC area and at the OCC is subject to delay, commenters are encouraged to submit comments by email, if possible. Comments may be sent to: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, Attention: 1557-0219, 400 7th Street SW., Suite 3E-218, Mail Stop 9W-11, Washington, DC 20219. In addition, comments may be sent by fax to (571) 465-4326 or by electronic mail to
All comments received, including attachments and other supporting materials, are part of the public record
Additionally, please send a copy of your comments by mail to: OCC Desk Officer, 1557-0219, U.S. Office of Management and Budget, 725 17th Street NW., #10235, Washington, DC 20503, or by email to:
Shaquita Merritt, OCC Clearance Officer, (202) 649-5490 or, for persons who are deaf or hard of hearing, TTY, (202) 649-5597, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, Washington, DC 20219.
The OCC is proposing to extend, without change, OMB approval of the following information collection:
Section 48 of the FDI Act applies to written agreements that: (1) Are made in fulfillment of the CRA; (2) involve funds or other resources of an IDI or affiliate with an aggregate value of more than $10,000 in a year or loans with an aggregate principal value of more than $50,000 in a year; and (3) are entered into by an IDI or affiliate of an IDI and an NGEP.
The parties to a covered agreement must make the agreement available to the public and the appropriate agency.
The information collections are found in 12 CFR 35.4(b); 35.6(b)-(d); and 35.7(b) and (f).
The commenter stated that the collection is necessary and has practical utility. The commenter suggested that the OCC amend 12 CFR 35.6 to require that national banks and Federal savings associations publish covered agreements on their Web sites and that the OCC post them on its Web site as well. The CRA Sunshine statute set forth in section 48 of the FDI Act requires that the Federal banking agencies' CRA Sunshine regulations protect proprietary and confidential information of parties.
The commenter believed that the burden estimates may be low as institutions may not be aware of the filing requirements in § 35.6(d). The commenter requested that the OCC discuss how the estimates were derived and whether the possibility of underreporting was factored into the estimates. The estimates were obtained by counting the number of actual filings received. Failure to report due to a lack of awareness of the filing requirements in § 35.6 was not considered as this is not within the scope of the PRA.
Comments continue to be invited on:
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the information collection burden;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on a continuing information collection as required by the Paperwork Reduction Act of 1995 (PRA).
In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number.
The OCC is soliciting comment concerning renewal of its information collection titled, “Interagency Guidance on Asset Securitization Activities.” The OCC also is giving notice that it has sent the collection to OMB for review.
Comments must be submitted on or before August 24, 2016.
Because paper mail in the Washington, DC area and at the OCC is subject to delay, commenters are encouraged to submit comments by email, if possible. Comments may be sent to: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, Attention: 1557-0217, 400 7th Street SW., Suite 3E-218, Mail Stop 9W-11, Washington, DC 20219. In addition, comments may be sent by fax to (571) 465-4326 or by electronic mail to
All comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.
Additionally, please send a copy of your comments by mail to: OCC Desk Officer, 1557-0217, U.S. Office of Management and Budget, 725 17th Street, NW., #10235, Washington, DC 20503 or by email to:
Shaquita Merritt, OCC Clearance Officer, (202) 649-5490 or, for persons who are deaf or hard of hearing, TTY, (202) 649-5597, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW., Suite 3E-218, Mail Stop 9W-11, Washington, DC 20219.
The OCC is requesting that OMB extend its approval of the following information collection:
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the information collection burden;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Determination of Interest Expense Deduction of Foreign Corporation.
Written comments should be received on or before September 23, 2016 to be assured of consideration.
Direct all written comments to Tuawana Pinkston, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the collection tools should be directed to Kerry Dennis, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224, or through the internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Continuity of Interest.
Written comments should be received on or before September 23, 2016 to be assured of consideration.
Direct all written comments to Tuawana Pinkston, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the regulation should be directed to Kerry Dennis at Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224, or through the internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.
Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the IRS is soliciting comments concerning Form 14693, Application for Reduced Rate of Withholding on Whistleblower Award Payment.
Written comments should be received on or before September 23, 2016 to be assured of consideration.
Direct all written comments to Christie Preston, Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the forms and instructions should be directed to Allan Hopkins, at Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
(1) the authority under section 614(a)(1) of the FAA to determine whether it is important to the security interests of the United States to furnish assistance using up to $19,708,000 of Fiscal Year (FY) 2010 supplemental International Narcotics Control and Law Enforcement (INCLE) funds without regard to any other provision of law within the purview of section 614(a)(1) of the FAA; and
(2) the authority under section 610 of the FAA to make the requisite determination and execute the transfer of up to $7,968,000 of these FY 2010 supplemental INCLE funds to the Economic Support Fund account.
Office of the Comptroller of the Currency, Treasury (OCC); Board of Governors of the Federal Reserve System (Board); Federal Deposit Insurance Corporation (FDIC).
Guidance on the interpretation and application of the Community Reinvestment Act regulations.
The OCC, Board, and FDIC (the Agencies) are adopting as final revisions to the Interagency Questions and Answers Regarding Community Reinvestment (Questions and Answers) based on the proposal issued on September 10, 2014 addressing alternative systems for delivering retail banking services; community development-related issues; and the qualitative aspects of performance, including innovative or flexible lending practices and the responsiveness and innovativeness of an institution's loans, qualified investments, and community development services. The Agencies are clarifying nine of the 10 proposed questions and answers (Q&A), revising four existing Q&As for consistency, and adopting two new Q&As. The Agencies are not adopting one of the proposed revisions to guidance that addressed the availability and effectiveness of retail banking services. Finally, the Agencies are making technical corrections to the Questions and Answers to update cross-references and remove references related to the Office of Thrift Supervision (OTS) as obsolete. The Agencies are publishing all of the new and revised Q&As, as well as those Q&As that were published in 2010 and 2013 and that remain in effect in this final guidance.
This document goes into effect on July 25, 2016.
The Agencies implement the Community Reinvestment Act (CRA) (12 U.S.C. 2901
The Agencies publish the Questions and Answers
The Questions and Answers are grouped by the provision of the CRA regulations that they discuss, are presented in the same order as the regulatory provisions, and employ an abbreviated method of citing to the regulations. For example, for thrifts, the small savings association performance standards appear at 12 CFR 195.26; for national banks, the small bank performance standards appear at 12 CFR 25.26; for Federal Reserve System member banks supervised by the Board, they appear at 12 CFR 228.26; and for state nonmember banks, they appear at 12 CFR 345.26. Accordingly, the citation would be to 12 CFR __.26. Each Q&A is numbered using a system that consists of the regulatory citation and a number, connected by a dash. For example, the first Q&A addressing 12 CFR __.26 would be identified as § __.26-1.
Although a particular Q&A may provide guidance on one regulatory provision,
On September 10, 2014, the Agencies proposed to revise six existing Q&As.
Together, the Agencies received 126 different comment letters on the proposed Q&As, plus over 900 form letter submissions. The commenters included financial institutions and their trade associations (collectively, industry commenters), community development advocates and consumer organizations (collectively, community organization commenters), state bank supervisors, Federal agencies, and other interested parties.
Most commenters supported the Agencies' efforts to clarify the CRA guidance. Some commenters also suggested revisions to the proposed new and revised Q&As, as well as posed questions or stated concerns about the Q&As. Comments received by the Agencies on each revised or new proposed Q&A are discussed in further detail below in Parts II and III.
The Agencies are adopting nine of the 10 proposed Q&As with clarifications to reflect commenters' suggestions. Parts II and III below discuss the clarifications made to these nine Q&As. Further, as discussed more fully below in Part II.C.i., in response to comments received, the Agencies are not adopting as final the proposed revisions to Q&A § __.24(d)-1, one of the Q&As that addresses the availability and effectiveness of retail banking services.
The Agencies are also revising four additional existing Q&As
As has been done in the past, the Agencies intend to provide training on all aspects of the new and revised Questions and Answers for examiners, as well as outreach for bankers and other interested parties.
Community development is an important component of community reinvestment and is considered in the CRA evaluations of financial institutions of all types and sizes. Community development activities are considered under the regulations' large institution, intermediate small institution, and wholesale and limited purpose institution performance tests.
The Agencies proposed to provide additional clarification of three Q&As addressing community development-related topics.
The CRA regulations define community development to include “activities that promote economic development by financing businesses or farms that meet the size eligibility standards of the Small Business Administration's Development Company (SBDC) or Small Business Investment Company (SBIC) programs (13 CFR 121.301) or have gross annual revenues of $1 million or less.”
Existing Q&A § __.12(g)(3)-1 explained the phrase “promote economic development.” This Q&A stated that activities promote economic development by financing small businesses or farms if they meet two “tests”: (i) A “size test” (the beneficiaries of the activity must meet the size eligibility standards of the SBDC or SBIC programs or have gross annual revenues of $1 million or less); and (ii) a “purpose test,” which is intended to ensure that a financial institution's activities promote economic development consistent with the CRA regulations. Existing Q&A § __.12(g)(3)-1 stated that activities promote economic development if they “support permanent job creation, retention, and/or improvement for persons who are currently low- or moderate-income, or support permanent job creation, retention, and/or improvement either in low- or moderate-income geographies or in areas targeted for redevelopment by Federal, state, local, or tribal governments.” The Q&A further explained, “[t]he Agencies will presume that any loan to or investment in a SBDC, SBIC, Rural Business Investment Company, New Markets Venture Capital Company, or New Markets Tax Credit-eligible Community Development Entity promotes economic development.”
The Agencies proposed to revise existing Q&A § __.12(g)(3)-1 to clarify what is meant by the phrase “promote economic development,” and to better align this Q&A with other guidance provided in existing Q&As § __.12(i)-1 and § __.12(i)-3 regarding consideration of economic development activities undertaken by financial institutions. Further, the Agencies proposed to revise the guidance to add additional examples that would demonstrate a purpose of economic development, such as workforce development and technical assistance support for small businesses. In addition, the Agencies requested public comment on seven questions regarding the proposed revisions to the Q&A.
The Agencies received 40 comments addressing proposed revised Q&A § __.12(g)(3)-1. Most commenters provided general comments about the proposed revised Q&A, with relatively few responding to the seven specific questions posed by the Agencies. Commenters generally supported the Agencies' efforts to clarify the types of activities that promote economic development. One industry commenter mentioned that changing the format to a bulleted list of activities that demonstrate a purpose of economic development is helpful.
A few industry commenters suggested eliminating the purpose test altogether, asserting that the regulations require only that activities relate to businesses that meet Small Business Administration (SBA) size-eligibility requirements. However, the Agencies note the intent of the purpose test is to explain what is meant by the phrase “promote economic development.” The purpose test ensures that examiners consider only activities that promote economic development as activities with a primary purpose of community development. Other loans to small businesses and small farms are considered as retail loans if they meet certain loan-size standards (
The Agencies specifically asked what information is available to demonstrate that an activity meets the size and purpose tests. One community organization commenter suggested that examiners consider the size of the business by revenues or, alternatively, the mission statement of the intermediary lender, if the statement provides sufficient detail on the types of businesses served, to demonstrate an activity meets the size test. A few industry commenters suggested that all activities that support small businesses should be presumed to qualify and meet the purpose test.
As noted above, existing Q&A § __.12(g)(3)-1 explained that the Agencies will presume that any loan to or investment in a SBDC, SBIC, Rural Business Investment Company, New Markets Venture Capital Company, or New Markets Tax Credit-eligible Community Development Entity promotes economic development. The Agencies proposed a revision to the Q&A to add the following presumption: For loans to or investments in a Community Development Financial Institution (CDFI) that finances small businesses or small farms. As discussed below, the Agencies are adopting this proposed amendment to Q&A § __.12(g)(3)-1 regarding CDFIs.
The Agencies also proposed to revise the existing Q&A § __.12(g)(3)-1 by removing the reference to persons who are “currently” low- or moderate-income in order to clarify that banks can focus on community development activities that extend beyond support for low-wage jobs. The Agencies specifically requested input on whether the proposed revision would help to clarify what is meant by job creation, retention, or improvement for low- or moderate-income individuals. Commenters generally agreed with removing the reference to persons who are “currently” low- or moderate-income. However, most commenters indicated that the proposal did not sufficiently clarify what is meant by job creation, retention, or improvement for low- or moderate-income persons beyond the creation of low-wage jobs. Industry commenters reiterated concerns that the primary method to demonstrate that activities benefit low- or moderate-income individuals is to provide evidence of low-wage jobs, which is not consistent with the spirit or intent of the CRA. These commenters also expressed concerns that the proposal did not include examples of methods that could be used to demonstrate that the persons for whom jobs are created, retained, or improved are low- or moderate-income, and asked that the Agencies incorporate examples into the final Q&A.
The Agencies are adopting revisions to existing Q&A § __.12(g)(3)-1 largely as proposed, but with additional clarifications.
First, the Agencies recognize that financial institutions may rely on a variety of methods to demonstrate that activities promote economic development. To make clear that financial institutions may provide various types of information to demonstrate that an activity meets the purpose test, the Agencies have added a statement in the final Q&A clarifying that examiners will employ appropriate flexibility in reviewing any information provided by a financial institution that reasonably demonstrates that the purpose, mandate, or function of an activity meets the purpose test.
In addition to the above revisions, the Agencies had proposed to add examples of types of activities that would meet the purpose test of promoting economic development. The Agencies are adopting these examples largely as proposed, but with some clarifications and revisions to address commenters' concerns, as discussed more fully below. Accordingly, the Agencies are adopting this final Q&A with reference to activities that are considered to promote economic development if they support permanent job creation, retention, and/or improvement:
• For low- or moderate-income persons;
• in low- or moderate-income geographies;
• in areas targeted for redevelopment by Federal, state, local, or tribal governments;
• by financing intermediaries that lend to, invest in, or provide technical assistance to start-ups or recently formed small businesses or small farms; or
• through technical assistance or supportive services for small businesses or farms, such as shared space, technology, or administrative assistance.
The final Q&A also recognizes that Federal, state, local, or tribal economic development initiatives that include provisions for creating or improving access by low- or moderate-income persons to jobs, or job training or workforce development programs, promote economic development.
The Agencies note that only one of the examples in the final Q&A explicitly refers to permanent job creation, retention, and/or improvement for low- or moderate-income persons. The Agencies encourage activities that promote economic development through opportunities for low- and moderate-income individuals to obtain higher wage jobs, such as through private industry collaborations with workforce development programs for unemployed persons and are clarifying that examiners will consider the qualitative aspects of performance related to all activities that promote economic development. In particular, activities will be considered more responsive to community needs if a majority of jobs created, retained, and/or improved benefit low- or moderate-income individuals.
The Agencies also note that Q&A § __.12(g)(2)-1 provides examples of ways in which an institution could determine that community services and, therefore, other types of community development activities, including economic development, are targeted to low- or moderate-income individuals. In particular, the example explaining that an institution may use readily available data for the average wage for workers in a particular occupation or industry could be useful when determining whether an activity promotes economic development.
The Agencies specifically asked whether the proposed examples demonstrating that an activity promotes economic development for CRA purposes were appropriate, and whether there are other examples the Agencies should include. Most commenters generally agreed the proposed examples were appropriate. Several community organization commenters, as well as a state bank supervisory agency commenter, suggested the Q&A should also include a reference to the “quality of jobs” created, retained, or improved. Industry commenters, however, opposed a “quality of jobs standard,” expressing concerns related to increased subjectivity by examiners and the Agencies and documentation burden on institutions, small businesses or small farms, and examiners. The Agencies recognize that the term “quality” is subjective, not easily defined, and heavily influenced by local economic conditions, needs, and opportunities. The amount of time, resources, and expertise needed to fairly evaluate the quality of jobs created, retained, and/or improved for low- or moderate-income individuals could be overly burdensome
The Agencies proposed that permanent job creation, retention, and/or improvement is supported “through the creation or development of small businesses or farms” and, therefore, such activity would be considered to promote economic development and meet the “purpose test.” The Agencies proposed this example in an effort to recognize the impact small businesses have on job creation in general, and to address industry concerns that activities in support of intermediary lenders or other service providers, such as business incubators that lend to start-up businesses and help businesses become bankable and sustainable, are often not considered under the purpose test. Industry commenters have previously indicated that such activities are not considered because it is not clear under the purpose test that these activities help promote economic development since any job creation, retention, or improvement would occur in the future—after the businesses are organized or more established. However, there were concerns that the proposed guidance stating that permanent job creation, retention, and/or improvement “through the creation or development of small business or farms” may be overly broad and could result in diffuse potential benefit to low- or moderate-income persons or geographies. The Agencies are adopting this example with revisions to clarify that examiners will consider activities that support permanent job creation, retention, and/or improvement by financing intermediaries that lend to, invest in, or provide technical assistance to
The Agencies also proposed to add activities that support permanent job creation, retention, and/or improvement “[t]hrough workforce development and/or job or career training programs that target unemployed or low- or moderate-income persons” to the list of activities that are considered to promote economic development under the purpose test. Two government agency commenters expressed concerns that these activities, in and of themselves, may not involve financing small businesses or small farms and, therefore, would not meet the size test. To address these concerns, the final Q&A does not incorporate this example in the list of those types of activities that promote economic development under the purpose test. However, the Agencies are amending existing Q&As § __.12(g)-1 and § __.12(t)-4 to clarify that activities related to workforce development or job training programs for low- or moderate-income or unemployed persons are considered qualified community development activities.
The last example of a type of activity that would be considered to promote economic development that the Agencies proposed referred to “Federal, state, local, or tribal economic development initiatives that include provisions for creating or improving access by low- or moderate-income persons, to jobs, affordable housing, financial services, or community services.” Industry and community organization commenters suggested amending or eliminating this proposed activity altogether because it blurs the line between activities that support economic development and those that support other types of community development and could create confusion. Although the Agencies' original intention was to recognize all Federal, state, local, or tribal economic development initiatives, the Agencies agree with these commenters and have eliminated references to affordable housing, financial services, and community services, which would receive consideration under other prongs of the definition of “community development.” However, the Agencies have otherwise retained the example in the final Q&A being adopted, and have added a reference to governmental economic development initiatives that include job training or workforce development programs, because those initiatives are closely related to job creation, retention, and/or improvement.
Commenters overwhelmingly supported adding CDFIs that finance small businesses or small farms to the list of entities for which loans or investments are presumed to promote economic development; even so, some questioned limiting the presumption to CDFIs that finance small businesses or small farms. The Agencies are adopting this revision as proposed. In order for a CDFI to promote economic development by financing small businesses and small farms, it follows that any CDFI presumed to promote economic development would need to finance small businesses or small farms. Additionally, the Agencies are further revising the statement granting presumptions for activities related to the specified entities to include services provided to these entities, as well loans and investments.
Several commenters representing the Historic Tax Credit (HTC) industry suggested changes to the proposed Q&A that would expand and clarify the circumstances under which CRA consideration would be available for loans and investments related to projects involving HTCs. These commenters suggested the Agencies amend Q&A § __.12(g)(3)-1 to create a presumption that activities related to HTC projects qualify for CRA consideration as promoting economic development by financing small businesses and small farms. Because not all HTC projects would meet the requirements to qualify for CRA consideration under 12 CFR __.12(g)(3), the Agencies believe it would be inappropriate to grant such a presumption. Nonetheless, in instances in which loans to, or investments in, projects that receive HTCs do meet the regulatory definition of community development, including the geographic restrictions, the Agencies concur that CRA consideration should be provided. For example, a loan to, or investment in, an HTC project that does, in fact, relate to a facility that will house small businesses that support permanent job creation, retention, or improvement for low- or moderate-income individuals, in low- or moderate-income areas, or in areas targeted for redevelopment by Federal, state, local, or tribal governments may receive CRA consideration as promoting economic development. Further, a loan to or investment in an HTC project that will provide affordable housing or community services for low- or moderate-income individuals would meet the definition of community development as affordable housing or a community service targeted to low- or
In response to the Agencies' request for input on the types of information examiners should review when determining the performance context of an institution, some community organizations suggested consulting local studies and Federal Reserve Bank credit surveys; talking with CDFIs, local municipalities, and community organizations that work directly with small businesses; reviewing municipal needs assessments; and evaluating business and local demographic data. One industry commenter suggested examiners could review financial institution Consolidated Reports of Condition and Income (Call Reports) and academic or governmental economic development reports or adopted plans. Another industry commenter suggested that existing Q&As explain that an institution may provide examiners with any relevant information and, therefore, provide sufficient guidance without overlaying prescriptive changes that could be counter-productive to an institution's efforts to balance innovativeness and responsiveness with its unique business strategy. Also regarding performance context, community organization commenters called for examiners to conduct “robust” analyses of local needs, including localized data on employment needs and opportunities for low- or moderate-income individuals. The Agencies will consider commenters' suggestions going forward.
Finally, one community organization commenter noted that activities that support technical assistance may not involve “financing” small businesses or small farms and, therefore, may not be consistent with the size test. Providing technical assistance on financial matters to small businesses is currently cited as an example of a community development service in Q&A § __.12(i)-3 and involves the provision of financial services. The Agencies long ago recognized that many small businesses, particularly start-up companies, are not immediately prepared for, or qualified to engage in, traditional bank financing and, therefore, included providing technical assistance to small businesses and small farms as a community development activity. However, the Agencies understand that reasoning may not be clear to examiners or financial institutions. To address this issue, the Agencies have amended the description of the “size test” in the final Q&A to explain that the term “financing” in this context is considered broadly and includes technical assistance that readies a business that meets the size eligibility standards to obtain financing. The Agencies intend this explanation to ensure that technical assistance that readies a small business or small farm to obtain financing is an activity that promotes economic development and, thus, would receive consideration as a community development activity.
The definition of “community development” includes “activities that revitalize or stabilize . . . underserved nonmetropolitan middle-income geographies . . . .”
The Agencies received 66 comments addressing the proposed addition of the new example involving communications infrastructure. Commenters' views on whether the new example should be added to Q&A § __.12(g)(4)(iii)-4 were mixed.
A number of commenters expressed concern regarding the addition of a new or rehabilitated communications infrastructure as an example of an activity that would be considered to revitalize or stabilize a nonmetropolitan middle-income geography. These commenters, primarily representing community organizations, generally expressed the view that CRA consideration should be used as a means of encouraging financial institutions to find more direct ways to meet the needs of low- or moderate-income individuals and geographies. One individual commenter that opposed the addition of the example expressed concern that “regulatory creep” was moving the focus of the CRA away from its original mission of helping to meet community credit needs.
In contrast, most industry commenters, as well as a few community organization commenters, supported the addition of the new example addressing communications infrastructure. These commenters stated that such an example would provide further clarity regarding what constitutes an activity that could revitalize or stabilize underserved nonmetropolitan middle-income geographies. Many commenters who supported the addition of the new example noted the importance of communications infrastructure, and in particular broadband access, to the economic viability of underserved nonmetropolitan middle-income geographies' residents and businesses in the current marketplace. Further, many of these commenters noted that the addition of the new example also may help to improve access to alternative systems of delivering retail banking services, which require reliable access to broadband.
The Agencies are adopting the new example describing a new or rehabilitated communications infrastructure because they continue to believe that, consistent with the CRA regulatory definition of “community development,” communications infrastructure is an essential community service. Specifically, the definition of “community development” provides that activities that help meet “essential community needs” revitalize and stabilize underserved nonmetropolitan middle-income geographies. Further, existing Q&A § __.12(g)(4)(iii)-4 clarifies that “financing for the construction, expansion, improvement, maintenance, or operation of essential infrastructure” may qualify for revitalization or stabilization consideration. As noted above, in the Agencies' view, reliable communications infrastructure is increasingly essential to the economic
Several industry and community organization commenters, as well as a commenter representing a state banking supervisor, sought clarification regarding the extent to which the new or rehabilitated communications infrastructure must benefit low- or moderate-income individuals or geographies. The Agencies considered whether to provide additional clarification addressing these comments and determined that additional guidance was not necessary. First, existing Q&A § __.12(g)(4)(iii)-4 states that, to receive CRA consideration on the basis of revitalizing or stabilizing an underserved nonmetropolitan middle-income geography, a project must meet essential community needs, including the needs of low- or moderate-income individuals. Although the geographies (a term defined at 12 CFR __.12(k) as census tracts) addressed by Q&A § __.12(g)(4)(iii)-4 are designated as middle-income, there typically are low- and moderate-income individuals and neighborhoods interspersed throughout these nonmetropolitan geographies.
Second, the CRA regulations
Two industry commenters and one community organization commenter requested that the proposed new example not be limited to Q&A § __.12(g)(4)(iii)-4, asserting that communications infrastructure should also be considered to be an activity that revitalizes or stabilizes distressed nonmetropolitan middle-income, and low- or moderate-income, geographies. One industry commenter stated that it should be made clear that investments in new or rehabilitated communications infrastructure, and not just loans related to such activities, would receive CRA consideration. In addition, a few commenters requested generally that the Agencies clarify that the list of examples included in Q&A § __.12(g)(4)(iii)-4 is not exhaustive.
In response to these comments, the Agencies are adopting a new Q&A § __.12(g)-4. This new Q&A explains that examples included throughout the Questions and Answers are not exhaustive; rather, the Agencies provide examples to illustrate the types of activities that may qualify for consideration under a particular provision of the regulations. Nonetheless, the Agencies emphasize that the examples that are expressly provided are not the only activities that might receive CRA consideration. In addition, new Q&A § __.12(g)-4 explains that financial institutions may receive consideration for a community development activity, such as a qualified investment, if it serves a similar community development purpose as an activity described in an example related to a different type of community development activity, such as a community development loan. If a financial institution can demonstrate that an activity it has undertaken has a primary purpose of community development and meets the relevant geographic requirements, that activity should receive CRA consideration.
The Agencies considered whether the example pertaining to a new or rehabilitated communications infrastructure should be added to any other Q&As, such as Q&A § __.12(g)(4)(iii)-3, but declined to add the example to any other Q&As. The Agencies believe that new Q&A § __.12(g)-4, described above, should provide guidance as to whether a new or rehabilitated communications infrastructure might receive CRA consideration in other contexts. The Agencies do not believe it is necessary to add the same example to any other Q&As.
Some industry and community organization commenters, as well as the U.S. Environmental Protection Agency (EPA), requested that the Agencies add additional examples of activities that qualify for consideration as activities that revitalize or stabilize underserved nonmetropolitan middle-income geographies. For example, the EPA suggested expanding Q&A § __.12(g)(4)(iii)-4 to address renewable energy facilities, which it posited could be considered “public services.” (As discussed below, loans to finance certain renewable energy facilities has been added to the examples of community development loans in Q&A § __.12(h)-1.) Consistent with the explanation in new Q&A § __.12(g)-4, if a financial institution were to submit information demonstrating that financing or investing in renewable energy facilities qualifies for CRA consideration under, for example, 12 CFR __.12(g)(4)(iii), or any of the other provisions within the definition of community development, then the financial institution would receive consideration for the activity. Therefore, the Agencies are not expressly adding a reference to renewable energy facilities to the list of examples in Q&A § __.12(g)(4)(iii)-4.
Other commenters suggested that loans enabling flood control measures should be considered as an example of a community development loan. Although these comments were offered as a suggestion for an example of a community development loan in connection with Q&A § __.12(h)-1, the Agencies believe that the commenters' suggestion of a new or rehabilitated flood control measure is another example of essential infrastructure that could qualify as an activity that revitalizes or stabilizes an underserved nonmetropolitan middle-income geography. As such, the Agencies have added the following new example in Q&A § __.12(g)(4)(iii)-4: “a new or rehabilitated flood control measure, such as a levee or storm drain, that serves the community, including low- and moderate-income residents.”
The Agencies' CRA regulations define “community development loan” to mean a loan that has community development as its primary purpose.
The Agencies received 43 distinct comments and 917 form letters addressing the proposed example in Q&A § __.12(h)-1. Industry and community organization commenters, as well as commenters representing environmental organizations, generally supported adding the proposed example to the Q&A. However, a few community organization commenters expressed differing opinions regarding how the Agencies proposed to describe that an indirect benefit from renewable energy
In addition, a number of commenters representing the renewable energy industry asked the Agencies to consider renewable energy facilities that are not attached directly on the affordable housing or community services facility, explaining that this approach could be more efficient, technologically simpler, or less costly if a particular building site is not oriented to optimize renewable energy generation. In response to these comments, the Agencies have revised the example in the final Q&A to clarify that a renewable energy project may be located on-site or off-site. This clarification would apply, for example, to a community-scale or micro-grid renewable energy facility or solar panels placed on carports instead of being physically mounted on the main building, so long as the benefit from the energy generated is provided to an affordable housing project or a community facility that has a community development purpose. To demonstrate that activities related to a renewable energy facility or project have a primary purpose of community development, an institution may provide a copy of the contractual agreement, such as a lease, power purchase agreement, or energy service contract, that allocates energy or otherwise reduces energy cost to benefit affordable housing or a community facility that serves low- or moderate-income individuals.
The EPA suggested adding “revitalizing a contaminated property by installing renewable energy” to the list of examples of community development loans in the revision of Q&A § __.12(h)-1. A community development loan must have a primary purpose of community development (
Several renewable energy-related industry commenters discussed the job creation and job training aspects of installing renewable energy improvements and requested greater CRA consideration of the impact of jobs during the construction phase. The agencies note that Q&A § __.12(h)-5, in offering guidance on community development activities that revitalize or stabilize a low- or moderate-income geography, states that some activities provide only indirect or short-term benefits to low- or moderate-income individuals and, as such, do not receive CRA consideration. Construction jobs are used as an illustration of this type of short-term benefit. Consistent with this guidance, the Agencies do not believe that additional consideration should be given to short-term job creation related to the installation of renewable energy improvements benefitting affordable housing or a community facility that serves low- or moderate-income individuals and are not amending the Q&A as suggested by the commenters.
A few renewable energy-related industry commenters suggested that CRA consideration should be given for loans to low- or moderate-income homeowners to install renewable energy facilities or energy-efficient improvements. A loan to a homeowner for these purposes would be considered as a consumer loan or home mortgage loan. Under the existing regulation and guidance, these loans may be considered in an institution's CRA evaluation under the lending test relevant to the particular institution, so the Agencies have not made any additional revisions to the Questions and Answers in response to this comment.
One environmental organization suggested broadening the proposed language in Q&A § __.12(h)-1 to expressly cover energy efficiency improvements in schools. The Agencies believe that inclusion of this language in Q&A § __.12(h)-1 is unnecessary. A school that primarily serves low- or moderate- income students could be considered as a community facility, and a loan for energy efficiency improvements at that school would qualify as a community development loan, consistent with the example in the revised Q&A.
A number of community organization commenters suggested broadening the language in Q&A § __.12(h)-1 to include water conservation improvements. The Agencies agree that water conservation improvements can promote sustainable affordable housing or community facilities serving low- or moderate-income individuals by lowering operating costs and, accordingly, have modified the example to include water conservation. In addition, activities related to water conservation improvements may also qualify as having a different community development purpose if an institution were to maintain information demonstrating that the activity meets the applicable community development definition as explained in new Q&A § __.12(g)-4.
Although some commenters also suggested adding flood control improvements to the example in Q&A § __.12(h)-1, the Agencies concluded that financing for flood control improvements may more appropriately be considered as essential infrastructure addressing the need for revitalization and stabilization of underserved nonmetropolitan middle-income geographies.
The final paragraph of existing Q&A § __.12(h)-1 stated that the rehabilitation and construction of affordable housing or community facilities may include the abatement or remediation of environmental hazards, and provided lead-based paint as an example. The Agencies received many comments from community and environmental organizations suggesting the inclusion of more explicit enumeration of several additional examples of environmental hazards and have added to the example “asbestos, mold, or radon” as other examples of environmental hazards that may be abated or remediated as part of a rehabilitation or construction project.
One renewable energy-related industry commenter noted that the discussion in the preamble of the September 2014
The Agencies want to make clear that the addition of this example does not expand the definition of community development, but rather clarifies that consideration will be given for loans financing renewable energy facilities or energy-efficient improvements in affordable housing or community facilities that otherwise meet the existing definition of community development.
The CRA regulations provide that a financial institution's lending performance is evaluated by, among other things, an institution's “use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies.”
First, the Agencies proposed to revise Q&A § __.22(b)(5)-1 to emphasize that an innovative or flexible lending practice is not required to obtain a specific rating, but rather is a qualitative consideration that, when present, can enhance a financial institution's CRA performance. Second, the Agencies proposed to explain that examiners will consider whether, and to what extent, the innovative or flexible practices augment the success and effectiveness of the institution's lending program. Third, the Agencies proposed two new examples of innovative or flexible lending practices. The first example described small dollar loan programs as an innovative or flexible practice when such loans are made in a safe and sound manner with reasonable terms, and are offered in conjunction with outreach initiatives that include financial literacy or a savings component. A small dollar loan program currently receives consideration under the lending test and, therefore, the guidance already acknowledges these programs as a type of lending activity that is likely to be responsive in helping to meet the credit needs of many communities.
The second example proposed by the Agencies described mortgage or consumer lending programs that utilize alternative credit histories in a manner that would benefit low- or moderate-income individuals. The Agencies believed that considering alternative credit histories to supplement conventional trade line information with additional information about the borrower, such as rent and utility payments, could provide some additional creditworthy low- or moderate-income individuals an opportunity to gain access to credit, consistent with safe and sound underwriting practices. The Agencies also solicited comment on whether the proposed guidance was sufficient to encourage institutions to design more innovative and flexible lending programs that are responsive to community needs; whether the benefits of using alternative credit histories outweighed any concerns; and if this additional guidance would better enable examiners and institutions to identify those cases in which alternative credit histories benefit low- or moderate-income individuals.
The Agencies received 87 comments addressing the proposed revisions and the three related questions the Agencies posed for comment. Because commenters' more general observations also addressed the three questions, their responses to the questions are integrated into the broader discussion of the comments received by the Agencies.
Most commenters were supportive of the Agencies' intent to clarify how examiners evaluate an institution's innovative or flexible lending practices. However, several commenters representing both the banking industry and community organizations expressed some concerns about the revisions, as discussed more fully below.
A few industry commenters asked the Agencies to further clarify that innovative activities, such as small dollar lending programs and alternative credit histories, are not required to obtain a specific CRA rating, and had concerns despite the revision proposed by the Agencies intended to address this issue. The Agencies have revised the introductory paragraph of the final Q&A to make clearer that innovative or flexible lending practices are not required to obtain a specific CRA rating. In addition, the final Q&A is revised to cross-reference Q&A § __.28-1, which explains how innovativeness is considered in the rating process. Current Q&A § __.28-1 explicitly states, among other things, that the lack of innovative lending practices will not result in a “Needs to Improve” CRA rating. Rather, the guidance notes that the use of innovative lending practices may augment the consideration given to an institution's performance under the quantitative criteria, resulting in a higher performance rating.
One industry commenter addressed the Agencies' proposed language stating that examiners will consider whether, and the extent to which, innovative or flexible practices augment the success and effectiveness of an institution's lending program. This commenter questioned whether the proposed guidance would be sufficient to help examiners or bankers understand and identify innovative or flexible lending activities since examiner discretion determines what is considered “innovative” or “flexible.” The Agencies recognize that the terms “innovative” and “flexible” are qualitative in nature and, thus, examiner judgment is needed to assess the unique characteristics and differences in an institution's lending programs. However, the Agencies believe additional guidance concerning what constitutes an innovative activity would be helpful to the review process undertaken by examiners. Bankers and examiners may also find additional guidance in new Q&A § __.21(a)-4, discussed in further detail below, which explains, among other things, that “innovative activities are especially meaningful when they emphasize serving, for example, low- or moderate-income consumers or distressed or underserved nonmetropolitan middle-income geographies in new or more effective ways.” Although examiner judgment and discretion remain in determining what lending practices are deemed innovative or flexible, the Agencies believe the additional guidance in Q&A § __.21(a)-4 provides further clarification on when an activity should be considered innovative or flexible.
Most commenters addressing proposed Q&A § __.22(b)(5)-1 commented on the two examples proposed by the Agencies. Concerning the small dollar loan example, most
In particular, one state agency expressed concern that the small dollar loan example did not sufficiently emphasize consumer protection and the safety and soundness aspects of individual small dollar loans. This commenter suggested that the Agencies consider adding the phrase “based on a borrower's ability to repay” to the small dollar loan example because it would emphasize that small dollar loans made in a safe and sound manner are evaluated with respect to individual loans and not the entire portfolio. Similarly, several community organization commenters asked that the Agencies give CRA consideration for small dollar loan programs only if the loans are safe and sound alternatives to high-cost predatory programs.
In response to these comments, the Agencies are adopting the small dollar loan program example largely as proposed with a revision to ensure consistency with Q&A § __.22(a)-1.
Finally, one industry commenter requested that the Agencies clarify the term “reasonable terms” in the context of small dollar lending programs. This commenter expressed concern that “reasonable terms” was undefined and, thus, would add confusion as to what would receive CRA consideration. The Agencies note that whether a lending program has “reasonable terms” would depend on the facts and circumstances and, therefore, defining the term would not be practicable.
Most community organization commenters were supportive of the proposed new example addressing consideration of alternative credit histories as an innovative or flexible lending practice. Several community organization commenters, however, expressed concern over the risk of using certain alternative data sources, such as social media, checking account history, voter registration records, and criminal convictions, to establish credit history. According to these commenters, such data sources provide no predictive value, but could have a disproportionately negative impact on low- or moderate-income individuals and people of color. These commenters suggested that the Agencies clarify the types of data sources that should be used in alternative credit history reports that could be considered innovative, but that would not have a negative impact on low- or moderate-income individuals.
Industry commenters were also supportive of the proposed example concerning alternative credit histories. A few industry commenters acknowledged that the use of alternative credit histories could be effective in expanding access to credit to low- or moderate-income individuals. However, these industry commenters believed that access to credit should be balanced against safety and soundness considerations. These industry commenters urged the Agencies to work closely with each other to provide a consistent message regarding the activities that could be innovative and flexible while ensuring delivery in a safe and sound manner.
The Agencies are finalizing the example addressing consideration of alternative credit histories largely as proposed with clarifying revisions based on comments received. The Agencies agree with commenters that certain data sources provide little or no predictive value. Hence, the Agencies intend to consider an institution's use of alternative credit histories that are consistent with safe and sound banking practices and that would benefit
Finally, the Agencies revised the introductory paragraph of this Q&A to make clear that, although many financial institutions have used innovative or flexible lending practices, such as a small dollar loan program or consideration of alternative credit histories, to customize loans to their customers' specific needs in a safe and sound manner and consistent with statutes, regulations, and guidance, such practices are not required to obtain a specific CRA rating. Further, the CRA regulations provide that a financial institution is not required to make loans or investments or to provide services that are inconsistent with safe and sound operations. Financial institutions are permitted and encouraged to develop and apply flexible underwriting standards for loans that benefit low- or moderate-income geographies or individuals only if consistent with safe and sound operations.
The CRA regulations provide that the Agencies evaluate the availability and effectiveness of a financial institution's systems for delivering retail banking services under the service test pursuant to four criteria: (1) The current distribution of the institution's branches among low-, moderate-, middle-, and upper-income geographies; (2) the institution's record of opening and closing branches, particularly those located in low- or moderate-income geographies or primarily serving low- or moderate-income individuals; (3) the availability and effectiveness of alternative systems for delivering retail banking services in low- and moderate-income geographies and to low- and moderate-income individuals; and (4) the range of services provided in low-, moderate-, middle-, and upper-income geographies and the degree to which the
The Agencies proposed to revise current Q&A § __.24(d)-1, which addresses how examiners should evaluate the availability and effectiveness of an institution's systems for delivering retail banking services. Specifically, the Agencies proposed to delete the statements that “performance standards place primary emphasis on full-service branches” and that alternative delivery systems are considered “only to the extent” that they are effective alternatives in providing needed services to low- or moderate-income geographies and individuals. The proposal was intended to encourage broader availability of alternative delivery systems to low- or moderate-income geographies and individuals without diminishing the value full-service branches offer to communities.
The Agencies received 41 comments on proposed revisions to Q&A § __.24(d)-1. Nearly all of the industry commenters supported the revision, including commenters that stressed the continued importance of branches to the communities they serve. Some industry commenters, however, voiced concern about how the Agencies would implement the revision and asked for further clarification on how examiners would weigh branches and alternative delivery systems and utilize performance context considerations in rating the different delivery systems' performance under the service test. In contrast, almost all community organization commenters opposed the proposed revisions, asserting that branches continue to be uniquely important to low- and moderate-income neighborhoods and individuals, elderly customers, and local businesses. Many of these community organization commenters highlighted the importance of face-to-face contact in order to overcome language barriers and effectively provide essential financial services, such as opening accounts, applying for loans, and explaining terms and conditions. These commenters believed the proposed changes regarding how examiners should weigh branches and alternative delivery systems would result in more branches being closed. Moreover, these commenters stated that the proposed revisions to Q&A § __.24(d)-1 would not resolve the CRA regulations' outdated definition of assessment area.
In consideration of the comments received, the Agencies are withdrawing the proposed revisions to Q&A § __.24(d)-1 to avoid the unintended inference that branches are less important in providing financial services to low- and moderate-income geographies. However, the Agencies are making a minor revision to the Q&A to remove references to automated teller machines (“ATMs”) as the only example of alternative delivery systems to acknowledge that many other alternative delivery channels are utilized by financial institutions. The Agencies note that other Q&As being finalized in this document provide additional guidance on how examiners will evaluate criteria under the retail service test to ensure that appropriate consideration is given to branches, alternative delivery systems, and financial services tailored to meet the needs of low- and moderate-income individuals or geographies.
The Agencies proposed to revise Q&A § __.24(d)(3)-1, which addresses how examiners evaluate the availability and effectiveness of alternative delivery systems in the context of the retail service test. The proposed revisions were responsive to suggestions that the Agencies update the guidance to reflect technological advances used to deliver retail banking services by: (1) Adding examples of such technologically advanced systems, even though the examples were not, and are not, intended to limit consideration of new methods as technology evolves; and (2) providing additional guidance on how examiners will evaluate the availability and effectiveness of alternative delivery systems.
Proposed Q&A § __.24(d)(3)-1 identified additional factors that examiners may consider when evaluating whether a financial institution's alternative delivery systems are available and effective in delivering retail banking services in low- and moderate-income geographies and to low- and moderate-income individuals. These proposed factors included: (1) Ease of access, whether physical or virtual; (2) cost to consumers, as compared to other delivery systems; (3) range of services delivered; (4) ease of use; (5) rate of adoption; and (6) reliability of the system. The proposed Q&A further explained that examiners will consider any information an institution maintains and provides to examiners to demonstrate that the institution's alternative delivery systems are available to, and used by, low- and moderate-income individuals, such as data on customer usage or transactions.
The Agencies received 41 comments on the proposed Q&A § __.24(d)(3)-1. Commenters generally believed the proposed factors were reasonable and sufficiently flexible. Community organization commenters emphasized the importance of determining whether alternative services and products were not just offered, but adopted and used consistently by consumers. These commenters suggested that the cost of products is most relevant in the consideration of whether an alternative delivery system is available to, and used by, low- and moderate-income individuals.
Some community organization commenters suggested that the Agencies refrain from placing too much emphasis on alternative delivery systems until usage data can be accessed and used by the public to independently monitor the industry's performance. Furthermore, these commenters suggested that the Agencies clarify that financial institutions will
The Agencies specifically sought comment on whether the factors proposed were sufficiently flexible to be used by examiners as the financial services marketplace evolves, and if other factors should be included. Commenters that addressed this question were largely supportive. Industry commenters indicated that the factors were sufficiently flexible, but noted that additional guidance was needed regarding the use of proxies for income and how the criteria would be weighted. Community organization commenters were also generally supportive of the proposed factors but offered suggestions on how to implement them.
One industry commenter opposed the proposed factor that would evaluate the comparative cost of alternative delivery systems to the consumer because it would give examiners broad discretion when evaluating the pricing of banking services. Other industry commenters suggested that the Agencies provide more clarity regarding how the factors would be weighted. Yet another industry commenter suggested that the Agencies clearly specify that the list of factors is not intended to be exhaustive and requested that the guidance clearly state that there is no regulatory requirement to provide banking services
Community organization commenters focused on the importance of evaluating the actual impact of financial services on low- and moderate-income communities. These commenters suggested evaluating the sustainability of accounts opened, the range of services offered through alternative delivery systems, and the degree to which they are tailored to meet the needs of low- or moderate-income individuals. In addition, some community organization commenters suggested that the Agencies provide additional explanation on the “ease of access” factor to include consideration of language access, disability accommodation, and ability to use a system with alternative forms of identification.
One commenter, a public policy organization, supported the proposed factors, but suggested that they be applied to determine the effectiveness of branches as well as alternative delivery systems. This commenter stated that high-cost or inconvenient branches are no more beneficial than poorly utilized alternative delivery platforms, and asserted that the Agencies' objective should be to encourage high-quality service delivery through both branches and alternative channels. This commenter also stated that the use of intermediaries, such as community-based organizations that provide face-to-face interaction with customers, should be considered as an effective substitute for branch activity.
In general, the commenters agreed that the factors proposed are reasonable and sufficiently flexible. The Agencies are finalizing the proposed factors in final Q&A § __.24(d)(3)-1 largely as proposed, but with two modifications. First, to address commenters' concern that availability of alternative delivery systems alone does not demonstrate a system's responsiveness to community needs, the Agencies have revised the factor regarding the rate of adoption to read “the rate of adoption
The Agencies did not include additional explanation to the “ease of access” factor, as suggested by some commenters, but note that evaluation of “ease of access” could include consideration of language access, disability accommodation, and the ability to use a system with alternative forms of identification. Similarly, the Agencies did not revise the final Q&A to address how the various factors will be weighted since the availability and applicability of information regarding each factor will vary depending on the type of delivery system under consideration and the performance context of the institution. The factors cited in the final Q&A are examples of information that is relevant to the evaluation of whether alternative delivery systems are available and effective, and they are meant to be flexible.
The Agencies did not revise the guidance to address the comment suggesting that the proposed measures of availability and effectiveness of alternative delivery systems should be made applicable to branches and third-party service providers. The Agencies share the commenter's view that financial institutions should provide high-quality service delivery overall; however, the measures of availability and effectiveness in Q&A § __.24(d)(3)-1 were designed to evaluate alternative delivery systems. As provided in the Interagency CRA Examination Procedures, examiners assess the quantity, quality, and accessibility of the financial institution's service delivery systems provided in low-, moderate-, middle-, and upper-income geographies. Examiners also consider the degree to which services are tailored to the convenience and needs of each geography (
The second question on which the Agencies requested comment asked about the types of information routinely maintained by financial institutions that would be useful to demonstrate the availability and effectiveness of its alternative delivery systems to low- or moderate-income individuals. One industry commenter described the data that it has begun to collect and retain to comprehensively assess all delivery systems, including customer complaint metrics, cost of delivery (including third-party costs), new account/product volume, account/product closure volume, current accounts/product volume, and Service Level Agreements metrics (uptime/downtime). Other industry commenters stated that financial institutions do not collect income information from customers and most suggested that the income level of the census tract where the customer resides is the best available proxy for income. Another industry commenter counseled against any effort to collect income information when opening deposit accounts, asserting that opening a bank account needs to be as simple as possible to increase access to banking services. This commenter believed that the more questions a financial institution asks, the fewer people would finish the process and, more importantly, that income information collected in this way would quickly become stale and statistically invalid.
One industry commenter suggested that some financial institutions may maintain information, such as internal operations reports, industry rankings, and customer surveys, that would be helpful in understanding their performance context, but, since the types of information that institutions maintain vary widely, such information would be difficult to use for anything other than context. A community organization commenter suggested that examiners evaluate the frequency of transactions, adoption and attrition rates, as well as any geographic and income data available.
Two commenters addressed the information available regarding the reliability of alternative delivery systems. The first, representing a community organization, suggested that examiners evaluate the alternative delivery systems' ability to handle peak transaction volumes, the frequency of system crashes, the number of service shut downs for system maintenance, and the information security of systems. The other comment, from a financial institution, suggested that the Agencies provide specific guidance on, and examples of, the types of information that might be relevant to the evaluation of a system's reliability.
The comment letters indicated that the types of information collected and maintained by financial institutions that would be relevant to an evaluation of the availability and effectiveness of alternative delivery systems vary widely. The Agencies, therefore, are retaining the proposed language stating that examiners will consider any information that an institution maintains and provides to demonstrate the availability and effectiveness of its alternative delivery systems to low- or moderate-income individuals.
Third, the Agencies asked what other sources of data and quantitative information examiners could use to
A community organization commenter noted the lack of useful data regarding the actual geographic location of a person or business holding deposits and suggested that the Summary of Deposits
The Agencies found these comments helpful in thinking about the types of information that may be useful in evaluating the availability and effectiveness of alternative delivery systems. Moreover, the Agencies noted that the comments, particularly those related to determining the relative cost of alternative delivery systems, suggest that the distinction between delivery systems and financial products is not clear. For example, many commenters focused on how the costs of financial products tailored to meet the needs of low- and moderate-income customers, such as prepaid cards and low-cost checking accounts, should be evaluated, rather than addressing information that could be used to determine the relative costs of delivery systems, such as usage or access fees for online accounts and mobile banking platforms.
In order to more clearly distinguish between delivery systems and financial products tailored to meet the needs of low- or moderate-income individuals, the Agencies have revised Q&A § __.12(i)-3, which lists examples of community development services, to remove from that list any examples of retail banking services that are tailored to meet the needs of low- or moderate-income individuals. This revised Q&A is discussed more fully below under III.A.i. However, these examples of retail services will continue to be given consideration under the service test as provided pursuant to 12 CFR __.24(d)(4).
The Agencies have also added a new Q&A § __.24(d)(4)-1 addressing how examiners evaluate whether retail services are tailored to meet the needs of geographies of different income levels. The Agencies are adopting Q&A § __.24(d)(4)-1 in response to the many comments received regarding how examiners evaluate alternative delivery systems. Many of these commenters indicated that some confusion exists in distinguishing alternative delivery systems from financial products that are tailored to meet the needs of low- or moderate-income geographies and individuals. The Agencies believe that this new guidance makes clear that, in addition to evaluating the range of services provided in geographies of different incomes, examiners will also review any other information provided by the institution to demonstrate that its services are tailored to meet the needs of its customers in the various geographies of its assessment area(s). The final guidance further explains that this information may include data regarding the costs and features of loan and deposit products, account usage and retention, geographic location of accountholders, the availability of information in languages other than English, and any other relevant information maintained by the institution.
Fourth, the Agencies asked whether examiners should evaluate the cost of alternative delivery systems to consumers as compared with other delivery systems, as well as the range of services delivered relative to other delivery systems, (i) offered by the institution, (ii) offered by institutions within the institution's assessment area(s), or (iii) offered by the banking industry generally. Two industry commenters stated that an evaluation of the cost to consumers compared to other delivery systems is best evaluated within the specific context of each financial institution. One of these commenters suggested that it would be unreasonably burdensome to expect an institution to survey and monitor costs related to other institutions' delivery systems. One industry commenter suggested that it would be preferable to evaluate the cost to consumers within each assessment area, recognizing that examiners are required to reach a conclusion on a financial institution's performance in each of its assessment areas. One community organization commenter stated that the cost to consumers of a particular delivery system should not be considered along with other factors, such as the rate of adoption and sustained use. Another community organization commenter asserted that examiners should consider the total cost of products because fees are a primary factor preventing households from obtaining bank products and retaining banking relationships.
After reviewing the comments received in response to this question, the Agencies agree that it would be most appropriate to compare the costs of a financial institution's alternative delivery systems with its other delivery systems because of significant differences in size, capacity, and business strategy among institutions. As a result, the Agencies have revised the final Q&A to clarify that costs of alternative delivery systems will be compared to the financial institution's other delivery systems.
Lastly, the Agencies asked whether the proposed revisions adequately address changes in the way financial institutions deliver products in the context of assessment area(s) based on the location of a financial institution's branches and deposit-taking ATMs. While most commenters noted that the proposed Q&A offered helpful guidance on how examiners would evaluate the availability and effectiveness of alternative delivery systems, they also observed that the proposed guidance did not adequately address the trend in the financial services industry toward non-branch delivery systems and its impact on financial institutions'
The Agencies proposed a new Q&A § __.24(a)-1 to clarify how examiners evaluate retail and community development services under the large institution service test to improve consistency and reduce uncertainty regarding the performance criteria in the service test, and to encourage additional community development services.
For retail banking services, the proposed new Q&A stated that “examiners consider the availability and effectiveness of an institution's systems for delivering banking services, particularly in low- and moderate-income geographies and to low- and moderate-income individuals; the range of services provided in low-, moderate-, middle-, and upper-income geographies; and the degree to which the services are tailored to meet the needs of those geographies.” With regard to community development services, the proposed Q&A stated that examiners would consider the extent of community development services offered.
The proposed Q&A sought to differentiate retail services that are also considered community development services under existing Q&A § __.12(i)-3 (such as low-cost banking accounts targeted to low- or moderate-income individuals) from other retail banking services by stating that examiners would consider whether these retail banking services are responsive and effective in that they “improve or increase access to financial services by low- and moderate-income individuals or in low- or moderate-income geographies.” In addition, the proposed Q&A stated that examiners will consider any information provided by the institution that demonstrates community development services are responsive to those needs in order to address concerns that examiners have refused to consider certain types of documentation.
The Agencies solicited comment on all aspects of this proposed new Q&A and specifically requested commenters' views on two questions, as discussed below. The Agencies received 26 comments that were generally supportive of the intent of the Q&A; however, most of these commenters did not believe that the proposed Q&A would achieve its stated purpose. A number of commenters asserted that the proposal did not elevate the relative importance of community development services compared to retail banking services as the Agencies had intended.
The Agencies specifically requested comment on whether the proposed guidance provided sufficient clarity regarding how examiners evaluate retail and community development services under the large institution service test and if not, suggestions that would make the Q&A clearer. Community organization and industry commenters responded generally that the proposed Q&A did not clarify how retail services that benefit low- and moderate-income individuals or geographies and that are described as community development services under existing Q&A § __.12(i)-3 (such as low-cost transaction accounts and electronic benefit transfer accounts) are evaluated. Rather, at least one commenter believed the proposed Q&A exacerbated the confusion that currently exists. One community organization commenter contended that the Agencies incorrectly labelled low-cost transaction and savings accounts as community development services, rather than as retail banking services. This sentiment was shared by a few other commenters who asserted that basic transaction savings and checking accounts should be considered retail banking services. Commenters noted that, under existing guidance, these services could be classified as either retail banking or community development services.
These commenters and others urged the Agencies to more clearly demarcate the boundaries between retail banking services and community development services in the Questions and Answers. They requested that the Agencies provide specific examples or additional explanation that more clearly identifies which products and services will be evaluated under the retail banking services criteria and which will be considered as community development services.
In reviewing the comments, the Agencies noted that much of the confusion surrounding the distinction between retail banking services and community development services can be traced to the inclusion of retail services or products that are tailored to meet the needs of low- or moderate-income individuals in existing Q&A § __.12(i)-3, which lists examples of community development services. Of the 11 examples of community development services listed in Q&A § __.12(i)-3, five are related to branch delivery systems and retail products or services. They involve: (i) providing financial services to low- or moderate-income individuals through branches and other facilities located in low- or moderate-income geographies; (ii) increasing access to financial services by opening or maintaining branches or other facilities that help to revitalize or stabilize a low- or moderate-income geography, a designated disaster area, or a distressed or underserved nonmetropolitan middle-income geography; (iii) providing electronic benefits transfer and point of sale terminal systems; (iv) providing international remittance services; and (v) providing other financial services with the primary purpose of community development, such as low-cost savings or checking accounts, including electronic transfer accounts, individual development accounts, or free or low-cost government, payroll, or other check cashing services.
The Agencies have revised Q&A § __.24(a)-1 in response to these comments. The final Q&A incorporates, as examples, most of the retail banking services currently listed as community development services under Q&A § __.12(i)-3. These examples demonstrate retail banking services that improve access to financial services, or decrease costs, for low- or moderate-income individuals. The examples include: low-cost deposit accounts; electronic benefit transfer accounts and point of sale systems; individual development accounts; free or low-cost government, payroll, or other check cashing services; and reasonably priced international remittance services.
In turn, as mentioned above, the Agencies have deleted all of the retail banking services from the list of examples of community development services in Q&A § __.12(i)-3. This conforming change is intended to address commenters' concerns that including examples of retail banking services, even when such services increase access by, or reduce costs for, low- or moderate-income individuals or geographies, in the list of examples for
The Agencies are also adopting conforming revisions to existing Q&A § __.26(c)(3)-1 to ensure these activities are appropriately evaluated in intermediate small institutions. This Q&A addresses what activities examiners consider when evaluating the provision of community development services by an intermediate small institution. To ensure that intermediate small institutions continue to receive consideration under their community development test for retail banking services that increase access by, or reduce costs for, low- or moderate-income individuals, the Agencies are revising existing Q&A § __.26(c)(3)-1. Although the revised Q&A labels services such as electronic benefit transfer accounts, individual development accounts, and free or low-cost government, payroll, or other check cashing services as retail services, examiners will continue to consider these services when evaluating the provision of community development services for an intermediate small institution when the services increase access by, or reduce costs for, low- or moderate-income individuals. This Q&A is revised to clarify also that branches and other facilities in low- or moderate-income geographies, designated disaster areas, or distressed or underserved nonmetropolitan middle-income geographies are considered as providing community development services under the community development test applicable to intermediate small institutions.
The Agencies made one additional revision based on these comments. Because all of the examples of community development services that now remain in revised Q&A § __.12(i)-3 are more direct examples of community development services, the Agencies added a cross-reference to Q&A § __.12(i)-3 in the discussion of community development services in new Q&A § __.24(a)-1.
In addition to addressing the confusion between retail and community development services, some commenters asserted that proposed Q&A § __.24(a)-1 did not adequately emphasize the importance of community development services or address concerns that community development services are not given sufficient consideration in the service test relative to retail banking services. A few commenters contended that it remained unclear how the Agencies planned to weigh the relative importance of retail banking and community development services under the service test pursuant to the proposed Q&A. For instance, one industry commenter urged the Agencies to state that community development services will be reflected in the total “score” that is attributed to the service test. Other commenters noted that the Agencies appear to give more consideration to branches than other services when evaluating a large institution's service test performance.
In response to these comments, the Agencies have revised Q&A § __.24(a)-1 to stress that both retail banking and community development services are important factors under the large institution service test. The revision to the Q&A now states: “Retail banking services and community development services are two components of the service test and are both important in evaluating a large institution's performance.” The Agencies note that, as with other aspects of the CRA evaluation process, the relative weighting of retail banking and community development services will depend on the financial institution's performance context.
Several commenters asserted that the proposed Q&A did not sufficiently explain how qualitative factors, such as “effectiveness” and “availability,” would be evaluated in the context of retail banking and community development services. These commenters urged the Agencies to provide more specificity by defining key terms or providing concrete examples of the metrics for the key concepts of “availability and effectiveness” and “responsiveness.” The Agencies did not revise Q&A § __.24(a)-1 to address the qualitative factors associated with retail banking and community development services because the Agencies believe other Q&As adequately discuss what is meant by “availability and effectiveness” and “responsiveness.” See Q&As § __.24(d)-1 and § __.21(a)-3, respectively.
The proposed Q&A stated that examiners will consider any information provided by the institution that demonstrates its community development services are responsive to the needs of low- or moderate-income individuals and low- or moderate-income geographies. Industry commenters were particularly supportive of this proposal. These commenters opined that examiners often impose excessive and unreasonable documentation requirements on institutions to demonstrate that particular products and services offered are responsive to community needs. A few industry and community organization commenters, however, sought further clarification regarding the types of information that would be considered to ensure consistency.
The Agencies specifically requested comment on what types of information financial institutions are likely to maintain that may demonstrate that an institution's community development services are responsive to the needs of low- or moderate-income individuals or in low- or moderate-income geographies. In response to this question, both community organization and industry commenters provided several examples of the types of information that are or should be maintained to demonstrate such responsiveness, including: (i) Documentation evidencing attendance at and involvement in applicable community events; (ii) surveys completed by the financial institution to ascertain community needs; (iii) an institution's records of discussions with community contacts; and (iv) publicly available market research data that support the importance to low- or moderate-income families for a particular type of service, such as financial literacy education services or Volunteer Income Tax Assistance (VITA) tax preparation. Some commenters suggested that the examples would be useful and effective additions to the final Q&A.
The examples offered by commenters are practical suggestions of the types of information institutions could collect or maintain to demonstrate the responsiveness of a community development service. However, the Agencies have chosen not to include the above suggested examples in the final Q&A because some examiners and bankers may view examples as requirements, which could lead to unintended burden on financial institutions. The Agencies remind institutions that they can provide any information to examiners that demonstrates responsiveness.
One community organization commenter opined that community development services are currently defined too narrowly and urged the Agencies to broaden the definition of community development services to include access for small businesses. This commenter contended that financial institutions should receive CRA consideration when loan officers refer a small business applicant to an intermediary when the applicant does not qualify for a bank loan. The Agencies note that Q&A § __.12(i)-3
Finally, to reflect more closely the regulatory factors used to evaluate community development services, the Agencies have revised final Q&A § __.24(a)-1 to state clearly that examiners evaluate the extent of community development services and their innovativeness and responsiveness to community needs.
The Agencies proposed new Q&A § __.24(e)-2 to clarify how community development services are quantitatively and qualitatively evaluated. The new Q&A is meant to address inconsistencies in how community development services have been evaluated quantitatively and to respond to concerns that qualitative factors, such as whether community development services are effective or responsive to community needs, receive inadequate consideration. Thus, the proposed Q&A noted that both quantitative and qualitative aspects of community development services are considered during an institution's evaluation.
With regard to quantitative factors, the proposed Q&A stated that examiners assess the extent to which community development services are offered and used by the community. This review is not limited to a single quantitative factor, such as the number of hours that financial institution staff devotes to a particular community development service. Rather, an evaluation of community development services assesses the degree to which those services are responsive to community needs. Finally, the proposed Q&A stated that examiners would consider any relevant information provided by the institution and from third parties to quantify the extent and responsiveness of community development services.
Overall, the Agencies received 19 comments addressing this proposed Q&A. Commenters unanimously supported the Agencies' intent to clarify the quantitative and qualitative factors that examiners review when evaluating community development services to determine whether these services are effective and responsive. However, commenters disagreed on whether the proposed Q&A fully achieved its stated goal of clarifying the assessment of qualitative and quantitative factors or explaining the importance of qualitative factors.
The Agencies specifically requested feedback on whether the proposed guidance sufficiently explained the importance of the qualitative factors related to community development services. Commenters addressing this question were divided, with a slight majority stating the proposed Q&A sufficiently explained the importance of the qualitative factors related to community development services. For example, one community organization commenter found the guidance on examiners taking into consideration the degree to which community development services are responsive to community needs helpful. Other commenters, representing both the industry and community organizations, noted that clarifying that examiners should not rely solely on quantitative factors, such as hours spent by employees conducting financial literacy workshops, was adequate guidance and would help give examiners needed direction to consider other factors besides hours worked when making evaluations of community development services. Other commenters viewed that statement as inadequate. These commenters noted the proposed Q&A mentioned only that the review “is not limited to a single quantitative factor” rather than listing examples of the qualitative factors that examiners could consider. Commenters further noted that the proposed Q&A did not adequately explain qualitative factors, such as responsiveness, and asserted that the proposal could benefit from the inclusion of specific examples of how examiners assess the degree to which services are responsive to community needs.
The Agencies have revised Q&A § __.24(e)-2 to address some of these comments. The final Q&A incorporates language that, consistent with regulatory factors, more explicitly states that examiners will consider community development services qualitatively by assessing the degree to which those services are innovative or responsive to community needs. The proposed Q&A did not include a reference to “innovativeness,” although it is a qualitative factor included in the regulation.
Further, the final Q&A discusses how qualitative performance criteria augment the consideration given to community development services by recognizing that community development services sometimes require special expertise and effort on the part of the financial institution and provide benefit to the community that would not otherwise be possible. The final Q&A states that these assessments will depend on the impact of a particular activity on community needs and the benefits received by a community and illustrates this point with an example of a community development service that would be considered responsive to credit and community needs.
In addition, some commenters, representing both the industry and community organizations, asserted that the proposed Q&A did not provide sufficient guidance regarding how the quantitative and qualitative factors would be comparatively weighted under the service test. Some commenters expressed support for a balanced approach to how qualitative and quantitative factors are evaluated in assessing community development service performance, while others indicated a preference for weighting one factor over the other. For instance, one industry commenter preferred using the hours spent by employees performing community development services as the baseline measure, augmented with a review of responsiveness, innovation, leadership, complexity, and flexibility, to the extent that the institution chooses to provide such information. State financial regulator commenters took an opposing position, suggesting that qualitative aspects of community development services should serve as the primary driver in determining whether services are effective and responsive.
The Agencies do not believe it is necessary to revise the Q&A to address these comments. First, the Agencies note that examiners do not use a specific formula when quantitatively and qualitatively evaluating community development services. As with all aspects of an institution's CRA performance evaluation, the performance context of the institution will affect how the qualitative and quantitative factors are considered under the service test. Similarly, some industry commenters asserted that the Q&A should specify how many community development services would be needed in order to obtain a rating of “outstanding” or
The proposed Q&A stated that examiners will consider any relevant information provided by the institution or from a third party to quantify the extent and responsiveness of community development services. Industry commenters were particularly supportive of this aspect of the proposal because they viewed it as a flexible policy.
With regard to relevant information, the Agencies specifically asked what types of information financial institutions and third parties would be likely to maintain that may be used to demonstrate the extent to which community development services are offered and used. In response, commenters provided several examples of relevant information that may be available, including: (i) data on the number of low- and moderate-income individuals attending counseling sessions; (ii) demographic information on clients or customers benefitting from a service; (iii) records of the number and types of community development service provided; and (iv) attestations collected via a survey of employees, directors, and officers that tracks hourly involvement in community development services.
Rather than referring to only a single quantitative factor as an example, final Q&A § __.24(e)-2 includes a list of examples of quantitative factors that examiners may assess to determine the extent to which community development services are offered and used. The expanded list should provide additional clarity and address concerns that examiners and institutions may default to “the number of hours financial institution staff devotes to a particular community development service” as the only quantitative measure of community development services. The final Q&A includes the following additional examples of quantitative factors: (i) The number of low- and moderate-income individuals participating in a community development activity; (ii) the number of organizations served by a community development activity; and (iii) the number of sessions of a community development service activity.
Finally, a community organization commenter suggested that the Agencies revise the proposed Q&A to explicitly state that institutions' funding of community organizations to enable them to collect quantitative data will receive favorable CRA consideration. The commenter asserted that, while quantitative information is necessary in assessing whether a community development service is effective in assisting low- or moderate-income individuals and families to access the financial system, obtaining this information can be very expensive and resource intensive. The commenter maintained that providing an incentive to finance data collection systems in nonprofit organizations would increase the availability and quality of this much needed information. The Agencies note that the CRA regulations allow for the consideration of grants or other funding to nonprofit organizations with a community development purpose as qualified investments or community development loans. Such funding could be used by these recipients for a variety of purposes, including data collection.
The term “responsiveness” is found throughout the CRA regulations and the Questions and Answers. Generally, the Agencies' regulations and guidance promote an institution's responsiveness to credit and community development needs by providing that the greater an institution's responsiveness to credit and community development needs in its assessment area(s), the higher the CRA rating that is assigned to that institution.
The Agencies' Questions and Answers address responsiveness in various contexts. For example, Q&A § __.21(a)-2 explains that responsiveness is meant to lend a qualitative element to the rating system. Other Q&As state that examiners should give greater weight to those activities that are most responsive to community needs, including the needs of low- or moderate-income individuals and geographies.
Because the concept of “responsiveness” is utilized in the CRA regulations and Questions and Answers applicable to all covered institutions, the Agencies proposed a new Q&A § __.21(a)-3 to set forth general guidance on how examiners evaluate whether a financial institution has been responsive to credit and community development needs. The Agencies intended the proposed Q&A to encourage institutions to think strategically about how to best meet the needs of their communities based on their performance context. The proposed new Q&A indicated that examiners would look at not only the volume and types of an institution's activities, but also how effective those activities have been. The proposed Q&A noted that examiners always evaluate responsiveness in light of an institution's performance context. The proposed new Q&A also suggested several information sources that could inform examiners' evaluations of performance context and responsiveness.
The Agencies received 28 public comments addressing the proposed new Q&A. With few exceptions, the commenters were supportive of the Agencies' intent to clarify how examiners evaluate an institution's responsiveness to credit and community development needs. However, a number of commenters, representing both the industry and community organizations, questioned whether the proposed new Q&A would help examiners or bankers understand that a project or program has been responsive to credit and community development needs.
The Agencies requested comment on three questions relating to proposed new Q&A § __.21(a)-3. First, the Agencies asked whether the proposed new Q&A appropriately highlighted the importance of responsiveness to credit and community development needs and provided a flexible, yet clear, standard for determining how financial institutions would receive consideration. An industry commenter and a community organization commenter agreed that the importance of responsiveness to credit and community development needs was highlighted, but that there was also an increase in subjectivity in the evaluation process and burden to institutions, as well as a shortage of detail. To help clarify how the Agencies review responsiveness and the flexible approach taken, a new sentence was added at the beginning of the answer to provide a road map of the three factors that examiners consider when evaluating responsiveness: quantity, quality, and performance context. The answer then describes each of the three factors.
The Agencies also asked whether there were other sources of information that examiners should consider when evaluating an institution's responsiveness to credit and community development needs. Commenters representing both the industry and community organizations suggested a number of information sources, including targeted outreach to local
In response to these comments, the Agencies expanded the list of sources of information about credit and community development needs and opportunities that examiners may consider by adding “consumer complaint information.” To address commenters' concern that a formal needs assessment will be expected from financial institutions, the Agencies have deleted the reference to an assessment prepared by the institution and have clarified that examiners will consider any relevant information provided to examiners by the financial institution that is maintained by the institution in its ordinary course of business.
Finally, the Agencies asked whether the new Q&A would help a financial institution in making decisions about the community development activities in which it will participate, particularly if those activities benefit individuals or geographies located somewhere in the broader statewide or regional area that includes the institution's assessment area(s), but that may not benefit the institution's assessment area(s).
To respond to commenters' assertion that new Q&A § __.21(a)-3, as proposed, would not assist a financial institution in determining whether a community development activity in the broader statewide or regional area that includes the institution's assessment area(s) would receive CRA consideration, the Agencies have added to the final Q&A a new paragraph discussing how examiners will determine whether an institution has been responsive to the credit and community development needs of its assessment area(s). First, examiners will consider as responsive all of the institution's community development activities in its assessment area(s). Examiners will also consider as responsive to assessment area needs any community development activities that support an organization or activity that covers an area that is larger than, but includes, the institution's assessment area(s). If the purpose, mandate, or function of the organization or activity includes serving the institution's assessment area(s), it will be considered responsive to assessment area needs even if the institution's assessment area(s) did not receive an immediate or direct benefit from the institution's participation in the organization or activity. New Q&A § __.21(a)-3, as adopted, also includes an example of such an investment.
Finally, several industry commenters noted that the proposed new Q&A stated that “activities are particularly responsive to community development needs if they benefit low- or moderate-income individuals, low- or moderate-income geographies, designated disaster areas, or distressed or underserved nonmetropolitan middle-income geographies.” They asked whether any activity that has a community development purpose, as defined in the CRA regulations, would be “particularly” responsive. If so, they noted that financing for small businesses or small farms should also be included. And, if not, the Agencies should clarify what is meant by that statement. In addition, two community organization commenters addressed the importance of the “impact” of responsive activities. These commenters asserted that responsiveness must be demonstrated through impact and outcomes in meeting a documented community need. To address these related comments, the Agencies have deleted the statement addressing activities that would be “particularly responsive” that caused the confusion. In its place, the final Q&A explains that, when evaluated qualitatively, some activities are more responsive than others, and that activities are more responsive if they are successful in meeting identified credit and community development needs. The final Q&A also includes an example of two community development activities, one of which would be considered more responsive than the other, to describe this concept.
The Agencies proposed a new Q&A § __.21(a)-4 in response to reports about inconsistencies in the types of activities considered innovative and requests from financial institutions that the Agencies provide clarification of the “innovativeness” standard found throughout the CRA regulations. For example, the large institution lending test evaluates the complexity and innovativeness of community development lending and the institution's use of innovative or flexible lending practices in a safe and sound manner to address the credit needs of low- or moderate-income individuals or geographies.
The proposed new Q&A stated that an innovative practice or activity will be considered when an institution implements meaningful improvements to products, services, or delivery systems that respond more effectively to customer and community needs, particularly to the needs of those segments enumerated in the definition of community development. Then, the proposed Q&A addressed innovativeness in terms of an institution's market and customers, specifically stating that innovation includes the introduction of products, services, or delivery systems by institutions, which do not have the capacity to be market leaders in innovation, to their low- or moderate-income customers or segments of consumers or markets not previously served.
The Agencies' proposal stressed that institutions should not innovate simply to meet this criterion of the applicable test, particularly if, for example, existing products, services, or delivery systems effectively address the needs of all segments of the community. The proposed Q&A also indicated that practices that cease to be innovative may still receive qualitative consideration for being flexible, complex, or responsive.
The majority of commenters addressing Q&A § __.21(a)-4 were largely supportive of the Agencies' intent to clarify how examiners evaluate an institution's innovativeness. Nevertheless, several of the commenters posed questions about the import of “innovativeness” generally, notwithstanding the specific references to that term in the various CRA performance tests.
Rather than focusing on innovativeness, several of the community organization commenters urged the Agencies to address strengthening performance context when evaluating whether the subject CRA activities were responsive to local needs and had a positive demonstrable impact on the communities they were meant to serve. Industry commenters sought language stating that innovativeness is not required, lack of it will not have a negative impact, and, when present, innovativeness will result in positive consideration. These commenters also sought language specifically tying “innovativeness” to the requirement that CRA activities must be consistent with safe and sound banking practices.
With regard to the proposed Q&A statement addressing consideration for entities that do not have the “capacity to be market leaders,” commenters had differing points of view. One industry commenter found that statement to be overly broad, open to wide interpretation, and contrary to the intent of the Q&A. This general view was also shared by two other commenters. On the other hand, one community organization commenter was expressly in favor of that statement, although another community organization commenter stated that a financial institution should not receive consideration for innovativeness when bringing another institution's innovative product to its assessment area(s) unless it is doing so in a way that could not have been, or was not otherwise, done.
In response to comments, the Agencies are adopting Q&A § __.21(a)-4 with revisions to provide additional clarification. As stated above, the Agencies note that “innovativeness” is a regulatory consideration in a variety of performance tests. The Agencies continue to believe that there is a benefit in clarifying the term, while not overemphasizing its importance. The final Q&A continues to make the point that “innovative” practices need to be responsive to community needs but are not required if existing products, services, or delivery systems effectively address the needs of all segments of the community. The final Q&A also adds a cross-reference to Q&A § __.28-1, which explains how innovativeness is considered in the rating process and states, in part: “The lack of innovative lending practices, innovative or complex qualified investments, or innovative community development services alone will not result in a `needs to improve' CRA rating. However, under these tests, the use of innovative lending practices, innovative or complex qualified investments, and innovative community development services may augment the consideration given to an institution's performance under the quantitative criteria of the regulations, resulting in a higher performance rating.”
With regard to comments we received about innovative products and services already in the market, the Agencies continue to believe that innovativeness could include a financial institution's adoption of products, services, or delivery systems already in the market under certain circumstances. This is especially true for smaller institutions and institutions that have, to date, offered only traditional products, services, or delivery systems. For sake of clarity, the Agencies amended the final Q&A by removing the potentially ambiguous terms “capacity” and “market leader.” Specifically, the Agencies replaced the reference to “market leader” with “leaders in innovation” and explained that some financial institutions may not be leaders in innovation “due to, for example, available financial resources or technological expertise.”
The Agencies also have revised the Questions and Answers to address a number of events that have occurred since the 2010 Questions and Answers were published, including, for example, the elimination of the OTS and the Thrift Financial Report (TFR), changes in data sources for income-level information, and the transfer to the CFPB of rulemaking authority for certain consumer financial laws. The Agencies have made technical changes to a number of Q&As to provide this updated information.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Public Law 111-203 (July 21, 2010) (Dodd-Frank Act), transferred powers of the OTS to the OCC, the FDIC, and the Board, and eliminated the OTS. Specifically, among other changes, the Dodd-Frank Act transferred rulemaking and supervisory authority over savings and loan holding companies and supervisory authority over their non-depository subsidiaries to the Board; transferred rulemaking authority over Federal savings associations and state savings associations, and supervisory authority over Federal savings associations, to the OCC; and transferred supervisory authority over state savings associations to the FDIC.
In 2010, when the Questions and Answers were last updated, banks filed Call Reports and savings associations filed TFRs. Beginning with the first quarterly filing in 2012, all savings associations began filing Call Reports. The Agencies are removing the references to the TFR in 12 Q&As. One additional Q&A refers to the Uniform Thrift Performance Report (UTPR), which was phased out when savings associations began filing Call Reports. Uniform Bank Performance Reports are now produced for savings associations, so the Agencies have removed the reference to the UTPR in Q&A § __.26(b)(1)-1. The Agencies have also adopted a consistent citation to the relevant sections of the Call Report and have made revisions to effect those changes where necessary throughout the Questions and Answers.
The Dodd-Frank Act transferred exclusive rulemaking authority to the CFPB for certain consumer financial laws, including the HMDA. The CFPB subsequently published its own rule to implement HMDA, 12 CFR part 1003.
Q&A § __.12(m)-1 discusses the sources of income level data for geographies and individuals. Beginning with the FFIEC's geographic income data published in 2012, the FFIEC discontinued using decennial census data to calculate geographic income levels and began using the U.S. Census Bureau's American Community Survey (ACS) five-year estimate data. At the same time, the FFIEC announced that it would begin using ACS data to update geographic incomes every five years. Q&A § __.12(m)-1 has been revised to reflect the current data sources used to calculate income level data for geographies and individuals.
Q&As § __.42-1, § __.42-2, and § __.42-6 address data submission, validation, and software, respectively. The Agencies have revised these Q&As to include updated data submission instructions and the correct Board contact information for submitting questions about CRA data submission, validation, and software.
Q&A § __.12(g)(4)-1 advises that the revised definition of “community development,” which became effective in 2005 for banks and 2006 for savings associations, is applicable to all institutions. Because this revised definition has been in effect for around 10 years, it has been shortened to omit the historical information about its effective dates. The revised version merely affirms that the definition of “community development” is applicable to all institutions.
Q&A Appendix B to Part __-1 includes OCC-specific contact information. The OCC's headquarters moved in December 2012; thus, the Q&A has been revised to reflect the OCC's new street address, which is to be included in national banks' and Federal savings associations' public notices. In addition, a Web site URL has been added that national banks and Federal savings associations may include in their public notices that will allow interested parties to find information about planned OCC CRA evaluations in upcoming quarters. Similarly, an email address has been added that national banks and Federal savings associations may include in their public notices to which commenters may submit electronic comments about institutions' performance in helping to meet community credit needs.
The text of the final Interagency Questions and Answers follows:
§§ __.11(c)(3) & 195.11(c)(2)—1:
A1. No, there may be other examples of special purpose institutions. These institutions engage in specialized activities that do not involve granting credit to the public in the ordinary course of business. Special purpose institutions typically serve as correspondent banks, trust companies, or clearing agents or engage only in specialized services, such as cash management controlled disbursement services. A financial institution, however, does not become a special purpose institution merely by ceasing to make loans and, instead, making investments and providing other retail banking services.
§§ __.11(c)(3) & 195.11(c)(2)—2:
A2. No. A special purpose institution may, but is not required to, limit the scope of its activities in its charter, articles of association, or other corporate organizational documents. An institution that does not have legal limitations on its activities, but has voluntarily limited its activities, however, would no longer be exempt from Community Reinvestment Act (CRA) requirements if it subsequently engaged in activities that involve granting credit to the public in the ordinary course of business. An institution that believes it is exempt from CRA as a special purpose institution should seek confirmation of this status from its supervisory Agency.
§ __.12(a)—1:
A1. Yes, “affiliate” includes any company that controls, is controlled by, or is under common control with another company. An institution's subsidiary is controlled by the institution and is, therefore, an affiliate.
§ __.12(f)—1:
A1. Yes. Staffed mobile offices that are authorized as branches are considered “branches,” and mobile ATMs and RSFs are considered “ATMs” and “RSFs.”
§ __.12(f)—2:
A2. LPOs and other offices are not “branches” unless they are authorized as branches of the institution through the regulatory approval process of the institution's supervisory Agency.
§ __.12(g)—1:
A1. No. Although the definition of “community development” includes activities that promote economic development by financing small businesses or farms, the rule does not limit community development loans and services and qualified investments to those activities. Community development also includes community- or tribal-based child care, educational, health, social services, or workforce development or job training programs targeted to low- or moderate-income persons, affordable housing for low- or moderate-income individuals, and activities that revitalize or stabilize low- or moderate-income areas, designated disaster areas, or underserved or distressed nonmetropolitan middle-income geographies.
§ __.12(g)—2:
A2. No. Community development includes activities, regardless of their location, that provide affordable housing for, or community services targeted to, low- or moderate-income individuals and activities that promote economic development by financing small businesses and farms. Activities that stabilize or revitalize particular low- or moderate-income areas, designated disaster areas, or underserved or distressed nonmetropolitan middle-income areas (including by creating, retaining, or improving jobs for low- or moderate-income persons) also qualify as community development, even if the activities are not located in these areas. One example is financing a supermarket that serves as an anchor store in a small strip mall located at the edge of a middle-income area, if the mall stabilizes the adjacent low-income community by providing needed shopping services that are not otherwise available in the low-income community.
§ __.12(g)—3:
A3. Yes, the flexibility of the performance standards allows examiners to account in their evaluations for conditions in high-cost areas. Examiners consider lending and services to individuals and geographies of all income levels and businesses of all sizes and revenues. In addition, the flexibility in the requirement that community development loans, community development services, and qualified investments have as their “primary” purpose community development allows examiners to account for conditions in high-cost areas. For example, examiners could take into account the fact that activities address a credit shortage among middle-income people or areas caused by the disproportionately high cost of building, maintaining or acquiring a house when determining whether an institution's loan to or investment in an organization that funds affordable housing for middle-income people or areas, as well as low- and moderate-income people or areas, has as its primary purpose community development. See also Q&A § __.12(h)-8 for more information on “primary purpose.”
§ __.12(g)—4:
A4. Yes. The Interagency Questions and Answers Regarding Community Reinvestment (Questions and Answers) provide examples of particular activities that may receive consideration as community development activities. Because a particular Q&A often describes a single type of community development activity, such as a community development loan, the corresponding examples are of community development loans. However, because community development loans, qualified investments, and community development services all must have a primary purpose of community development, a qualified investment or community development service that supports a community development purpose similar to the activity described in the context of the community development loan would likely receive consideration under the applicable test. The same would be true if the community development activity described in a particular Q&A were a qualified investment or community development service. For example, Q&A § __.12(h)-1 provides an example of a community development loan to a not-for-profit organization supporting primarily low- or moderate-income housing needs. Similarly, a grant to the same not-for-profit organization would be considered a qualified investment or technical assistance, such as writing a grant proposal for the not-for-profit organization, would be considered as a community development service. Further if a financial institution engaged in all of these activities, each would be considered under the applicable test.
Moreover, lists of examples included throughout the Questions and Answers are not exhaustive. A Q&A may include examples to demonstrate activities that may qualify under that Q&A, but the examples are not the only activities that might qualify. Financial institutions may submit information about activities they believe meet the definition of community development loan, qualified investment, or community development service to examiners for consideration.
§ __.12(g)(1)—1:
A1. The concept of “affordable housing” for low- or moderate-income individuals does hinge on whether low- or moderate-income individuals benefit, or are likely to benefit, from the housing. It would be inappropriate to give consideration to a project that exclusively or predominately houses families that are not low- or moderate-income simply because the rents or housing prices are set according to a particular formula.
For projects that do not yet have occupants, and for which the income of the potential occupants cannot be determined in advance, or in other projects where the income of occupants cannot be verified, examiners will
§ __.12(g)(2)—1:
A1. Examples of ways in which an institution could determine that community services are targeted to low- or moderate-income persons include, but are not limited to:
• The community service is targeted to the clients of a nonprofit organization that has a defined mission of serving low- and moderate-income persons, or, because of government grants, for example, is limited to offering services only to low- or moderate-income persons.
• The community service is offered by a nonprofit organization that is located in and serves a low- or moderate-income geography.
• The community service is conducted in a low- or moderate-income area and targeted to the residents of the area.
• The community service is a clearly defined program that benefits primarily low- or moderate-income persons, even if it is provided by an entity that offers other programs that serve individuals of all income levels.
• The community service is offered at a workplace to workers who are low- and moderate-income, based on readily available data for the average wage for workers in that particular occupation or industry (
• The community service is provided to students or their families from a school at which the majority of students qualify for free or reduced-price meals under the U.S. Department of Agriculture's National School Lunch Program.
• The community service is targeted to individuals who receive or are eligible to receive Medicaid.
• The community service is provided to recipients of government assistance programs that have income qualifications equivalent to, or stricter than, the definitions of low- and moderate-income as defined by the CRA Regulations. Examples include U.S. Department of Housing and Urban Development's section 8, 202, 515, and 811 programs or U.S. Department of Agriculture's section 514, 516, and Supplemental Nutrition Assistance programs.
§ __.12(g)(3)—1: “
A1. No. The concept of “community development” under 12 CFR __.12(g)(3) involves both a “size” test and a “purpose” test that clarify what economic development activities are considered under CRA. An institution's loan, investment, or service meets the “size” test if it finances, either directly, or through an intermediary, businesses or farms that either meet the size eligibility standards of the Small Business Administration's Development Company (SBDC) or Small Business Investment Company (SBIC) programs, or have gross annual revenues of $1 million or less. For consideration under the “size test,” the term financing is considered broadly and includes technical assistance that readies a business that meets the size eligibility standards to obtain financing. To meet the “purpose test,” the institution's loan, investment, or service must promote economic development. These activities are considered to promote economic development if they support
• permanent job creation, retention, and/or improvement
○ for low- or moderate-income persons;
○ in low- or moderate-income geographies;
○ in areas targeted for redevelopment by Federal, state, local, or tribal governments;
○ by financing intermediaries that lend to, invest in, or provide technical assistance to start-ups or recently formed small businesses or small farms; or
○ through technical assistance or supportive services for small businesses or farms, such as shared space, technology, or administrative assistance; or
• Federal, state, local, or tribal economic development initiatives that include provisions for creating or improving access by low- or moderate-income persons to jobs or to job training or workforce development programs.
The agencies will presume that any loan or service to or investment in a SBDC, SBIC, Rural Business Investment Company, New Markets Venture Capital Company, New Markets Tax Credit-eligible Community Development Entity, or Community Development Financial Institution that finances small businesses or small farms, promotes economic development. (See also Q&As § __.42(b)(2)-2, § __.12(h)-2, and § __.12(h)-3 for more information about which loans may be considered community development loans.)
Examiners will employ appropriate flexibility in reviewing any information provided by a financial institution that reasonably demonstrates that the purpose, mandate, or function of the activity meets the “purpose test.” Examiners will also consider the qualitative aspects of performance. For example, activities will be considered more responsive to community needs if a majority of jobs created, retained, and/or improved benefit low- or moderate-income individuals.
§ __.12(g)(4)—1:
A1. The definition of “community development” is applicable to all institutions, regardless of a particular institution's size or the performance criteria under which it is evaluated.
§ __.12(g)(4)-2:
A2. An activity that provides housing for middle- or upper-income individuals qualifies as an activity that revitalizes or
In
§ __.12(g)(4)(i)—1:
A1. Activities that revitalize or stabilize a low- or moderate-income geography are activities that help to attract new, or retain existing, businesses or residents. Examiners will presume that an activity revitalizes or stabilizes a low- or moderate-income geography if the activity has been approved by the governing board of an Enterprise Community or Empowerment Zone (designated pursuant to 26 U.S.C. 1391) and is consistent with the board's strategic plan. They will make the same presumption if the activity has received similar official designation as consistent with a Federal, state, local, or tribal government plan for the revitalization or stabilization of the low- or moderate-income geography. For example, foreclosure prevention programs with the objective of providing affordable, sustainable, long-term loan restructurings or modifications to homeowners in low- or moderate-income geographies, consistent with safe and sound banking practices, may help to revitalize or stabilize those geographies.
To determine whether other activities revitalize or stabilize a low- or moderate-income geography, examiners will evaluate the activity's actual impact on the geography, if information about this is available. If not, examiners will determine whether the activity is consistent with the community's formal or informal plans for the revitalization and stabilization of the low- or moderate-income geography. For more information on what activities revitalize or stabilize a low- or moderate-income geography, see Q&As § __.12(g)-2 and § __.12(h)-5.
§ __.12(g)(4)(ii)—1:
A1. A “designated disaster area” is a major disaster area designated by the Federal government. Such disaster designations include, in particular, Major Disaster Declarations administered by the Federal Emergency Management Agency (FEMA) (
Examiners will consider institution activities related to disaster recovery that revitalize or stabilize a designated disaster area for 36 months following the date of designation. Where there is a demonstrable community need to extend the period for recognizing revitalization or stabilization activities in a particular disaster area to assist in long-term recovery efforts, this time period may be extended.
§ __.12(g)(4)(ii)—2:
A2. The Agencies generally will consider an activity to revitalize or stabilize a designated disaster area if it helps to attract new, or retain existing, businesses or residents and is related to disaster recovery. An activity will be presumed to revitalize or stabilize the area if the activity is consistent with a bona fide government revitalization or stabilization plan or disaster recovery plan. The Agencies generally will consider all activities relating to disaster recovery that revitalize or stabilize a designated disaster area, but will give greater weight to those activities that are most responsive to community needs, including the needs of low- or moderate-income individuals or neighborhoods. Qualifying activities may include, for example, providing financing to help retain businesses in the area that employ local residents, including low- and moderate-income individuals; providing financing to attract a major new employer that will create long-term job opportunities, including for low- and moderate-income individuals; providing financing or other assistance for essential community-wide infrastructure, community services, and rebuilding needs; and activities that provide housing, financial assistance, and services to individuals in designated disaster areas and to individuals who have been displaced from those areas, including low- and moderate-income individuals (
§ __.12(g)(4)(iii)—1:
A1. Eligible nonmetropolitan middle-income geographies are those designated by the Agencies as being in distress or that could have difficulty meeting essential community needs (underserved). A particular geography could be designated as both distressed and underserved. As defined in 12 CFR __.12(k), a geography is a census tract delineated by the U.S. Bureau of the Census.
A nonmetropolitan middle-income geography will be designated as distressed if it is in a county that meets one or more of the following triggers: (1) An unemployment rate of at least 1.5 times the national average, (2) a poverty rate of 20 percent or more, or (3) a population loss of 10 percent or more between the previous and most recent decennial census or a net migration loss of five percent or more over the five-year period preceding the most recent census.
A nonmetropolitan middle-income geography will be designated as underserved if it meets criteria for population size, density, and dispersion that indicate the area's population is sufficiently small, thin, and distant from a population center that the tract is likely to have difficulty financing the fixed costs of meeting essential community needs. The Agencies will use as the basis for these designations the “urban influence codes,” numbered “7,” “10,” “11,” and “12,” maintained by the Economic Research Service of the U.S. Department of Agriculture.
The Agencies publish data source information along with the list of eligible nonmetropolitan census tracts on the Federal Financial Institutions Examination Council (FFIEC) Web site (
§ __.12(g)(4)(iii)—2:
A2. The Agencies will review and update the list annually. The list is published on the FFIEC Web site (
To the extent that changes to the designated census tracts occur, the Agencies have determined to adopt a one-year “lag period.” This lag period will be in effect for the 12 months immediately following the date when a census tract that was designated as distressed or underserved is removed from the designated list. Revitalization or stabilization activities undertaken during the lag period will receive consideration as community development activities if they would have been considered to have a primary purpose of community development if the census tract in which they were located were still designated as distressed or underserved.
§ __.12(g)(4)(iii)—3:
A3. An activity revitalizes or stabilizes a distressed nonmetropolitan middle-income geography if it helps to attract new, or retain existing, businesses or residents. An activity will be presumed to revitalize or stabilize the area if the activity is consistent with a bona fide government revitalization or stabilization plan. The Agencies generally will consider all activities that revitalize or stabilize a distressed nonmetropolitan middle-income geography, but will give greater weight to those activities that are most responsive to community needs, including needs of low- or moderate-income individuals or neighborhoods. Qualifying activities may include, for example, providing financing to attract a major new employer that will create long-term job opportunities, including for low- and moderate-income individuals, and activities that provide financing or other assistance for essential infrastructure or facilities necessary to attract or retain businesses or residents.
§ __.12(g)(4)(iii)—4:
A4. The regulation provides that activities revitalize or stabilize an underserved nonmetropolitan middle-income geography if they help to meet essential community needs, including needs of low- or moderate-income individuals. Activities, such as financing for the construction, expansion, improvement, maintenance, or operation of essential infrastructure or facilities for health services, education, public safety, public services, industrial parks, affordable housing, or communication services, will be evaluated under these criteria to determine if they qualify for revitalization or stabilization consideration. Examples of the types of projects that qualify as meeting essential community needs, including needs of low- or moderate-income individuals, would be
• a new or expanded hospital that serves the entire county, including low- and moderate-income residents;
• an industrial park for businesses whose employees include low- or moderate-income individuals;
• a new or rehabilitated sewer line that serves community residents, including low- or moderate-income residents;
• a mixed-income housing development that includes affordable housing for low- and moderate-income families;
• a renovated elementary school that serves children from the community, including children from low- and moderate-income families;
• a new or rehabilitated communications infrastructure, such as broadband internet service, that serves the community, including low- and moderate-income residents; or
• a new or rehabilitated flood control measure, such as a levee or storm drain, that serves the community, including low- and moderate-income residents.
Other activities in the area, such as financing a project to build a sewer line spur that connects services to a middle- or upper-income housing development while bypassing a low- or moderate-income development that also needs the sewer services, generally would not qualify for revitalization or stabilization consideration in geographies designated as underserved. If an underserved geography is also designated as a distressed or a disaster area, additional activities may be considered to revitalize or stabilize the geography, as explained in Q&As § __.12(g)(4)(ii)-2 and § __.12(g)(4)(iii)-3.
§ __.12(h)—1:
A1. Examples of community development loans include, but are not limited to, loans to
• borrowers for affordable housing rehabilitation and construction, including construction and permanent financing of multifamily rental property serving low- and moderate-income persons;
• not-for-profit organizations serving primarily low- and moderate-income housing or other community development needs;
• borrowers to construct or rehabilitate community facilities that are located in low- and moderate-income areas or that serve primarily low- and moderate-income individuals;
• financial intermediaries including Community Development Financial Institutions (CDFI), New Markets Tax Credit-eligible Community Development Entities, Community Development Corporations (CDC), minority- and women-owned financial institutions, community loan funds or pools, and low-income or community development credit unions that primarily lend or facilitate lending to promote community development;
• local, state, and tribal governments for community development activities;
• borrowers to finance environmental clean-up or redevelopment of an industrial site as part of an effort to revitalize the low- or moderate-income
• businesses, in an amount greater than $1 million, when made as part of the Small Business Administration's 504 Certified Development Company program; and
• borrowers to finance renewable energy, energy-efficient, or water conservation equipment or projects that support the development, rehabilitation, improvement, or maintenance of affordable housing or community facilities, such as a health clinic that provides services for low- or moderate-income individuals. For example, the benefit to low- or moderate-income individuals may result in either a reduction in a tenant's utility cost or the cost of providing utilities to common areas in an affordable housing development. Further, a renewable energy facility may be located on-site or off-site, so long as the benefit from the energy generated is provided to an affordable housing project or a community facility that has a community development purpose.
The rehabilitation and construction of affordable housing or community facilities, referred to above, may include the abatement or remediation of, or other actions to correct, environmental hazards, such as lead-based paint, asbestos, mold, or radon that are present in the housing, facilities, or site.
§ __.12(h)—2:
A2. No. Although small institutions are not required to report or collect information on small business and small farm loans and consumer loans, and some institutions are not required to report information about their home mortgage loans under HMDA, if these institutions are retail institutions, the Agencies will consider in their CRA evaluations the institutions' originations and purchases of loans that would have been collected or reported as small business, small farm, consumer or home mortgage loans, had the institution been a collecting and reporting institution under the CRA or the HMDA. Therefore, these loans will not be considered as community development loans, unless the small institution is an intermediate small institution (
§ __.12(h)—3:
A3. Yes. In instances where intermediate small institutions are not required to report HMDA or small business or small farm loans, these loans may be considered, at the institution's option, as community development loans, provided they meet the regulatory definition of “community development.” If small business or small farm loan data have been reported to the Agencies to preserve the option to be evaluated as a large institution, but the institution ultimately chooses to be evaluated under the intermediate small institution examination standards, then the institution would continue to have the option to have such loans considered as community development loans. However, if the institution opts to be evaluated under the lending, investment, and service tests applicable to large institutions, it may not choose to have home mortgage, small business, small farm, or consumer loans considered as community development loans.
Loans other than multifamily dwelling loans may not be considered under both the lending test and the community development test for intermediate small institutions. Thus, if an institution elects to have certain loans considered under the community development test, those loans may not also be considered under the lending test, and would be excluded from the lending test analysis.
Intermediate small institutions may choose individual loans within their portfolio for community development consideration. Examiners will evaluate an intermediate small institution's community development activities within the context of the responsiveness of the activity to the community development needs of the institution's assessment area(s).
§ __.12(h)—4:
A4. No. Credit cards issued to low- or moderate-income individuals for household, family, or other personal expenditures, whether as part of a program targeted to such individuals or otherwise, do not qualify as community development loans because they do not have as their primary purpose any of the activities included in the definition of “community development.”
§ __.12(h)—5:
A5. No. Some loans may provide only indirect or short-term benefits to low- or moderate-income individuals in a low- or moderate-income geography. These loans are not considered to have a community development purpose. For example, a loan for upper-income housing in a low- or moderate-income area is not considered to have a community development purpose simply because of the indirect benefit to low- or moderate-income persons from construction jobs or the increase in the local tax base that supports enhanced services to low- and moderate-income area residents. On the other hand, a loan for an anchor business in a low- or moderate-income area (or a nearby area) that employs or serves residents of the area and, thus, stabilizes the area, may be considered to have a community development purpose. For example, in a low-income area, a loan for a pharmacy that employs and serves residents of the area promotes community development.
§ __.12(h)—6:
A6. No. The regulations recognize that community development organizations and programs are efficient and effective ways for institutions to promote community development. These organizations and programs often operate on a statewide or even multistate basis. Therefore, an institution's activity is considered a community development loan or service or a qualified investment if it supports an organization or activity that covers an area that is larger than, but includes, the institution's assessment area(s). The institution's assessment area(s) need not receive an immediate or direct benefit from the institution's participation in
In addition, a retail institution will receive consideration for certain other community development activities. These activities must benefit geographies or individuals located somewhere within a broader statewide or regional area that includes the institution's assessment area(s). Examiners will consider these activities even if they will not benefit the institution's assessment area(s), as long as the institution has been responsive to community development needs and opportunities in its assessment area(s).
§ __.12(h)—7:
A7. A “regional area” may be an intrastate area or a multistate area that includes the financial institution's assessment area(s). Regional areas typically have some geographic, demographic, and/or economic interdependencies and may conform to commonly accepted delineations, such as “the tri-county area” or the “mid-Atlantic states.” Regions are often defined by the geographic scope and specific purpose of a community development organization or initiative.
§ __.12(h)—8:
A8. A loan, investment, or service has as its primary purpose community development when it is designed for the express purpose of revitalizing or stabilizing low- or moderate-income areas, designated disaster areas, or underserved or distressed nonmetropolitan middle-income areas, providing affordable housing for, or community services targeted to, low- or moderate-income persons, or promoting economic development by financing small businesses or farms that meet the requirements set forth in 12 CFR __.12(g). To determine whether an activity is designed for an express community development purpose, the agencies apply one of two approaches. First, if a majority of the dollars or beneficiaries of the activity are identifiable to one or more of the enumerated community development purposes, then the activity will be considered to possess the requisite primary purpose. Alternatively, where the measurable portion of any benefit bestowed or dollars applied to the community development purpose is less than a majority of the entire activity's benefits or dollar value, then the activity may still be considered to possess the requisite primary purpose, and the institution may receive CRA consideration for the entire activity, if (1) the express, bona fide intent of the activity, as stated, for example, in a prospectus, loan proposal, or community action plan, is primarily one or more of the enumerated community development purposes; (2) the activity is specifically structured (given any relevant market or legal constraints or performance context factors) to achieve the expressed community development purpose; and (3) the activity accomplishes, or is reasonably certain to accomplish, the community development purpose involved.
Generally, a loan, investment, or service will be determined to have a “primary purpose” of community development only if it meets the criteria described above. However, an activity involving the provision of affordable housing also may be deemed to have a “primary purpose” of community development in certain other limited circumstances in which these criteria have not been met. Specifically, activities related to the provision of mixed-income housing, such as in connection with a development that has a mixed-income housing component or an affordable housing set-aside required by Federal, state, or local government, also would be eligible for consideration as an activity that has a “primary purpose” of community development at the election of the institution. In such cases, an institution may receive pro rata consideration for the portion of such activities that helps to provide affordable housing to low- or moderate-income individuals. For example, if an institution makes a $10 million loan to finance a mixed-income housing development in which 10 percent of the units will be set aside as affordable housing for low- and moderate-income individuals, the institution may elect to treat $1 million of such loan as a community development loan. In other words, the pro rata dollar amount of the total activity will be based on the percentage of units set-aside for affordable housing for low- or moderate-income individuals.
The fact that an activity provides indirect or short-term benefits to low- or moderate-income persons does not make the activity community development, nor does the mere presence of such indirect or short-term benefits constitute a primary purpose of community development. Financial institutions that want examiners to consider certain activities should be prepared to demonstrate the activities' qualifications.
§ __.12(i)—1:
A1. Providing financial services means providing services of the type generally provided by the financial services industry. Providing financial services often involves informing community members about how to get or use credit or otherwise providing credit services or information to the community. For example, service on the board of directors of an organization that promotes credit availability or finances affordable housing is related to the provision of financial services. Providing technical assistance about financial services to community-based groups, local or tribal government agencies, or intermediaries that help to meet the credit needs of low- and moderate-income individuals or small businesses and farms is also providing financial services. By contrast, activities that do not take advantage of the employees' financial expertise, such as neighborhood cleanups, do not involve the provision of financial services.
§ __.12(i)—2:
A2. No. Services must be provided as a representative of the institution. For example, if a financial institution's director, on her own time and not as a representative of the institution, volunteers one evening a week at a local community development corporation's financial counseling program, the institution may not consider this activity a community development service.
§ __.12(i)—3:
A3. Examples of community development services include, but are not limited to, the following:
• Providing technical assistance on financial matters to nonprofit, tribal, or government organizations serving low- and moderate-income housing or economic revitalization and development needs;
• Providing technical assistance on financial matters to small businesses or community development organizations, including organizations and individuals
• Lending employees to provide financial services for organizations facilitating affordable housing construction and rehabilitation or development of affordable housing;
• Providing credit counseling, home-buyer and home maintenance counseling, financial planning or other financial services education to promote community development and affordable housing, including credit counseling to assist low- or moderate-income borrowers in avoiding foreclosure on their homes;
• Establishing school savings programs or developing or teaching financial education or literacy curricula for low- or moderate-income individuals; and
• Providing foreclosure prevention programs to low- or moderate-income homeowners who are facing foreclosure on their primary residence with the objective of providing affordable, sustainable, long-term loan modifications and restructurings.
Examples of technical assistance activities that are related to the provision of financial services and that might be provided to community development organizations include
• serving on the board of directors;
• serving on a loan review committee;
• developing loan application and underwriting standards;
• developing loan-processing systems;
• developing secondary market vehicles or programs;
• assisting in marketing financial services, including development of advertising and promotions, publications, workshops and conferences;
• furnishing financial services training for staff and management;
• contributing accounting/bookkeeping services;
• assisting in fund raising, including soliciting or arranging investments; and
• providing services reflecting a financial institution's employees' areas of expertise at the institution, such as human resources, information technology, and legal services.
Refer to Q&A § __.24(a)—1 for information about how retail services are evaluated under the large institution service test.
§ __.12(j)—1:
A1. Home equity loans made for purposes other than home purchase, home improvement, or refinancing home purchase or home improvement loans are consumer loans if they are extended to one or more individuals for household, family, or other personal expenditures.
§ __.12(j)—2:
A2. If the predominant purpose of the line is home improvement, the line may only be reported under HMDA and may not be considered a consumer loan. However, the full amount of the line may be considered a “consumer loan” if its predominant purpose is for household, family, or other personal expenditures, and to a lesser extent home improvement, and the full amount of the line has not been reported under HMDA. This is the case even though there may be “double counting” because part of the line may also have been reported under HMDA.
§ __.12(j)—3:
A3. If an institution makes a single loan or provides a line of credit to a customer to be used for both consumer and small business purposes, consistent with the instructions for the Consolidated Reports of Condition and Income (Call Report), the institution should determine the major (predominant) component of the loan or the credit line and collect or report the entire loan or credit line in accordance with the regulation's specifications for that loan type.
§ __.12(l)—1:
A1. Yes. “Home mortgage loan” includes “home improvement loan,” “home purchase loan,” and “refinancing,” as defined in the HMDA regulation, Regulation C, 12 CFR part 1003. This definition also includes multifamily (five-or-more families) dwelling loans, and loans for the purchase of manufactured homes.
§ __.12(l)—2:
A2. Yes. A financial institution that funds home mortgage loans but immediately assigns the loans to the lender that made the credit decisions may present information about these loans to examiners for consideration under the lending test as “other loan data.” Under Regulation C, the broker institution does not record the loans on its HMDA-LAR because it does not make the credit decisions, even if it funds the loans. An institution electing to have these home mortgage loans considered must maintain information about all of the home mortgage loans that it has funded in this way. Examiners will consider these other loan data using the same criteria by which home mortgage loans originated or purchased by an institution are evaluated.
Institutions that do not provide funding but merely take applications and provide settlement services for another lender that makes the credit decisions will receive consideration for this service as a retail banking service. Examiners will consider an institution's mortgage brokerage services when evaluating the range of services provided to low-, moderate-, middle- and upper-income geographies and the degree to which the services are tailored to meet the needs of those geographies. Alternatively, an institution's mortgage brokerage service may be considered a community development service if the primary purpose of the service is community development. An institution wishing to have its mortgage brokerage service considered as a community development service must provide sufficient information to substantiate that its primary purpose is community development and to establish the extent of the services provided.
§ __.12(m)—1:
A1. The median family income (MFI) levels for
The income levels for
§ __.12(n)—1:
A1. An institution offers a narrow product line by limiting its lending activities to a product line other than a traditional retail product line required to be evaluated under the lending test (
§ __.12(n)—2:
A2. Wholesale institutions may engage in some retail lending without losing their designation if this activity is incidental
• Is the retail lending provided as an incident to the institution's wholesale lending?
• Are the retail loans provided as an accommodation to the institution's wholesale customers?
• Are the other types of loans made only infrequently to the limited purpose institution's customers?
• Does only an insignificant portion of the institution's total assets and income result from the other lending?
• How significant a role does the institution play in providing that type(s) of loan(s) in the institution's assessment area(s)?
• Does the institution hold itself out as offering that type(s) of loan(s)?
• Does the lending test or the community development test present a more accurate picture of the institution's CRA performance?
§ __.12(n)—3:
A3. Generally, no. Institutions that are in the business of lending to the public, but specialize in certain types of retail loans (for example, home mortgage or small business loans) to certain types of borrowers (for example, to high-end income level customers or to corporations or partnerships of licensed professional practitioners) (“niche institutions”) generally would not qualify as limited purpose (or wholesale) institutions.
§ __.12(t)—1:
A1. No. The CRA regulation does not provide authority for institutions to make investments that are not otherwise allowed by Federal law.
§ __.12(t)—2:
A2. As a general rule, mortgage-backed securities and municipal bonds are not qualified investments because they do not have as their primary purpose community development, as defined in the CRA regulations. Nonetheless, mortgage-backed securities or municipal bonds designed primarily to finance community development generally are qualified investments. Municipal bonds or other securities with a primary purpose of community development need not be housing-related. For example, a bond to fund a community facility or park or to provide sewage services as part of a plan to redevelop a low-income neighborhood is a qualified investment. Certain municipal bonds in underserved nonmetropolitan middle-income geographies may also be qualified investments.
§ __.12(t)—3:
A3. No. FHLB stocks or unpaid dividends, and membership reserves with the Federal Reserve Banks do not have a sufficient connection to community development to be qualified investments. However, FHLB member institutions may receive CRA consideration as a community development service for technical assistance they provide on behalf of applicants and recipients of funding from the FHLB's Affordable Housing Program.
§ __.12(t)—4:
A4. Examples of qualified investments include, but are not limited to, investments, grants, deposits, or shares in or to:
• Financial intermediaries (including CDFIs, New Markets Tax Credit-eligible Community Development Entities, CDCs, minority- and women-owned financial institutions, community loan funds, and low-income or community development credit unions) that primarily lend or facilitate lending in low- and moderate-income areas or to low- and moderate-income individuals in order to promote community development, such as a CDFI that promotes economic development on an Indian reservation;
• Organizations engaged in affordable housing rehabilitation and construction, including multifamily rental housing;
• Organizations, including, for example, SBICs, specialized SBICs, and Rural Business Investment Companies (RBIC) that promote economic development by financing small businesses;
• Community development venture capital companies that promote economic development by financing small businesses;
• Facilities that promote community development by providing community services for low- and moderate-income individuals, such as youth programs, homeless centers, soup kitchens, health care facilities, battered women's centers, and alcohol and drug recovery centers;
• Projects eligible for low-income housing tax credits;
• State and municipal obligations, such as revenue bonds, that specifically support affordable housing or other community development;
• Not-for-profit organizations serving low- and moderate-income housing or other community development needs, such as counseling for credit, home-ownership, home maintenance, and other financial literacy programs; and
• Organizations supporting activities essential to the capacity of low- and moderate-income individuals or geographies to utilize credit or to sustain economic development, such as, for example, day care operations and job training programs or workforce development programs that enable low-
§ __.12(t)—5:
A5. Yes, provided they have as their primary purpose community development as defined in the regulations. A charitable contribution, whether in cash or an in-kind contribution of property, is included in the term “grant.” A qualified investment is not disqualified because an institution receives favorable treatment for it (for example, as a tax deduction or credit) under the Internal Revenue Code.
§ __.12(t)—6:
A6. No. The Agencies will, however, consider the responsiveness, innovativeness, and complexity of the community development loan within the bounds of safe and sound banking practices.
§ __.12(t)—7:
A7. No. However, the Agencies will consider donated labor of employees or directors of a financial institution as a community development service if the activity meets the regulatory definition of “community development service.”
§ __.12(t)—8:
A8. When evaluating an institution's qualified investment record, examiners will consider investments that were made prior to the current examination, but that are still outstanding. Qualitative factors will affect the weight given to both current period and outstanding prior-period qualified investments. For example, a prior-period outstanding investment with a multi-year impact that addresses assessment area community development needs may receive more consideration than a current period investment of a comparable amount that is less responsive to area community development needs.
§ __.12(t)—9:
A9. Examiners will give quantitative consideration for the dollar amount of funds that benefit an organization or activity that has a primary purpose of community development. If an institution invests in (or lends to) an organization that, in turn, invests those funds in instruments that do not have as their primary purpose community development, such as Treasury securities, and uses only the income, or a portion of the income, from those investments to support the organization's community development purposes, the Agencies will consider only the amount of the investment income used to benefit the organization or activity that has a community development purpose for CRA purposes. Examiners will, however, provide consideration for such instruments when the organization invests solely as a means of securing capital for leveraging purposes, securing additional financing, or in order to generate a return with minimal risk until funds can be deployed toward the originally intended community development activity. The organization must express a bona fide intent to deploy the funds from investments and loans in a manner that primarily serves a community development purpose in order for the institution to receive consideration under the applicable test.
§ __.12(u)—1:
A1. A Federal or state branch of a foreign bank is considered a small institution if the Federal or state branch has assets less than the asset threshold delineated in 12 CFR __.12(u)(1) for small institutions.
§ __.12(u)(2)—1:
A1. The asset size thresholds for “small institutions” and “intermediate small institutions” will be adjusted annually based on changes to the Consumer Price Index. More specifically, the dollar thresholds will be adjusted annually based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, not seasonally adjusted for each 12-month period ending in November, with rounding to the nearest million. Any changes in the asset size thresholds will be published in the
§ __.12(v)—1:
A1. To be considered a small business loan, a loan must meet the definition of “loans to small businesses” in the instructions in the Call Report. In general, a loan to a nonprofit organization, for business or farm purposes, where the loan is secured by nonfarm nonresidential property and the original amount of the loan is $1 million or less, if a business loan, or $500,000 or less, if a farm loan, would be reported in the Call Report as a small business or small farm loan. If a loan to a nonprofit organization is reportable as a small business or small farm loan, it cannot also be considered as a community development loan, except by a wholesale or limited purpose institution. Loans to nonprofit organizations that are not small business or small farm loans for Call Report purposes may be considered as community development loans if they meet the regulatory definition of “community development.”
§ __.12(v)—2:
A2. Yes, depending on their principal amount. Small business loans include loans secured by “nonfarm nonresidential properties,” as defined in the Call Report, in amounts of $1 million or less.
§ __.12(v)—3:
A3. Typically not. Loans secured by nonfarm residential real estate that are used to finance small businesses are not included as “small business” loans for Call Report purposes unless the security interest in the nonfarm residential real estate is taken only as an abundance of caution. (
§ __.12(v)—4:
A4. Credit cards issued to a small business or to individuals to be used, with the institution's knowledge, as business accounts are small business loans if they meet the definitional requirements in the Call Report instructions.
§ __.12(x)—1:
A1. The Agencies will consider whether:
• The institution holds itself out to the retail public as providing such loans.
• the institution's revenues from extending such loans are significant when compared to its overall operations, including off-balance sheet activities.
A wholesale institution may make some retail loans without losing its wholesale designation as described above in Q&A § __.12(n)-2.
§ __.21(a)—1:
A1. Examiners will apply the performance criteria reasonably and fairly, in accord with the regulations, the examination procedures, and this guidance. In doing so, examiners will disregard efforts by an institution to manipulate business operations or present information in an artificial light that does not accurately reflect an institution's overall record of lending performance.
§ __.21(a)—2:
A2. No. Examiners will consider the responsiveness to credit and community development needs, as well as the innovativeness and complexity, if applicable, of an institution's community development lending, qualified investments, and community development services. These criteria include consideration of the degree to which they serve as a catalyst for other community development activities. The criteria are designed to add a qualitative element to the evaluation of an institution's performance. (“Innovativeness” and “complexity” are not factors in the community development test applicable to intermediate small institutions.)
§ __.21(a)—3:
A3. There are three important factors that examiners consider when evaluating responsiveness: quantity, quality, and performance context. Examiners evaluate the volume and type of an institution's activities,
Examiners evaluate the responsiveness of an institution's activities to credit and community development needs in light of the institution's performance context. That is, examiners consider the institution's capacity, its business strategy, the needs of the community, and the opportunities for lending, investments, and services in the community. To inform their assessment, examiners may consider information about credit and community development needs and opportunities from many sources, including:
• demographic and other information compiled by local, state, and Federal government entities;
• public comments received by the Agency, for example, in response to its publication of its planned examination schedule;
• information from community leaders or organizations;
• studies and reports from academic institutions and other research bodies;
• consumer complaint information; and
• any relevant information provided to examiners by the financial institution that is maintained by the institution in its ordinary course of business.
Responsiveness to community development needs and opportunities in an institution's assessment area(s) is also a key consideration when an institution plans to engage in community development activities that benefit areas outside of its assessment area(s). Q&A § __.12(h)-6 states that an institution will receive consideration for activities that benefit geographies or individuals located somewhere within a broader statewide or regional area that includes the institution's assessment area(s) even if they will not benefit the institution's assessment area(s), as long as the institution has been responsive to community development needs and opportunities in its assessment area(s). When considering whether an institution has been responsive to community development needs and opportunities in its assessment area(s), examiners will consider all of the institution's community development activities in its assessment area(s). Examiners will also consider as responsive to assessment area needs community development activities that support an organization or activity that covers an area that is larger than, but includes, the institution's assessment area(s). This is true if the purpose, mandate, or function of the organization or activity includes serving geographies or individuals located within the institution's assessment area(s), even though the institution's assessment
§ __.21(a)—4:
A4. “Innovativeness” is one of several qualitative considerations under the lending, investment, and service tests. The community development test for wholesale and limited purpose institutions similarly considers “innovative” loans, investments, and services in the evaluation of performance. Under the CRA regulations, all innovative practices or activities will be considered when an institution implements meaningful improvements to products, services, or delivery systems that respond more effectively to customer and community needs, particularly those segments enumerated in the definition of community development.
Institutions should not innovate simply to meet this criterion of the applicable test, particularly if, for example, existing products, services, or delivery systems effectively address the needs of all segments of the community.
§ __.21(b)—1:
A1. The performance context is a broad range of economic, demographic, and institution- and community-specific information that an examiner reviews to understand the context in which an institution's record of performance should be evaluated. The Agencies will provide examiners with some of this information. The performance context is not a formal assessment of community credit needs.
§ __.21(b)(2)—1:
A1. Yes. An institution may provide examiners with any information it deems relevant, including information on the lending, investment, and service opportunities in its assessment area(s). This information may include data on the business opportunities addressed by lenders not subject to the CRA. Institutions are not required, however, to prepare a formal needs assessment. If an institution provides information to examiners, the Agencies will not expect information other than what the institution normally would develop to prepare a business plan or to identify potential markets and customers, including low- and moderate-income persons and geographies in its assessment area(s). The Agencies will not evaluate an institution's efforts to ascertain community credit needs or rate an institution on the quality of any information it provides.
§ __.21(b)(2)—2:
A2. Yes. Examiners will consider information obtained from interviews with local community, civic, and government leaders. These interviews provide examiners with knowledge regarding the local community, its economic base, and community development initiatives. To ensure that information from local leaders is considered—particularly in areas where the number of potential contacts may be limited—examiners may use information obtained through an interview with a single community contact for examinations of more than one institution in a given market. In addition, the Agencies may consider information obtained from interviews conducted by other Agency staff and by the other Agencies. In order to augment contacts previously used by the Agencies and foster a wider array of contacts, the Agencies may share community contact information.
§ __.21(b)(4)—1:
A1. Yes. Examiners will take into account statutory and supervisory limitations on an institution's ability to engage in any lending, investment, and service activities. For example, a savings association that has made few or no qualified investments due to its limited investment authority may still receive a low satisfactory rating under the investment test if it has a strong lending record.
§ __.21(b)(5)—1:
A1. Yes. The Agencies will consider an institution's past performance in its overall evaluation. For example, an institution that received a rating of “needs to improve” in the past may receive a rating of “substantial noncompliance” if its performance has not improved.
§ __.21(b)(5)—2:
A2. The performance context section of the regulation permits the performance of similarly situated lenders to be considered, for example, as one of a number of considerations in evaluating the geographic distribution of an institution's loans to low-, moderate-, middle-, and upper-income geographies. This analysis, as well as other analyses, may be used, for example, where groups of contiguous geographies within an institution's assessment area(s) exhibit abnormally low penetration. In this regard, the performance of similarly situated lenders may be analyzed if such an analysis would provide accurate insight into the institution's lack of performance in those areas. The regulation does not require the use of a specific type of analysis under these circumstances. Moreover, no ratio developed from any type of analysis is linked to any lending test rating.
§ __.21(f)—1:
A1. No. Although the regulations generally provide that an institution's CRA activities will be evaluated for the extent to which they benefit the institution's assessment area(s) or a broader statewide or regional area that includes the institution's assessment area(s), the Agencies apply a broader geographic criterion when evaluating capital investments, loan participations, and other ventures undertaken by that institution in cooperation with MWLIs, as provided by the CRA. Thus, such activities will be favorably considered in the CRA performance evaluation of the institution (as loans, investments, or services, as appropriate), even if the MWLIs are not located in, or such activities do not benefit, the assessment area(s) of the majority-owned institution or the broader statewide or regional area that includes its assessment area(s). The activities must, however, help meet the credit needs of the local communities in which the MWLIs are chartered. The impact of a majority-owned institution's activities in cooperation with MWLIs on the majority-owned institution's CRA rating will be determined in conjunction with its overall performance in its assessment area(s).
Examples of activities undertaken by a majority-owned financial institution in cooperation with MWLIs that would receive CRA consideration may include
• making a deposit or capital investment;
• purchasing a participation in a loan;
• loaning an officer or providing other technical expertise to assist an MWLI in improving its lending policies and practices;
• providing financial support to enable an MWLI to partner with schools or universities to offer financial literacy education to members of its local community; or
• providing free or discounted data processing systems, or office facilities to aid an MWLI in serving its customers.
§ __.22(a)—1:
A1. Credit needs vary from community to community. However, there are some lending activities that are likely to be responsive in helping to meet the credit needs of many communities. These activities include
• providing loan programs that include a financial education component about how to avoid lending activities that may be abusive or otherwise unsuitable;
• establishing loan programs that provide small, unsecured consumer loans in a safe and sound manner (
• offering lending programs, which feature reporting to consumer reporting agencies, that transition borrowers from loans with higher interest rates and fees (based on credit risk) to lower-cost loans, consistent with safe and sound lending practices. Reporting to consumer reporting agencies allows borrowers accessing these programs the opportunity to improve their credit histories and thereby improve their access to competitive credit products; and
• establishing loan programs with the objective of providing affordable, sustainable, long-term relief, for example, through loan refinancings, restructures, or modifications, to homeowners who are facing foreclosure on their primary residences.
Examiners may consider favorably such lending activities, which have features augmenting the success and effectiveness of the small, intermediate small, or large institution's lending programs.
§ __.22(a)(1)—1:
A1. Yes. The Agencies will sample the institution's home mortgage loan files in order to assess its performance under the lending test criteria.
§ __.22(a)(1)—2:
A2. Consumer loans will be evaluated if the institution so elects and has collected and maintained the data; an institution that elects not to have its consumer loans evaluated will not be viewed less favorably by examiners than one that does. However, if consumer loans constitute a substantial majority of the institution's business, the Agencies will evaluate them even if the institution does not so elect. The Agencies interpret “substantial majority” to be so significant a portion of the institution's lending activity by number and dollar volume of loans that the lending test evaluation would not meaningfully reflect its lending performance if consumer loans were excluded.
§ __.22(a)(2)—1:
A1. The Agencies consider lending commitments (such as letters of credit) only at the option of the institution, regardless of examination type. Commitments must be legally binding between an institution and a borrower in order to be considered. Information about lending commitments will be used by examiners to enhance their understanding of an institution's performance, but will be evaluated separately from the loans.
§ __.22(a)(2)—2:
A2. Application activity is not a performance criterion of the lending test. However, examiners may consider this information in the performance context analysis because this information may give examiners insight on, for example, the demand for loans.
§ __.22(a)(2)—3:
A3. Yes. In some states, MECAs, which are not considered loan refinancings because the existing loan obligations are not satisfied and replaced, are common. Although these transactions are not considered to be purchases or refinancings, as those terms have been interpreted under CRA, they do achieve the same results. A small, intermediate small, or large institution may present information about its MECA activities with respect to home mortgages to examiners for consideration under the lending test as “other loan data.”
§ __.22(a)(2)—4:
A4. Other loan data include, for example,
• loans funded for sale to the secondary markets that an institution has not reported under HMDA;
• unfunded loan commitments and letters of credit;
• commercial and consumer leases;
• loans secured by nonfarm residential real estate, not taken as an abundance of caution, that are used to finance small businesses or small farms and that are not reported as small business/small farm loans or reported under HMDA; and
• an increase to a small business or small farm line of credit if the increase would cause the total line of credit to exceed $1 million, in the case of a small business line; or $500,000, in the case of a small farm line.
§ __.22(a)(2)—5:
A5. Yes. For all examination types, examiners evaluate an institution's record of helping to meet the credit needs of its assessment area(s) through the origination or purchase of specified types of loans. Examiners do not take into account whether or not such loans are guaranteed.
§ __.22(a)(2)—6:
A6. Yes. Examiners will consider the amount of loan participations purchased when evaluating an institution's record of helping to meet the credit needs of its assessment area(s) through the origination or purchase of specified types of loans, regardless of examination type. As with other loan purchases, examiners will evaluate whether loan participations purchased by an institution, which have been sold and purchased a number of times, artificially inflate CRA performance.
§ __.22(a)(2)—7:
A7. A loan of $1 million or less with a business purpose that is secured by a one-to-four family residence is considered a small business loan for CRA purposes only if the security interest in the residential property was taken as an abundance of caution and where the terms have not been made more favorable than they would have been in the absence of the lien. (See Call Report Glossary definition of “Loan Secured by Real Estate.”) If this same loan is refinanced and the new loan is also secured by a one-to-four family residence, but only through an abundance of caution, this loan is reported not only as a refinancing under HMDA, but also as a small business loan under CRA. (Note that small farm loans are similarly treated.)
It is not anticipated that “double-reported” loans will be so numerous as to affect the typical institution's CRA rating. In the event that an institution reports a significant number or amount of loans as both home mortgage and small business loans, examiners will consider that overlap in evaluating the institution's performance and generally will consider the “double-reported” loans as small business loans for CRA consideration.
The origination of a small business or small farm loan that is secured by a one-to-four family residence is not reportable under HMDA, unless the purpose of the loan is home purchase or home improvement. Nor is the loan reported as a small business or small farm loan if the security interest is not taken merely as an abundance of caution. Any such loan may be provided to examiners as “other loan data” (“Other Secured Lines/Loans for Purposes of Small Business”) for consideration during a CRA evaluation.
§ __.22(b)(1)—1:
A1. Examiners will review closely institutions with (1) a small number and amount of home mortgage loans with an unusually good distribution among low- and moderate-income areas and low- and moderate-income borrowers and (2) a policy of referring most, but not all, of their home mortgage loans to affiliated institutions. If an institution is making loans mostly to low- and moderate-income individuals and areas and referring the rest of the loan applicants to an affiliate for the purpose of receiving a favorable CRA rating, examiners may conclude that the institution's lending activity is not satisfactory because it has inappropriately attempted to influence the rating. In evaluating an institution's lending, examiners will consider legitimate business reasons for the allocation of the lending activity.
§ __.22(b)(2) & (3)—1:
A1. Examiners generally will consider both the distribution of an institution's loans among geographies of different income levels, and among borrowers of different income levels and businesses and farms of different sizes. The importance of the borrower distribution criterion, particularly in relation to the geographic distribution criterion, will depend on the performance context. For example, distribution among borrowers with different income levels may be more important in areas without identifiable geographies of different income categories. On the other hand, geographic distribution may be more important in areas with the full range of geographies of different income categories.
§ __.22(b)(2) & (3)—2:
A2. The term “assessment area” describes the geographic area within which the agencies assess how well an institution, regardless of examination type, has met the specific performance tests and standards in the rule. The Agencies do not expect that simply because a census tract is within an institution's assessment area(s), the institution must lend to that census tract. Rather the Agencies will be concerned with conspicuous gaps in loan distribution that are not explained by the performance context. Similarly, if an institution delineated the entire county in which it is located as its assessment area, but could have delineated its assessment area as only a portion of the county, it will not be penalized for lending only in that portion of the county, so long as that portion does not reflect illegal discrimination or arbitrarily exclude low- or moderate-income geographies. The capacity and constraints of an institution, its business decisions about how it can best help to meet the needs of its assessment area(s), including those of low- and moderate-income neighborhoods, and other aspects of the performance context, are all relevant to explain why the institution is serving or
§ __.22(b)(2) & (3)—3:
A3. Examiners will not take into account loans made by affiliates when determining the proportion of an institution's lending in its assessment area(s), even if the institution elects to have its affiliate lending considered in the remainder of the lending test evaluation. However, examiners may consider an institution's business strategy of conducting lending through an affiliate in order to determine whether a low proportion of lending in the assessment area(s) should adversely affect the institution's lending test rating.
§ __.22(b)(2) & (3)—4:
A4. Consideration will be given for loans to low- and moderate-income persons and small business and farm loans outside of an institution's assessment area(s), provided the institution has adequately addressed the needs of borrowers within its assessment area(s). The Agencies will apply this consideration not only to loans made by large retail institutions being evaluated under the lending test, but also to loans made by small and intermediate small institutions being evaluated under their respective performance standards. Loans to low- and moderate-income persons and small businesses and farms outside of an institution's assessment area(s), however, will not compensate for poor lending performance within the institution's assessment area(s).
§ __.22(b)(2) & (3)—5:
A5. Examiners will consider these home mortgage loans under the performance criteria of the lending test,
§ __.22(b)(4)—1:
A1. Yes. When evaluating the institution's record of community development lending under 12 CFR __.22(b)(4), it is appropriate to give greater weight to the amount of the loan that is targeted to the intended community development purpose. For example, consider two $10 million projects (with a total of 100 units each) that have as their express primary purpose affordable housing and are located in the same community. One of these projects sets aside 40 percent of its units for low-income residents and the other project allocates 65 percent of its units for low-income residents. An institution would report both loans as $10 million community development loans under the 12 CFR __.42(b)(2) aggregate reporting obligation. However, transaction complexity, innovation and all other relevant considerations being equal, an examiner should also take into account that the 65 percent project provides more affordable housing for more people per dollar expended.
Under 12 CFR __.22(b)(4), the extent of CRA consideration an institution receives for its community development loans should bear a direct relation to the benefits received by the community and the innovation or complexity of the loans required to accomplish the activity, not simply to the dollar amount expended on a particular transaction. By applying all lending test performance criteria, a community development loan of a lower dollar amount could meet the credit needs of the institution's community to a greater extent than a community development loan with a higher dollar amount, but with less innovation, complexity, or impact on the community.
§ __.22(b)(4)—2:
A2. An institution's record of making community development loans may have a positive, neutral, or negative impact on the lending test rating. Community development lending is one of five performance criteria in the lending test criteria and, as such, it is considered at every examination. As with all lending test criteria, examiners evaluate an institution's record of making community development loans in the context of an institution's business model, the needs of its community, and the availability of community development opportunities in its assessment area(s) or the broader statewide or regional area(s) that includes the assessment area(s). For example, in some cases community development lending could have either a neutral or negative impact when the volume and number of community development loans are not adequate, depending on the performance context, while in other cases, it would have a positive impact when the institution is a leader in community development lending. Additionally, strong performance in retail lending may compensate for weak performance in community development lending, and conversely, strong community development lending may compensate for weak retail lending performance.
§ __.22(b)(5)—1:
A1. In evaluating the innovativeness or flexibility of an institution's lending practices (and the complexity and innovativeness of its community development lending), examiners will not be limited to reviewing the overall variety and specific terms and conditions of the credit product themselves. Examiners also consider whether, and the extent to which, innovative or flexible terms or products augment the success and effectiveness of the institution's community development loan programs or, more generally, of its loan programs that address the credit needs of low- or moderate-income geographies or individuals. Historically, many institutions have used innovative and flexible lending practices to customize loans to their customers' specific needs in a safe and sound manner. However, an innovative or flexible lending practice is not required in order to obtain a specific CRA rating.
• In connection with a community development loan program, an institution may establish a technical assistance program under which the institution, directly or through third parties, provides affordable housing developers and other loan recipients with financial consulting services. Such a technical assistance program may, by itself, constitute a community development service eligible for consideration under the service test of the CRA regulations. In addition, the technical assistance may be considered as an innovative or flexible practice that augments the success and effectiveness of the related community development loan program.
• In connection with a small business lending program in a low- or moderate-income area and consistent with safe and sound lending practices, an institution may implement a program under which, in addition to providing financing, the institution also contracts with the small business borrowers. Such a contracting arrangement would not, itself, qualify for CRA consideration. However, it may be considered as an innovative or flexible practice that augments the loan program's success and effectiveness, and improves the program's ability to serve community development needs by helping to promote economic development through support of small business activities and revitalization or stabilization of low- or moderate-income geographies.
• In connection with a small dollar loan program with reasonable terms and offered in a safe and sound manner, which includes evaluating an individual's ability to repay, an institution may establish outreach initiatives or financial counseling targeted to low- or moderate-income individuals or communities. The institution's efforts to encourage the availability, awareness, and use of the small dollar loan program to meet the credit needs of low- and moderate-income individuals, in lieu of higher-cost credit, should augment the success and effectiveness of the lending program. Such loans may be considered responsive under Q&A § __.22(a)—1, and the use of such outreach initiatives in conjunction with financial literacy education or linked savings programs also may be considered as an innovative or flexible practice to the extent that they augment the success and effectiveness of the related loan program. Such initiatives may receive consideration under other performance criteria as well. For example, an initiative to partner with a nonprofit organization to provide financial counseling that encourages responsible use of credit may, by itself, constitute a community development service eligible for consideration under the service test.
• In connection with a mortgage or consumer lending program targeted to low- or moderate-income geographies or individuals, consistent with safe and sound lending practices, an institution may establish underwriting standards that utilize alternative credit histories, such as utility or rent payments, in an effort to evaluate low- or moderate-income individuals who lack sufficient conventional credit histories and who would be denied credit under the institution's traditional underwriting standards. The use of alternative credit histories in this manner to demonstrate that consumers have a timely and consistent record of paying their obligations may be considered as an innovative or flexible practice that augments the success and effectiveness of the lending program.
A1. Yes. An institution may elect to have only a particular category of its affiliate's lending considered. The basic categories of loans are home mortgage loans, small business loans, small farm loans, community development loans, and the five categories of consumer loans (motor vehicle loans, credit card loans, home equity loans, other secured loans, and other unsecured loans).
A1. This constraint prohibits one affiliate from claiming a loan origination or purchase claimed by another affiliate. However, an institution can count as a purchase a loan originated by an affiliate that the institution subsequently purchases, or count as an origination a loan later sold to an affiliate, provided the same loans are not sold several times to inflate their value for CRA purposes. For example, assume that two institutions are affiliated. Institution A originates a loan and claims it as a loan origination. Institution B later purchases the loan. Institution B may count the loan as a purchased loan.
The same institution may not count both the origination and purchase. Thus, for example, if an institution claims loans made by an affiliated mortgage company as loan originations, the institution may not also count the loans as purchased loans if it later purchases the loans from its affiliate.
A1. This constraint prohibits “cherry-picking” affiliate loans within any one category of loans. The constraint requires an institution that elects to have a particular category of affiliate lending in a particular assessment area considered to include all loans of that type made by all of its affiliates in that particular assessment area. For example, assume that an institution has several affiliates, including a mortgage company that makes loans in the institution's
A2. Strict application of this constraint against “cherry-picking” to loans of an affiliate that is also an insured depository institution covered by the CRA would produce the anomalous result that the other institution would, without its consent, not be able to count its own loans. Because the Agencies did not intend to deprive an institution subject to the CRA of receiving consideration for its own lending, the Agencies read this constraint slightly differently in cases involving a group of affiliated institutions, some of which are subject to the CRA and share the same assessment area(s). In those circumstances, an institution that elects to include all of its mortgage affiliate's home mortgage loans in its assessment area would not automatically be required to include all home mortgage loans in its assessment area of another affiliate institution subject to the CRA. However, all loans of a particular type made by any affiliate in the institution's assessment area(s) must either be counted by the lending institution or by another affiliate institution that is subject to the CRA. This reading reflects the fact that a holding company may, for business reasons, choose to transact different aspects of its business in different subsidiary institutions. However, the method by which loans are allocated among the institutions for CRA purposes must reflect actual business decisions about the allocation of banking activities among the institutions and should not be designed solely to enhance their CRA evaluations.
A1. If an institution has made an equity or equity-type investment in a third party, community development loans made by the third party may be considered under the lending test. On the other hand, asset-backed and debt securities that do not represent an equity-type interest in a third party will not be considered under the lending test unless the securities are booked by the purchasing institution as a loan. For example, if an institution purchases stock in a CDC that primarily lends in low- and moderate-income areas or to low- and moderate-income individuals in order to promote community development, the institution may claim a pro rata share of the CDC's loans as community development loans. The institution's pro rata share is based on its percentage of equity ownership in the CDC. Q&A § __.23(b)—1 provides information concerning consideration of an equity or equity-type investment under the investment test and both the lending and investment tests. (Note that in connection with an intermediate small institution's CRA performance evaluation, community development loans, including pro rata shares of community development loans, are considered only in the community development test.)
§ __.22(d)—2:
A2. Loans originated or purchased by consortia in which an institution participates or by third parties in which an institution invests will be considered only if they qualify as community development loans and will be considered only under the community development criterion. However, loans originated directly on the books of an institution or purchased by the institution are considered to have been made or purchased directly by the institution, even if the institution originated or purchased the loans as a result of its participation in a loan consortium. These loans would be considered under the lending test or community development test criteria appropriate to them depending on the type of loan and type of examination.
§ __.22(d)—3:
A3. Yes, regardless of examination type, as long as the financial institution and the third party are not affiliates. The regulations state, at 12 CFR __.22(c)(2)(i), that two affiliates may not both claim the same loan origination or loan purchase. However, if the financial institution and the third party are not affiliates, the third party may receive consideration for the community development loans it originates, and the financial institution that invested in the third party may also receive consideration for its pro rata share of the same community development loans under 12 CFR __.22(d).
§ __.23(a)—1:
A1. Yes, the direct or indirect nature of the qualified investment does not affect whether an institution will receive consideration under the CRA regulations because the regulations do not distinguish between “direct” and “indirect” investments. Thus, an institution's investment in an equity fund that, in turn, invests in projects that, for example, provide affordable housing to low- and moderate-income individuals, would receive consideration as a qualified investment under the CRA regulations, provided the investment benefits one or more of the institution's assessment area(s) or a broader statewide or regional area(s) that includes one or more of the institution's assessment area(s). Similarly, an institution may receive consideration for a direct qualified investment in a nonprofit organization that, for example, supports affordable housing for low- and moderate-income individuals in the institution's assessment area(s) or a broader statewide or regional area(s) that includes the institution's assessment area(s).
§ __.23(a)—2:
A2. There may be several ways to demonstrate that the institution's investment in a nationwide fund meets the geographic requirements, and the Agencies will employ appropriate flexibility in this regard in reviewing
In making this determination, the Agencies will consider any information provided by a financial institution that reasonably demonstrates that the purpose, mandate, or function of the fund includes serving geographies or individuals located within the institution's assessment area(s) or a broader statewide or regional area that includes the institution's assessment area(s). Typically, information about where a fund's investments are expected to be made or targeted will be found in the fund's prospectus, or other documents provided by the fund prior to or at the time of the institution's investment, and the institution, at its option, may provide such documentation in connection with its CRA evaluation.
Nationwide funds are important sources of investments in low- and moderate-income and underserved communities throughout the country and can be an efficient vehicle for institutions in making qualified investments that help meet community development needs. Nationwide funds may be suitable investment opportunities, particularly for large financial institutions with a nationwide branch footprint. Other financial institutions, including those with a nationwide business focus, may find such funds to be efficient investment vehicles to help meet community development needs in their assessment area(s) or the broader statewide or regional area that includes their assessment area(s). Prior to investing in such a fund, an institution should consider reviewing the fund's investment record to see if it is generally consistent with the institution's investment goals and the geographic considerations in the regulations. Examiners will consider investments in nationwide funds that benefit the institution's assessment area(s). Examiners will also consider investments in nationwide funds that benefit the broader statewide or regional area that includes the institution's assessment area(s) consistent with the treatment detailed in Q&A § __.12(h)—6.
§ __.23(b)—1:
A1. Yes, in some instances the nature of an activity may make it eligible for consideration under more than one of the performance tests. For example, certain investments and related support provided by a large retail institution to a CDC may be evaluated under the lending, investment, and service tests. Under the service test, the institution may receive consideration for any community development services that it provides to the CDC, such as service by an executive of the institution on the CDC's board of directors. If the institution makes an investment in the CDC that the CDC uses to make community development loans, the institution may receive consideration under the lending test for its pro rata share of community development loans made by the CDC. Alternatively, the institution's investment may be considered under the investment test, assuming it is a qualified investment. In addition, an institution may elect to have a part of its investment considered under the lending test and the remaining part considered under the investment test. If the investing institution opts to have a portion of its investment evaluated under the lending test by claiming its pro rata share of the CDC's community development loans, the amount of investment considered under the investment test will be offset by that portion. Thus, the institution would receive consideration under the investment test for only the amount of its investment multiplied by the percentage of the CDC's assets that meet the definition of a qualified investment.
§ __.23(b)—2:
A2. No. Because the institution received lending test consideration for the loans that underlie the securities, the institution may not also receive consideration under the investment test for its purchase of the securities. Of course, an institution may receive investment test consideration for purchases of mortgage-backed securities that are backed by loans to low- and moderate-income individuals as long as the securities are not backed primarily or exclusively by loans that the same institution originated or purchased.
§ __.23(e)—1:
A1. Yes. By applying all the criteria, a qualified investment of a lower dollar amount may be weighed more heavily under the investment test than a qualified investment with a higher dollar amount that has fewer qualitative enhancements. The criteria permit an examiner to qualitatively weight certain investments differently or to make other appropriate distinctions when evaluating an institution's record of making qualified investments. For instance, an examiner should take into account that a targeted mortgage-backed security that qualifies as an affordable housing issue that has only 60 percent of its face value supported by loans to low- or moderate-income borrowers would not provide as much affordable housing for low- and moderate-income individuals as a targeted mortgage-backed security with 100 percent of its face value supported by affordable housing loans to low- and moderate-income borrowers. The examiner should describe any differential weighting (or other adjustment), and its basis in the Performance Evaluation. See also Q&A § __.12(t)—8 for a discussion about the qualitative consideration of prior-period investments.
§ __.23(e)—2:
A2. When evaluating qualified investments that benefit an institution's assessment area(s) or a broader statewide or regional area that includes its assessment area(s), examiners will look at the following four performance criteria:
(1) The dollar amount of qualified investments;
(2) The innovativeness or complexity of qualified investments;
(3) The responsiveness of qualified investments to credit and community development needs; and
(4) The degree to which the qualified investments are not routinely provided by private investors.
With respect to the first criterion, examiners will determine the dollar amount of qualified investments by relying on the figures recorded by the institution according to generally accepted accounting principles (GAAP). Although institutions may exercise a range of investment strategies, including short-term investments, long-term investments, investments that are
The extent to which qualified investments receive consideration, however, depends on how examiners evaluate the investments under the remaining three performance criteria—innovativeness and complexity, responsiveness, and degree to which the investment is not routinely provided by private investors. Examiners also will consider factors relevant to the institution's CRA performance context, such as the effect of outstanding long-term qualified investments, the pay-in schedule, and the amount of any cash call, on the capacity of the institution to make new investments.
§ __.24(a)—1:
A1. Retail banking services and community development services are the two components of the service test and are both important in evaluating a large institution's performance. In evaluating retail banking services, examiners consider the availability and effectiveness of an institution's systems for delivering banking services, particularly in low- and moderate-income geographies and to low- and moderate income individuals; the range of services provided in low-, moderate-, middle-, and upper-income geographies; and the degree to which the services are tailored to meet the needs of those geographies. Examples of retail banking services that improve access to financial services, or decrease costs, for low- or moderate-income individuals include
• low-cost deposit accounts;
• electronic benefit transfer accounts and point of sale terminal systems;
• individual development accounts;
• free or low-cost government, payroll, or other check cashing services; and
• reasonably priced international remittance services.
In evaluating community development services, examiners consider the extent to which the institution provides such services and their innovativeness and responsiveness to community needs. Examples of community development services are listed in Q&A § __.12(i)—3. Examiners will consider any information provided by the institution that demonstrates community development services benefit low- or moderate-income individuals or are responsive to community development needs.
§ __.24(d)—1:
A1. Convenient access to full service branches within a community is an important factor in determining the availability of credit and non-credit services. Therefore, the service test performance standards place primary emphasis on full service branches while still considering alternative systems. The principal focus is on an institution's current distribution of branches and its record of opening and closing branches, particularly branches located in low- or moderate-income geographies or primarily serving low- or moderate-income individuals. However, an institution is not required to expand its branch network or operate unprofitable branches. Under the service test, alternative systems for delivering retail banking services are considered only to the extent that they are effective alternatives in providing needed services to low- and moderate-income areas and individuals.
§ __.24(d)—2:
A2. Although there is no standard IDA program, IDAs typically are deposit accounts targeted to low- and moderate-income families that are designed to help them accumulate savings for education or job-training, down-payment and closing costs on a new home, or start-up capital for a small business. Once participants have successfully funded an IDA, their personal IDA savings are matched by a public or private entity. Financial institution participation in IDA programs comes in a variety of forms, including providing retail banking services to IDA accountholders, providing matching dollars or operating funds to an IDA program, designing or implementing IDA programs, providing consumer financial education to IDA accountholders or prospective accountholders, or other means. The extent of financial institutions' involvement in IDAs and the products and services they offer in connection with the accounts will vary. Thus, subject to 12 CFR __.23(b), examiners evaluate the actual services and products provided by an institution in connection with IDA programs as one or more of the following: community development services, retail banking services, qualified investments, home mortgage loans, small business loans, consumer loans, or community development loans.
Note that all types of institutions may participate in IDA programs. Their IDA activities are evaluated under the performance criteria of the type of examination applicable to the particular institution.
§ __.24(d)(3)—1:
A1. There are a number of alternative systems used by financial institutions to deliver retail banking services to customers. Non-branch delivery systems, such as ATMs, online and mobile banking, and other means by which institutions provide services to their customers evolve over time. No matter the means of delivery, examiners evaluate the extent to which the alternative delivery systems are available and effective in providing financial services to low- and moderate-income geographies and individuals. For example, a system may be determined to be effective based on the accessibility of the system to low- and moderate-income geographies and individuals. To determine whether a financial institution's alternative delivery system is an available and effective means of delivering retail banking services in low- and moderate-income geographies and to low- and moderate-income individuals, examiners may consider a variety of factors, including
• the ease of access, whether physical or virtual;
• the cost to consumers, as compared with the institution's other delivery systems;
• the range of services delivered;
• the ease of use;
• the rate of adoption and use; and
• the reliability of the system.
Examiners will consider any information an institution maintains and provides to examiners demonstrating that the institution's alternative delivery systems are
§ __.24(d)(3)—2:
A2. By themselves, no. However, if debit cards are a part of a larger combination of products, such as a comprehensive electronic banking service, that allows an institution to deliver needed services to low- and moderate-income areas and individuals in its community, the overall delivery system that includes the debit card feature would be considered an alternative delivery system.
§ __.24(d)(4)—1:
A1. Examiners review both information from the institution's public file and other information provided related to the range of services offered and how they are tailored to meet the particular needs of low- and moderate-income geographies. Examiners always review the information that institutions must maintain in their public files: A list of services generally offered at their branches, including their hours of operation; available loan and deposit products; transaction fees, as well as descriptions, where applicable, of material differences in the availability or cost of services at particular branches.
§ __.24(e)—1:
A1. At an institution's option, the Agencies will consider services performed by an affiliate or by a third party on the institution's behalf under the service test if the services provided enable the institution to help meet the credit needs of its community. Indirect services that enhance an institution's ability to deliver credit products or deposit services within its community and that can be quantified may be considered under the service test, if those services have not been considered already under the lending or investment test.
§ __.24(e)—2:
A2. The community development services criteria are important factors in the evaluation of a large institution's service test performance. According to the regulation, the Agencies evaluate the extent to which the financial institution provides community development services as well as the innovativeness and responsiveness of such services. Examiners consider both quantitative and qualitative aspects of community development services during the evaluation. Examiners assess quantitative factors to determine the extent to which community development services are offered and used. The review is not limited to a single quantitative factor. For example, quantitative factors may include the number of
• low- or moderate-income participants;
• organizations served;
• sessions sponsored; or
• financial institution staff hours devoted.
Examiners will also consider qualitative factors by assessing the degree to which community development services are innovative or responsive to community needs.
Examiners will consider any relevant information provided by the institution and from third parties that documents the extent, innovativeness, and responsiveness of community development services.
§ __.25(a)—1:
A1. Although the BHCA restricts institutions known as CEBA credit card banks to credit card operations, a CEBA credit card bank can engage in community development activities
§ __.25(d)—1:
A1. Similar to the lending test for retail institutions, investments in third-party community development organizations may be considered as qualified investments or as community development loans or both (provided there is no double counting), at the institution's option, as described above in the discussion regarding 12 CFR __.22(d) and __.23(b).
§ __.25(e)—1:
A1. If examiners find that a wholesale or limited purpose institution has adequately addressed the needs of its assessment area(s), they will give consideration to qualified investments, as well as community development loans and community development services, by that institution nationwide. In determining whether an institution has adequately addressed the needs of its assessment area(s), examiners will consider qualified investments that benefit a broader statewide or regional area that includes the institution's assessment area(s).
§ __.25(f)—1:
A1. No, a wholesale or limited purpose institution may perform well under the community development test by engaging in one or more of these activities.
§ __.26—1:
A1. Yes. However, a small institution that elects to have examiners consider affiliate activities must maintain sufficient information that the examiners may evaluate these activities under the appropriate performance criteria and ensure that the activities are not claimed by another institution. The constraints applicable to affiliate activities claimed by large institutions also apply to small and intermediate small institutions.
§ __.26(a)(2)—1:
A1. When a small institution has met the intermediate small institution asset threshold delineated in 12 CFR __.12(u)(1) for two consecutive calendar year-ends, the institution may be examined under the intermediate small institution examination procedures. The regulation does not specify an additional lag period between becoming an intermediate small institution and being examined as an intermediate small institution, as it does for large institutions, because an intermediate small institution is not subject to CRA data collection and reporting requirements. Institutions should contact their primary regulator for information on examination schedules.
§ __.26(b)—1:
A1. Yes. Examiners can consider “lending-related activities,” including community development loans and lending-related qualified investments, when evaluating the first four performance criteria of the small institution performance test. Although lending-related activities are specifically mentioned in the regulation in connection with only the first three criteria (
Although lending-related community development activities are evaluated under the community development test applicable to intermediate small institutions, these activities may also augment the loan-to-deposit ratio analysis (12 CFR __.26(b)(1)) and the percentage of loans in the intermediate small institution's assessment area(s) analysis (12 CFR __.26(b)(2)), if appropriate.
§ __.26(b)—2:
A2. “As appropriate” means that lending-related activities will be considered when it is necessary to determine whether an institution meets or exceeds the standards for a satisfactory rating. Examiners will also consider other lending-related activities at an institution's request, provided they have not also been considered under the community development test applicable to intermediate small institutions.
§ __.26(b)—3:
A3. Yes. However, a small institution that elects to have examiners consider community development loans originated or purchased by a consortium or third party must maintain sufficient information on its share of the community development loans so that the examiners may evaluate these loans under the small institution performance criteria.
§ __.26(b)—4:
A4. Yes, consistent with the other assessment methods in the regulation, examiners will consider both loans originated and purchased by the institution. Likewise, examiners may consider any other loan data the small institution chooses to provide, including data on loans outstanding, commitments, and letters of credit.
§ __.26(b)—5:
A5. The small institution lending test performance standards focus on lending and other lending-related activities. Therefore, examiners will consider only lending-related qualified investments for the purpose of determining whether a small institution that is not an intermediate small institution receives a satisfactory CRA rating.
§ __.26(b)(1)—1:
A1. A small institution's loan-to-deposit ratio is calculated in the same manner that the Uniform Bank Performance Report (UBPR) determines the ratio. It is calculated by dividing the institution's net loans and leases by its total deposits. The ratio is found in the Liquidity and Investment Portfolio section of the UBPR. Examiners will use this ratio to calculate an average since the last examination by adding the quarterly loan-to-deposit ratios and dividing the total by the number of quarters.
§ __.26(b)(1)—2:
A2. No specific ratio is reasonable in every circumstance, and each small institution's ratio is evaluated in light of information from the performance context, including the institution's capacity to lend, demographic and economic factors present in the assessment area(s), and the lending opportunities available in the assessment area(s). If a small institution's loan-to-deposit ratio appears unreasonable after considering this information, lending performance may still be satisfactory under this criterion taking into consideration the number and the dollar volume of loans sold to the secondary market or the number and amount and innovativeness or complexity of community development loans and lending-related qualified investments.
§ __.26(b)(1)—3:
A3. No. Examiners will look at the institution's net loan-to-deposit ratio for the whole institution, without any adjustments.
§ __.26(b)(2)—1:
A1. No. The percentage of loans and, as appropriate, other lending-related activities located in the institution's assessment area(s) is but one of the performance criteria upon which small institutions are evaluated. If the percentage of loans and other lending-related activities in an institution's assessment area(s) is less than a majority, then the institution does not meet the standards for satisfactory performance only under this criterion. The effect on the overall performance rating of the institution, however, is considered in light of the performance context, including information regarding economic conditions; loan demand; the institution's size, financial condition, business strategies, and branching network; and other aspects of the institution's lending record.
§ __.26(b)(3) & (4)—1:
A1. Distribution of loans, like other small institution performance criteria, is considered in light of the performance context. For example, a small institution is not required to lend evenly throughout its assessment area(s) or in any particular geography. However, in order to meet the standards for satisfactory performance under this criterion, conspicuous gaps in a small institution's loan distribution must be adequately explained by performance context factors such as lending opportunities in the institution's assessment area(s), the institution's product offerings and business strategy, and institutional capacity and constraints. In addition, it may be impracticable to review the geographic distribution of the lending of an institution with very few demographically distinct geographies within an assessment area. If sufficient information on the income levels of individual borrowers or the revenues or sizes of business borrowers is not available, examiners may use loan size as a proxy for estimating borrower characteristics, where appropriate.
§ __.26(c)—1:
A1. Generally, intermediate small institutions engage in a combination of community development loans, qualified investments, and community development services. An institution may not simply ignore one or more of these categories of community development, nor do the regulations prescribe a required threshold for community development loans, qualified investments, and community development services. Instead, based on the institution's assessment of community development needs in its assessment area(s), it may engage in different categories of community development activities that are responsive to those needs and consistent with the institution's capacity.
An intermediate small institution has the flexibility to allocate its resources among community development loans, qualified investments, and community development services in amounts that it reasonably determines are most responsive to community development needs and opportunities. Appropriate levels of each of these activities would depend on the capacity and business strategy of the institution, community needs, and number and types of opportunities for community development.
§ __.26(c)(3)—1:
A1. In addition to the examples listed in Q&A § __.12(i)-3, examiners will consider retail banking services as community development services if they provide benefit to low- or moderate-income individuals. Examples include:
• Low-cost deposit accounts;
• electronic benefit transfer accounts and point of sale terminal systems;
• individual development accounts;
• free or low-cost government, payroll, or other check cashing services; and
• reasonably priced international remittance services.
In addition, providing services to low- and moderate-income individuals through branches and other facilities located in low- and moderate-income, designated disaster, or distressed or underserved nonmetropolitan middle-income areas is considered. Generally, the presence of branches located in low- and moderate-income geographies will help to demonstrate the availability of banking services to low- and moderate-income individuals.
§ __.26(c)(4)—1:
A1. When evaluating an intermediate small institution's community development record, examiners will consider not only quantitative measures of performance, such as the number and amount of community development loans, qualified investments, and community development services, but also qualitative aspects of performance. In particular, examiners will evaluate the responsiveness of the institution's community development activities in light of the institution's capacity, business strategy, the needs of the community, and the number and types of opportunities for each type of community development activity (its performance context). Examiners also will consider the results of any assessment by the institution of community development needs, and how the institution's activities respond to those needs.
An evaluation of the degree of responsiveness considers the following factors: The volume, mix, and qualitative aspects of community development loans, qualified investments, and community development services. Consideration of the qualitative aspects of performance recognizes that community development activities sometimes require special expertise or effort on the part of the institution or provide a benefit to the community that would not otherwise be made available. (However, “innovativeness” and “complexity”—factors examiners consider when evaluating a large institution under the lending, investment, and service tests—are not criteria in the intermediate small institutions' community development test.) In some cases, a smaller loan may have more qualitative benefit to a community than a larger loan. Activities are considered particularly responsive to community development needs if they benefit low- and moderate-income individuals in low- or moderate-income geographies, designated disaster areas, or distressed or underserved nonmetropolitan middle-income geographies. Activities are also considered particularly responsive to community development needs if they benefit low- or moderate-income geographies.
§ __.26(d)—1:
A1. A small institution that is not an intermediate small institution that meets each of the standards in the lending test for a “satisfactory” rating and exceeds some or all of those standards may warrant an “outstanding” performance rating. In assessing performance at the “outstanding” level, the Agencies consider the extent to which the institution exceeds each of the performance standards and, at the institution's option, its performance in making qualified investments and providing services that enhance credit availability in its assessment area(s). In some cases, a small institution may qualify for an “outstanding” performance rating solely on the basis of its lending activities, but only if its performance materially exceeds the standards for a “satisfactory” rating, particularly with respect to the penetration of borrowers at all income levels and the dispersion of loans throughout the geographies in its assessment area(s) that display income variation. An institution with a high loan-to-deposit ratio and a high percentage of loans in its assessment area(s), but with only a reasonable penetration of borrowers at all income levels or a reasonable dispersion of loans throughout geographies of differing income levels in its assessment area(s), generally will not be rated “outstanding” based only on its lending performance. However, the institution's performance in making qualified investments and its performance in providing branches and other services and delivery systems that enhance credit availability in its assessment area(s) may augment the institution's satisfactory rating to the extent that it may be rated “outstanding.”
§ __.26(d)—2:
A2. Yes. These activities are eligible for consideration if they benefit a broader statewide or regional area that includes a small institution's assessment area(s), as discussed more fully in Q&As § __.12(h)-6 and § __.12(h)-7.
§ __.27(c)—1:
A1. An institution will have an opportunity to consult with and provide information to the Agencies on a proposed strategic plan. Through this process, an institution is provided guidance on procedures and on the information necessary to ensure a complete submission. For example, the Agencies will provide guidance on whether the level of detail as set out in the proposed plan would be sufficient to permit Agency evaluation of the plan. However, the Agencies' guidance during plan development and, particularly, prior to the public comment period, will not include commenting on the merits of a proposed strategic plan or on the adequacy of measurable goals.
§ __.27(c)—2:
A2. The Agencies will coordinate review of and action on the joint plan. Each Agency will evaluate the measurable goals for those affiliates for which it is the primary regulator.
§ __.27(f)(1)—1:
A1. Annual measurable goals (
§ __.27(g)(2)—1:
A1. An institution submitting a strategic plan for approval by the Agencies is required to solicit public comment on the plan for a period of 30 days after publishing notice of the plan at least once in a newspaper of general circulation. The notice should be sufficiently prominent to attract public attention and should make clear that public comment is desired. An institution may, in addition, provide notice to the public in any other manner it chooses.
§ __.28—1:
A1. No. The performance criterion of “innovativeness” applies only under the lending, investment, and service tests applicable to large institutions and the community development test applicable to wholesale and limited purpose institutions. Moreover, even under these tests, the lack of innovative lending practices, innovative or complex qualified investments, or innovative community development services alone will not result in a “needs to improve” CRA rating. However, under these tests, the use of innovative lending practices, innovative or complex qualified investments, and innovative community development services may augment the consideration given to an institution's performance under the quantitative criteria of the regulations, resulting in a higher performance rating. See also Q&A § __.26(c)(4)-1 for a discussion about responsiveness to community development needs under the community development test applicable to intermediate small institutions.
§ __.28(a)—1:
A1. The evaluation of an institution that maintains domestic branches in more than one state (“multistate institution”) will include a written evaluation and rating of its CRA record of performance as a whole and in each state in which it has a domestic branch. The written evaluation will contain a separate presentation on a multistate institution's performance for each MSA and the nonmetropolitan area within each state, if it maintains one or more domestic branch offices in these areas. This separate presentation will contain conclusions, supported by facts and data, on performance under the performance tests and standards in the regulation. The evaluation of a multistate institution that maintains a domestic branch in two or more states in a multistate metropolitan area will include a written evaluation (containing the same information described above) and rating of its CRA record of performance in the multistate metropolitan area. In such cases, the statewide evaluation and rating will be adjusted to reflect performance in the portion of the state not within the multistate MSA.
§ __.28(a)—2:
A2. An institution that operates within only a single state (“single-state institution”) will be assigned a rating of its CRA record based on its performance within that state. In assigning this rating, the Agencies will separately present a single-state institution's performance for each metropolitan area in which the institution maintains one or more domestic branch offices. This separate presentation will contain conclusions, supported by facts and data, on the single-state institution's performance under the performance tests and standards in the regulation.
§ __.28(a)—3:
A3. A rating of “outstanding,” “high satisfactory,” “low satisfactory,” “needs to improve,” or “substantial noncompliance,” based on a judgment supported by facts and data, will be assigned under each performance test. Points will then be assigned to each rating as described in the first matrix set forth below. A large retail institution's overall rating under the lending, investment and service tests will then be calculated in accordance with the second matrix set forth below, which incorporates the rating principles in the regulation.
§ __.28(b)—1:
A1. The lending, investment, and service tests each contain a number of performance criteria designed to measure whether an institution is effectively helping to meet the credit needs of its entire community, including low- and moderate-income neighborhoods, in a safe and sound manner. Some of these performance criteria are quantitative, such as number and amount, and others, such as the use of innovative or flexible lending practices, the innovativeness or complexity of qualified investments, and the innovativeness and responsiveness of community development services, are qualitative. The performance criteria that deal with these qualitative aspects of performance recognize that these loans, qualified investments, and community development services sometimes require special expertise and effort on the part of the institution and provide a benefit to the community that would not otherwise be possible. As such, the Agencies consider the qualitative aspects of an institution's activities when measuring the benefits received by a community. An institution's performance under these qualitative criteria may augment the consideration given to an institution's performance under the quantitative criteria of the regulations, resulting in a higher level of performance and rating.
§ __.28(c)—1:
A1. An institution engages in discriminatory credit practices if it discourages or discriminates against credit applicants or borrowers on a prohibited basis, in violation, for example, of the Fair Housing Act or the Equal Credit Opportunity Act (as implemented by Regulation B). Examples of other illegal credit practices inconsistent with helping to meet community credit needs include violations of
Violations of other provisions of the consumer protection laws generally will not adversely affect an institution's CRA rating, but may warrant the inclusion of comments in an institution's performance evaluation. These comments may address the institution's policies, procedures, training programs, and internal assessment efforts.
§ __.29(a)—1:
A1. In reviewing applications in which CRA performance is a relevant factor, information from a CRA examination of the institution is a particularly important consideration. The examination is a detailed evaluation of the institution's CRA performance by its supervisory Agency. In this light, an examination is an important, and often controlling, factor in the consideration of an institution's record. In some cases, however, the examination may not be recent, or a specific issue raised in the application process, such as progress in addressing weaknesses noted by examiners, progress in implementing commitments previously made to the reviewing Agency, or a supported allegation from a commenter, is relevant to CRA performance under the regulation and was not addressed in the examination. In these circumstances, the applicant should present sufficient information to supplement its record of performance and to respond to the substantive issues raised in the application proceeding.
§ __.29(a)—2:
A2. Commitments for future action are not viewed as part of the CRA record of performance. In general, institutions cannot use commitments made in the applications process to overcome a seriously deficient record of CRA performance. However, commitments for improvements in an institution's performance may be appropriate to address specific weaknesses in an otherwise satisfactory record or to address CRA performance when a financially troubled institution is being acquired.
§ __.29(b)—1:
A1. Materials relating to CRA performance received during the application process can provide valuable information. Written comments, which may express either support for or opposition to the application, are made a part of the record in accordance with the Agencies' procedures, and are carefully considered in making the Agencies' decisions. Comments should be supported by facts about the applicant's performance and should be as specific as possible in explaining the basis for supporting or opposing the application. These comments must be submitted within the time limits provided under the Agencies' procedures.
§ __.29(b)—2:
A2. No. Although communications between an institution and members of its community may provide a valuable method for the institution to assess how best to address the credit needs of the community, the CRA does not require an institution to enter into agreements with private parties. The Agencies do not monitor compliance with nor enforce these agreements.
§ __.41(a)—1:
A1. The rule focuses on the distribution and level of an institution's lending, investments, and services
§ __.41(a)—2:
A2. If an institution elects to have the lending activities of its affiliates considered in the evaluation of the institution's lending, the geographies in which the affiliate lends do not affect the institution's delineation of assessment area(s).
§ __.41(a)—3:
A3. No, assessment areas must be based on geography. The only exception to the requirement to delineate an assessment area based on geography is that an institution, the business of which predominantly consists of serving the needs of military personnel or their dependents who are not located within a defined geographic area, may delineate its entire deposit customer base as its assessment area.
§ __.41(c)(1)—1:
A1. Townships and Indian reservations are political subdivisions for CRA purposes. Institutions should be aware that the boundaries of townships and Indian reservations may not be consistent with the boundaries of the census tracts (
§ __.41(c)(1)—2:
A2. No. However, an institution that determines that it predominantly serves an area that is smaller than a city, town, or other political subdivision may delineate as its assessment area the larger political subdivision and then, in accordance with 12 CFR __.41(d), adjust the boundaries of the assessment area to include only the portion of the political subdivision that it reasonably can be expected to serve. The smaller area that the institution delineates must consist of entire geographies, may not reflect illegal discrimination, and may not arbitrarily exclude low- or moderate-income geographies.
§ __.41(d)—1:
A1. Institutions must include whole geographies (
§ __.41(e)(3)—1:
A1. Examiners will make this determination on a case-by-case basis after considering the facts relevant to the institution's assessment area delineation. Information that examiners will consider may include
• income levels in the institution's assessment area(s) and surrounding geographies;
• locations of branches and deposit-taking ATMs;
• loan distribution in the institution's assessment area(s) and surrounding geographies;
• the institution's size;
• the institution's financial condition; and
• the business strategy, corporate structure, and product offerings of the institution.
§ __.41(e)(4)—1:
A1. An institution may not delineate an assessment area extending substantially across the boundaries of an MSA unless the MSA is in a combined statistical area (CSA)). Although more than one MSA in a CSA may be delineated as a single assessment area, an institution's CRA performance in individual MSAs in those assessment areas will be evaluated using separate median family incomes and other relevant information at the MSA level rather than at the CSA level.
An assessment area also may not extend substantially across state boundaries unless the assessment area is located in a multistate MSA. An institution may not delineate a whole state as its assessment area unless the entire state is contained within an MSA. These limitations apply to wholesale and limited purpose institutions as well as other institutions.
An institution must delineate separate assessment areas for the areas inside and outside an MSA if the area served by the institution's branches outside the MSA extends substantially beyond the MSA boundary. Similarly, the institution must delineate separate assessment areas for the areas inside and outside of a state if the institution's branches extend substantially beyond the boundary of one state (unless the assessment area is located in a multistate MSA). In addition, the institution should also delineate separate assessment areas if it has branches in areas within the same state that are widely separate and not at all contiguous. For example, an institution that has its main office in New York City and a branch in Buffalo, New York, and each office serves only the immediate areas around it, should delineate two separate assessment areas.
§ __.41(e)(4)—2:
A2. As a general rule, an institution's assessment area should not extend substantially beyond the boundary of an MSA. Therefore, the MSA would be a separate assessment area, and because the two abutting counties are not adjacent to each other and, in this example, extend substantially beyond the boundary of the MSA, the institution would delineate each county as a separate assessment area, assuming branches or deposit-taking ATMs are located in each county and the MSA. So, in this example, there would be three assessment areas. However, if the MSA and the two counties were in the same CSA, then the institution could delineate only one assessment area including them all. But, the institution's CRA performance in the MSAs and the non-MSA counties in that assessment area would be evaluated using separate median family incomes and other relevant information at the MSA and state, non-MSA level, rather than at the CSA level.
§ __.42—1:
A1. All institutions except small institutions are subject to data collection and reporting requirements. (“Small institution” is defined in the Agencies' CRA regulations at 12 CFR __.12(u).) Examples describing the data collection requirements of institutions, in particular those that have just surpassed the asset-size threshold of a small institution, may be found on the FFIEC Web site at
The Board of Governors of the Federal Reserve System processes the reports for all of the primary regulators. Data may be submitted on diskette, CD-ROM, or via Internet email.
CRA respondents are encouraged to use the free FFIEC Data Entry Software to send their CRA data. “Submission via Web” is the preferred option. CRA respondents may also send a properly encrypted CRA file (using the “Export to Federal Reserve Board via Internet email” option) to
Please mail diskette or CD-ROM submissions to: Federal Reserve Board, Attention: CRA Processing, 20th & Constitution Avenue NW., MS N402, Washington, DC 20551-0001.
For questions about submitting or resubmitting CRA data, please contact the FFIEC at
§ __.42—2:
A2. An institution may use the free software that is provided by the FFIEC to reporting institutions for data collection and reporting or develop its own program. Those institutions that develop their own programs may create a data submission using the File Specifications and Edit Validation Rules that have been set forth to assist with electronic data submissions. For information about specific electronic formatting procedures, contact
§ __.42—3:
A3. Institutions must collect and report data on lines of credit in the same way that they provide data on loan originations. Lines of credit are considered originated at the time the line is approved or increased; and an increase is considered a new origination. Generally, the full amount of the credit line is the amount that is considered originated. In the case of an increase to an existing line, the amount of the increase is the amount that is considered originated and that amount should be reported. However, consistent with the Call Report instructions, institutions would not report an increase to a small business or small farm line of credit if the increase would cause the total line of credit to exceed $1 million, in the case of a small business line, or $500,000, in the case of a small farm line. Of course, institutions may provide information about such line increases to examiners as “other loan data.”
§ __.42—4:
A4. Renewals of lines of credit for small business, small farm, consumer, or community development purposes should be collected and reported, if applicable, in the same manner as renewals of small business or small farm loans.
§ __.42—5:
A5. Three scenarios of data collection responsibilities for the calendar year of a merger and subsequent data reporting responsibilities are described below.
• Two institutions are exempt from CRA collection and reporting requirements because of asset size. The institutions merge. No data collection is required for the year in which the merger takes place, regardless of the resulting asset size. Data collection would begin after two consecutive years in which the combined institution had year-end assets at least equal to the small institution asset-size threshold amount described in 12 CFR __.12(u)(1).
• Institution A, an institution required to collect and report the data, and Institution B, an exempt institution, merge. Institution A is the surviving institution. For the year of the merger, data collection is required for Institution A's transactions. Data collection is optional for the transactions of the previously exempt institution. For the following year, all transactions of the surviving institution must be collected and reported.
• Two institutions that each are required to collect and report the data merge. Data collection is required for the entire year of the merger and for subsequent years so long as the surviving institution is not exempt. The surviving institution may file either a consolidated submission or separate submissions for the year of the merger but must file a consolidated report for subsequent years.
§ __.42—6:
A6. Yes. Any institution that is interested in receiving a copy of the software may download it from the FFIEC Web site at
§ __.42—7:
A7. No. However, small institutions that are designated as wholesale or limited purpose institutions must be prepared to identify those loans, investments, and services to be evaluated under the community development test.
§ __.42(a)—1:
A1. No. Institutions that are not exempt from data collection and reporting are required to collect and report only those commercial loans that they capture in Call Report Schedule RC-C, Part II. Small business loans are defined as those whose original amounts are $1 million or less
§ __.42(a)—2:
A2. Institutions that are not exempt from data collection and reporting are required to collect and maintain, in a standardized, machine-readable format, information on each small business loan originated or purchased for each calendar year:
• A unique number or alpha-numeric symbol that can be used to identify the relevant loan file.
• The loan amount at origination.
• The loan location.
• An indicator whether the loan was to a business with gross annual revenues of $1 million or less.
The location of the loan must be maintained by census tract. In addition, supplemental information contained in the file specifications includes a date associated with the origination or purchase and whether a loan was originated or purchased by an affiliate. The same requirements apply to small farm loans.
§ __.42(a)—3:
A3. Yes.
§ __.42(a)—4:
A4. Institutions are to report those farm loans that they capture in Call Report Schedule RC-C, Part II. Small farm loans are defined as those whose original amounts are $500,000 or less
§ __.42(a)—5:
A5. An institution should collect information about small business and small farm loans that it refinances or renews as loan originations. (A
If an institution increases the amount of a small business or small farm loan when it extends the term of the loan, it should always report the amount of the increase as a small business or small farm loan origination. The institution should report only the amount of the increase if the original or remaining amount of the loan has already been reported one time that year. For example, a financial institution makes a term loan for $25,000; principal payments have resulted in a present outstanding balance of $15,000. In the next year, the customer requests an additional $5,000, which is approved, and a new note is written for $20,000. In this example, the institution should report both the $5,000 increase and the renewal or refinancing of the $15,000 as originations for that year. These two originations may be reported together as a single origination of $20,000.
§ __.42(a)—6:
A6. Yes. Instructions for Call Report Schedule RC—C, Part I include loans “made for the purpose of financing fisheries and forestries, including loans to commercial fishermen” as a component of the definition for “Loans to finance agricultural production and other loans to farmers.” Call Report Schedule RC-C, Part II, which serves as the basis of the definition for small business and small farm loans in the regulation, captures both “Loans to finance agricultural production and other loans to farmers” and “Loans secured by farmland.”
§ __.42(a)—7:
A7. When an institution originates a home equity line of credit that is for both home improvement and small business purposes, the institution has the option of reporting the portion of the home equity line that is for home improvement purposes as a home improvement loan under HMDA. Examiners would consider that portion of the line when they evaluate the institution's home mortgage lending. When an institution refinances a home equity line of credit into another home equity line of credit, HMDA reporting continues to be optional. If the institution opts to report the refinanced line, the entire amount of the line would be reported as a refinancing and examiners will consider the entire refinanced line when they evaluate the institution's home mortgage lending.
If an institution that has originated a home equity line of credit for both home improvement and small business purposes (or if an institution that has refinanced such a line into another line) chooses not to report a home improvement loan (or a refinancing) under HMDA, and if the line meets the regulatory definition of a “community development loan,” the institution should collect and report information on the entire line as a community development loan. If the line does not qualify as a community development loan, the institution has the option of collecting and maintaining (but not reporting) the entire line of credit as “Other Secured Lines/Loans for Purposes of Small Business.”
§ __.42(a)—8:
A8. At an institution's option, it may collect data about small business and small farm loans located outside the United States; however, it cannot report this data because the CRA data collection software will not accept data concerning loan locations outside the United States.
§ __.42(a)—9:
A9. Each institution subject to data reporting requirements must, at a minimum, submit a transmittal sheet, definition of its assessment area(s), and a record of its community development loans. If the institution does not have community development loans to report, the record should be sent with “0” in the community development loan composite data fields. An institution that has not purchased or originated any small business or small farm loans during the reporting period would not submit the composite loan records for small business or small farm loans.
§ __.42(a)—10:
A10. Prudent banking practices and Bank Secrecy Act regulations dictate that institutions know the location of their customers and loan collateral. Further, Bank Secrecy Act regulations specifically state that a post office box is not an acceptable address. Therefore, institutions typically will know the actual location of their borrowers or loan collateral beyond an address consisting only of a post office box.
Many borrowers have street addresses in addition to rural route and box numbers. Institutions should ask their borrowers to provide the street address of the main business facility or farm or the location where the loan proceeds otherwise will be applied. Moreover, in many cases in which the borrower's address consists only of a rural route number, the institution knows the location (
However, if an institution cannot determine a rural borrower's street address, and does not know the census tract, the institution should report the borrower's state, county, MSA or metropolitan division, if applicable, and “NA,” for “not available,” in lieu of a census tract code.
§ __.42(a)(2)—1:
A1. When collecting and reporting information on purchased small business and small farm loans, including loan participations, an institution collects and reports the amount of the loan at origination, not at the time of purchase. This is consistent with the Call Report's use of the “original amount of the loan” to determine whether a loan should be reported as a “loan to a small business” or a “loan to a small farm” and in which loan size category a loan should be reported. When assessing the volume of small business and small farm loan purchases for purposes of evaluating lending test performance under CRA, however, examiners will evaluate an institution's activity based on the amounts at purchase.
§ __.42(a)(2)—2:
A2. If an institution makes multiple originations to the same business, the loans should be collected and reported as separate originations rather than combined and reported as they are on the Call Report, which reflects loans outstanding, rather than originations. However, if institutions make multiple originations to the same business solely to inflate artificially the number or volume of loans evaluated for CRA lending performance, the Agencies may combine these loans for purposes of evaluation under the CRA.
§ __.42(a)(2)—3:
A3. If an institution agrees to issue credit cards to a business's employees, all of the credit card lines opened on a particular date for that single business should be reported as one small business loan origination rather than reporting each individual credit card line, assuming the criteria in the “small business loan” definition in the regulation are met. The credit card program's “amount at origination” is the sum of all of the employee/business credit cards' credit limits opened on a particular date. If subsequently issued credit cards increase the small business credit line, the added amount is reported as a new origination.
§ __.42(a)(3)—1:
A1. The institution should record the loan location by either the location of the small business borrower's headquarters or the location where the greatest portion of the proceeds are applied, as indicated by the borrower.
§ __.42(a)(4)—1:
A1. Generally, an institution should rely on the revenues that it considered in making its credit decision. For example, in the case of affiliated businesses, such as a parent corporation and its subsidiary, if the institution considered the revenues of the entity's parent or a subsidiary corporation of the parent as well, then the institution would aggregate the revenues of both corporations to determine whether the revenues are $1 million or less. Alternatively, if the institution considered the revenues of only the entity to which the loan is actually extended, the institution should rely solely upon whether gross annual revenues are above or below $1 million for that entity. However, if the institution considered and relied on revenues or income of a cosigner or guarantor that is not an affiliate of the borrower, such as a sole proprietor, the institution should not adjust the borrower's revenues for reporting purposes.
§ __.42(a)(4)—2:
A2. No. In those instances, the institution should enter the code indicating “revenues not known” on the individual loan portion of the data collection software or on an internally developed system. Loans for which the institution did not collect revenue information may not be included in the loans to businesses and farms with gross annual revenues of $1 million or less when reporting this data.
§ __.42(a)(4)—3:
A3. The institution should use the actual gross annual revenue to date (including $0 if the new business has had no revenue to date). Although a start-up business will provide the institution with pro forma projected revenue figures, these figures may not accurately reflect actual gross revenue and, therefore, should not be used.
§ __.42(a)(4)—4:
A4. Institutions rely on the gross annual revenue, rather than the adjusted gross annual revenue, of their small business or small farm borrowers when indicating the revenue of small business or small farm borrowers. The purpose of this data collection is to enable examiners and the public to judge whether the institution is lending to small businesses and small farms or whether it is only making small loans to larger businesses and farms.
The regulation does not require institutions to request or consider revenue information when making a loan; however, if institutions do gather this information from their borrowers,
§ __.42(b)(1)—1:
A1. Each institution that is not exempt from data collection and reporting is required to report in machine-readable form annually by March 1 the following information, aggregated for each census tract in which the institution originated or purchased at least one small business or small farm loan during the prior year:
• The number and amount of loans originated or purchased with original amounts of $100,000 or less.
• The number and amount of loans originated or purchased with original amounts of more than $100,000 but less than or equal to $250,000.
• The number and amount of loans originated or purchased with original amounts of more than $250,000 but not more than $1 million, as to small business loans, or $500,000, as to small farm loans.
• To the extent that information is available, the number and amount of loans to businesses and farms with gross annual revenues of $1 million or less (using the revenues the institution considered in making its credit decision).
§ __.42(b)(2)—1:
A1. Institutions subject to data reporting requirements must report the aggregate number and amount of community development loans originated and purchased during the prior calendar year.
§ __.42(b)(2)—2:
A2. Except for multifamily affordable housing loans, which may be reported by retail institutions both under HMDA as home mortgage loans and as community development loans, in order to avoid double counting, retail institutions must report loans that meet the definition of “home mortgage loan,” “small business loan,” or “small farm loan” only in those respective categories even if they also meet the definition of “community development loan.” As a practical matter, this is not a disadvantage for institutions evaluated under the lending, investment, and service tests because any affordable housing mortgage, small business, small farm, or consumer loan that would otherwise meet the definition of “community development loan” will be considered elsewhere in the lending test. Any of these types of loans that occur outside the institution's assessment area(s) can receive consideration under the borrower characteristic criteria of the lending test.
Limited purpose and wholesale institutions that meet the size threshold for reporting purposes also must report loans that meet the definitions of home mortgage, small business, or small farm loans in those respective categories. However, these institutions must also report any loans from those categories that meet the regulatory definition of “community development loan” as community development loans. There is no double counting because wholesale and limited purpose institutions are not subject to the lending test and, therefore, are not evaluated on their level and distribution of home mortgage, small business, small farm, and consumer loans.
§ __.42(b)(2)—3:
A3. It depends. As long as the primary purpose of the loan is a community development purpose as described in Q&A § __.12(h)-8, the full amount of the institution's loan should be included in its reporting of aggregate amounts of community development lending. Even though the entire amount of the loan is reported, as noted in Q&A § __.22(b)(4)-1, examiners may make qualitative distinctions among community development loans on the basis of the extent to which the loan advances the community development purpose.
In addition, if an institution that reports CRA data elects to request consideration for loans that provide mixed-income housing where only a portion of the loan has community development as its primary purpose, such as in connection with a development that has a mixed-income housing component or an affordable housing set-aside required by Federal, state, or local government, the institution must report only the pro rata dollar amount of the portion of the loan that provides affordable housing to low- or moderate-income individuals. The pro rata dollar amount of the total activity will be based on the percentage of units that are affordable. See Q&A § __.12(h)-8 for a discussion of “primary purpose” of community development describing the distinction between the types of loans that would be reported in full and those for which only the pro rata amount would be reported.
§ __.42(b)(2)—4:
A4. The institution reports only the amount of the participation purchased as a community development loan. However, the institution uses the entire amount of the credit originated by the lead lender to determine whether the original credit meets the definition of a “loan to a small business,” “loan to a small farm,” or “community development loan.” For example, if an institution purchases a $400,000 participation in a business credit that has a community development purpose, and the entire amount of the credit originated by the lead lender is over $1 million, the institution would report $400,000 as a community development loan.
§ __.42(b)(2)—5:
A5. Yes. Institutions should collect information about community development loans that they refinance or renew as loan originations. Community development loan refinancings and renewals are subject to the reporting limitations that apply to refinancings and renewals of small
§ __.42(b)(3)—1:
A1. No. If an institution is not required to collect home mortgage loan data by the HMDA, the institution need not collect home mortgage loan data under the CRA. Examiners will sample these loans to evaluate the institution's home mortgage lending. If an institution wants to ensure that examiners consider all of its home mortgage loans, the institution may collect and maintain data on these loans.
§ __.42(c)(1)—1:
A1. There are no data reporting requirements for consumer loans. Institutions may, however, opt to collect and maintain data on consumer loans. If an institution chooses to collect information on consumer loans, it may collect data for one or more of the following categories of consumer loans: Motor vehicle, credit card, home equity, other secured, and other unsecured. If an institution collects data for loans in a certain category, it must collect data for all loans originated or purchased within that category. The institution must maintain these data separately for each category for which it chooses to collect data. The data collected and maintained should include for each loan
• a unique number or alpha-numeric symbol that can be used to identify the relevant loan file;
• the loan amount at origination or purchase;
• the loan location; and
• the gross annual income of the borrower that the institution considered in making its credit decision.
Generally, guidance given with respect to data collection of small business and small farm loans, including, for example, guidance regarding collecting loan location data, and whether to collect data in connection with refinanced or renewed loans, will also apply to consumer loans.
§ __.42(c)(1)(iv)—1:
A1. No. Further, if the institution routinely collects, but does not verify, a borrower's income when making a credit decision, it need not verify the income for purposes of data maintenance.
§ __.42(c)(1)(iv)—2:
A2. Yes.
§ __.42(c)(1)(iv)—3:
A3. Institutions collect the gross annual income, rather than the adjusted gross annual income, of consumer borrowers. The purpose of income data collection in connection with consumer loans is to enable examiners to determine the distribution, particularly in the institution's assessment area(s), of the institution's consumer loans, based on borrower characteristics, including the number and amount of consumer loans to low-, moderate-, middle-, and upper-income borrowers, as determined on the basis of gross annual income.
The regulation does not require institutions to request or consider income information when making a loan; however, if institutions do gather this information from their borrowers, the Agencies expect them to collect the borrowers' gross annual income for purposes of CRA. The CRA regulations similarly do not require institutions to verify income amounts; thus, institutions may rely on the gross annual income amount provided by borrowers in the ordinary course of business.
§ __.42(c)(1)(iv)—4:
A4. An institution that chooses to collect and maintain information on consumer loans collects the gross annual income of all primary obligors for consumer loans, to the extent that the institution considered the income of the obligors when making the decision to extend credit. Primary obligors include co-applicants and co-borrowers, including co-signers. An institution does not, however, collect the income of guarantors on consumer loans, because guarantors are only secondarily liable for the debt.
§ __.42(c)(2)—1:
A1. Yes. If these loans promote community development, as defined in the regulation, the institution should collect and report information about the loans as community development loans. Otherwise,
§ __.42(c)(2)—2:
A2. No. Institutions are not required to collect data on loan commitments and letters of credit. Institutions may, however, provide for examiner consideration information on letters of credit and commitments.
§ __.42(c)(2)—3:
A3. Commercial and consumer leases are not considered small business or small farm loans or consumer loans for purposes of the data collection requirements in 12 CFR __.42(a) & (c)(1). However, if an institution wishes to collect and maintain data about leases, the institution may provide this data to examiners as “other loan data” under 12 CFR __.42(c)(2) for consideration under the lending test.
§ __.42(d)—1:
A1. If the affiliate is a HMDA reporter, the institution must identify those loans reported by its affiliate under 12 CFR part 1003 (Regulation C, implementing HMDA). At its option, the institution may provide examiners with either the affiliate's entire HMDA Disclosure
§ __.43(a)(1)—1:
A1. Comments received by an Agency will be on file at the Agency for use by examiners. Those comments are also available to the public unless they are exempt from disclosure under the Freedom of Information Act.
§ __.43(a)(1)—2:
A2. No. All institutions should review comments and complaints carefully to determine whether any response or other action is warranted. A small institution subject to the small institution performance standards is specifically evaluated on its record of taking action, if warranted, in response to written complaints about its performance in helping to meet the credit needs in its assessment area(s). See 12 CFR __.26(b)(5). For all institutions, responding to comments may help to foster a dialogue with members of the community or to present relevant information to an institution's supervisory Agency. If an institution responds in writing to a letter in the public file, the response must also be placed in that file, unless the response reflects adversely on any person or placing it in the public file violates a law.
§ __.43(a)(2)—1:
A1. Yes. However, the format and content of the evaluation, as transmitted by the supervisory Agency, may not be altered or abridged in any manner. In addition, an institution that received a less than satisfactory rating during it most recent examination must include in its public file a description of its current efforts to improve its performance in helping to meet the credit needs of its entire community.
§ __.43(b)(1)—1:
A1. Yes. The lending data to be contained in an institution's public file covers the lending of the institution's affiliates, as well as of the institution itself, considered in the assessment of the institution's CRA performance. An institution that has elected to have mortgage loans of an affiliate considered must include either the affiliate's HMDA Disclosure Statements for the two prior years or the parts of the Disclosure Statements that relate to the institution's assessment area(s), at the institution's option.
§ __.43(b)(1)—2:
A2. Yes, if the institution can readily print out its CRA disclosure statement from an electronic medium (
§ __.43(c)—1:
A1. An institution's main office is the main, home, or principal office as designated in its charter.
§ __.43(c)—2:
A2. Yes, an institution may keep all or part of its public file on an intranet or the Internet, provided that the institution maintains all of the information, either in paper or electronic form, that is required in 12 CFR __.43. An institution that opts to keep part or all of its public file on an intranet or the Internet must follow the rules in 12 CFR __.43(c)(1) and (2) as to what information is required to be kept at a main office and at a branch. The institution also must ensure that the information required to be maintained at a main office and branch, if kept electronically, can be readily downloaded and printed for any member of the public who requests a hard copy of the information.
§ __.44—1:
A1. The notice must be placed in the institution's public lobby, but the size and placement may vary. The notice should be placed in a location and be of a sufficient size that customers can easily see and read it.
§ __.45—1:
A1. The Agencies may use the
§ __.45—2:
A2. No. The Agencies attempt to determine as accurately as possible which institutions will be examined during the upcoming calendar quarter. However, whether an institution's name appears on the published list does not conclusively determine whether the institution will be examined during that quarter. The Agencies may need to defer a planned examination or conduct an unforeseen examination because of scheduling difficulties or other circumstances.
Appendix A to Part __—1:
A1. No. Exceptionally strong performance in some aspects of a particular rating profile may compensate for weak performance in others. For example, a retail institution other than an intermediate small institution that uses non-branch delivery systems to obtain deposits and to deliver loans may have
Appendix B to Part __—1:
A1. The following information should be added to the form:
For community banks, insert in the appropriate blank the postal mailing address of the deputy comptroller of the district in which the institution is located. These addresses can be found at
By order of the Board of Governors of the Federal Reserve System, July 7, 2016.
U.S. Small Business Administration.
Final rule.
The U.S. Small Business Administration (SBA or Agency) is amending its regulations to implement provisions of the Small Business Jobs Act of 2010, and the National Defense Authorization Act for Fiscal Year 2013. Based on authorities provided in these two statutes, the rule establishes a Government-wide mentor-protégé program for all small business concerns, consistent with SBA's mentor-protégé program for Participants in SBA's 8(a) Business Development (BD) program. The rule also makes minor changes to the mentor-protégé provisions for the 8(a) BD program in order to make the mentor-protégé rules for each of the programs as consistent as possible. The rule also amends the current joint venture provisions to clarify the conditions for creating and operating joint venture partnerships, including the effect of such partnerships on any mentor-protégé relationships. In addition, the rule makes several additional changes to current size, 8(a) Office of Hearings and Appeals and HUBZone regulations, concerning among other things, ownership and control, changes in primary industry, standards of review and interested party status for some appeals. Finally, SBA notes that the title of this rule has been changed.
This rule is effective August 24, 2016.
Brenda Fernandez, U.S. Small Business Administration, Office of Government Contracting, 409 3rd Street SW., 8th Floor, Washington, DC 20416; (202) 205-7337;
This rule initially appeared in the Regulatory Agenda of Fall 2010 with the title “Small Business Jobs Act: Small Business Mentor-Protégé Programs.” SBA carried this rule title until the Regulatory Agenda of Spring 2013 when the reference to the Jobs Act was taken out, and the title changed to “Small Business Mentor-Protégé Programs.” This change reflected the statutory amendments in section 1641 of NDAA 2013. However, when the proposed rule was published, the title had been changed to: “Small Business Mentor Protégé Program; Small Business Size Regulations; Government Contracting Programs; 8(a) Business Development/Small Disadvantaged Business Status Determinations; HUBZone Program; Women-Owned Small Business Federal Contract Program; Rules of Procedure Governing Cases Before the Office of Hearings and Appeals.” In drafting this final rule, SBA concluded that the simpler current title (“Small Business Mentor Protégé Programs”) is easier for the public to understand and would be consistent with the title that has been publicly reported in the Regulatory Agenda since 2013.
On September 27, 2010, the President signed into law the Small Business Jobs Act of 2010 (Jobs Act), Public Law 111-240, 124 Stat. 2504, which was designed to protect the interests of small businesses and increase opportunities in the Federal marketplace. With the enactment of the Jobs Act, Congress recognized that mentor-protégé programs serve an important business development function for small business and authorized SBA to establish separate mentor-protégé programs for the Service-Disabled Veteran-Owned Small Business Concern (SDVO SBC) Program, the HUBZone Program, and the Women-Owned Small Business (WOSB) Program, each modeled on SBA's existing mentor-protégé program available to 8(a) Business Development (BD Program Participants. See section 1347(b)(3) of the Jobs Act.
On January 2, 2013, the President signed into law the National Defense Authorization Act for Fiscal Year 2013 (NDAA 2013), Public Law 112-239, 126 Stat. 1632. Section 1641 of the NDAA 2013 authorized SBA to establish a mentor-protégé program for all small business concerns. This section further provides that a small business mentor-protégé program must be identical to the 8(a) BD mentor-protégé program, except that SBA may modify the program to the extent necessary, given the types of small business concerns to be included as protégés. Section 1641 also provides that a Federal department or agency could not carry out its own agency specific mentor-protégé program for small businesses unless the head of the department or agency submitted a plan for such a program to SBA and received the SBA Administrator's approval of the plan. Finally, section 1641 requires the head of each Federal department or agency carrying out an agency-specific mentor-protégé program to report annually to SBA the participants in its mentor-protégé program, the assistance provided to small businesses through the program, and the progress of protégé firms to compete for Federal prime contracts and subcontracts.
On February 5, 2015, SBA published in the
The proposed rule called for a 60-day comment period, with comments required to be made to SBA by April 6, 2015. The overriding comment SBA received in the first few weeks after the publication was to extend the comment period. In response to these comments, SBA published a notice in the
Currently, the mentor-protégé program available to firms participating in the 8(a) BD program is used as a business development tool in which mentors provide diverse types of business assistance to eligible 8(a) BD protégés. This assistance may include, among other things, technical and/or management assistance; financial
One commenter opposed expanding the mentor-protégé program beyond the 8(a) BD program. The commenter believed that it has not been established that the 8(a) mentor-protégé program is bestowing a substantial benefit on 8(a) Participants, and, therefore, SBA should perform additional research and analysis before expanding the program. SBA disagrees. In the current 8(a) BD mentor-protégé program, in order for any mentor-protégé relationship to continue, the 8(a) protégé firm must demonstrate annually what benefits it has derived from the mentor-protégé relationship. Where the benefits provided to the protégé firm are minimal or where it appears that the relationship has been used primarily to permit a non-8(a) (oftentimes, large) mentor to benefit from contracts with its approved protégé, through one or more joint ventures, that it would otherwise not be eligible for, SBA will terminate the mentor-protégé relationship. The proposed rule also provided that SBA may terminate the mentor-protégé agreement (MPA) where it determines that the parties are not complying with any term or condition of the MPA. This rule requires similar reporting of benefits for non-8(a) protégé firms and similar consequences where the benefits provided to the protégé firm do not adequately justify the mentor-protégé relationship. One commenter requested clarification as to when and how SBA would cancel a MPA. SBA's analysis as to whether a protégé firm is adequately benefitting from the relationship or whether non-compliance with one or more specific terms or conditions of the MPA should warrant termination of the agreement is a fact specific determination to be made based on the totality of the circumstances. SBA would not terminate a particular MPA where there are de minimus or inadvertent violations of the agreement. In addition, it is not SBA's intent to terminate a particular MPA without considering the views of the protégé firm. However, the mere fact that a protégé wants the mentor-protégé relationship to continue will not be dispositive if SBA believes that termination is justified.
Conversely, SBA received a significant number of comments supporting a small business mentor-protégé program. These commenters believed that a small business mentor-protégé program would enable firms that are not in the 8(a) BD program to receive critical business development assistance that would otherwise not be available to them. Many of these commenters expressed support for the opportunity to gain meaningful expertise that would help them to independently perform more complex and higher value contracts in the future.
This rule implements a mentor-protégé program similar to the 8(a) BD mentor-protégé program for all small business concerns. The rule adds this program to a new § 125.9 of SBA's regulations. SBA proposed one program for all small businesses because SBA believed it would be easier for the small business and acquisition communities to use and understand. However, SBA specifically requested comments as to whether SBA should finalize one small business mentor-protégé program, as proposed, or, rather, five separate mentor-protégé programs for the various small business entities. Most commenters supported having one new small business mentor-protégé program instead of four new mentor-protégé programs (one for SDVO small businesses, one for HUBZone small businesses, one for WOSBs, and one for small businesses not falling into one of the other categories). They agreed that it would be less confusing to deal with one new program, rather than four new programs, and that it was not necessary to have four separate mentor-protégé programs since the three subcategories of small business are necessarily included within the overall category of small business. Many of the commenters were concerned, however, that changes could be made to the current 8(a) BD mentor-protégé program. Specifically, commenters were concerned that SBA might want to eliminate the 8(a) BD mentor-protégé program as a separate program and instead roll it into the small business mentor-protégé program. SBA has considered those concerns and has decided to keep the 8(a) BD mentor-protégé program as a separate program. That program has independently operated successfully for a number of years and SBA believes that it serves important business development purposes that should continue to be coordinated through SBA's Office of Business Development, rather than through a separate mentor-protégé office managed elsewhere within the Agency. As such, this final rule makes no changes as to how MPAs are processed for the 8(a) BD program.
In addition, the final rule revises the joint venture provisions contained in § 125.15(b) (for SDVO SBCs, and which are now contained in § 125.18(b)), § 126.616 (for HUBZone SBCs), and § 127.506 (for WOSB and Economically Disadvantaged Women-Owned Small Business (EDWOSB) concerns) to more fully align those requirements to the requirements of the 8(a) BD program. The rule also adds a new § 125.8 to specify requirements for joint ventures between small business protégé firms and their mentors. The rule also makes several additional changes to current size, 8(a) BD and HUBZone regulations that are needed to clarify certain provisions or correct interpretations of the regulations that were inconsistent with SBA's intent. These changes, the comments to the proposed rule, and SBA's response to the comments are set forth more fully below.
In response to the 90-day comment period, SBA received 113 comments, with most of the commenters commenting on multiple proposed provisions. With the exception of comments that did not set forth any rationale or make suggestions, SBA discusses and responds fully to all the comments below.
SBA's size regulations recognize that joint ventures may be formal or informal. The proposed rule amended § 121.103(h) to clarify that every joint venture, whether a separate legal entity or an “informal” arrangement that exists between two (or more) parties, must be in writing. SBA never meant that an informal joint venture arrangement could exist without a formal written document setting forth the responsibilities of all parties to the joint venture. SBA merely intended to recognize that a joint venture need not be established as a limited liability company or other formal separate legal entity.
A few comments opposed that provision of the proposed rule that identified informal joint ventures as partnerships, believing that entering into a formal or informal partnership
In addition, the proposed rule specified that if a joint venture exists as a formal separate legal entity, it may not be populated with individuals intended to perform contracts awarded to the joint venture. This is a change from the current regulation that allows a separate legal entity joint venture to be unpopulated, to be populated with administrative personnel only, or to be populated with its own separate employees that are intended to perform contracts awarded to the joint venture. SBA explained that it is concerned that allowing populated joint ventures between a mentor and protégé would not ensure that the protégé firm and its employees benefit by developing new expertise, experience, and past performance. The separate joint venture entity would gain those things. If the individuals hired by the joint venture to perform the work under the contract did not come from the protégé firm, there is no guarantee that they would ultimately end up working for the protégé firm after the contract is completed. In such a case, the protégé firm would have gained nothing out of that contract. The company itself did not perform work under the contract and the individual employees who performed work did not at any point work for the protégé firm.
SBA received comments on both sides of this issue. Several commenters supported the proposed change, noting that forming a separate legal entity is an undue burden, and questioned whether the firm admitted to the 8(a) program (the protégé small business) would gain any direct benefits if all the work was performed by a separate legal entity. In addition, several of the commenters appreciated SBA's attempt to simplify these regulatory requirements. Several other commenters opposed the elimination of populated joint ventures. Many of these commenters believed that populated joint venture companies are an important mechanism for an entity-owned firm to remain competitive. They argued that this method of business organization facilitates the development of the disadvantaged small business because it makes the company more competitive in the marketplace. Specifically, these commenters pointed out that a populated joint venture has its own lower indirect costs, which, in turn, lowers the cost to the Government. Although SBA understands the benefit of using lower indirect costs from a populated joint venture, SBA continues to believe that a small protégé firm does not adequately enhance its expertise or ability to perform larger and more complex contracts on its own in the future when all the work through a joint venture is performed by a populated separate legal entity. A joint venture between a protégé firm and its mentor is intended to promote the business development of the protégé firm. SBA questions how that can be accomplished where the protégé itself performs no work on a particular joint venture contract, and the employees who do the work for the separate legal entity may or may not have any present or future connection to the protégé firm. In the 8(a) BD context, the purpose is to promote the business development of the firm that was admitted to the 8(a) BD program, the protégé firm, not a separate legal entity that is not itself a certified 8(a) Participant. In addition, populated joint ventures create unique problems in the HUBZone program. HUBZone's unique requirements with regard to employees, principal office, and residency make maintaining HUBZone status while participating in populated joint ventures difficult. In determining whether an individual should be determined an employee, the HUBZone program utilizes the totality of the circumstances approach and oftentimes a firm will have some individuals not on its payroll considered an employee for HUBZone eligibility purposes. Populated joint ventures present a problem because it can be difficult for firms to determine whom should be counted as an employee at any given time.
SBA continues to believe that the benefits received by a protégé from a joint venture are more readily identifiable where the work done on behalf of the joint venture is performed by the protégé and the mentor separately. In such a case, it is much easier to determine that the protégé firm performed at least 40% of all work done by the joint venture, performed more than merely ministerial or administrative work, and otherwise gained experience that could be used to perform a future contract independently. Thus, this rule adopts the proposed language to allow a separate legal entity joint venture to have its own separate employees to perform administrative functions, but not to have its own separate employees to perform contracts awarded to the joint venture.
SBA also proposed to require joint venture partners to allow SBA's authorized representatives, including representatives authorized by the SBA Inspector General, to access its files and inspect and copy records and documents when necessary. Several commenters requested SBA to clarify that the access should be limited to documents and records relating to the joint venture, not to unrelated documents of the joint venture partners themselves. SBA agrees and has amended §§ 124.513(i), 125.8(h), 125.18(b)(8), 126.616(h), and 127.506(i) to clarify that SBA's access would be related to files, records and documents of the joint venture. A few commenters also recommended that SBA should provide reasonable notice before it sought access to such records. SBA disagrees. SBA's Office of Inspector General must be able to have unlimited access when investigating potential violations of SBA's regulations. In a potential fraud case, providing notice could cause a destruction of records or provide time for a party to create the appearance of complying with applicable requirements. As such, this final rule does not require SBA to provide reasonable notice before seeking access to joint venture files, records and documents. SBA notes, however, that in its normal oversight responsibilities not related to any investigation of alleged wrongdoing, SBA would generally provide reasonable notice.
In the case of
The February 5, 2015 proposed rule proposed to add similar language to §§ 124.501, 125.22(b), 126.600, and 127.500, thus specifically authorizing contracting in the 8(a) BD, SDVO, HUBZone and WOSB programs regardless of the place of performance, where appropriate. Although SBA believes that the authority to use those programs in appropriate circumstances overseas already exists, the proposed rule merely sought to make that authority clear. Nothing in the Small Business Act would prohibit the use of those programs in appropriate circumstances overseas. SBA received a few comments on this issue. The commenters supported clarification of the current authority. The regulatory text merely highlights contracting officers' discretionary authority to use these programs where appropriate regardless of the place of performance.
The HUBZone program is a community growth and development program in which businesses are incentivized to establish principal office locations in, and employ individuals from, areas of chronically high unemployment and/or low income in order to stimulate economic development. To further this purpose, the HUBZone program regulations permitted a joint venture only between a HUBZone SBC and another HUBZone SBC. In authorizing a mentor-protégé relationship for HUBZone qualified SBCs, the proposed rule provided language to allow joint ventures for HUBZone contracts between a HUBZone protégé firm and its mentor, regardless of whether the mentor was itself a HUBZone qualified SBC.
SBA received a significant number of comments on this provision. The commenters overwhelmingly supported allowing a HUBZone qualified SBC that obtained an SBA-approved small business mentor-protégé relationship to be able to joint venture with its mentor on all contracts for which the protégé individually qualified, including HUBZone contracts. The commenters felt that such a provision would allow protégés to perform contracts that they otherwise could not have obtained and truly provide them with expertise and past performance that would help them to individually perform additional contracts in the future.
The commenters expressed that they felt that the purposes of the HUBZone program would be appropriately served by allowing non-HUBZone firms to act as mentors and joint venture with protégé HUBZone firms because the HUBZone firm itself would be developed and would necessarily be required to hire additional HUBZone employees if it sought to remain eligible for future HUBZone contracts.
The proposed rule required all partners to a joint venture agreement that perform a SDVO, HUBZone, WOSB, or small business set-aside contract to certify to the contracting officer and SBA prior to performing any such contract that they will perform the contract in compliance with the joint venture regulations and with the joint venture agreement. In addition, the parties to the joint venture are required to report to the contracting officer and to SBA how they are meeting or have met the applicable performance of work requirements for each SDVO, HUBZone, WOSB or small business set-aside contract they perform as a joint venture.
SBA received comments both supporting and opposing this approach. One commenter suggested use of an honor system for the reporting. SBA did not view this as a viable alternative. Others believed that certifications in the System for Award Management (SAM) should be sufficient. Other commenters supported the proposed approach as a reasonable way to ensure compliance. SBA believes that affirmative reporting by the joint venture parties to both the contracting officer and SBA will provide the necessary information to track the use and performance of joint ventures. SBA also believes that the certification and reporting requirements implemented in this rule will assist the Government in its ability to deter wrongdoing. Regular reporting and monitoring of the limitations on subcontracting requirements will allow all parties to know where the joint venture stands with respect to those requirements and what must be done to come into compliance in the future if the joint venture's performance is below the required amount at any point in time. A contracting officer will be able to more closely oversee the performance of a contract where the reports show inadequate performance to date.
As such, the final rule adopts the proposed language requiring joint venture partners to annually report compliance to both the contracting officer and SBA.
The proposed rule announced that SBA was considering various methods of tracking awards to the joint ventures permitted by SBA's regulations. The possible approaches included: Requiring all joint ventures permitted by the regulations to include in their names “small business joint venture,” and, if a mentor-protégé joint venture, to include in their names “mentor-protégé small business joint venture;” requiring contracting officers to identify awards as going to small business joint ventures or to mentor-protégé small business joint ventures; requiring SBCs to amend their SAM entries to specify that they have formed a joint venture; requiring each joint venture to get a separate DUNS number; or a combination of all of these actions. SBA sought to ensure that governmental agencies and members of the public could track joint venture awards, which would promote transparency and accountability. SBA specifically asked for comments on how best to track awards to joint ventures. SBA believes a tracking approach will deter fraudulent or improper conduct, and promote compliance with SBA's regulations.
SBA received numerous comments on these proposals both in support and in opposition to the alternate approaches contemplated. Several commenters opposed the naming requirement, expressing concern about the administrative burden on the participating firms to change names, establish duns numbers and meet other compliance requirements in order to meet this requirement. Other commenters recommended that the cleanest way to track awards to joint ventures would in fact be to require a joint venture to form a new entity in SAM and identity itself to be a joint venture in SAM. Several commenters suggested the SAM system adopt a
In response to the comments, SBA first notes that any SAM certification process is beyond SBA's authority and outside the scope of this rule. SBA also notes that current participants in the 8(a) BD program annually report to SBA the joint venture awards they have received and how they are meeting the limitations on subcontracting requirements. To track small business joint venture awards, SBA could require similar reporting. However, SBA does not seek to impose any unnecessary burdens on small business. With that in mind, SBA believes that additional reporting is not necessary, but continues to believe that some sort of joint venture identification is required. Thus, this final rule requires joint ventures to be separately identified in SAM so that awards to joint ventures can be properly accounted for. A joint venture must be identified as a joint venture in SAM, with a separate DUNS number and CAGE number than those of the individual parties to the joint venture. In addition, the Entity Type in SAM must be identified as a joint venture, and the individual joint venture partners should also be listed.
As noted above, SBA proposed implementing one universal small business mentor-protégé program instead of a separate mentor-protégé program for each type of small business (
SBA received a significant number of comments regarding applications for mentor-protégé relationships. Commenters applauded SBA's proposal to keep the 8(a) BD mentor-protégé program separate from the small business mentor-protégé program. Commenters also supported establishing a separate office to process applications for the small business mentor-protégé program. The commenters were concerned, however, about the administrative burden the additional small business mentor-protégé program will have on SBA's resources. They felt that the volume of firms seeking mentor-protégé relationships could excessively delay SBA's processing of applications. Commenters also opposed the proposal to have open enrollment periods to receive small business mentor-protégé applications. They thought that such a process would cause significant delays in allowing firms to benefit from the mentor-protégé program. They also felt that open enrollment periods could cause firms to miss out on developmental procurement opportunities if they had to wait several months before they could apply to participate in the program. If there were open enrollment periods, then commenters believed that firms should be processed on a first come first served basis, and different types of small businesses should not be given priority or processed first over other types of small businesses.
SBA understands the concerns raised by the commenters. It is not SBA's intent to delay participation in the small business mentor-protégé program. In order to reduce the processing time for a small business mentor-protégé application, SBA considered changing final approval from the D/GC to six senior SBA district directors. SBA thought that six decision makers instead of one might speed up the processing time for applications and eliminate the need for open enrollment periods. However, such a structure could also cause inconsistent results and could require more overall resources (by requiring additional staff in six different locations) than simply providing adequate staff at one location. SBA recognizes that the D/GC is responsible for many other functions, and understands several commenters' concerns that mentor-protégé applications might not be the highest priority of that office. Therefore, SBA intends to establish a separate unit within the Office of Business Development whose sole function would be to process mentor-protégé applications and review the MPAs and the assistance provided under them once approved. This final rule provides that this new unit will process and make determinations with respect to all small business MPAs, with the ultimate decision to be made by the AA/BD or his/her designee. SBA believes that the efficiencies gained by having a dedicated staff for the small business mentor-protégé program will allow SBA to timely process applications for mentor-protégé status, and that the need for open and closed enrollment periods will be reduced. Of course, it is still possible that the number of applications could overwhelm the dedicated small business mentor-protégé unit. If that is the case, open enrollment periods could still be a possibility. Several commenters suggested that SBA may have an enormous volume of applications, and others suggested otherwise. SBA believes that additional information is needed before a decision to control the acceptance of applications is necessary. If the need arises, SBA will provide advance notice to allow potential applicants the opportunity to properly plan.
The proposed rule permitted any for-profit business concern that demonstrates a commitment and the ability to assist small business concerns to be approved to act as a mentor and receive the benefits of the mentor-protégé relationship. SBA also proposed to limit mentors to for-profit business entities based on the language contained in the NDAA 2013. Section 1641 of the NDAA 2013 added section 45(d)(1) of the Small Business Act, 15 U.S.C. 657r(d)(1), which defines the term mentor to be “a for-profit business concern of any size.” In order to make the 8(a) BD mentor-protégé program consistent with the small business mentor-protégé program, SBA proposed that mentors in the 8(a) BD mentor-protégé program must be for profit businesses as well. This was a change for the 8(a) BD program, which previously allowed non-profit entities to be mentors. SBA felt that the change to the 8(a) BD program made sense because
A small number of commenters disagreed with having a small business mentor-protégé program at all, and argued that the statutory authorities were discretionary and did not require SBA to implement additional small business mentor-protégé programs. A few of these commenters also felt that if there were such a program, the mentors should be limited to other small businesses. They expressed the view that individual small businesses could be harmed competing against joint ventures in which a large business mentor was a partner. Although SBA understands that the small business mentor-protégé programs authorized by the Jobs Act and the NDAA 2013 are discretionary, SBA believes that they will serve an important developmental function that will enable many small businesses to grow to be able to independently perform procurements that they otherwise would not have been able to perform. In addition, the vast majority of commenters supported a small business mentor-protégé program and many of those comments believed that it would be critical in helping them to advance and be able to perform larger and more complex contracts on their own. SBA agrees with the majority of commenters on this issue and this final rule implements a small business mentor-protégé program. Because the language of section 45(d)(1) of the Small Business Act, 15 U.S.C. 657r(d)(1), specifies a mentor in the small business mentor-protégé program to be “a for-profit business concern of any size” and section 45(a)(2) of the Small Business Act, 15 U.S.C. 657r(a)(2), requires the mentor-protégé program for small businesses to be “identical to the [8(a) BD] mentor-protégé program . . . as in effect on the date of enactment of this section . . .,” which authorized large business mentors, this final rule authorizes only other than small businesses that are organized for profit to be mentors. Specifically, the final rule authorizes any “concern,” regardless of size, to be a mentor, and the term “concern” has historically been defined in SBA's size regulations to mean a business entity organized for profit.
The proposed rule also required a firm seeking to be a mentor to demonstrate that it “possesses a good financial condition.” Several commenters urged SBA to clarify what it means to possess good financial condition. In addition, during the tribal consultations, several individuals spoke of situations where SBA denied a large multi-national firm from being a mentor because one or more financial documents indicated a loss. These individuals believed SBA did not take the proper approach when considering whether a business concern should be a mentor. They stressed that SBA should look only at whether the proposed mentor can deliver what it has said it will bring to the protégé. They believed that anything beyond that was not necessary. SBA agrees that the “good financial condition” requirement has caused some confusion. SBA believes that the key issue is whether a proposed mentor can meet its obligations under its MPA. If a proposed mentor can fulfill those obligations and has the financial wherewithal to provide all of the business development assistance to the protégé firm as described in its MPA, SBA should not otherwise care about the proposed mentor's financial condition. SBA wants to ensure that the protégé firm receives needed business development assistance through the mentor-protégé relationship. If that can be demonstrated, SBA will be satisfied with the arrangement. As such, this final rule changes the requirement that a mentor have good financial condition to one requiring that the mentor must demonstrate that it can fulfill its obligations under the MPA.
In addition, the proposed rule provided that a mentor participating in any SBA-approved mentor-protégé program would generally have no more than one protégé at a time. It also provided that SBA could authorize a concern to mentor more than one protégé at a time where it can demonstrate that the additional mentor-protégé relationship would not adversely affect the development of either protégé firm (
Finally, the proposed rule provided that a protégé in the small business mentor-protégé program may not become a mentor and retain its protégé status. That proposal was patterned off the 8(a) BD mentor-protégé program. SBA received several comments opposing this proposal. The commenters felt that firms that have
In order to qualify as a protégé, the proposed rule required a business concern to qualify as small for the size standard corresponding to its primary NAICS code. This was a departure for the current 8(a) BD mentor-protégé program, which required an 8(a) Program Participant to: Have a size that is less than half the size standard corresponding to its primary NAICS code; or be in the developmental stage of its 8(a) program participation; or not have received an 8(a) contract. SBA received a significant number of comments supporting the change to loosen the requirements to qualify as a protégé for the 8(a) BD mentor-protégé program. These commenters supported consistency between the two programs and believed that allowing more mature small businesses to participate as protégés in the 8(a) BD mentor-protégé program would facilitate more dynamic developmental assistance and strengthen the contractor base for government procurements. Several commenters also felt that the proposed change made the requirement clearer to understand and implement. Conversely, a few commenters did not support changes to the size of the protégé for the 8(a) BD mentor-protégé program. These commenters believed that the 8(a) mentor-protégé program should not be made available to larger, or successful, or experienced 8(a) Participants, and that allowing participation by firms that are close to exceeding their applicable size standard would thwart the purpose of the program. SBA also received several comments recommending that a firm should be able to form a mentor-protégé relationship as long as it qualified as small for the particular type of work for which a mentor-protégé relationship is sought, even if the firm no longer qualified as small for its primary business activity. These commenters believed that there would be no harm in allowing such a mentor-protégé relationship because the protégé firm would still have to qualify as a small business for any contract opportunity requiring status as a small business that it sought. In other words, if SBA approved a mentor-protégé relationship that focused on assisting a firm to gain access to or expand its experience in a particular industry or NAICS code where the proposed protégé firm qualified as a small business for the size standard corresponding to that NAICS code but not for the size standard corresponding to its primary industry, the protégé firm could form a joint venture with its mentor and be considered small for a contract opportunity only where the protégé firm qualified as small. It could not take that mentor-protégé relationship, form a joint venture and be considered small for contract opportunities in the protégé's primary industry if the protégé did not qualify as small for that NAICS code.
SBA believes that consistency between the 8(a) BD mentor-protégé program and the small business mentor-protégé program is critical, particularly where this final rule authorizes an 8(a) mentor-protégé relationship to transition to a small business mentor-protégé relationship when the 8(a) protégé graduates from or otherwise leaves the 8(a) BD program. Therefore, SBA believes that it does not make sense to have different rules regarding who can qualify as a protégé for the two mentor-protégé programs. As such, SBA does not agree with the commenters who recommended that SBA continue to limit protégés in the 8(a) BD mentor-protégé program only to Participants whose size was less than half the size standard corresponding to their primary industry. Moreover, SBA feels that any small business could gain valuable business development assistance through the mentor-protégé program. For this reason, SBA agrees with the commenters who recommended that a firm that does not qualify as small for its primary NAICS code should be able to form a mentor-protégé relationship in a secondary NAICS code for which it does qualify as small. However, SBA would not authorize mentor-protégé relationships in secondary NAICS codes where the firm had never performed any work in that NAICS code previously or where the protégé would bring nothing to a potential joint venture with its mentor other than its status as a small business. The intent of allowing joint ventures between a protégé firm and its mentor is to provide a protégé firm the opportunity to further develop its expertise and enhance its ability to independently perform similar contracts in the future. The mentor-protégé program is not intended to enable firms that have outgrown a particular size standard to find another industry in which they have no expertise or past performance merely to be able to continue to receive additional contracts as a small business. As long as the firm can demonstrate how the mentor-protégé relationship is a logical progression for the firm and will further develop current capabilities, SBA believes that a mentor-protégé relationship may be appropriate. Thus, the final rule provides that a concern must qualify as small for the size standard corresponding to its primary NAICS code or identify that it is seeking business development assistance with respect to a secondary NAICS code and qualify as small for the size standard corresponding to that NAICS code.
The proposed rule provided that a protégé participating in either of the mentor-protégé programs generally would have no more than one mentor at a time. However, it authorized a protégé to have two mentors where the two relationships would not compete or otherwise conflict with each other and the protégé demonstrates that the second relationship pertains to an unrelated, secondary NAICS code, or the first mentor does not possess the specific expertise that is the subject of the MPA with the second mentor. The comments supported this provision and, therefore, SBA adopts it in this final rule.
In addition, § 125.9(c)(1) of the proposed rule required that SBA verify that a firm qualifies as a small business before approving that firm to act as a protégé in a small business mentor-protégé relationship. SBA was attempting to make eligibility for the small business mentor-protégé program similar to that of the 8(a) BD mentor-protégé program. Just as only firms that have been certified to be eligible to participate in the 8(a) BD program and verified to meet at least one of the three requirements set forth in the prior 8(a) BD regulations could be a protégé, the proposed rule would have permitted only those firms that have been affirmatively determined to be small to qualify as protégés for the small business mentor-protégé program. Several commenters believed that such a requirement was overly burdensome.
The proposed rule provided that a protégé firm that graduates or otherwise leaves the 8(a) BD program but continues to qualify as a small business may transfer its 8(a) mentor-protégé relationship to a small business mentor-protégé relationship. Several commenters supported this proposal as a natural extension of SBA's implementation of a small business mentor-protégé program. A few commenters sought clarification, however, as to whether the transfer from an 8(a) BD mentor-protégé relationship to a small business mentor-protégé relationship would be automatic or whether the protégé firm would have to apply and again receive SBA approval. It was not SBA's intent to require a firm to apply to transfer its 8(a) BD mentor-protégé relationship to a small business mentor-protégé relationship. SBA intended that a firm merely inform SBA of its intent to transfer its mentor-protégé relationship. There would be no SBA review or approval required of such a transfer. As such, this final rule adopts the language of the proposed rule and adds clarifying language that a firm seeking to transfer its mentor-protégé relationship could do so by notification, without applying to and receiving approval from SBA to do so. In light of that change, the final rule also deletes § 124.520(d)(5) as unnecessary. That provision provided that SBA would not approve an 8(a) BD mentor-protégé relationship where the proposed protégé firm had less than six months remaining in its 8(a) program term. Because SBA will now permit an 8(a) protégé to transfer its mentor-protégé relationship to a small business mentor-protégé relationship after it leaves the 8(a) BD program (provided the firm continues to qualify as a small business), it does not make sense that SBA would not approve a mentor-protégé relationship for a proposed 8(a) protégé that has less than six months remaining in its program term. SBA will give such a firm the option of pursuing an 8(a) mentor-protégé relationship during its last six months in the 8(a) BD program, and then transferring that relationship to a small business mentor-protégé relationship when the protégé firm leaves the 8(a) BD program, or pursuing a small business mentor-protégé relationship during that same time frame.
As noted above, section 1641 of the NDAA 2013 provided that a Federal department or agency cannot carry out its own agency specific mentor-protégé program for small businesses unless the head of the department or agency submitted a plan for such a program to SBA and received the SBA Administrator's approval of the plan. The NDAA 2013 specifically excluded the Department of Defense's mentor-protégé program, but included all other current mentor-protégé programs of other agencies. Under its provisions, a department or agency that is currently conducting a mentor-protégé program (except the Department of Defense) may continue to operate that program for one year but must then go through the SBA approval process in order for the program to continue after one year. Thus, in order to continue to operate any current mentor-protégé program beyond one year after SBA's mentor-protégé regulations are final, each department or agency would be required to obtain the SBA Administrator's approval. These statutory provisions were proposed to be implemented in new § 125.10 of SBA's regulations.
Because the SBA's 8(a) BD and small business mentor-protégé programs will apply to all Government small business contracts, and thus to all Federal departments and agencies, conceivably other agency-specific mentor-protégé programs for small business would not be needed. In the proposed rule, SBA specifically requested comments as to whether other Federal mentor-protégé programs should continue after the one-year grace period expires. SBA understands that many of the agency-specific mentor-protégé programs incentivize mentors to utilize their protégés as subcontractors. For instance, some agencies provide additional evaluation points to a large business submitting an offer on an unrestricted procurement where the business has an active MPA, where the business has used the protégé firm as a subcontractor previously, or where the mentor and protégé are submitting an offer as a joint venture. In addition, some mentor-protégé programs give additional credit to a large business mentor toward its subcontracting plan goals when the mentor uses the protégé as a subcontractor on the mentor's prime contract(s) with the given agency. SBA's mentor-protégé programs assume more of a prime contractor role for protégés, but would also encourage subcontracts from mentors to protégés as part of the developmental assistance that protégés receive from their mentors. Because one or more mentor-protégé programs of other agencies ultimately may not be continued after SBA's various mentor-protégé programs are finalized, SBA requested comments as to whether the subcontracting incentives authorized by mentor-protégé programs of other agencies should specifically be incorporated into SBA's mentor-protégé programs.
SBA received only a few comments regarding this proposed new section. These commenters agreed with the statutory provisions in questioning the utility of other Federal mentor-protégé programs. Their only concern was whether SBA would have the necessary resources to handle mentor-protégé applications for the entire government. SBA is working to assure that it can adequately process mentor-protégé applications, but, as noted above, if the number of firms seeking SBA to approve their mentor-protégé relationships becomes unwieldy, SBA may institute certain “open” and “closed” periods for the receipt of further mentor-protégé applications. In such a case, SBA would then accept mentor-protégé applications only in “open” periods.
Assuming that many agencies will decide not to continue their own mentor-protégé programs, one commenter recommended that SBA should incorporate the subcontracting incentives found in other mentor-
As with the 8(a) BD program, under the proposed small business mentor-protégé program, a protégé may joint venture with its SBA-approved mentor and qualify as a small business for any Federal government contract or subcontract, provided the protégé qualifies as small for the size standard corresponding to the NAICS code assigned to the procurement. Commenters supported this provision. They believed that it provides incentives to firms to become mentors and encourages meaningful business development assistance to protégés on any small business contracts for which they qualify as small. As such, SBA adopts the proposed language in this final rule.
This means that a joint venture between a protégé and its approved mentor in the small business mentor-protégé program will be deemed to be a small business concern for any Federal contract or subcontract. It does not mean that such a joint venture affirmatively qualifies for any other small business program. For example, a joint venture between a small business protégé firm and its SBA-approved mentor will be deemed a small business concern for any Federal contract or subcontract for which the protégé qualified as small, but the joint venture will qualify for a contract reserved or set-aside for eligible 8(a) BD, HUBZone SBCs, SDVO SBCs, or WOSBs only if the protégé firm meets the particular program-specific requirements as well.
Several commenters sought clarification of the requirement that the project manager of a joint venture between a protégé firm and its SBA-approved mentor must be an employee of the protégé firm. These comments pointed out that many times a firm that is awarded a contract will hire many, if not all, of the individuals currently performing the work under the contract for a different firm. These commenters recommended that SBA clarify that an individual identified as the project manager need not be an employee of the protégé firm at the time the joint venture makes an offer, as long as there is a commitment by the individual to work for the protégé if the joint venture wins the award. SBA agrees and has clarified that the individual identified as the project manager of the joint venture need not be an employee of the protégé firm at the time the joint venture submits an offer, but, if he or she is not, there must be a signed letter of intent that the individual commits to be employed by the protégé firm if the joint venture is the successful offeror. The final rule also clarifies that the individual identified as the project manager cannot be employed by the mentor and become an employee of the protégé firm for purposes of performance under the joint venture. SBA is concerned that such an “employee” of the protégé has no ties to the protégé, is not bound to stay with the protégé after performance of the contract is complete, and could easily go back to the mentor at that time. If that happens, the business development of the protégé firm would be diminished.
Consistent with the 8(a) BD program, the proposed rule permitted a mentor to a small business to own an equity interest of up to 40% in the protégé firm in order to raise capital for the protégé firm. SBA requested comments as to whether this 40% ownership interest should be a temporary interest, being authorized only as long as the mentor-protégé relationship exists, or whether it should be able to survive the termination of the mentor-protégé relationship. SBA was concerned that allowing a mentor to own 40% of a small business protégé after the mentor-protégé relationship ends may allow far-reaching influence by large businesses that act as mentors and enable them to receive long-term benefits from programs designed to assist only small businesses. Several commenters believed that mentors should not be required to divest themselves of their ownership interest in a protégé firm once the mentor-protégé relationship ends. They noted that, outside the 8(a) BD program (which has ownership restrictions on firms in the same or similar line of business), a large business may currently own a substantial ownership interest in a small business (up to 49% where one individual owns the remaining 51%) without a finding of affiliation, and that the affiliation rules are sufficient to protect against a large business from unduly benefitting from small business contracting programs. After further consideration, SBA agrees. During the mentor-protégé relationship, the protégé firm is shielded from a finding of affiliation where a large business mentor owns 40% of the protégé. Once the mentor-protégé relationship ends, any protection from a finding of affiliation also ends. As such, if the large business mentor's 40% ownership interest is controlling (or deemed to be controlling under SBA's affiliation rules), the two firms will be affiliated and the former protégé would not qualify as a small business. For this reason, there is no need to require a former mentor to divest itself of its 40% ownership interest in the former protégé after the mentor-protégé relationship ends. If it does not divest, the former protégé will be found to be ineligible for any contract as a small business where the 40% ownership interest causes affiliation under SBA's size rules. As such, this final rule does not add any language requiring a mentor to divest itself of its ownership interest in a protégé firm once the mentor-protégé relationship ends.
The key to any mentor-protégé relationship is the benefits to be received by the proposed protégé firm from the proposed mentor. It is essential that such benefits be identified as clearly and specifically as possible. To this end, the proposed rule required that all MPAs be in writing, identifying specifically the benefits intended to be derived by the projected protégé firms. Commenters universally supported requiring a written MPA and that the benefits to be provided through a MPA must be clearly identified. Specifically, they felt that the proposed provision requiring that there be a detailed timeline for the delivery of the assistance in the MPA was critical to ensuring that assistance was timely provided to protégé firms. They understood that without clear and identifiable deliverables set forth in MPAs, both protégé firms and SBA would lack the ability to require mentors to provide specific business development assistance. One
The proposed rule also required a firm seeking approval to be a protégé in either the 8(a) BD or small business mentor-protégé programs to identify any other mentor-protégé relationship it has through another Federal agency or SBA and provide a copy of each such MPA to SBA. The proposed rule required that the MPA submitted to SBA for approval must identify how the assistance to be provided by the proposed mentor is different from assistance provided to the protégé through another mentor-protégé relationship, either with the same or a different mentor. Several commenters opposed this requirement. They thought that the requirement might cause disputes as to whether the proposed MPA was different enough from a MPA with another agency. One commenter questioned whether a MPA of another agency could be transferred into the SBA's 8(a) BD or small business mentor-protégé program. This commenter reasoned that if one or more mentor-protégé programs of other agencies cease because of the new Government-wide SBA small business mentor-protégé program, a firm should be able to use that agreement, or at least the assistance that had been committed but not yet provided through the agreement, in the SBA's program. SBA continues to believe that assistance that has already been provided or pledged in a MPA of another agency should not be used as the basis for an SBA MPA. The intent is that a protégé firm gain business development assistance that it otherwise would not be able to obtain. SBA agrees, however, that if certain specified assistance was identified in a MPA of another agency, but that assistance had not yet been provided, a firm should be able to choose to terminate the mentor-protégé relationship with the other agency and use the not yet provided assistance as part of the assistance that will be provided through the 8(a) BD or small business mentor-protégé relationship. Therefore, SBA has clarified the regulatory text to better implement its intent in this final rule.
The proposed rule also provided that SBA will review a mentor-protégé relationship annually to determine whether to approve its continuation for another year. SBA intended to evaluate the relationship and determine whether the mentor provided the agreed-upon business development assistance, and whether the assistance provided appears to be worthwhile. SBA also proposed to limit the duration of a MPA to three years and to permit a protégé to have one three-year MPA with one entity and one three-year MPA with another entity, or two three-year MPAs (successive or otherwise) with the same entity. SBA invited comments regarding whether three years is an appropriate length of time and whether SBA should allow a mentor and protégé to enter into an additional MPA upon the expiration of the original agreement. Several commenters did not believe that three years was an appropriate length to authorize a mentor-protégé relationship. A few commenters disagreed with any specific limit on the number of years that a MPA may be in place. They believed that as long as the protégé continues to qualify as a small business and to receive developmental assistance, and the mentor is capable of and actually providing the assistance, then the mentor-protégé relationship should be allowed to continue. A few other commenters thought that three years was too short and recommended a longer length. They believed that in many instances it takes several years in order for both the mentor and protégé to understand how best to work with each other, and three years is not sufficient to allow that process to develop. They felt that the proposed rule would, in effect, limit a protégé to one mentor throughout its life as a small business. Although the rule proposed to authorize two three-year MPAs with two separate mentors, the commenters felt that because it takes a few years to get one mentor-protégé relationship to operate smoothly, most protégés would elect to keep the first MPA for a second three years instead of seeking a new three-year MPA with a different mentor.
SBA believes that the mentor-protégé program serves an important business development function for 8(a) Participants and other small businesses. However, SBA does not believe that any mentor-protégé relationship should last indefinitely (
The proposed rule also solicited comments on clarifying language not currently contained in the 8(a) mentor-protégé regulations authorizing the continuation of a mentor-protégé relationship where control or ownership of the mentor changes during the term of the MPA. Specifically, the proposed rule provided (for the 8(a) BD and small business mentor-protégé programs) that if control of the mentor changes (through a stock sale or otherwise), the previously approved mentor-protégé relationship may continue provided that, after the change in control, the mentor expresses in writing to SBA that it acknowledges the MPA and that it continues its commitment to fulfill its obligations under the agreement. Commenters supported this provision, and it is not changed in this final rule.
The rule also proposed to amend § 124.513 to clarify that interested parties may protest the size of an SBA-approved 8(a) joint venture that is the apparent successful offeror for a competitive 8(a) contract. This change alters the rule expressed in
One commenter encouraged SBA to add additional language to clarify that the only issue that may be challenged is size, and not the underlying terms, conditions, or structure of the joint venture agreement itself. SBA believes such a clarification is not necessary. As part of a size protest, an SBA Office of Government Contracting Area Office will review a joint venture agreement to make sure that the agreement complies with § 124.513, but in no way would that office seek or have the authority to invalidate certain terms or conditions of the joint venture.
A few commenters also sought clarification of SBA's regulations regarding when SBA will determine the eligibility of an 8(a) joint venture. They questioned whether approval would occur as part of the offer and acceptance process or at some later point in time. SBA's regulations provide that SBA approval of an 8(a) joint venture must occur prior to the award of an 8(a) contract. § 124.513(e)(1). That being the case, requiring an eligibility determination for a joint venture as part of the offer and acceptance process would make that requirement meaningless. SBA believes that a district office has flexibility to determine the eligibility of a particular 8(a) joint venture depending upon its workload. As long as that determination occurs any time prior to award, SBA has complied with the regulatory requirement. For a competitive 8(a) procurement, SBA does not receive an offering letter on behalf of any particular 8(a) Participant or potential offeror. As such, requiring SBA to determine the eligibility of a potential joint venture offeror at the time of acceptance would not make any sense. There is no certainty that the joint venture will submit an offer, and, if it does, that it will be the apparent successful offeror. Section 124.507(e) provides that within five working days after being notified by a contracting officer of the apparent successful offeror, SBA will verify the 8(a) eligibility of that entity. If the apparent successful offeror is a joint venture and SBA has not yet approved the joint venture, the five-day period for determining general eligibility would then apply to the joint venture also. If the SBA district office has asked for clarifications or changes with respect to the joint venture and has not received them by the end of this five-day period (and the contracting officer has not granted SBA additional time to conduct an eligibility determination), SBA will have to say that it was unable to verify the eligibility of the apparent successful offeror joint venture.
In the proposed rule, SBA proposed that an Agency must consider the past performance of the members of a joint venture when considering the past performance of an entity submitting an offer as a joint venture. SBA proposed this for both 8(a) joint ventures (proposed § 124.513(f)) and small business joint ventures (proposed § 125.8(e)). This proposal was in response to agencies that were considering only the past performance of a joint venture entity, and not considering the past performance of the very entities that created the joint venture entity. Where an agency required the specific joint venture entity itself to have experience and past performance, it made it extremely hard for newly established (and impossible for first-time) joint venture partners to demonstrate positive past performance. Each partner to a joint venture may have individually performed on one or more similar contracts previously, but the joint venture would not be credited with any experience or past performance of its individual partners. Commenters generally supported these changes. A few commenters recommended that SBA clarify that the same policy should also apply to joint ventures in the SDVO, HUBZone and WOSB programs, arguing that joint ventures in those programs could also be hurt where a procuring agency did not consider the experience and past performance of the individual partners to a joint venture. SBA agrees. As such, this final rule adds similar language to that proposed for 8(a) and small business joint ventures to SDVO joint ventures (§ 125.18(b)(5)), HUBZone joint ventures (§ 126.616(f)), and WOSB joint ventures (§ 127.506(f)).
In the final rule, SBA is clarifying its position that recertification is required when an affiliate of an entity acquires another concern. Under SBA's general principles of affiliation, if a firm is an affiliate it means that one entity controls or has the power to control the other or a third party controls both, and SBA aggregates the receipts or employees of the concern in question and its affiliates. In our view, an acquisition by an affiliate must be deemed an acquisition by the concern in question. Otherwise, firms could easily circumvent SBA's recertification rules by simply creating affiliates to acquire or merge with other firms. The clear intent of SBA's recertification rule was to require recertification when an entity exceeds the size standard due to acquisition, merger or novation, and there is no public policy rationale for not requiring recertification based on the whether it is the entity in question that acquires another concern, or an affiliate of the entity in question. The bottom line is the entity, including its affiliates, no longer qualifies as small and agencies should not receive future small business credit for dollars awarded to the concern in question, or its affiliates.
SBA also proposed amendments to § 124.103(c) in order to clarify that an individual claiming social disadvantage must present a combination of facts and evidence which by itself establishes that the individual has suffered social disadvantage that has negatively impacted his or her entry into or advancement in the business world. Under the proposed rule, SBA could disregard a claim of social disadvantage where a legitimate alternative ground for an adverse action exists and the individual has not presented evidence that would render his/her claim any more likely than the alternative ground. A statement that a male co-worker received higher compensation or was promoted over a woman does not amount to an incident of social disadvantage by itself. Additional facts are necessary to establish an instance of social disadvantage. A statement that a male co-worker received higher compensation or was promoted over a woman and that the woman had the
A few commenters opposed this proposed change. They did not believe that it would be appropriate to require proof of certain events that are not easily documented. One commenter noted that SBA currently permits individuals to prove social disadvantage with affidavits and sworn statements attesting to events in their lives that they believe were motivated by bias or discrimination, and questioned how an individual could in fact present additional evidence to prove his or her claim of alleged discriminatory conduct. SBA believes that these commenters misunderstood SBA's intent. SBA does not intend that individuals provide additional supporting documentation or evidence. Rather, SBA is merely looking for the individual's statement to contain a more complete picture. As noted in the proposed rule, the example of a man being promoted over a woman without additional facts does not lead to a more likely than not conclusion of discriminatory conduct. If the man had 10 years of experience to the woman's 3 years of experience, there could be a legitimate reason for his promotion over the woman. However, if she can say that the two had similar experience and qualifications and yet he was promoted and she was not, her claim of discriminatory conduct would have merit. All SBA is looking for is the complete picture, or additional facts, that would make an individual's claim of bias or discriminatory conduct more likely than not. Absent any evidence to the contrary, SBA would continue to rely on affidavits and sworn statements, and as long as those statements presented a clear picture, they would be sufficient to establish an instance of social disadvantage.
SBA is not intending to raise the evidentiary burden placed on an 8(a) applicant above the preponderance of the evidence standard. SBA is not seeking definitive proof, but rather additional facts to support the claim that a negative outcome (
Section 124.106 of SBA's regulations currently provides that one or more disadvantaged individuals must control the daily business operations of an 8(a) BD applicant or Participant. In determining whether the experience of one or more disadvantaged individuals claiming to manage the applicant or Participant is sufficient for SBA to determine that control exists, SBA's regulations require that the individuals must have managerial experience “of the extent and complexity needed to run the concern.” Although the regulations also provide that a “disadvantaged individual need not have the technical expertise or possess a required license to be found to control an applicant or Participant,” several comments indicated that there is confusion as to what type of managerial experience is needed to satisfy SBA's requirements. SBA did not intend to require in all instances that a disadvantaged individual must have managerial experience in the same or similar line of work as the applicant or Participant. A middle manager in a multi-million dollar large business or a vice president in a concern qualifying as small but nevertheless substantial may have gained sufficient managerial experience in a totally unrelated business field. The words “of the extent and complexity needed to run the concern” were meant to look at the degree of management experience, not the field in which that experience was gained. For example, an individual who has been a middle manager of a large aviation firm for 20 years and can demonstrate overseeing the work of a substantial number of employees may be deemed to have managerial experience of the extent and complexity needed to run a five-employee applicant firm whose primary industry category was in emergency management consulting even though that individual had no technical knowledge relating to the emergency management consulting field. SBA believes, however, that more specific industry-related experience may be needed in appropriate circumstances to ensure that the disadvantaged individual(s) claiming to control the day-to-day operations of the firm do so in fact. This would be particularly true where a non-disadvantaged owner (or former owner) who has experience related to the industry is actively involved in the day-to-day management of the firm. In order to clarify SBA's intent, this rule adds language to § 124.106 to specify that management experience need not be related to the same or similar industry as the primary industry classification of the applicant or Participant.
SBA's regulations require applicants to the 8(a) BD program to submit certain specified supporting documentation, including financial statements, copies of signed Federal personal and business tax returns and individual and business bank statements. The regulations also required that an applicant must submit a signed IRS Form 4506T, Request for Copy or Transcript of Tax Form, in all cases. A commenter questioned the need for every applicant to submit IRS Form 4506T. SBA agrees that this form is not needed in every case. SBA always has the right to request any applicant to submit specific information that may be needed in connection with a specific application. As long as SBA's regulations clearly provide that SBA may request any additional documents SBA deems necessary to determine whether a specific applicant is eligible to participate in the 8(a) BD program, SBA will be able to request that a particular firm submit IRS Form 4506T where SBA believes it to be appropriate. As such, this final rule eliminates the requirement from § 124.203 that an applicant must submit IRS Form 4506T in very case, and clarifies that SBA may request additional documentation when necessary.
In addition, a commenter noted that SBA's regulations provide that applications for the 8(a) BD program must generally be filed electronically, and questioned the need to allow hard copy applications at all. The commenter was concerned that there is a greater possibility for one or more attachments to be misplaced when an applicant files a hard copy application, that SBA staff could incorrectly transpose information when putting it into an electronic format, and that in today's business world there is no excuse for not having access to the internet and SBA's electronic application. SBA agrees. As such, this final rule amends § 124.202 to require applications to be filed electronically, with the understanding that certain supporting documentation may also be required under § 124.203.
Section 124.203 also requires that an applicant must provide a wet signature from each individual claiming social disadvantage status. Several commenters questioned the need for “wet” signatures, arguing that this requirement placed a significant burden on applicants. These commenters noted that an applicant that files an electronic
SBA's regulations also provided that if during the processing of an application, SBA receives adverse information regarding possible criminal conduct by the applicant or any of its principals, SBA would automatically suspend further processing of the application and refer it to SBA's Office of Inspector General (OIG) for review. Commenters believed that both of these provisions unnecessarily delayed SBA's processing of 8(a) applications. These commenters believed that referral to SBA's OIG should not occur in every instance, such as where a minor infraction occurred many years ago, but that SBA should have the discretion to refer matters to SBA's OIG in appropriate instances. SBA is committed to reducing the processing time for 8(a) applications and agrees that mandatory OIG referral may be unnecessary. SBA agrees that an application evidencing a 20 year old disorderly conduct offense for an individual claiming disadvantaged status when that individual was in college should not be referred to the OIG where that is the only instance of anything concerning the individual's good character. Such an offense has nothing to do with the individual's business integrity. In addition, even if it did, an offense that was that old (with no other instances of such misconduct) could also be determined not to be relevant for a present good character determination, and thus, not be one that caused SBA to suspend an 8(a) application and refer the matter to the OIG for review. This final rule provides necessary discretion to SBA to allow SBA to determine when to refer a matter to the OIG.
In addition, SBA's regulations provide that each individual claiming economic disadvantage must describe such economic disadvantage in a narrative statement, and must submit personal financial information to SBA. SBA believes that the written narrative on economic disadvantage is an unnecessary burden imposed on applicants to the 8(a) BD program. SBA's determination as to whether an individual qualifies as economically disadvantaged is based solely on an analysis of objective financial data relating to the individual's net worth, income and total assets. As such, this final rule eliminates the requirement that each individual claiming economic disadvantage must submit a narrative statement in support of his or her claim of economic disadvantage.
Pursuant to section 7(j)(10)(J)(ii)(II) of the Small Business Act, 15 U.S.C. 636(j)(10)(J)(ii)(II), “[i]n determining the size of a small business concern owned by a socially and economically disadvantaged Indian tribe (or a wholly owned business entity of such tribe) [for purposes of 8(a) BD program entry and 8(a) BD contract award], each firm's size shall be independently determined without regard to its affiliation with the tribe, any entity of the tribal government, or any other business enterprise owned by the tribe, unless the Administrator determines that one or more such tribally owned business concerns have obtained, or are likely to obtain, a substantial unfair competitive advantage within an industry category.” For purposes of the 8(a) BD program, the term “Indian tribe” includes any Alaska Native village or regional or village corporation (within the meaning of the Alaska Native Claims Settlement Act). 15 U.S.C. 637(a)(13). SBA's regulations have extended this broad exclusion from affiliation to the other entity-owned firms authorized to participate in the 8(a) BD program (
SBA received a significant number of comments supporting the clarifying language of the proposed rule. Commenters agreed that the term “industry category” should be defined by six digit NAICS code, as that application would be consistent with other similar terms in SBA's regulations. They also agreed that an industry category should be looked at nationally since size standards are established on a national basis. Thus, the final rule provides that an entity-owned business concern is not subject to the broad exemption to affiliation set forth in 13 CFR part 124 where one or more entity-owned firms are found to have obtained, or are likely to obtain, a substantial unfair competitive advantage on a national basis in a particular NAICS code with a particular size standard.
In making this assessment, SBA will consider a firm's percentage share of the national market and other relevant factors to determine whether a firm is dominant in a specific six-digit NAICS code with a particular size standard. SBA will review Federal Procurement Data System (FPDS) data to compare the firm's share of the industry as compared to overall small business participation in that industry to determine whether there is an unfair competitive advantage. The rule does not contemplate a finding of affiliation where an entity-owned concern appears to have obtained an unfair competitive advantage in a local market, but remains competitive, but not dominant, on a national basis.
The proposed rule sought to add language to § 124.109(c)(4) specifying that the individuals responsible for the management and daily operations of a tribally-owned concern cannot manage more than two Program Participants at the same time. This language is taken directly from section 7(j)(11)(B)(iii)(II) of the Small Business Act (15 U.S.C. 636(j)(11)(B)(iii)(II)), but does not currently appear in SBA's 8(a) BD regulations. The proposed rule provided that SBA believes it is necessary to incorporate this provision into the regulations to more fully apprise tribally-owned 8(a) applicants and Participants of the control requirements applicable to them. Those commenting on this provision understood the change and supported it. Thus, this final rule adopts the proposed language.
The proposed rule also sought to add language to § 124.110(d) to clarify that the members or directors of an NHO need not have the technical expertise or possess a required license to be found to control an applicant or Participant owned by the NHO. Rather, the NHO, through its members and directors, must merely have managerial experience of the extent and complexity needed to run the concern. As with individually owned 8(a) applicants and Participants,
The Small Business Act authorizes small business concerns owned by “economically disadvantaged” NHOs to participate in the 8(a) BD program. 15 U.S.C. 637(a)(4)(A)(i)(III). Neither the statute nor its legislative history provides any guidance on how to determine whether an NHO is economically disadvantaged. Currently, § 124.110(c)(1) provides that in determining whether an NHO is economically disadvantaged, SBA will look at the individual economic status of the NHO's members. The NHO must establish that a majority of its members qualify as economically disadvantaged under the rules that apply to individuals as set forth in § 124.104. The proposed rule solicited comments as to whether this is the most sensible approach to establishing economic disadvantage for NHOs.
SBA received a significant number of comments from the Native Hawaiian community on this issue, including several commenters who appeared at one or more of the tribal consultations. These commenters recommended that NHOs should establish economic disadvantage in the same way that tribes currently do for the 8(a) BD program: that is, by providing information relating to members, including the tribal unemployment rate, the per capita income of tribal members, and the percentage of tribal members below the poverty level. For the Native Hawaiian community, this would mean that an NHO would have to describe the individuals to be served by the NHO and provide the economic data regarding those individuals. SBA agrees that basing the economic disadvantage status of an NHO on individual Native Hawaiians who control the NHO does not seem to be the most appropriate way to do so. The Small Business Act defines the term “Native Hawaiian Organization” to mean “any community service organization serving Native Hawaiians in the State of Hawaii which (A) is a nonprofit corporation . . ., (B) is controlled by Native Hawaiians, and (C) whose business activities will principally benefit such Native Hawaiians.” 15 U.S.C. 637(a)(15). The crucial point is that an NHO must be a community service organization that benefits Native Hawaiians. It is certainly understood that an NHO must serve economically disadvantaged Native Hawaiians, but nowhere is there any hint that economically disadvantaged Native Hawaiians must control the NHO. The statutory language merely requires that an NHO must be controlled by Native Hawaiians. In order to maximize benefits to the Native Hawaiian community, SBA believes that it makes sense that an NHO should be able to attract the most qualified Native Hawaiians to run and control the NHO. If the most qualified Native Hawaiians cannot be part of the team that controls an NHO because they may not qualify individually as economically disadvantaged, SBA believes that is a disservice to the Native Hawaiian community. As such, this final rule changes the way that SBA will determine whether an NHO qualifies as economically disadvantaged. It makes NHOs similar to Indian tribes by requiring an NHO to present information relating to the economic disadvantaged status of Native Hawaiians, including the unemployment rate of Native Hawaiians and the per capita income of Native Hawaiians. The difference between tribes and NHOs, however, is that one tribe serves and intends to benefit one distinct group of people (
Pursuant to § 8(a)(1)(D) of the Small Business Act, 8(a) procurements that exceed $7.0 million for those assigned a manufacturing NAICS code and $4.0 million for all others must generally be competed among eligible 8(a) Program Participants. 15 U.S.C. 637(a)(1)(D). However, pursuant to section 303 of the Business Opportunity Reform Act of 1988 (Pub. L. 100-656), 102 Stat. 3853, 3887-3888, 8(a) Program Participants owned by Indian tribes and Alaska Native Corporations (ANCs) are exempt from those competitive threshold limitations. As such, a Participant owned by an Indian tribe or ANC can receive an 8(a) sole source award in any amount under the Small Business Act. Section 811 of the National Defense Authorization Act for Fiscal Year 2010 (NDAA 2010) (Section 811), Public Law 111-84, imposed justification and approval requirements on any 8(a) sole source contract that exceeds $20 million. 123 Stat. 2190, 2405. Specifically, section 811 provides that the head of an agency may not award a sole source 8(a) contract for an amount exceeding $20 million “unless the contracting officer for the contract justifies the use of a sole-source contract in writing” and “the justification is approved by the appropriate official designated to approve contract awards for dollar amounts that are comparable to the amount of the sole-source contract. . .”
SBA believes that there is some confusion in the 8(a) and procurement communities regarding the requirements of section 811. There is a misconception by some that there can be no 8(a) sole source awards that exceed $22 million. That is not true. Nothing in either section 811 or the FAR prohibits 8(a) sole source awards to Program Participants owned by Indian tribes and ANCs above $22 million. All that is required is that a contracting officer justify the award and have that justification approved at the proper level. In addition, there is no statutory or regulatory requirement that would support prohibiting 8(a) sole source awards above any specific dollar amount, higher or lower than $22 million.
As noted above, 8(a) procurements that exceed $7.0 million for those assigned a manufacturing NAICS code and $4.0 million for all others must generally be competed among eligible 8(a) Program Participants. This final rule also amends § 124.506(a)(2)(ii) regarding the competitive threshold amounts to make it consistent with the inflationary adjustment made to the FAR. As such, the final rule replaces the outdated $6.5 million competitive threshold for procurements assigned a manufacturing NAICS, and replaces it with the $7.0 million competitive threshold currently contained in § 19.805-1(a)(2) of the FAR.
The proposed rule sought to authorize SBA to change the primary industry classification contained in a Participant's business plan where the greatest portion of the Participant's total revenues during a three-year period have evolved from one NAICS code to another. It also provided discretion to SBA in deciding whether to change a Participant's primary industry classification because SBA recognized that whether the greatest portion of a firm's revenues is derived from one NAICS code, as opposed to one or more other NAICS codes, is a snapshot in time that is ever changing. The rule also proposed to require SBA to notify the Participant of its intent to change the Participant's primary industry classification and afford the Participant the opportunity to submit information explaining why such a change would be inappropriate. Although the language of the proposed rule specifically authorized the opportunity for a Participant to dispute any intent to change its primary NAICS code, the supplementary information to the proposed rule also requested comments as to whether an alternative that would permit SBA to change a Participant's primary industry automatically, based on FPDS data, should be considered instead.
SBA received a vast number of comments on this particular provision, both as formal written comments and as part of the various tribal consultations. In fact, this was the most heavily commented on provision of the proposed rule. Commenters focused on the alternative to allow SBA to change a Participant's primary industry unilaterally and strenuously opposed that alternative. Commenters presented many reasons why they opposed any automatic change in Participants' primary industry category. They felt that it would inappropriately impose a significant change on a firm based on inherently incomplete date in FPDS, which does not take all revenue streams into consideration. Commenters also noted that firms are not limited to pursuing work only in their primary NAICS code, and naturally pursue work in multiple NAICS codes. They believed that it would be contrary to the business development purposes of the program to discourage firms from branching out into several related industry categories. In addition, commenters noted that the work to be performed for a particular requirement may often be classified under more than one NAICS code. Commenters argued that if there are several reasonable NAICS codes that could be assigned to a requirement and a procuring agency selects one code (that happens to be a Participant's secondary NAICS code) instead of another (which is the Participant's primary NAICS code), the Participant should not be penalized for not performing work in its identified primary NAICS code. Commenters also felt that a unilateral change by SBA would deny a Participant due process rights and argued that there definitely should be dialogue between SBA and the Participant before any change is made to the Participant's primary NAICS code. Finally, although several commenters supported SBA's belief that it needed the ability to change a Participant's primary NAICS code in appropriate circumstances, a few different commenters opposed any change to a Participant's primary NAICS code.
SBA continues to believe that it should have the ability to change a Participant's primary NAICS code in appropriate circumstances. Because an entity-owned applicant need not have a track record of past performance to be eligible to participate in the 8(a) BD program (
The proposed rule also provided that if SBA determined that a change in a Participant's primary NAICS code was appropriate and that Participant was an entity-owned firm that could not have two Participants in the program with the same primary NAICS code, the entity (tribe, ANC, NHO, or CDC) would be required to choose which Participant should leave the 8(a) BD program if the change in NAICS codes caused it to have two Participants with the same primary NAICS code. Several commenters opposed requiring an entity to terminate the continued participation of one of its 8(a) BD Participants where it would have two Participants having the same primary NAICS code after SBA changes the primary NAICS of one of the firms. Instead, these commenters recommended that the second, newer firm be permitted to continue to participate in the 8(a) BD program, but not be permitted to receive any additional 8(a) contracts in the six-digit NAICS code that is the primary NAICS code of the other 8(a) Participant. SBA agrees that that would be a more suitable approach. The second firm is the one that should not have been able to have been admitted to the 8(a) BD program to perform most of its work in a NAICS code that was the primary NAICS code of another Participant owned by the same entity. Allowing the entity to choose to end the participation of the first firm, which may already be near the end of its program term, while allowing the second firm to continue to receive 8(a) contracts in a primary NAICS code that it never should have had would not appear to be much of a deterrent to others to continue this practice, and would not in any way penalize the second Participant that made no reasonable attempt to perform work in the NAICS code that it identified as its primary NAICS code to SBA. Thus, SBA adopts the recommendation and incorporates it into this final rule.
SBA proposed to add two additional bases for allowing a Participant to elect to be suspended from 8(a) BD program participation: Where the Participant's principal office is located in an area declared a major disaster area or where there is a lapse in Federal appropriations. The changes were intended to allow a firm to suspend its term of participation in the 8(a) BD program in order to not miss out on contract opportunities that the firm might otherwise have lost due to a disaster or a lapse in Federal funding.
SBA received only comments in support of these two new bases to allow a Participant to elect suspension from 8(a) BD program participation. As such, the final rule adopts the language contained in the proposed rule. Upon the request of a certified 8(a) firm in a major declared disaster area, SBA will be able to suspend the eligibility of the firm for up to a one year period while the firm recovers from the disaster to ensure that it is able to take full advantage of the 8(a) BD program, rather than being impacted by lack of capacity or contracting opportunities due to disaster-induced disruptions. During such a suspension, a Participant would not be eligible for 8(a) BD program benefits, including set-asides, however, but would not “lose time” in its program term due to the extenuating circumstances wrought by a disaster. Similarly, this rule will allow a Participant to elect to suspend its participation in the 8(a) BD program where: Federal appropriations for one or more Federal departments or agencies have expired without being extended via continuing resolution or other means and no new appropriations have been enacted (
The proposed rule included an amendment to the time frame for the reporting of benefits for entity-owned Participants in the 8(a) BD program. Previously, SBA required an entity-owned Participant to report benefits as part of its annual review submission. SBA believes it is more appropriate that this information be submitted as part of a Participant's submission of its annual financial statements pursuant to § 124.602. SBA wants to make clear that benefits reporting should not be tied to continued eligibility, as may be assumed where such reporting is part of SBA's annual review analysis. The proposed rule changed the timing of benefits reporting from the time of a Participant's annual review submission to the time of a Participant's annual financial statement submission. SBA believes that the data collected by certain Participants in preparing their financial statements submissions may also help them report some of the benefits that flow to the native or other community. The regulatory change will continue to require the submission of the data on an annual basis but within 120 days after the close of the concern's fiscal year instead of as part of the annual submission.
Commenters supported this change, believing that it was important to remove any doubt that benefits reporting should not in any way be tied to continued eligibility. Although a few commenters opposed the reporting of benefits flowing back to the native or other community entirely, most commenters understood that this requirement was generated in response to a GAO audit and was intended to support the continued need for the tribal 8(a) program. The final rule adopts the proposed language.
SBA also proposed to amend §§ 125.2(a) and 125.5(a)(1) to address reverse auctions. Specifically, SBA proposed to reinforce the principle that all of SBA's regulations, including those relating to set-asides and referrals for a Certificate of Competency, apply to reverse auctions. With a reverse auction, the Government is buying a product or service, but the businesses are bidding against each other, which tends to drive the price down (hence the name reverse auction). In a reverse auction, the bidders actually get to see all of the other bidders' prices and can “outbid” them by offering a lower price. Although SBA believes that the small business rules currently apply to reverse auctions, the proposed rule intended to make it clear to contracting officials that there are no exceptions to SBA's small business regulations for reverse auctions. SBA received no adverse comments in response to this provision.
The proposed rule added clarifying language to § 134.227(c) to recognize SBA as a party that may file a request for reconsideration in an OHA proceeding in which it has not previously participated. The final rule adopts the language as proposed. This provision is intended to alter the rule expressed in
The Office of Management and Budget (OMB) has determined that this proposed rule is a significant regulatory action for purposes of Executive Order 12866. Accordingly, the next section contains SBA's Regulatory Impact Analysis. This is not a major rule, however, under the Congressional Review Act.
1.
The final rule implements section 1347(b)(3) of the Small Business Jobs Act of 2010, Public Law 111-240, 124 Stat. 2504, which authorizes the Agency to establish mentor-protégé programs for SDVO SBCs, HUBZone SBCs, and WOSB concerns, modeled on the Agency's mentor-protégé program for small business concerns participating in programs under section 8(a) of the Small Business Act (15 U.S.C. 637(a)). In addition, the final rule implements section 1641 of the NDAA 2013, Public Law 112-239, which authorized SBA to establish a mentor-protégé program for all small business concerns. SBA is also updating its rules to clarify areas where small business concerns may have been confused or where OHA's interpretations of SBA rules do not conform to SBA's interpretation or intent.
2.
As noted above in the supplementary information, this rule seeks to implement the Jobs Act of 2010 and NDAA 2013 authorities by creating one new mentor-protégé program in which any small business could participate instead of implementing four new separate small business mentor-protégé programs (
3.
The final rule enhances the ability of small business concerns to obtain larger prime contracts that would be normally out of the reach of these businesses. The small business mentor-protégé program should allow all small businesses to tap into the expertise and capital of larger firms, which in turn should help small business concerns become more knowledgeable, stable, and competitive in the Federal procurement arena.
SBA estimates that under the final rule, approximately 2,000 SBCs, will become active in the small business mentor-protégé program, and protégé firms may obtain Federal contracts totaling possibly $2 billion per year. SBA notes that these estimates represent an extrapolation from data on the percentage of 8(a) BD Program Participants with signed MPAs and joint venture agreements, and are based on the dollars awarded to SBCs in FY 2012 according to data retrieved from the Federal Procurement Data System—Next Generation (FPDS-NG). With SBCs able to compete for larger contracts and thus a greater number of contracts in general, Federal agencies may choose to set aside more contracts for competition among small businesses, SDVO SBCs, HUBZone SBCs, and WOSB concerns, rather than using full and open competition. The movement from unrestricted to set-aside contracting might result in competition among fewer total bidders, although there will be more small businesses eligible to submit offers. The added competition for many of these procurements could result in lower prices to the Government for procurements reserved for SBCs, HUBZone SBCs, WOSB concerns, and SDVO SBCs, although SBA cannot quantify this benefit. To the extent that more than two thousand SBCs could become active in the small business mentor-protégé program, this might entail some additional administrative costs to the Federal Government associated with additional bidders for Federal small business procurement opportunities.
The small business mentor-protégé program may have some distributional effects among large and small businesses. Although SBA cannot estimate with certainty the actual outcome of the gains and losses among small and large businesses, it can identify several probable impacts. There may be a transfer of some Federal contracts from large businesses to SBC protégés. However, large business mentors will be able to joint venture with protégé firms for contracts reserved for small business and be eligible to perform contracts that they would otherwise be ineligible to perform. Large businesses may have fewer Federal prime contract opportunities as Federal agencies decide to set aside more Federal contracts for SBCs, SDVO SBCs, HUBZone SBCs, and WOSB concerns. In addition, some Federal contracts may be awarded to HUBZone protégés instead of large businesses since these firms may be eligible for an evaluation adjustment for contracts when they compete on a full and open basis. This transfer may be offset by a greater number of contracts being set aside for SBCs, SDVO SBCs, HUBZone SBCs, and WOSB concerns. SBA cannot estimate the potential distributional impacts of these transfers with any degree of precision.
The small business mentor-protégé program is consistent with SBA's statutory mandate to assist small businesses, and this regulatory action promotes the Administration's objectives. One of SBA's goals in support of the Administration's objectives is to help individual small businesses, including SDVO SBCs, HUBZone SBCs, and WOSB concerns, succeed through fair and equitable access to capital and credit, Federal contracts, and management and technical assistance.
A description of the need for this regulatory action and the benefits and costs associated with this action, including possible distributional impacts that relate to Executive Order 13563, is included above in the Regulatory Impact Analysis.
In an effort to engage interested parties in this action, SBA met with representatives from various agencies to obtain their feedback on SBA's proposed mentor-protégé program. For example, SBA participated in a Government-wide meeting involving Office of Small and Disadvantaged Business Utilization (OSDBU) representatives responsible for mentor-protégé programs in their respective agencies. It was generally agreed upon that SBA's proposed mentor-protégé program would complement the already existing Federal programs due in part to the differing incentives offered to the mentors under the various programs. SBA also presented proposed small business mentor-protégé programs to businesses in thirteen cities in the U.S. and sought their input as part of the Jobs Act tours. In developing the proposed rule, SBA considered all input, suggestions, recommendations, and relevant information obtained from industry groups, individual businesses, and Federal agencies.
Finally, SBA also conducted a series of tribal consultations pursuant to Executive Order 13175, Tribal Consultations. SBA conducted three in-person tribal consultations (in Washington, DC on February 26, 2015, in Tulsa, Oklahoma on April 21, 2015, and in Anchorage, Alaska on April 23, 2015) and two telephonic tribal consultations (one on April 7, 2015, and a Hawaii/Native Hawaiian Organization specific one on April 8, 2015). These consultations highlighted those issues specifically relevant to the tribal, ANC, and NHO communities, but also solicited comments regarding all of the provisions of the proposed rule. SBA considered the statements and recommendations received during the consultation process in finalizing this rule.
For purposes of Executive Order 12988, SBA has drafted this final rule, to the extent practicable, in accordance with the standards set forth in sections 3(a) and 3(b)(2) of that Executive Order, to minimize litigation, eliminate ambiguity, and reduce burden. This rule has no preemptive or retroactive effect.
For the purpose of Executive Order 13132, SBA has determined that this final rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, SBA has determined that this final rule has no federalism implications warranting preparation of a federalism assessment.
For purposes of the Paperwork Reduction Act, 44 U.S.C. Chapter 35, SBA has determined that this final rule would impose new reporting requirements. These collections of information include the following: (1) Information necessary for SBA to evaluate the success of a mentor-protégé relationship; (2) information necessary for SBA to determine whether a prospective mentor is capable of carrying out its responsibilities to assist the protégé firm under the proposed mentor-protégé agreement; (3) information necessary for SBA to evaluate compliance with performance of work requirements, including work performed by the joint venture; and (4) information detailing the proposed relationship between the mentor and protégé. The rule also eliminates the collection of information currently contained in SBA's regulations. Specifically, the final rule eliminates the requirement that each individual claiming economic disadvantage for purposes of 8(a) eligibility must submit a narrative statement in support of his or her claim of economic disadvantage. SBA eliminated this requirement because SBA believes it to be burdensome and unnecessary.
Finally, the final rule also makes a minor change to the benefits reporting schedule from the time of an 8(a) Participant's annual review submission to when the Participant submits its financial statement as required by § 124.602; specifically, within 120 days after the close of the Participant's fiscal year. The 8(a) Participants Benefits Report form has been approved by OMB (OMB Control No. 3245-0391). This rule makes no substantive changes to the benefits information to be reported to SBA, it merely adjusts the reporting date. The title, summary of each information collection, description of respondents, and an estimate of the reporting burden are discussed below. Included in the estimate is the time for reviewing instructions, searching existing data needed, and completing and reviewing each collection of information.
SBA solicited public comments on these collections of information at the proposed rule stage. Except as discussed below, there was very little feedback on these changes. SBA will submit the final information collections to OMB for approval.
1.
Overall, commenters agreed that the collection of information identified in the proposed rule is necessary for the proper performance of SBA's functions, and would not be overly burdensome for affected business concerns.
2.
3.
4.
5.
Under the Regulatory Flexibility Act (RFA), this final rule may have a significant impact on a substantial number of small businesses. Immediately below, SBA sets forth a final regulatory flexibility analysis (FRFA) addressing the impact of this final rule in accordance with section 604, Title 5, of the United States Code. The FRFA examines the need and objectives for this final rule; the significant issues raised by public comment and SBA's responses thereto; kind and number of small entities that may be affected; the projected recordkeeping, reporting, and other requirements; and a description of the steps SBA has taken to minimize the significant economic impact on small entities.
1.
This final rule implements section 1347(b)(3) of the Small Business Jobs Act of 2010, Public Law 111-240, and section 1641 of the NDAA 2013, Public Law 112-239. As discussed above, the Small Business Jobs Act tasked the Agency with establishing mentor-protégé programs for SDVO SBCs, HUBZone SBCs, and WOSB concerns, modeled on the Agency's mentor-protégé program for small business concerns participating in programs under section 8(a) of the Small Business Act (13 U.S.C. 637(a)), commonly known as the 8(a) Business Development program. Similarly, section 1641 of NDAA 2013 authorized SBA to establish a mentor-protégé program for all small business concerns that is identical to the 8(a) BD mentor-protégé program, except that SBA may modify the program to the extent necessary given the types of small
2.
As noted above, SBA received 113 comments in response to the proposed rule, with most of the commenters commenting on multiple proposed provisions. A description of the comments received, SBA's response to such comments, and the changes made to the final rule in response to the comments is identified in detail in the supplementary information section of this final rule. The most heavily commented on provision of the proposed rule was the provision authorizing SBA to change the primary NAICS code of an 8(a) BD Program Participant in appropriate circumstances. SBA believed that many of the commenters misconstrued SBA's intent. SBA alleviated the concern that SBA would unilaterally change a firm's primary NAICS code without input from the firm by clarifying in the final rule that there will be a dialogue between SBA and the affected Participant before any NAICS code change is made, and that a change will not occur where the firm provides a reasonable explanation as to why the identified primary NAICS code should remain as the Participant's primary NAICS code.
SBA received a significant number of comments supporting a small business mentor-protégé program. These commenters believed that a small business mentor-protégé program would enable firms that are not in the 8(a) BD program to receive critical business development assistance that would otherwise not be available to them. Many of these commenters expressed support for the opportunity to gain meaningful expertise that would help them to independently perform more complex and higher value contracts in the future.
3.
The final rule will apply to all small business concerns participating in the Federal procurement market that seek to form mentor-protégé relationships. SBA estimates this number to be about two thousand, based upon the number of 8(a) Participants that have established mentor-protégé relationships in that program.
4.
The final rule imposes the following reporting and recordkeeping requirements: (1) Information necessary for SBA to evaluate the success of a mentor-protégé relationship; (2) information necessary for SBA to determine whether a prospective mentor is meeting its obligations under its MPA; and (3) information necessary for SBA to evaluate compliance with performance of work requirements. SDVO SBC, HUBZone SBC, and WOSB joint venture partners would be required to submit to SBA performance of work reports demonstrating their compliance with the limitations on subcontracting requirements. SBA estimates this number to be approximately 2,000.
The Paperwork Reduction Act requirements are addressed further above.
5.
Thirteen Federal agencies, including SBA, currently offer mentor-protégé programs aimed at assisting small businesses to gain the technical and business skills necessary to successfully compete in the Federal procurement market. While the mentor-protégé programs offered by other agencies share SBA's goal of increasing the participation of small businesses in Government contracts, the other Federal mentor-protégé programs are structured differently than SBA's proposed mentor-protégé programs, particularly in terms of the incentives offered to mentors. For example, some agencies offer additional points to a bidder who has a signed mentor-protégé agreement in place, while other agencies offer the benefit of reimbursing mentors for certain costs associated with protégés' business development. SBA, as the agency authorized to determine small business size status, is uniquely qualified to offer mentor-protégé program participants the distinctive benefit of an exclusion from affiliation. This incentive makes SBA's mentor-protégé programs particularly attractive to potential mentors. Having a larger and more robust mentor pool increases the likelihood that small business protégés will indeed obtain valuable business development assistance.
SBA decided to implement one new small business mentor-protégé program instead of four new mentor-protégé programs (one for small businesses, one for SDVO small businesses, one for WOSBs and one for HUBZone small businesses) since the other three types of small businesses (SDVO, HUBZone and women-owned) would be necessarily included within any mentor-protégé program targeting all small business concerns. Having one additional program instead of four additional programs will be easier for small business concerns to use and understand, and cause less of a burden on them.
In addition, where the benefits provided to a protégé firm are minimal or where it appears that the relationship has been used primarily to permit a large mentor to benefit from contracts with its approved protégé, through one or more joint ventures, that it would otherwise not be eligible for, SBA will terminate the mentor-protégé relationship. This will allow a small protégé firm to get out of a bad mentor-protégé relationship that may have a negative impact on its economic development and seek and enter a new mentor-protégé relationship that will prove to be more beneficial to the small protégé firm.
Throughout this final rule, SBA has attempted to minimize any costs to small business. SBA believes that the benefits to be gained through a productive mentor-protégé relationship will far outweigh any administrative costs associated with the mentor-protégé program. In addition, the provisions of the final rule attempt to impose safeguards that ensure that small businesses receive meaningful business development assistance, while at the same time ensuring that large businesses do not unduly benefit from small business contracts for which they would otherwise be ineligible to perform.
Administrative practice and procedure, Government procurement, Government property, Individuals with disabilities, Loan programs-business, Reporting and recordkeeping requirements, Small businesses.
Administrative practice and procedures, Government procurement, Hawaiian natives, Indians—business and finance, Minority businesses, Reporting and recordkeeping requirements, Tribally-owned concerns, Technical assistance.
Government contracts, Government procurement, Reporting and recordkeeping requirements, Small businesses, Technical assistance.
Administrative practice and procedure, Government procurement, Penalties, Reporting and recordkeeping requirements, Small businesses.
Government contracts, Reporting and recordkeeping requirements, Small businesses.
Administrative practice and procedure, Organization and functions (Government agencies).
For the reasons set forth in the preamble, SBA amends 13 CFR parts 121, 124, 125, 126, 127, and 134 as follows:
15 U.S.C. 632, 634(b)(6), 636(b), 662, and 694a(9).
(b) * * *
(2) * * *
(ii) Business concerns owned and controlled by Indian Tribes, ANCs, NHOs, CDCs, or wholly-owned entities of Indian Tribes, ANCs, NHOs, or CDCs, are not considered to be affiliated with other concerns owned by these entities because of their common ownership or common management. In addition, affiliation will not be found based upon the performance of common administrative services so long as adequate payment is provided for those services. Affiliation may be found for other reasons.
(A) Common administrative services which are subject to the exception to affiliation include, bookkeeping, payroll, recruiting, other human resource support, cleaning services, and other duties which are otherwise unrelated to contract performance or management and can be reasonably pooled or otherwise performed by a holding company, parent entity, or sister business concern without interfering with the control of the subject firm.
(B) Contract administration services include both services that could be considered “common administrative services” under the exception to affiliation and those that could not.
(
(
(C) Business development may include both services that could be considered “common administrative services” under the exception to affiliation and those that could not. Efforts at the holding company or parent level to identify possible procurement opportunities for specific subsidiary companies may properly be considered “common administrative services” under the exception to affiliation. However, at some point the opportunity identified by the holding company's or parent entity's business development efforts becomes concrete enough to assign to a subsidiary and at that point the subsidiary must be involved in the business development efforts for such opportunity. At the proposal or bid preparation stage of business development, the appropriate subsidiary company for the opportunity has been identified and a representative of that company must be involved in preparing an appropriate offer. This does not mean to imply that one or more representatives of a holding company or parent entity cannot also be involved in preparing an offer. They may be involved in assisting with preparing the generic part of an offer, but the specific subsidiary that intends to ultimately perform the contract must control the technical and contract specific portions of preparing an offer. In addition, once award is made, employee assignments and the logistics for contract performance must be controlled by the specific subsidiary company and should not be performed at a holding company or parent entity level.
(6) A firm that has an SBA-approved mentor-protégé agreement authorized under § 124.520 or § 125.9 of this chapter is not affiliated with its mentor firm solely because the protégé firm receives assistance from the mentor under the agreement. Similarly, a protégé firm is not affiliated with its mentor solely because the protégé firm receives assistance from the mentor under a federal mentor-protégé program where an exception to affiliation is specifically authorized by statute or by SBA under the procedures set forth in § 121.903. Affiliation may be found in either case for other reasons as set forth in this section.
(h) * * * For purposes of this provision and in order to facilitate tracking of the number of contract awards made to a joint venture, a joint venture: must be in writing and must do business under its own name; must be identified as a joint venture in the System for Award Management (SAM); may be in the form of a formal or informal partnership or exist as a separate limited liability company or other separate legal entity; and, if it exists as a formal separate legal entity, may not be populated with individuals intended to perform contracts awarded to the joint venture (
(3) * * *
(ii) Two firms approved by SBA to be a mentor and protégé under § 125.9 of this chapter may joint venture as a small business for any Federal government prime contract or subcontract, provided the protégé qualifies as small for the size standard corresponding to the NAICS code assigned to the procurement, and the joint venture meets the requirements of § 125.18(b)(2) and (3), § 126.616(c) and (d), or § 127.506(c) and (d) of this chapter, as appropriate.
(g) * * *
(2) * * *
(ii) * * *
(A) When a concern, or an affiliate of the concern, acquires or is acquired by another concern;
(b) * * *
(10) For purposes of the small business mentor-protégé program authorized pursuant to § 125.9 of this chapter (based on its status as a small business for its primary or identified secondary NAICS code), the business concern seeking to be a protégé or SBA may request a formal size determination.
15 U.S.C. 634(b)(6), 636(j), 637(a), 637(d) and 644; Pub. L. 99-661; Pub. L. 100-656, sec. 1207; Pub. L. 101-37; Pub. L. 101-574, section 8021; Pub. L. 108-87; and 42 U.S.C. 9815.
The additions and revisions read as follows:
(c) * * *
(1) * * * Such individual should present corroborating evidence to support his or her claim(s) of social disadvantage where readily available.
(2) * * *
(ii) The individual's social disadvantage must be rooted in treatment which he or she has experienced in American society, not in other countries;
(iii) The individual's social disadvantage must be chronic and substantial, not fleeting or insignificant; and
(iv) The individual's social disadvantage must have negatively impacted on his or her entry into or advancement in the business world. SBA will consider any relevant evidence in assessing this element, including experiences relating to education, employment and business history (including experiences relating to both the applicant firm and any other previous firm owned and/or controlled by the individual), where applicable.
(3) An individual claiming social disadvantage must present facts and evidence that by themselves establish that the individual has suffered social disadvantage that has negatively impacted his or her entry into or advancement in the business world.
(i) Each instance of alleged discriminatory conduct must be accompanied by a negative impact on the individual's entry into or advancement in the business world in order for it to constitute an instance of social disadvantage.
(ii) SBA may disregard a claim of social disadvantage where a legitimate alternative ground for an adverse employment action or other perceived adverse action exists and the individual has not presented evidence that would render his/her claim any more likely than the alternative ground.
A woman who is not a member of a designated group attempts to establish her individual social disadvantage based on gender. She certifies that while working for company X, she received less compensation than her male counterpart. Without additional facts, that claim is insufficient to establish an incident of gender bias that could lead to a finding of social disadvantage. Without additional facts, it is no more likely that the individual claiming disadvantage was paid less than her male counterpart because he had superior qualifications or because he had greater responsibilities in his employment position. She must identify her qualifications (education, experience, years of employment, supervisory functions) as being equal or superior to that of her male counterpart in order for SBA to consider that particular incident may be the result of discriminatory conduct.
A woman who is not a member of a designated group attempts to establish her individual social disadvantage based on gender. She certifies that while working for company Y, she was not permitted to attend a professional development conference, even though male employees were allowed to attend similar conferences in the past. Without additional facts, that claim is insufficient to establish an incident of gender bias that could lead to a finding of social disadvantage. It is no more likely that she was not permitted to attend the conference based on gender bias than based on non-discriminatory reasons. She must identify that she was in the same professional position and level as the male employees who were permitted to attend similar conferences in the past, and she must identify that funding for training or professional development was available at the time she requested to attend the conference.
(iii) SBA may disregard a claim of social disadvantage where an individual presents evidence of discriminatory conduct, but fails to connect the discriminatory conduct to consequences that negatively impact his or her entry into or advancement in the business world.
A woman who is not a member of a designated group attempts to establish her individual social disadvantage based on gender. She provides instances where one or more male business clients utter derogatory statements about her because she is a woman. After each instance, however, she acknowledges that the clients gave her contracts or otherwise continued to do business with her. Despite suffering discriminatory conduct, this individual has not established social disadvantage because the discriminatory conduct did not have an adverse effect on her business.
(4) SBA may request an applicant to provide additional facts to support his or her claim of social disadvantage to substantiate that a negative outcome was based on discriminatory conduct instead of one or more legitimate non-discriminatory reasons.
(5) SBA will discount or disbelieve statements made by an individual seeking to establish his or her individual social disadvantage where such statements are inconsistent with other evidence contained in the record.
(6) In determining whether an individual claiming social disadvantage meets the requirements set forth in this paragraph (c), SBA will determine whether:
(i) Each specific claim establishes an incident of bias or discriminatory conduct;
(ii) Each incident of bias or discriminatory conduct negatively impacted the individual's entry into or advancement in the business world; and
(iii) In the totality, the incidents of bias or discriminatory conduct that negatively impacted the individual's entry into or advancement in the business world establish chronic and substantial social disadvantage.
(b)
(h) * * *
(2) A non-Participant concern in the same or similar line of business or a principal of such concern may not own more than a 10 percent interest in a Participant that is in the developmental stage or more than a 20 percent interest in a Participant in the transitional stage of the program, except that a former Participant in the same or similar line of business or a principal of such a former Participant (except those that have been terminated from 8(a) BD program participation pursuant to §§ 124.303 and 124.304) may have an equity ownership interest of up to 20 percent in a current Participant in the developmental stage of the program or up to 30 percent in a transitional stage Participant.
* * * Management experience need not be related to the same or similar industry as the primary industry classification of the applicant or Participant. * * *
The revision reads as follows:
(a) * * *
(1) If during the processing of an application, SBA receives adverse information from the applicant or a credible source regarding possible criminal conduct by the applicant or any of its principals, SBA may suspend further processing of the application and refer it to SBA's Office of Inspector General (OIG) for review. If the SBA suspends the application, but does not hear back from OIG within 45 days, SBA may proceed with application processing. The AA/BD will consider any findings of the OIG when evaluating the application.
(c) * * *
(2) * * *
(iv) In determining whether a tribally-owned concern has obtained, or is likely to obtain, a substantial unfair competitive advantage within an industry category, SBA will examine the firm's participation in the relevant six digit NAICS code nationally as compared to the overall small business share of that industry.
(A) SBA will consider the firm's percentage share of the national market and other relevant factors to determine whether the firm is dominant in a specific six-digit NAICS code with a particular size standard.
(B) SBA does not contemplate a finding of affiliation where a tribally-owned concern appears to have obtained an unfair competitive advantage in a local market, but remains competitive, but not dominant, on a national basis.
(4) * * *
(iii) The individuals responsible for the management and daily operations of a tribally-owned concern cannot manage more than two Program Participants at the same time.
(A) An individual's officer position, membership on the board of directors or position as a tribal leader does not necessarily imply that the individual is responsible for the management and daily operations of a given concern. SBA looks beyond these corporate formalities and examines the totality of the information submitted by the applicant to determine which individual(s) manage the actual day-to-day operations of the applicant concern.
(B) Officers, board members, and/or tribal leaders may control a holding company overseeing several tribally-owned or ANC-owned companies, provided they do not actually control the day-to-day management of more than two current 8(a) BD Program Participant firms.
The additions and revisions read as follows:
(b) * * * In determining whether an NHO-owned concern has obtained, or is likely to obtain, a substantial unfair competitive advantage within an industry category, SBA will examine the firm's participation in the relevant six digit NAICS code nationally.
(1) SBA will consider the firm's percentage share of the national market and other relevant factors to determine whether the firm is dominant in a specific six-digit NAICS code with a particular size standard.
(2) SBA does not contemplate a finding of affiliation where an NHO-owned concern appears to have obtained an unfair competitive advantage in a local market, but remains competitive, but not dominant, on a national basis.
(c) An NHO must establish that it is economically disadvantaged and that its business activities will principally benefit Native Hawaiians. Once an NHO establishes that it is economically disadvantaged in connection with the application of one NHO-owned firm, it need not reestablish such status in order to have other businesses that it owns certified for 8(a) BD program participation, unless specifically requested to do so by the AA/BD. If a different NHO identifies that it will serve and benefit the same Native Hawaiian community as an NHO that has already established its economic disadvantage status, that NHO need not
(1) In order to establish that an NHO is economically disadvantaged, it must demonstrate that it will principally benefit economically disadvantaged Native Hawaiians. To do this, the NHO must provide data showing the economic condition of the Native Hawaiian community that it intends to serve, including:
(i) The number of Native Hawaiians in the community that the NHO intends to serve;
(ii) The present Native Hawaiian unemployment rate of those individuals;
(iii) The per capita income of those Native Hawaiians, excluding judgment awards;
(iv) The percentage of those Native Hawaiians below the poverty level; and
(v) The access to capital of those Native Hawaiians.
(d) An NHO must control the applicant or Participant firm. To establish that it is controlled by an NHO, an applicant or Participant must demonstrate that the NHO controls its board of directors, managing members, managers or managing partners.
(1) The NHO need not possess the technical expertise necessary to run the NHO-owned applicant or Participant firm. The NHO must have managerial experience of the extent and complexity needed to run the concern. Management experience need not be related to the same or similar industry as the primary industry classification of the applicant or Participant.
(2) An individual responsible for the day-to-day management of an NHO-owned firm need not establish personal social and economic disadvantage.
(g) An NHO-owned firm's eligibility for 8(a) BD participation is separate and distinct from the individual eligibility of the NHO's members, directors, or managers.
(1) The eligibility of an NHO-owned concern is not affected by the former 8(a) BD participation of one or more of the NHO's individual members.
(2) In determining whether an NHO is economically disadvantaged, SBA may consider the individual economic status of an NHO member or director even if the member or director previously used his or her disadvantaged status to qualify an individually owned 8(a) applicant or Participant.
(c) * * * In determining whether a CDC-owned concern has obtained, or is likely to obtain, a substantial unfair competitive advantage within an industry category, SBA will examine the firm's participation in the relevant six digit NAICS code nationally.
(1) SBA will consider the firm's percentage share of the national market and other relevant factors to determine whether the firm is dominant in a specific six-digit NAICS code with a particular size standard.
(2) SBA does not contemplate a finding of affiliation where a CDC-owned concern appears to have obtained an unfair competitive advantage in a local market, but remains competitive, but not dominant, on a national basis.
(e) * * *
(2) SBA may change the primary industry classification contained in a Participant's business plan where the greatest portion of the Participant's total revenues during the Participant's last three completed fiscal years has evolved from one NAICS code to another. As part of its annual review, SBA will consider whether the primary NAICS code contained in a Participant's business plan continues to be appropriate.
(i) Where SBA believes that the primary industry classification contained in a Participant's business plan does not match the Participant's actual revenues over the Participant's most recently completed three fiscal years, SBA may notify the Participant of its intent to change the Participant's primary industry classification and afford the Participant the opportunity to respond.
(ii) A Participant may challenge SBA's intent to change its primary industry classification by demonstrating why it believes the primary industry classification contained in its business plan continues to be appropriate, despite an increase in revenues in a secondary NAICS code beyond those received in its designated primary industry classification. The Participant should identify: All non-federal work that it has performed in its primary NAICS code; any efforts it has made and any plans it has to make to receive contracts to obtain contracts in its primary NAICS code; all contracts that it was awarded that it believes could have been classified under its primary NAICS code, but which a contracting officer assigned another reasonable NAICS code; and any other information that it believes has a bearing on why its primary NAICS code should not be changed despite performing more work in another NAICS code.
(iii) As long as the Participant provides a reasonable explanation as to why the identified primary NAICS code continues to be its primary NAICS code, SBA will not change the Participant's primary NAICS code.
(iv) Where an SBA change in the primary NAICS code of an entity-owned firm results in the entity having two Participants with the same primary NAICS code, the second, newer Participant will not be able to receive any 8(a) contracts in the six-digit NAICS code that is the primary NAICS code of the first, older Participant for a period of time equal to two years after the first Participant leaves the 8(a) BD program.
An application for 8(a) BD program admission must be filed in an electronic format. An electronic application can be found by going to the 8(a) BD page of SBA's Web site (
Each 8(a) BD applicant concern must submit those forms and attachments required by SBA when applying for admission to the 8(a) BD program. These forms and attachments may include, but not be limited to, financial statements, copies of signed Federal personal and business tax returns, individual and business bank statements, personal history statements, and any additional documents SBA deems necessary to determine eligibility. In all cases, the applicant must provide a signature from each individual claiming social and
The additions read as follows:
(h)(1) * * *
(iii) A Participant has a principal place of business located in a federally declared disaster area and elects to suspend its participation in the 8(a) BD program for a period of up to one year from the date of the disaster declaration to allow the firm to recover from the disaster and take full advantage of the program. A Participant that elects to be suspended may request that the suspension be lifted prior to the end date of the original request; or
(iv) Federal appropriations for one or more federal departments or agencies have lapsed, SBA has previously accepted an offer for a sole source 8(a) award on behalf of the Participant, award is pending, and the Participant elects to suspend its participation in the 8(a) BD program during the lapse in federal appropriations.
(5) Where a Participant is suspended pursuant to (h)(1)(iv) of this section, the Participant must notify SBA when the lapse in appropriation ends so that SBA can immediately lift the suspension. When the suspension is lifted, the length of the suspension will be added to the concern's program term.
(a) Pursuant to section 8(a) of the Small Business Act, SBA is authorized to enter into all types of contracts with other Federal agencies regardless of the place of performance, including contracts to furnish equipment, supplies, services, leased real property, or materials to them or to perform construction work for them, and to contract the performance of these contracts to qualified Participants. * * *
(b) * * * In addition, for multiple award contracts not set aside for the 8(a) BD program, a procuring agency may set aside specific orders to be competed only among eligible 8(a) Participants, regardless of the place of performance. Such an order may be awarded as an 8(a) award where the order was offered to and accepted by SBA as an 8(a) award and the order specifies that the performance of work and/or non-manufacturer rule requirements apply as appropriate.
The revision and addition read as follows:
(c) * * *
(9) The acquisition history, if any, of the requirement, including specifically whether the requirement is a follow-on requirement, and whether any portion of the contract was previously performed by a small business outside of the 8(a) BD program;
(17) A statement that the necessary justification and approval under the Federal Acquisition Regulation has occurred where a requirement whose estimated contract value exceeds $22,000,000 is offered to SBA as a sole source requirement on behalf of a specific Participant; and
(a) * * *
(1) * * * As part of its acceptance of a sole source requirement, SBA will determine the eligibility of the Participant identified in the offering letter, using the same analysis set forth in § 124.507(b)(2). Where a procuring agency offers a sole source 8(a) procurement on behalf of a joint venture, SBA will conduct an eligibility review of the lead 8(a) party to the joint venture as part of its acceptance, and will approve the joint venture prior to award pursuant to § 124.513(e).
(2) * * * For a competitive 8(a) procurement, SBA will determine the eligibility of the apparent successful offeror pursuant to § 124.507(b).
(g) * * *
(4) A procuring agency may offer, and SBA may accept, an order issued under a BOA to be awarded through the 8(a) BD program where the BOA itself was not accepted for the 8(a) BD program, but rather was awarded on an unrestricted basis.
The addition reads as follows:
(b) * * *
(5) An agency may not award an 8(a) sole source contract for an amount exceeding $22,000,000 unless the contracting officer justifies the use of a sole source contract in writing and has obtained the necessary approval under the Federal Acquisition Regulation.
(b) * * *
(3) Where the apparent successful offeror is a joint venture and SBA has not approved the joint venture prior to receiving notification of the apparent successful offeror, review of the joint venture will be part of the eligibility determination conducted under this paragraph (b). If SBA cannot approve the joint venture within 5 days of receiving a procuring activity's request for an eligibility determination, and the procuring activity does not grant additional time for review, SBA will be unable to verify the eligibility of the joint venture for award.
The additions and revisions read as follows:
(b) * * *
(3) SBA approval of a joint venture agreement pursuant to paragraph (e) of this section does not equate to a formal size determination. As such, despite SBA's approval of a joint venture, the size status of a joint venture that is the apparent successful offeror for a competitive 8(a) contract may be protested pursuant to § 121.1001(a)(2) of this chapter.
(c) * * *
(2) Designating an 8(a) Participant as the managing venturer of the joint venture and an employee of an 8(a) Participant as the project manager responsible for performance of the contract. The individual identified as the project manager of the joint venture need not be an employee of the 8(a) Participant at the time the joint venture submits an offer, but, if he or she is not, there must be a signed letter of intent that the individual commits to be employed by the 8(a) Participant if the joint venture is the successful offeror. The individual identified as the project manager cannot be employed by the mentor and become an employee of the 8(a) Participant for purposes of performance under the joint venture;
(6) Itemizing all major equipment, facilities, and other resources to be furnished by each party to the joint venture, with a detailed schedule of cost or value of each, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated major equipment, facilities, and other resources to be furnished by each party to the joint venture, without a detailed schedule of cost or value of each, or in the alternative, specify how the parties to the joint venture will furnish such resources to the joint venture once a definite scope of work is made publicly available;
(7) Specifying the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, including ways that the parties to the joint venture will ensure that the joint venture and the 8(a) partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, not including the ways that the parties to the joint venture will ensure that the joint venture and the 8(a) partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, or in the alternative, specify how the parties to the joint venture will define such responsibilities once a definite scope of work is made publicly available;
(d)
(2) The 8(a) partner(s) to the joint venture must perform at least 40% of the work performed by the joint venture.
(i) The work performed by the 8(a) partner(s) to a joint venture must be more than administrative or ministerial functions so that the 8(a) partners gain substantive experience.
(ii) The amount of work done by the partners will be aggregated and the work done by the 8(a) partner(s) must be at least 40% of the total done by all partners. In determining the amount of work done by a non-8(a) partner, all work done by the non-8(a) partner and any of its affiliates at any subcontracting tier will be counted.
(e) * * *
(1) SBA must approve a joint venture agreement prior to the award of an 8(a) contract on behalf of the joint venture. A Participant may submit a joint venture agreement to SBA for approval at any time, whether or not in connection with a specific 8(a) procurement.
(2) * * *
(iii) If a second or third contract to be awarded a joint venture is not an 8(a) contract, the Participant would not have to submit an addendum setting forth contract performance for the non-8(a) contract(s) to SBA for approval.
(3) Where a joint venture has been established and approved by SBA without a corresponding specific 8(a) contract award (including where a joint venture is established in connection with a blanket purchase agreement (BPA), basic agreement (BA), or basic ordering agreement (BOA)), the Participant must submit an addendum to the joint venture agreement, setting forth the performance requirements, to SBA for approval for each of the three 8(a) contracts authorized to be awarded to the joint venture. In the case of a BPA, BA or BOA, each order issued under the agreement would count as a separate contract award, and SBA would need to approve the addendum for each order prior to award of the order to the joint venture.
(f)
(g)
(i)
(j)
(i) The parties have entered into a joint venture agreement that fully complies with paragraph (c) of this section;
(ii) The parties will perform the contract in compliance with the joint venture agreement and with the performance of work requirements set forth in paragraph (d) of this section.
(iii) The parties have obtained SBA's approval of the joint venture agreement and any addendum to that agreement and that there have been no modifications to the agreement that SBA has not approved.
(l)
(1) Failure to enter a joint venture agreement that complies with paragraph (c) of this section;
(2) Failure to perform a contract in accordance with the joint venture agreement or performance of work requirements in paragraph (d) of this section; or
(3) Failure to submit the certification required by paragraph (e) of this section or comply with paragraph (i) of this section.
The revision reads as follows:
(a) An 8(a) contract (or 8(a) order where the underlying contract is not an 8(a) contract) must be performed by the Participant that initially received it unless a waiver is granted under paragraph (b) of this section.
The revisions and additions read as follows:
(a) * * * This assistance may include technical and/or management assistance; financial assistance in the form of equity investments and/or loans; subcontracts (either from the mentor to the protégé or from the protégé to the mentor); trade education; and/or assistance in performing prime contracts with the Government through joint venture arrangements. * * *
(b) * * *
(1) * * *
(i) Is capable of carrying out its responsibilities to assist the protégé firm under the proposed mentor-protégé agreement;
(2) * * * Under no circumstances will a mentor be permitted to have more than three protégés at one time in the aggregate under the mentor-protégé programs authorized by §§ 124.520 and 125.9 of this chapter.
(3) In order to demonstrate that it is capable of carrying out its responsibilities to assist the protégé firm under the proposed mentor-protégé agreement, a firm seeking to be a mentor may submit to the SBA copies of the federal tax returns it submitted to the IRS, or audited financial statements, including any notes, or in the case of publicly traded concerns, the filings required by the Securities and Exchange Commission (SEC), for the past three years.
(c) * * *
(1) In order to initially qualify as a protégé firm, a concern must:
(i) Qualify as small for the size standard corresponding to its primary NAICS code or identify that it is seeking business development assistance with respect to a secondary NAICS code and qualify as small for the size standard corresponding to that NAICS code; and
(ii) Demonstrate how the business development assistance to be received through its proposed mentor-protégé relationship would advance the goals and objectives set forth in its business plan.
(4) The AA/BD may authorize a Participant to be both a protégé and a mentor at the same time where the Participant can demonstrate that the second relationship will not compete or otherwise conflict with the first mentor-protégé relationship.
(d) * * *
(1) * * *
(iii) Once a protégé firm graduates or otherwise leaves the 8(a) BD program or grows to be other than small for its primary NAICS code, it will not be eligible for any further 8(a) contracting benefits from its 8(a) BD mentor-protégé relationship. Leaving the 8(a) BD program, growing to be other than small for its primary NAICS code, or terminating the mentor-protégé relationship while a protégé is still in the program, does not, however, generally affect contracts previously awarded to a joint venture between the protégé and its mentor. A protégé firm that graduates or otherwise leaves the 8(a) BD program but continues to qualify as a small business may transfer its 8(a) mentor-protégé relationship to a small business mentor-protégé relationship. In order to effectuate such a transfer, a firm must notify SBA of its intent to transfer its 8(a) mentor-protégé relationship to a small business mentor-protégé relationship. The transfer will occur without any application or approval process.
(A) A joint venture between a protégé firm that continues to qualify as small and its mentor may certify its status as small for any Government contract or subcontract so long as the protégé (and/or the joint venture) has not been determined to be other than small for the size standard corresponding to the procurement at issue (or any higher size standard).
(B) Where the protégé firm no longer qualifies as small, the receipts and/or employees of the protégé and mentor would generally be aggregated in determining the size of any joint venture between the mentor and protégé after that date.
(C) Except for contracts with durations of more than five years (including options), a contract awarded to a joint venture between a protégé and a mentor as a small business continues to qualify as an award to small business for the life of that contract and the joint venture remains obligated to continue performance on that contract.
(D) For contracts with durations of more than five years (including options), where size re-certification is required no more than 120 days prior to the end of the fifth year of the contract and no more than 120 days prior to exercising any option thereafter, once the protégé firm no longer qualifies as small for its primary NAICS code, the joint venture must aggregate the receipts/employees of the partners to the joint venture in determining whether it continues to qualify as and can re-certify itself to be a small business under the size standard corresponding to the NAICS code
(5) Where appropriate, procuring activities may provide incentives in the contract evaluation process to a firm that will provide significant subcontracting work to its SBA-approved protégé firm.
(e) * * *
(2) A firm seeking SBA's approval to be a protégé must identify any other mentor-protégé relationship it has through another federal agency or SBA and provide a copy of each such mentor-protégé agreement to SBA.
(i) The 8(a) BD mentor-protégé agreement must identify how the assistance to be provided by the proposed mentor is different from assistance provided to the protégé through another mentor-protégé relationship, either with the same or a different mentor.
(ii) A firm seeking SBA's approval to be a protégé may terminate a mentor-protégé relationship it has through another agency and use any not yet provided assistance identified in the other mentor-protégé agreement as part of the assistance that will be provided through the 8(a) BD mentor-protégé relationship. Any assistance that has already been provided through another mentor-protégé relationship cannot be identified as assistance that will be provided through the 8(a) BD mentor-protégé relationship.
(5) SBA will review the mentor-protégé relationship annually during the protégé firm's annual review to determine whether to approve its continuation for another year. Unless rescinded in writing at that time, the mentor-protégé relationship will automatically renew without additional written notice of continuation or extension to the protégé firm. The term of a mentor-protégé agreement may not exceed three years, but may be extended for a second three years. A protégé may have two three-year mentor-protégé agreements with different mentors, and each may be extended an additional three years provided the protégé has received the agreed-upon business development assistance and will continue to receive additional assistance through the extended mentor-protégé agreement.
(7) If control of the mentor changes (through a stock sale or otherwise), the previously approved mentor-protégé relationship may continue provided that, after the change in control, the mentor expresses in writing to SBA that it acknowledges the mentor-protégé agreement and certifies that it will continue to abide by its terms.
(8) SBA may terminate the mentor-protégé agreement at any time if it determines that the protégé is not adequately benefiting from the relationship or that the parties are not complying with any term or condition of the mentor protégé agreement. In the event SBA terminates the relationship, the mentor-protégé joint venture is obligated to complete any previously awarded contracts unless the procuring agency issues a stop work order.
(i)
(2) Where a protégé does not report the results of a mentor-protégé relationship upon its completion, SBA will not approve a second mentor-protégé relationship either under this section or under § 125.9 of this chapter.
15 U.S.C. 632(p), (q); 634(b)(6); 637; 644; 657f; 657r.
(a)
(a)
(a)
(b)
(2) Every joint venture agreement to perform a contract set aside or reserved for small business between a protégé small business and its SBA-approved mentor authorized by § 125.9 or § 124.520 of this chapter must contain a provision:
(i) Setting forth the purpose of the joint venture;
(ii) Designating a small business as the managing venturer of the joint venture, and an employee of the small business managing venturer as the project manager responsible for performance of the contract. The individual identified as the project manager of the joint venture need not be an employee of the small business at the time the joint venture submits an offer, but, if he or she is not, there must be a signed letter of intent that the individual commits to be employed by the small business if the joint venture is the successful offeror. The individual identified as the project manager cannot be employed by the mentor and become an employee of the small business for purposes of performance under the joint venture;
(iii) Stating that with respect to a separate legal entity joint venture, the small business must own at least 51% of the joint venture entity;
(iv) Stating that the small business must receive profits from the joint venture commensurate with the work performed by the small business, or in the case of a separate legal entity joint venture, commensurate with their ownership interests in the joint venture;
(v) Providing for the establishment and administration of a special bank account in the name of the joint venture. This account must require the signature of all parties to the joint venture or designees for withdrawal purposes. All payments due the joint venture for performance on a contract set aside or reserved for small business will be deposited in the special account; all expenses incurred under the contract will be paid from the account as well;
(vi) Itemizing all major equipment, facilities, and other resources to be furnished by each party to the joint venture, with a detailed schedule of cost or value of each, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated major equipment, facilities, and other resources to be furnished by each party to the joint venture, without a detailed schedule of cost or value of each, or in the alternative, specify how the parties to the joint venture will furnish such resources to the joint venture once a definite scope of work is made publicly available;
(vii) Specifying the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, including ways that the parties to the joint venture will ensure that the joint venture and the small business partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, not including the ways that the parties to the joint venture will ensure that the joint venture and the small business partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, or in the alternative, specify how the parties to the joint venture will define such responsibilities once a definite scope of work is made publicly available;
(viii) Obligating all parties to the joint venture to ensure performance of a contract set aside or reserved for small business and to complete performance despite the withdrawal of any member;
(ix) Designating that accounting and other administrative records relating to the joint venture be kept in the office of the small business managing venturer, unless approval to keep them elsewhere is granted by the District Director or his/her designee upon written request;
(x) Requiring that the final original records be retained by the small business managing venturer upon completion of any contract set aside or reserved for small business that was performed by the joint venture;
(xi) Stating that quarterly financial statements showing cumulative contract receipts and expenditures (including salaries of the joint venture's principals) must be submitted to SBA not later than 45 days after each operating quarter of the joint venture; and
(xii) Stating that a project-end profit and loss statement, including a statement of final profit distribution, must be submitted to SBA no later than 90 days after completion of the contract.
(c)
(2) The work performed by the small business partner to a joint venture must be more than administrative or ministerial functions so that it gains substantive experience.
(3) The amount of work done by the partners will be aggregated and the work done by the small business protégé partner must be at least 40% of the total done by the partners. In determining the amount of work done by a mentor participating in a joint venture with a small business protégé, all work done by the mentor and any of its affiliates at any subcontracting tier will be counted.
(d)
(1) The parties have entered into a joint venture agreement that fully complies with paragraph (b) of this section;
(2) The parties will perform the contract in compliance with the joint venture agreement and with the performance of work requirements set forth in paragraph (c) of this section.
(e)
(f)
(g)
(h)
(1) The small business partner to the joint venture must annually submit a report to the relevant contracting officer and to the SBA, signed by an authorized official of each partner to the joint venture, explaining how the performance of work requirements are being met for each contract set aside or reserved for small business that is performed during the year.
(2) At the completion of every contract set aside or reserved for small business that is awarded to a joint venture between a protégé small business and a mentor authorized by § 125.9, the small business partner to the joint venture must submit a report to the relevant contracting officer and to the SBA, signed by an authorized official of each partner to the joint venture, explaining how and certifying that the performance of work requirements were met for the contract, and further certifying that the contract was performed in accordance with the provisions of the joint venture agreement that are required under paragraph (b) of this section.
(i)
(1) Failure to enter a joint venture agreement that complies with paragraph (b) of this section;
(2) Failure to perform a contract in accordance with the joint venture agreement or performance of work requirements in paragraph (c) of this section; or
(3) Failure to submit the certification required by paragraph (d) of this section or comply with paragraph (g) of this section.
(j)
(a)
(b)
(1) In order to qualify as a mentor, a concern must demonstrate that it:
(i) Is capable of carrying out its responsibilities to assist the protégé firm under the proposed mentor-protégé agreement;
(ii) Possesses good character;
(iii) Does not appear on the federal list of debarred or suspended contractors; and
(iv) Can impart value to a protégé firm due to lessons learned and practical experience gained or through its knowledge of general business operations and government contracting.
(2) In order to demonstrate that it is capable of carrying out its responsibilities to assist the protégé firm under the proposed mentor-protégé agreement, a firm seeking to be a mentor may submit to the SBA copies of the federal tax returns it submitted to the IRS, or audited financial statements, including any notes, or in the case of publicly traded concerns, the filings required by the Securities and Exchange Commission (SEC), for the past three years.
(3) Once approved, a mentor must annually certify that it continues to possess good character and a favorable financial position.
(4) Generally, a mentor will have no more than one protégé at a time. However, SBA may authorize a concern to mentor more than one protégé at a time where it can demonstrate that the additional mentor-protégé relationship will not adversely affect the development of either protégé firm (
(c)
(i) A firm may self-certify that it qualifies as small for its primary or identified secondary NAICS code.
(ii) Where a firm is other than small for the size standard corresponding to its primary NAICS code and seeks to qualify as a small business protégé in a secondary NAICS code, the firm must demonstrate how the mentor-protégé relationship is a logical business progression for the firm and will further develop or expand current capabilities. SBA will not approve a mentor-protégé relationship in a secondary NAICS code in which the firm has no prior experience.
(2) A protégé firm may generally have only one mentor at a time. SBA may approve a second mentor for a particular protégé firm where the second relationship will not compete or otherwise conflict with the assistance set forth in the first mentor-protégé relationship and:
(i) The second relationship pertains to an unrelated NAICS code; or
(ii) The protégé firm is seeking to acquire a specific expertise that the first mentor does not possess.
(3) SBA may authorize a small business to be both a protégé and a mentor at the same time where the small business can demonstrate that the second relationship will not compete or otherwise conflict with the first mentor-protégé relationship.
(4) Where appropriate, SBA may examine the Service-Disabled Veteran-Owned Small Business status or Women-Owned Small Business status of a concern seeking to be a protégé that claims such status in any Federal procurement database.
(d)
(i) SBA must approve the mentor-protégé agreement before the two firms may submit an offer as a joint venture on a particular government prime contract or subcontract in order for the joint venture to receive the exclusion from affiliation.
(ii) In order to receive the exclusion from affiliation, the joint venture must meet the requirements set forth in § 125.8(b)(2), (c), and (d).
(iii) Once a protégé firm no longer qualifies as a small business for the size standard corresponding to its primary NAICS code, it will not be eligible for any further contracting benefits from its mentor-protégé relationship. However, a change in the protégé's size status does not generally affect contracts previously awarded to a joint venture between the protégé and its mentor.
(A) Except for contracts with durations of more than five years (including options), a contract awarded to a joint venture between a protégé and a mentor as a small business continues to qualify as an award to small business for the life of that contract and the joint venture remains obligated to continue performance on that contract.
(B) For contracts with durations of more than five years (including options), where size re-certification is required under § 121.404(g)(3) of this chapter no more than 120 days prior to the end of the fifth year of the contract and no more than 120 days prior to exercising any option thereafter, once the protégé no longer qualifies as small for the size standard corresponding to its primary NAICS code, the joint venture must aggregate the receipts/employees of the partners to the joint venture in determining whether it continues to qualify as and can re-certify itself to be a small business under the size standard corresponding to the NAICS code assigned to that contract. The rules set forth in § 121.404(g)(3) of this chapter apply in such circumstances.
(2) In order to raise capital, the protégé firm may agree to sell or otherwise convey to the mentor an equity interest of up to 40% in the protégé firm.
(3) Notwithstanding the mentor-protégé relationship, a protégé firm may qualify for other assistance as a small business, including SBA financial assistance.
(4) No determination of affiliation or control may be found between a protégé firm and its mentor based solely on the mentor-protégé agreement or any assistance provided pursuant to the agreement. However, affiliation may be found for other reasons set forth in § 121.103 of this chapter.
(5) Where appropriate, procuring activities may provide incentives in the contract evaluation process to a firm that will provide significant subcontracting work to its SBA-approved protégé firm.
(e)
(i) Address how the assistance to be provided through the agreement will help the protégé firm meet its goals as defined in its business plan;
(ii) Establish a single point of contact in the mentor concern who is responsible for managing and implementing the mentor-protégé agreement; and
(iii) Provide that the mentor will provide such assistance to the protégé firm for at least one year.
(2) A firm seeking SBA's approval to be a protégé must identify any other mentor-protégé relationship it has through another federal agency or SBA and provide a copy of each such mentor-protégé agreement to SBA.
(i) The small business mentor-protégé agreement must identify how the assistance to be provided by the proposed mentor is different from assistance provided to the protégé through another mentor-protégé relationship, either with the same or a different mentor.
(ii) A firm seeking SBA's approval to be a protégé may terminate a mentor-protégé relationship it has through another agency and use any not yet provided assistance identified in the other mentor-protégé agreement as part of the assistance that will be provided through the small business mentor-protégé relationship. Any assistance that has already been provided through another mentor-protégé relationship cannot be identified as assistance that will be provided through the small business mentor-protégé relationship.
(3) The written agreement must be approved by the Associate Administrator for Business Development (AA/BD) or his/her designee. The agreement will not be approved if SBA determines that the assistance to be provided is not sufficient to promote any real developmental gains to the protégé, or if SBA determines that the agreement is merely a vehicle to enable the mentor to receive small business contracts.
(4) The agreement must provide that either the protégé or the mentor may terminate the agreement with 30 days advance notice to the other party to the mentor-protégé relationship and to SBA.
(5) SBA will review the mentor-protégé relationship annually to determine whether to approve its continuation for another year. Unless rescinded in writing as a result of the review, the mentor-protégé relationship will automatically renew without additional written notice of continuation or extension to the protégé firm. The term of a mentor-protégé agreement may not exceed three years, but may be extended for a second three years. A protégé may have two three-year mentor-protégé agreements with different mentors, and each may be extended an additional three years provided the protégé has received the agreed-upon business development assistance and will continue to receive additional assistance through the extended mentor-protégé agreement.
(6) SBA must approve all changes to a mentor-protégé agreement in advance, and any changes made to the agreement must be provided in writing. If the parties to the mentor-protégé relationship change the mentor-protégé agreement without prior approval by SBA, SBA shall terminate the mentor-protégé relationship and may also propose suspension or debarment of one or both of the firms pursuant to paragraph (h) of this section where appropriate.
(7) If control of the mentor changes (through a stock sale or otherwise), the previously approved mentor-protégé relationship may continue provided that, after the change in control, the mentor expresses in writing to SBA that it acknowledges the mentor-protégé
(8) SBA may terminate the mentor-protégé agreement at any time if it determines that the protégé is not benefiting from the relationship or that the parties are not complying with any term or condition of the mentor protégé agreement. In the event SBA terminates the relationship, the mentor-protégé joint venture is obligated to complete any previously awarded contracts unless the procuring agency issues a stop work order.
(f)
(2) SBA will issue a written decision within 45 calendar days of receipt of the protégé's request. SBA may approve the mentor-protégé agreement, deny it on the same grounds as the original decision, or deny it on other grounds.
(3) If SBA declines the mentor-protégé agreement solely on issues not raised in the initial decline, the protégé can ask for reconsideration as if it were an initial decline.
(4) If SBA's final decision is to decline a specific mentor-protégé agreement, the small business concern seeking to be a protégé cannot attempt to enter into another mentor-protégé relationship with the same mentor for a period of 60 calendar days from the date of the final decision. The small business concern may, however, submit another proposed mentor-protégé agreement with a different proposed mentor at any time after the SBA's final decline decision.
(g)
(i) All technical and/or management assistance provided by the mentor to the protégé;
(ii) All loans to and/or equity investments made by the mentor in the protégé;
(iii) All subcontracts awarded to the protégé by the mentor and all subcontracts awarded to the mentor by the protégé, and the value of each subcontract;
(iv) All federal contracts awarded to the mentor-protégé relationship as a joint venture (designating each as a small business set-aside, small business reserve, or unrestricted procurement), the value of each contract, and the percentage of the contract performed and the percentage of revenue accruing to each party to the joint venture; and
(v) A narrative describing the success such assistance has had in addressing the developmental needs of the protégé and addressing any problems encountered.
(2) The protégé must report the mentoring services it receives by category and hours.
(3) The protégé must annually certify to SBA whether there has been any change in the terms of the agreement.
(4) SBA will review the protégé's report on the mentor-protégé relationship, and may decide not to approve continuation of the agreement if it finds that the mentor has not provided the assistance set forth in the mentor-protégé agreement or that the assistance has not resulted in any material benefits or developmental gains to the protégé.
(h)
(i) SBA will terminate the mentor-protégé agreement;
(ii) The firm will be ineligible to again act as a mentor for a period of two years from the date SBA terminates the mentor-protégé agreement; and
(iii) SBA may recommend to the relevant procuring agency to issue a stop work order for each federal contract for which the mentor and protégé are performing as a small business joint venture in order to encourage the mentor to comply with its mentor-protégé agreement. Where a protégé firm is able to independently complete performance of any such contract, SBA may recommend to the procuring agency to authorize a substitution of the protégé firm for the joint venture.
(2) SBA may consider a mentor's failure to comply with the terms and conditions of an SBA-approved mentor-protégé agreement as a basis for debarment on the grounds, including but not limited to, that the mentor has not complied with the terms of a public agreement under 2 CFR 180.800(b).
(i)
(2) Where a protégé does not report the results of a mentor-protégé relationship upon its completion, SBA will not approve a second mentor-protégé relationship either under this section or under § 124.520 of this chapter.
(a) Except as provided in paragraph (c) of this section, a Federal department or agency may not carry out a mentor-protégé program for small business unless the head of the department or agency submits a plan to the SBA Administrator for the program and the SBA Administrator approves the plan. Before starting a new mentor protégé program, the head of a department or agency must submit a plan to the SBA Administrator. Within one year of the effective date of this section, the head of a department or agency must submit a plan to the SBA for any previously existing mentor-protégé program that the department or agency seeks to continue.
(b) The SBA Administrator will approve or disapprove a plan submitted under paragraph (a) of this section based on whether the proposed program:
(1) Will assist protégés to compete for Federal prime contracts and subcontracts; and
(2) Complies with the provisions set forth in §§ 125.9 and 124.520 of this chapter, as applicable.
(c) Paragraph (a) of this section does not apply to:
(1) Any mentor-protégé program of the Department of Defense;
(2) Any mentoring assistance provided under a Small Business Innovation Research Program or a Small Business Technology Transfer Program; and
(3) A mentor-protégé program operated by a Department or agency on January 2, 2013, for a period of one year after the effective date of this section.
(d) The head of each Federal department or agency carrying out an
(1) The participants (both protégé firms and their approved mentors) in its mentor-protégé program. This includes identifying the number of participants that are:
(i) Small business concerns;
(ii) Small business concerns owned and controlled by service-disabled veterans;
(iii) Small business concerns owned and controlled by socially and economically disadvantaged individuals;
(iv) Small business concerns owned and controlled by Indian tribes, Alaska Native Corporations, Native Hawaiian Organizations, and Community Development Corporations; and
(v) Small business concerns owned and controlled by women;
(2) The assistance provided to small businesses through the program; and
(3) The progress of protégé firms under the program to compete for Federal prime contracts and subcontracts.
(b)
(1)
(ii) A joint venture between a protégé firm that qualifies as an SDVO SBC and its SBA-approved mentor (
(2)
(i) Setting forth the purpose of the joint venture;
(ii) Designating an SDVO SBC as the managing venturer of the joint venture, and an employee of the SDVO SBC managing venturer as the project manager responsible for performance of the contract;
(iii) Stating that with respect to a separate legal entity joint venture, the SDVO SBC must own at least 51% of the joint venture entity;
(iv) Stating that the SDVO SBC must receive profits from the joint venture commensurate with the work performed by the SDVO SBC, or in the case of a separate legal entity joint venture, commensurate with their ownership interests in the joint venture;
(v) Providing for the establishment and administration of a special bank account in the name of the joint venture. This account must require the signature of all parties to the joint venture or designees for withdrawal purposes. All payments due the joint venture for performance on an SDVO contract will be deposited in the special account; all expenses incurred under the contract will be paid from the account as well;
(vi) Itemizing all major equipment, facilities, and other resources to be furnished by each party to the joint venture, with a detailed schedule of cost or value of each, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated major equipment, facilities, and other resources to be furnished by each party to the joint venture, without a detailed schedule of cost or value of each, or in the alternative, specify how the parties to the joint venture will furnish such resources to the joint venture once a definite scope of work is made publicly available;
(vii) Specifying the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, including ways that the parties to the joint venture will ensure that the joint venture and the SDVO small business partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (b)(3) of this section, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, not including the ways that the parties to the joint venture will ensure that the joint venture and the SDVO small business partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, or in the alternative, specify how the parties to the joint venture will define such responsibilities once a definite scope of work is made publicly available;
(viii) Obligating all parties to the joint venture to ensure performance of the SDVO contract and to complete performance despite the withdrawal of any member;
(ix) Designating that accounting and other administrative records relating to the joint venture be kept in the office of the SDVO SBC managing venturer, unless approval to keep them elsewhere is granted by the District Director or his/her designee upon written request;
(x) Requiring that the final original records be retained by the SDVO SBC managing venturer upon completion of the SDVO contract performed by the joint venture;
(xi) Stating that quarterly financial statements showing cumulative contract receipts and expenditures (including salaries of the joint venture's principals) must be submitted to SBA not later than 45 days after each operating quarter of the joint venture; and
(xii) Stating that a project-end profit and loss statement, including a statement of final profit distribution, must be submitted to SBA no later than 90 days after completion of the contract.
(3)
(ii) The SDVO SBC partner(s) to the joint venture must perform at least 40% of the work performed by the joint venture.
(A) The work performed by the SDVO SBC partner(s) to a joint venture must be more than administrative or ministerial functions so that they gain substantive experience.
(B) The amount of work done by the partners will be aggregated and the work done by the SDVO SBC partner(s) must be at least 40% of the total done by all partners. In determining the amount of work done by a non-SDVO SBC partner, all work done by the non-SDVO SBC partner and any of its affiliates at any subcontracting tier will be counted.
(4)
(i) The parties have entered into a joint venture agreement that fully complies with paragraph (b)(2) of this section;
(ii) The parties will perform the contract in compliance with the joint venture agreement and with the performance of work requirements set forth in paragraph (b)(3) of this section.
(5)
(6)
(7)
(8)
(i) The SDVO SBC partner to the joint venture must annually submit a report to the relevant contracting officer and to the SBA, signed by an authorized official of each partner to the joint venture, explaining how and certifying that the performance of work requirements are being met.
(ii) At the completion of every SDVO contract awarded to a joint venture, the SDVO SBC partner to the joint venture must submit a report to the relevant contracting officer and to the SBA, signed by an authorized official of each partner to the joint venture, explaining how and certifying that the performance of work requirements were met for the contract, and further certifying that the contract was performed in accordance with the provisions of the joint venture agreement that are required under paragraph (b)(2) of this section.
(9)
(i) Failure to enter a joint venture agreement that complies with paragraph (b)(2) of this section;
(ii) Failure to perform a contract in accordance with the joint venture agreement or performance of work requirements in paragraph (b)(3) of this section; or
(iii) Failure to submit the certification required by paragraph (b)(4) of this section or comply with paragraph (b)(7) of this section.
(10) Any person with information concerning a joint venture's compliance with the performance of work requirements may report that information to SBA and/or the SBA Office of Inspector General.
15 U.S.C. 632(a), 632(j), 632(p), 644, and 657a; Pub. L. 111-240, 24 Stat. 2504.
The revisions and additions read as follows:
(a) The D/HUB or designee is authorized to approve or decline applications for certification. SBA will receive and review all applications and request supporting documents. SBA must receive all required information, supporting documents, and completed HUBZone representation before it will begin processing a concern's application. SBA will not process incomplete packages. SBA will make its determination within ninety (90) calendar days after receipt of a complete package whenever practicable. The decision of the D/HUB or designee is the final agency decision.
(b) SBA may request additional information or clarification of information contained in an application or document submission at any time.
(c) The burden of proof to demonstrate eligibility is on the applicant concern. If a concern does not provide requested information within the allotted time provided by SBA, or if it submits incomplete information, SBA may presume that disclosure of the missing information would adversely affect the business concern or demonstrate a lack of eligibility in the area or areas to which the information relates.
(d) The applicant must be eligible as of the date it submitted its application and up until and at the time the D/HUB issues a decision. The decision will be based on the facts set forth in the application, any information received in response to SBA's request for clarification, and any changed circumstances since the date of application.
(e) Any changed circumstance occurring after an applicant has submitted an application will be considered and may constitute grounds for decline. After submitting the application and signed representation, an applicant must notify SBA of any changes that could affect its eligibility. The D/HUB may propose decertification for any HUBZone SBC that failed to inform SBA of any changed circumstances that affected its eligibility for the program during the processing of the application.
HUBZone contracts are contracts awarded to a qualified HUBZone SBC, regardless of the place of performance, through any of the following procurement methods:
Except as provided in § 126.618(d), a large business may not participate as a prime contractor on a HUBZone award, but may participate as a subcontractor to an otherwise qualified HUBZone SBC, subject to the contract performance requirements set forth in § 126.700.
(a)
(b)
(2) A joint venture between a protégé firm and its SBA-approved mentor (
(c)
(1) Setting forth the purpose of the joint venture;
(2) Designating a HUBZone SBC as the managing venturer of the joint venture, and an employee of the HUBZone SBC managing venturer as the project manager responsible for performance of the contract. The individual identified as the project manager of the joint venture need not be an employee of the HUBZone SBC at the time the joint venture submits an offer, but, if he or she is not, there must be a signed letter of intent that the individual commits to be employed by the HUBZone SBC if the joint venture is the successful offeror. The individual identified as the project manager cannot be employed by the mentor and become an employee of the HUBZone SBC for purposes of performance under the joint venture;
(3) Stating that with respect to a separate legal entity joint venture, the HUBZone SBC must own at least 51% of the joint venture entity;
(4) Stating that the HUBZone SBC must receive profits from the joint venture commensurate with the work performed by the HUBZone SBC, or in the case of a separate legal entity joint venture, commensurate with their ownership interests in the joint venture;
(5) Providing for the establishment and administration of a special bank account in the name of the joint venture. This account must require the signature of all parties to the joint venture or designees for withdrawal purposes. All payments due the joint venture for performance on a HUBZone contract will be deposited in the special account; all expenses incurred under the contract will be paid from the account as well;
(6) Itemizing all major equipment, facilities, and other resources to be furnished by each party to the joint venture, with a detailed schedule of cost or value of each, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated major equipment, facilities, and other resources to be furnished by each party to the joint venture, without a detailed schedule of cost or value of each, or in the alternative, specify how the parties to the joint venture will furnish such resources to the joint venture once a definite scope of work is made publicly available;
(7) Specifying the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, including ways that the parties to the joint venture will ensure that the joint venture and the HUBZone partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, not including the ways that the parties to the joint venture will ensure that the joint venture and the HUBZone partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, or in the alternative, specify how the parties to the joint venture will define such responsibilities once a definite scope of work is made publicly available;
(8) Obligating all parties to the joint venture to ensure performance of the HUBZone contract and to complete performance despite the withdrawal of any member;
(9) Designating that accounting and other administrative records relating to the joint venture be kept in the office of the HUBZone SBC managing venturer, unless approval to keep them elsewhere is granted by the District Director or his/her designee upon written request;
(10) Requiring that the final original records be retained by the HUBZone SBC managing venturer upon completion of the HUBZone contract performed by the joint venture;
(11) Stating that quarterly financial statements showing cumulative contract receipts and expenditures (including salaries of the joint venture's principals) must be submitted to SBA not later than 45 days after each operating quarter of the joint venture; and
(12) Stating that a project-end profit and loss statement, including a statement of final profit distribution, must be submitted to SBA no later than 90 days after completion of the contract.
(d)
(2) For any HUBZone contract to be performed by a joint venture between a qualified HUBZone protégé and a small business concern or its SBA-approved mentor authorized by § 125.9 or § 124.520 of this chapter, the joint venture must perform the applicable percentage of work required by § 125.6 of this chapter, and the HUBZone SBC partner to the joint venture must perform at least 40% of the work performed by the joint venture.
(i) The work performed by the HUBZone SBC partner to a joint venture must be more than administrative or ministerial functions so that it gains substantive experience.
(ii) The amount of work done by the partners will be aggregated and the work done by the HUBZone protégé partner must be at least 40% of the total done by the partners. In determining the amount of work done by a mentor participating in a joint venture with a HUBZone qualified protégé, all work done by the mentor and any of its affiliates at any subcontracting tier will be counted.
(e)
(i) The parties have entered into a joint venture agreement that fully
(ii) The parties will perform the contract in compliance with the joint venture agreement and with the performance of work requirements set forth in paragraph (d) of this section.
(f)
(g)
(h)
(i)
(1) The HUBZone SBC partner to the joint venture must annually submit a report to the relevant contracting officer and to the SBA, signed by an authorized official of each partner to the joint venture, explaining how the performance of work requirements are being met for each HUBZone contract performed during the year.
(2) At the completion of every HUBZone contract awarded to a joint venture, the HUBZone SBC partner to the joint venture must submit a report to the relevant contracting officer and to the SBA, signed by an authorized official of each partner to the joint venture, explaining how and certifying that the performance of work requirements were met for the contract, and further certifying that the contract was performed in accordance with the provisions of the joint venture agreement that are required under paragraph (c) of this section.
(j)
(1) Failure to enter a joint venture agreement that complies with paragraph (c) of this section;
(2) Failure to perform a contract in accordance with the joint venture agreement or performance of work requirements in paragraph (d) of this section; or
(3) Failure to submit the certification required by paragraph (e) of this section or comply with paragraph (h) of this section.
(k) Any person with information concerning a joint venture's compliance with the performance of work requirements may report that information to SBA and/or the SBA Office of Inspector General.
(a) A qualified HUBZone SBC may enter into a mentor-protégé relationship under § 125.9 of this chapter (or, if also an 8(a) BD Participant, under § 124.520 of this chapter) or in connection with a mentor-protégé program of another agency, provided that such relationships do not conflict with the underlying HUBZone requirements.
(b) For purposes of determining whether an applicant to the HUBZone Program or a HUBZone SBC qualifies as small under part 121 of this chapter, SBA will not find affiliation between the applicant or qualified HUBZone SBC and the firm that is its mentor in an SBA-approved mentor-protégé relationship (including a mentor that is other than small) on the basis of the mentor-protégé agreement or the assistance provided to the protégé firm under the agreement. SBA will not consider the employees of the mentor in determining whether the applicant or qualified HUBZone SBC meets (or continues to meet) the 35% HUBZone residency requirement or the principal office requirement, or in determining the size of the applicant or qualified HUBZone SBC for any employee-based size standard.
(c) A qualified HUBZone SBC that is a prime contractor on a HUBZone contract may subcontract work to its mentor.
(1) The HUBZone SBC must meet the applicable performance of work requirements set forth in § 125.6(c) of this chapter.
(2) SBA may find affiliation between a prime HUBZone contractor and its mentor subcontractor where the mentor will perform primary and vital requirements of the contract.
15 U.S.C. 632, 634(b)(6), 637(m), 644 and 657r.
The revisions and additions read as follows:
A joint venture, including those between a protégé and a mentor under § 125.9 of this chapter (or, if also an 8(a) BD Participant, under § 124.520 of this chapter), may submit an offer on a WOSB Program contract if the joint venture meets all of the following requirements:
(a)(1) A joint venture of at least one WOSB or EDWOSB and one or more other business concerns may submit an offer as a small business for a WOSB Program procurement or sale so long as each concern is small under the size standard corresponding to the NAICS code assigned to the procurement or sale.
(2) A joint venture between a protégé firm and its SBA-approved mentor (
(c)
(2) Designating a WOSB as the managing venturer of the joint venture, and an employee of the WOSB managing venturer as the project manager responsible for performance of the contract. The individual identified as the project manager of the joint venture need not be an employee of the WOSB at the time the joint venture submits an offer, but, if he or she is not, there must be a signed letter of intent that the individual commits to be employed by the WOSB if the joint venture is the successful offeror. The individual identified as the project manager cannot be employed by the mentor and become an employee of the WOSB for purposes of performance under the joint venture;
(3) Stating that with respect to a separate legal entity joint venture, the WOSB must own at least 51% of the joint venture entity;
(4) Stating that the WOSB must receive profits from the joint venture commensurate with the work performed by the WOSB, or in the case of a separate legal entity joint venture, commensurate with their ownership interests in the joint venture;
(5) Providing for the establishment and administration of a special bank account in the name of the joint venture. This account must require the signature of all parties to the joint venture or designees for withdrawal purposes. All payments due the joint venture for performance on a WOSB Program contract will be deposited in the special account; all expenses incurred under the contract will be paid from the account as well;
(6) Itemizing all major equipment, facilities, and other resources to be furnished by each party to the joint venture, with a detailed schedule of cost or value of each, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated major equipment, facilities, and other resources to be furnished by each party to the joint venture, without a detailed schedule of cost or value of each, or in the alternative, specify how the parties to the joint venture will furnish such resources to the joint venture once a definite scope of work is made publicly available;
(7) Specifying the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, including ways that the parties to the joint venture will ensure that the joint venture and the WOSB Program participant(s) in the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, not including the ways that the parties to the joint venture will ensure that the joint venture and the WOSB Program participant(s) in the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, or in the alternative, specify how the parties to the joint venture will define such responsibilities once a definite scope of work is made publicly available;
(8) Obligating all parties to the joint venture to ensure performance of the WOSB contract and to complete performance despite the withdrawal of any member;
(9) Designating that accounting and other administrative records relating to the joint venture be kept in the office of the WOSB managing venturer, unless approval to keep them elsewhere is granted by the District Director or his/her designee upon written request;
(10) Requiring that the final original records be retained by the WOSB managing venturer upon completion of the WOSB Program contract performed by the joint venture;
(11) Stating that quarterly financial statements showing cumulative contract receipts and expenditures (including salaries of the joint venture's principals) must be submitted to SBA not later than 45 days after each operating quarter of the joint venture; and
(12) Stating that a project-end profit and loss statement, including a statement of final profit distribution, must be submitted to SBA no later than 90 days after completion of the contract.
(d)
(2) The WOSB partner(s) to the joint venture must perform at least 40% of the work performed by the joint venture.
(i) The work performed by the WOSB partner(s) to a joint venture must be more than administrative or ministerial functions so that they gain substantive experience.
(ii) The amount of work done by the partners will be aggregated and the work done by the WOSB partner(s) must be at least 40% of the total done by all partners. In determining the amount of work done by the non-WOSB partner, all work done by the non-WOSB partner and any of its affiliates at any subcontracting tier will be counted.
(e)
(i) The parties have entered into a joint venture agreement that fully complies with paragraph (c) of this section;
(ii) The parties will perform the contract in compliance with the joint venture agreement and with the performance of work requirements set forth in paragraph (d) of this section.
(f)
(g)
(h)
(i)
(j)
(1) The WOSB partner to the joint venture must annually submit a report to the relevant contracting officer and to the SBA, signed by an authorized
(2) At the completion of every WOSB Program contract awarded to a joint venture, the WOSB partner to the joint venture must submit a report to the relevant contracting officer and to the SBA, signed by an authorized official of each partner to the joint venture, explaining how and certifying that the performance of work requirements were met for the contract, and further certifying that the contract was performed in accordance with the provisions of the joint venture agreement that are required under paragraph (c) of this section.
(k)
(1) Failure to enter a joint venture agreement that complies with paragraph (c) of this section;
(2) Failure to perform a contract in accordance with the joint venture agreement or performance of work requirements in paragraph (d) of this section; or
(3) Failure to submit the certification required by paragraph (e) or comply with paragraph (i) of this section.
(l) Any person with information concerning a joint venture's compliance with the performance of work requirements may report that information to SBA and/or the SBA Office of Inspector General.
5 U.S.C. 504; 15 U.S.C. 632, 634(b)(6), 637(a), 648(l), 656(i), and 687(c); E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 189.
(c)
(b) Except in suspension appeals, the Administrative Law Judge's review is limited to determining whether the Agency's determination is arbitrary, capricious, or contrary to law. As long as the Agency's determination is not arbitrary, capricious or contrary to law, the Administrative Law Judge must uphold it on appeal.
(1) The Administrative Law Judge must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.
(2) If the SBA's path of reasoning may reasonably be discerned, the Administrative Law Judge will uphold a decision of less than ideal clarity.
Office of Postsecondary Education, Department of Education.
Notice of proposed rulemaking.
The Secretary proposes to amend the State authorization sections of the Institutional Eligibility regulations issued under the Higher Education Act of 1965, as amended (HEA). In addition, the Secretary proposes to amend the Student Assistance General Provisions regulations issued under the HEA, including the addition of a new section on required institutional disclosures for distance education and correspondence courses.
We must receive your comments on or before August 24, 2016.
Submit your comments through the Federal eRulemaking Portal or via postal mail, commercial delivery, or hand delivery. We will not accept comments submitted by fax or by email or those submitted after the comment period. To ensure that we do not receive duplicate copies, please submit your comments only once. In addition, please include the Docket ID at the top of your comments.
If you are submitting comments electronically, we strongly encourage you to submit any comments or attachments in Microsoft Word format. If you must submit a comment in Adobe Portable Document Format (PDF), we strongly encourage you to convert the PDF to print-to-PDF format or to use some other commonly used searchable text format.
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Sophia McArdle, U.S. Department of Education, 400 Maryland Ave. SW., Room 6W256, Washington, DC 20202. Telephone (202) 453-6318 or by email at:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
The HEA established what is commonly known as the program integrity “triad” under which States, accrediting agencies, and the Department act jointly as gatekeepers for the Federal student aid programs mentioned above. This triad has been in existence since the inception of the HEA; and as an important component of this triad, the HEA requires institutions of higher education to obtain approval from the States in which they provide postsecondary educational programs. This requirement recognizes the important oversight role States play in protecting students, their families, taxpayers, and the general public as a whole.
The Department established regulations in 2010 to clarify the minimum standards of State authorization that an institution must demonstrate in order to establish eligibility to participate in title IV programs. While the regulations established in 2010 made clear that all eligible institutions must have State authorization in the States in which they are physically located, the U.S. Court of Appeals for the District of Columbia set aside the Department's regulations regarding authorization of distance education programs or correspondence courses, and the regulations did not address additional locations or branch campuses located in foreign locations. As such, these proposed regulations would clarify the State authorization requirements an institution must comply with in order to be eligible to participate in title IV programs, ending uncertainty with respect to State authorization and closing any gaps in State oversight to ensure students, families and taxpayers are protected.
The Office of the Inspector General (OIG), the Government Accountability Office (GAO), and others have voiced concerns over fraudulent practices, issues of non-compliance with requirements of the title IV programs, and other challenges within the distance education environment. Such practices and challenges include misuse of title IV funds, verification of student identity, and gaps in consumer protections for students. The clarified requirements related to State authorization will support the integrity of the title IV, HEA programs by permitting the Department to withhold title IV funds from institutions that are not authorized to operate in a given State.
Because institutions that offer distance education programs usually offer the programs in multiple States, there are unique challenges with respect to oversight of these programs by State and other agencies.
Many States and stakeholders have expressed concerns with these unique challenges, especially those related to ensuring adequate consumer protections for students as well as compliance by institutions participating in this sector. For example, some States have expressed concerns over their ability to identify what out of State providers are operating in their States, whether those programs prepare their students for employment, including meeting licensure requirements in those States, the academic quality of programs offered by those providers, as well as the ability to receive, investigate and address student complaints about out-of-State institutions.
One stakeholder provided an example of a student in California who enrolled in an online program offered by an institution in Virginia, but then informed the institution of her decision to cancel her enrollment agreement. Four years later, that student was told that her wages would be garnished if she did not begin making monthly payments on her debt to the institution. Although the State of California had a cancellation law that may have been beneficial to the student, that law did not apply due to the institution's lack of physical presence in the State. According to the stakeholder, the Virginia-based institution was also exempt from oversight by the appropriate State oversight agency, making it problematic for the student to voice a complaint or have any action taken on it.
Documented wrong-doing has been reflected in the actions of multiple State attorneys general who have filed lawsuits against online education providers due to misleading business tactics. For example, the attorney general of Iowa settled a case against a distance education provider for misleading Iowa students because the provider stated that their educational programs would qualify a student to earn teacher licensure, which the programs did not lead to.
As such, this regulatory action also establishes requirements for institutional disclosures to prospective and enrolled students in programs offered through distance education or correspondence courses, which we believe will protect students by providing them with important information that will influence their attendance in distance education programs or correspondence courses as well as improve the efficacy of State-based consumer protections for students. Since distance education may involve multiple States, authorization requirements among States may differ, and students may be unfamiliar with or fail to receive information about complaint processes, licensure requirements, or other requirements of authorities in States in which they do not reside.
These disclosures will provide consistent information necessary to safeguard students and taxpayer investments in the title IV, HEA programs. By requiring disclosures that reflect actions taken against a distance education program, how to lodge complaints against a program they believe has misled them, and whether the program will lead to certification or licensure will provide enrolled and prospective students with important information that will protect them.
• Require an institution offering distance education or correspondence courses to be authorized by each State in which the institution enrolls students, if such authorization is required by the State, in order to link State authorization of institutions offering distance education to institutional eligibility to participate in title IV programs, including through a State authorization reciprocity agreement.
• Define the term “State authorization reciprocity agreement” to be an agreement between two or more States that authorizes an institution located and legally authorized in a State covered by the agreement to provide postsecondary education through distance education or correspondence courses to students in other States covered by the agreement.
• Require an institution to document the State process for resolving complaints from students enrolled in programs offered through distance education or correspondence courses.
• Require that an additional location or branch campus located in a foreign location be authorized by an appropriate government agency of the country where the additional location or branch campus is located and, if at least half of an educational program can be completed at the location or branch campus, be approved by the institution's accrediting agency and be reported to the State where the institution's main campus is located.
• Require that an institution provide public and individualized disclosures to enrolled and prospective students regarding its programs offered solely through distance education or correspondence courses.
The proposed regulations support States in their efforts to develop standards and increase State accountability for a significant sector of higher education—the distance education sector. In 2014, over 2,800,000 students were enrolled in over 23,000 separate distance education programs. The potential primary benefits of the proposed regulations are: (1) Increased transparency and access to institutional/program information through additional disclosures, (2) updated and clarified requirements for State authorization of distance education and foreign additional locations, and (3) a process for students to access complaint resolution in either the State in which the institution is authorized or the State in which they reside. The clarified requirements related to State authorization also support the integrity of the title IV, HEA programs by permitting the Department to withhold title IV funds from institutions that are not authorized to operate in a given State. Institutions that choose to offer distance education will incur costs in complying with State authorization requirements as well as costs associated with the disclosures that would be required by the proposed regulations.
We invite you to assist us in complying with the specific requirements of Executive Orders 12866 and 13563 and their overall requirement of reducing regulatory burden that might result from the proposed regulations. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the Department's programs and activities.
During and after the comment period, you may inspect all public comments about the proposed regulations by accessing
On May 1, 2012, we published a document in the
Section 492 of the HEA, 20 U.S.C. 1098a, requires the Secretary to obtain public involvement in the development of proposed regulations affecting programs authorized by title IV of the HEA. After obtaining advice and recommendations from the public, including individuals and representatives of groups involved in the title IV, HEA programs, in most cases the Secretary must subject the proposed regulations to a negotiated rulemaking process. If negotiators reach consensus on the proposed regulations, the Department agrees to publish without alteration a defined group of regulations on which the negotiators reached consensus unless the Secretary reopens the process or provides a written explanation to the participants stating why the Secretary has decided to depart from the agreement reached during negotiations. Further information on the negotiated rulemaking process can be found at:
On November 20, 2013, we published a document in the
The Department sought negotiators to represent the following groups: Students; legal assistance organizations that represent students; consumer advocacy organizations; State higher education executive officers; State attorneys general and other appropriate State officials; business and industry; institutions of higher education eligible to receive Federal assistance under title III, parts A, B, and F and title V of the HEA, which include Historically Black Colleges and Universities (HBCUs), Hispanic-Serving Institutions, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, Predominantly Black Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA; two-year public institutions of higher education; four-year public institutions of higher education; private, non-profit institutions of higher education; private, for-profit institutions of higher education; regional accrediting agencies; national accrediting agencies; specialized accrediting agencies; financial aid administrators at postsecondary institutions; business officers and bursars at postsecondary institutions; admissions officers at postsecondary institutions; institutional third-party servicers who perform functions related to the title IV Federal Student Aid programs (including collection agencies); State approval agencies; and lenders, community banks, and credit unions. The Department considered the nominations submitted by the public and chose negotiators who would represent the various constituencies.
The negotiating committee included the following members:
Chris Lindstrom, U.S. Public Interest Research Group, and Maxwell John Love (alternate), United States Student Association, representing students.
Whitney Barkley, Mississippi Center for Justice, and Toby Merrill (alternate), Project on Predatory Student Lending, The Legal Services Center, Harvard Law School, representing legal assistance organizations that represent students.
Suzanne Martindale, Consumers Union, representing consumer advocacy organizations. Carolyn Fast, Consumer Frauds and Protection Bureau, New York Attorney General's Office, and Jenny Wojewoda (alternate), Massachusetts Attorney General's Office representing State attorneys general and other appropriate State officials.
David Sheridan, School of International & Public Affairs, Columbia University in the City of New York, and Paula Luff (alternate), DePaul University, representing financial aid administrators.
Gloria Kobus, Youngstown State University, and Joan Piscitello (alternate), Iowa State University, representing business officers and bursars at postsecondary institutions.
David Swinton, Benedict College, and George French (alternate), Miles College, representing minority serving institutions.
Brad Hardison, Santa Barbara City College, and Melissa Gregory (alternate), Montgomery College, representing two-year public institutions.
Chuck Knepfle, Clemson University, and J. Goodlett McDaniel (alternate), George Mason University, representing four-year public institutions.
Elizabeth Hicks, Massachusetts Institute of Technology, and Joe Weglarz (alternate), Marist College, representing private, nonprofit institutions.
Deborah Bushway, Capella University, and Valerie Mendelsohn (alternate), American
Casey McGuane, Higher One, and Bill Norwood (alternate), Heartland Payment Systems, representing institutional third-party servicers.
Russ Poulin, WICHE Cooperative for Educational Technologies, and Marshall Hill (alternate), National Council for State Authorization Reciprocity Agreements, representing distance education providers.
Dan Toughey, TouchNet, and Michael Gradisher (alternate), Pearson Embanet, representing business and industry.
Paul Kundert, University of Wisconsin Credit Union, and Tom Levandowski (alternate), Wells Fargo Bank Law Department, Consumer Lending & Corporate Regulatory Division, representing lenders, community banks, and credit unions.
Leah Matthews, Distance Education and Training Council, and Elizabeth Sibolski (alternate), Middle States Commission on Higher Education, representing accrediting agencies.
Carney McCullough, U.S. Department of Education, representing the Department.
Pamela Moran, U.S. Department of Education, representing the Department.
The negotiated rulemaking committee met to develop proposed regulations on February 19-21, 2014, March 26-28, 2014, and April 23-25, 2014. During the March session, the Department proposed adding a negotiated rulemaking session to the schedule to give the negotiators more time to consider the issues and reach consensus on proposed regulatory language. The negotiators agreed to add a fourth and final session. On April 11, 2014, we published in the
At its first meeting, the negotiating committee reached agreement on its protocols and proposed agenda. These protocols provided, among other things, that the committee would operate by consensus. Consensus means that there must be no dissent by any member in order for the committee to have reached agreement. Under the protocols, if the committee reached a final consensus on all issues, the Department would use the consensus-based language in its proposed regulations. Furthermore, the Department would not alter the consensus-based language of its proposed regulations unless the Department reopened the negotiated rulemaking process or provided a written explanation to the committee members regarding why it decided to depart from that language.
During the first meeting, the negotiating committee agreed to negotiate an agenda of six issues related to student financial aid. These six issues were: Clock-to-credit-hour conversion; State authorization of distance education; State authorization of foreign locations of domestic institutions; cash management; retaking coursework; and PLUS loan adverse credit history. Under the protocols, a final consensus would have to include consensus on all six issues, which was not achieved in these negotiations. If consensus were reached, we would have been required to propose the agreed upon language. As it was not reached, there is no such requirement; the Department has discretion with regard to the regulations it proposes on the negotiated issues.
The vacated regulations under § 600.9(c) had provided that, if an institution is offering postsecondary education through distance or correspondence education to students in a State in which it is not physically located, or in which it is otherwise subject to State jurisdiction as determined by the State, the institution
Under proposed § 600.9(c)(1)(ii), if an institution described under § 600.9(a)(1) offers postsecondary education through distance education or correspondence courses in a State that participates in a State authorization reciprocity agreement, and the institution offering the program is located in a State where it is covered by such an agreement, the institution would be considered to be legally authorized to offer postsecondary distance or correspondence education in the State students enrolled in the program reside, subject to any limitations in that agreement. An institution would be required to document its coverage under such an agreement to the Secretary upon request.
In addition, under proposed § 600.9(c)(2)(i), if an institution described under § 600.9(a)(1) is offering postsecondary education through distance education or correspondence courses to students residing in a State in which it is not physically located, in order for the institution to be considered legally authorized in that State, the institution would be required to document that there is a State process in each State in which its enrolled students reside to review and take appropriate action on complaints from any of those enrolled students concerning the institution, including enforcing applicable State law. Alternatively, under § 600.9(c)(2)(ii), an institution could document that it was covered under a State authorization reciprocity agreement which included a process, in either the States in which students reside or the State in which the institution's main campus, as identified by the Department of Education and the institution's accrediting agency, is located, to review and take appropriate action on complaints from any of those enrolled students concerning the institution.
We have previously stated that, with respect to institutions subject to 34 CFR 600.9(a), State authorization for an institution must include a process where the State reviews and appropriately acts on complaints arising under State law (75 FR 66865-66, Oct. 29, 2010). We further clarified in Dear Colleague Letter GEN-14-04 that, while a State may refer the review of complaints concerning an institution to another entity, the final authority to ensure that complaints are resolved timely is with the State. Similarly, we believe that States should also play an important role in the protection of students who enroll in postsecondary educational programs provided through distance education or correspondence courses. Therefore, just like institutions physically located in a State, in order for an institution offering postsecondary educational programs through distance education or correspondence courses to students residing in one or more States in which the institution is not physically located to be considered legally authorized in those States, the institution would need to document that there is a State complaint process in each State in which the students reside. This State process must include steps to review and appropriately act in a timely manner on complaints by any of those students concerning the institution, including enforcing applicable State law. Students enrolled in programs offered through distance education or correspondence courses would therefore be able to access a complaint process under both current § 600.9(a)(1), which requires a process in the State in which the institution is physically located, and proposed § 600.9(c)(2), which requires a process in a student's State of residence. Because a State authorization reciprocity agreement may also designate a State process for these complaints, an institution could alternatively show that it was covered by that agreement's process for resolving complaints.
Proposed § 600.9(d)(1) would specify the requirements for legal authorization for any foreign additional location at which a student can complete 50 percent or more of an educational program, and for any foreign branch campus. Proposed § 600.9(d)(1)(i) would require these additional locations and branch campuses to be legally authorized to operate by an appropriate government authority in the country where the foreign additional location or branch campus is physically located, unless the additional location or branch campus is located on a U.S. military base and is exempt from obtaining such authorization from the foreign country.
Proposed § 600.9(d)(2) would require that foreign additional locations at which less than 50 percent of an educational program is offered, or will be offered, be in compliance with any requirements for legal authorization established by the foreign country.
Proposed § 600.9(d)(3) would provide that an institution must disclose to enrolled and prospective students the information regarding the student complaint process described in § 668.43(b), in accordance with 34 CFR 668.41 and would be satisfied by making this information available to prospective and enrolled students on the institution's Web site, which would then make it available to the general public. The requirement would apply to all foreign additional locations and branch campuses where students are attending and receiving title IV funds, regardless of the amount of the program offered there.
Proposed § 600.9(d)(4) would make clear that if the State in which the main campus of the institution is located limits the authorization of the institution to exclude the foreign additional location or branch campus, the foreign additional location or branch campus would not be considered to be authorized regardless of the percentage of the program offered at a foreign additional location or branch campus.
The proposed regulations would allow an institution with a foreign additional location or branch campus to meet the statutory State authorization requirement for the foreign location or branch campus in a manner that recognizes both the domestic control of the institution as a whole, while ensuring that the foreign location or branch campus is legally operating in the foreign country in which it is located. In addition, the proposed regulations would recognize the importance of extending the protections provided to U.S. students attending an institution in a State to those attending at a foreign additional location or branch campus.
The proposed regulations would only apply to foreign additional locations and branch campuses of domestic institutions. They would not apply to study abroad arrangements that domestic institutions have with foreign institutions whereby a student attends a portion of a program at a separate foreign institution, which are regulated under current § 668.5. These proposed regulations also would not apply to foreign institutions. The requirements for additional locations of foreign institutions are contained in current § 600.54(d).
Proposed § 600.9(d)(1) would limit the applicability of the proposed legal authorization and accreditation requirements to (1) foreign additional locations at which 50 percent or more of an educational program is offered, or will be offered, and (2) all foreign branch campuses. This is consistent with current § 600.10(b)(3) which provides that, generally, title IV eligibility does not automatically extend to any branch campus or additional location where the institution provides at least 50 percent of the educational program, so institutions are required to apply for separate approval of such locations under current § 600.20. It would also be consistent with current § 602.24(a), which requires accrediting agencies to approve the addition of branch campuses, and current § 602.22(a)(2)(viii), which generally requires accrediting agencies to have substantive change policies that include the evaluation of additional locations that provide at least 50 percent of a program, unless the location meets certain exceptions.
Because of the protections provided by State authorization of the main campus of an institution and accrediting agency oversight, the proposed legal authorization standard for foreign additional locations and branch campuses in § 600.9(d)(1)(i), (ii) and (iv) is more lenient than the standard for foreign schools, which provides that legal authorization must be obtained from the education ministry, council, or equivalent agency of the country in which the institution is located to provide an educational program beyond the secondary education level. Under the proposed regulations, a license for an additional location of a U.S. based postsecondary educational institution to operate from an appropriate foreign government authority would be sufficient to demonstrate compliance with § 600.9(d)(1)(i). In addition, unlike foreign schools, which must provide documentation of legal authorization up front, § 600.9(d)(1)(ii) would require that the institution provide documentation of the authorization by the foreign country in which the additional location or branch campus is located
Some negotiators suggested that State authorization of the institution's main campus and compliance with the accreditation requirements for a foreign additional location or branch campus was sufficient for the location or branch campus to be title IV eligible. However, the negotiated rulemaking committee discussed and tentatively agreed that this standard did not provide enough protection for students who would be harmed if a country sought to close an additional location or branch campus that it had not authorized to operate. For this same reason, proposed § 600.9(d)(1)(iv) would require that foreign additional locations and branch campuses be in compliance with any additional requirements for legal authorization established by the foreign country. While the committee agreed that it was not necessary that the specific legal authorization requirements of proposed § 600.9(d)(1)(i) and (ii) would apply to foreign additional locations at which less than 50 percent of an educational program is offered, or will be offered (discussed above), the committee agreed that proposed § 600.9(d)(2) would require that foreign additional locations at which less than 50 percent of an educational program is offered, or will be offered, be in compliance with any requirements for legal authorization established by the foreign country.
Under the proposed regulations, a foreign additional location or branch campus that is located on a U.S. military base and is exempt from obtaining legal authorization from the foreign country would be exempt from being legally authorized to operate by an appropriate government authority in the country where the additional location or branch campus is physically located. Although some negotiators suggested that all additional locations or branch campuses located on U.S. military bases should be exempt from the laws and regulations of the countries in which they are located because they are considered to be located on “U.S. soil,” the Department's understanding is that U.S. military bases are not automatically considered to be located on “U.S. soil.” Rather, they are governed by individual Status of Forces Agreements and vary by country and base. These regulations would defer to those agreements regarding the applicability of authorizing requirements of the foreign country.
Proposed § 600.9(d)(1)(iii) would not create a new requirement for accrediting agency approval of foreign additional locations or branch campuses. Rather, approval would be required in accordance with the existing regulations for the approval of additional locations and branch campuses in the regulations for the Secretary's recognition of accrediting agencies. That is, under the current regulations, if an institution plans to establish a branch campus, the accrediting agency must require the institution to notify the agency, submit a business plan for the branch campus, and wait for accrediting agency approval (§ 602.24(a)). For additional locations that provide at least 50 percent of a program, accrediting agencies must have substantive change policies that include the evaluation of additional locations that provide at least 50 percent of a program, unless the location meets certain exceptions (§ 602.22(a)(2)(viii)). In order to facilitate the oversight role of the State in which the institution's main campus is located with respect to a foreign additional location or branch campus, proposed § 600.9(d)(1)(v) would require an institution with a main campus in the State to report the establishment or operation of a foreign additional location or branch campus to the State at least annually, or more frequently if required by the State. Although the proposed regulations would not specifically require an institution to obtain authorization in the State in which the main campus is located for the foreign additional location or branch campus, in recognition that a State may set limitations on the establishment or operation of foreign locations or branch campuses other than simply denying eligibility, proposed § 600.9(d)(1)(vi) would provide that an institution must comply with any State limitations on the establishment or operation of a foreign additional location or branch campus set by that State.
To ensure that students are aware of the complaint process of the State in which the main campus of the institution is located, proposed § 600.9(d)(3) would require institutions to disclose information regarding the student complaint process to enrolled and prospective students at that foreign additional location or branch campus. To minimize burden, the proposed regulations would require that this disclosure be made in accordance with the existing consumer disclosure requirements of subpart D of part 668, rather than through the establishment of a separate disclosure.
Proposed § 600.9(d)(4) would make clear that if the State limits the authorization of the institution to exclude the additional foreign location or branch campus in a foreign country, the additional location or branch campus would not be considered to be authorized by the State. This would mean that a State is not required to authorize a foreign additional location or branch campus, but if a State expressly prohibits an institution then the location is not considered to be authorized. A State may also provide conditions by which an institution must abide by to have its foreign additional locations or branch campuses be authorized. In such an instance, the institution must abide by those conditions to be considered authorized.
For distance education programs and correspondence courses offered by an institution of higher education, the institution must disclose:
• How the distance education program or correspondence course is authorized (34 CFR 668.50(b)(1));
• How to submit complaints to the appropriate State agency responsible for student complaints or to the state authority reciprocity agreement, whichever is appropriate based on how the program or course is authorized (34 CFR 668.50(b)(2));
• How to submit complaints to the appropriate State agency in the student's State of residence (34 CFR 668.50(b)(3));
• Any adverse actions taken by a State or accrediting agency against an institution of higher education's distance education program or correspondence course and the year that the action was initiated for the previous five calendar years (34 CFR 668.50(b)(4) and 34 CFR 668.50(b)(5));
• Refund policies that the institution is required to comply with (34 CFR 668.50(b)(6));
• The applicable licensure or certification requirements for a career a student prepares to enter, and whether the program meets those requirements (34 CFR 668.50(b)(7)).
Additionally, these institutions must also disclose directly:
• When a distance education program or correspondence course does not meet the licensure or certification requirements for a State to all prospective students (34 CFR 668.50(c)(1)(i));
• When an adverse action is taken against an institution's postsecondary education programs offered by the institution solely through distance education or correspondence student to each enrolled and prospective student (34 CFR 668.50(c)(2)); and
• Any determination that a program ceases to meet licensure or certification requirements to each enrolled and prospective student (34 CFR 668.50(c)(2)).
Under proposed § 668.50(b)(1), an institution would be required to disclose whether the program offered by the institution through distance education or correspondence courses is authorized by each State in which students enrolled in the program reside. If an institution is authorized through a State authorization reciprocity agreement, the institution would be required to disclose its authorization status under such an agreement.
Under proposed § 668.50(b)(2)(i), an institution authorized by a State agency would be required to disclose the process for submitting complaints to the appropriate State agency in the State in which the main campus of the institution is located, including providing contact information for the appropriate individuals at the State agencies that handle consumer complaints.
Under proposed § 668.50(b)(2)(ii), an institution that is authorized by a State authorization reciprocity agreement would be required to disclose the complaint process established by the reciprocity agreement, if the agreement establishes such a process. In addition to the State authorization reciprocity agreement's complaint process, an institution authorized through such an agreement would also be required to provide contact information for the individual responsible for handling such complaints, as set out in the State authorization reciprocity agreement, if applicable.
Under proposed § 668.50(b)(3), an institution would be required to disclose the process for submitting complaints to the appropriate State agency for all States in which the institution enrolls students in distance education programs or correspondence courses, regardless of whether the institution is authorized by the State in which the main campus of the institution is located or by a State authorization reciprocity agreement.
Under proposed § 668.50(b)(4) and (5), an institution would be required to disclose any adverse actions a State entity or an accrediting agency has initiated related to the institution's distance education programs or correspondence courses for a five calendar year period prior to the year in which the institution makes the disclosure.
Under proposed § 668.50(b)(6), an institution would be required to disclose, for any State in which the institution enrolls students in distance education programs or correspondence courses, any State policies requiring the institution to refund unearned tuition and fees.
Under proposed § 668.50(b)(7), an institution would be required to disclose the applicable educational prerequisites for professional licensure or certification which the program prepares the student to enter in any State in which the program's enrolled students reside, or any other State for which the institution has made a determination regarding such prerequisites. The institution would also be required to disclose whether the distance education program or correspondence course does or does not satisfy those applicable educational prerequisites for professional licensure or certification. Distance education programs and correspondence courses enroll students from a multitude of States where they do not have a physical presence and their programs may not necessarily lead to licensure or certification, which would be important for students to know. For any State as to which an institution has not made a determination with respect to the licensure or certification requirement, an institution would be required to disclose a statement to that effect. This disclosure does not require an institution to make a determination with regard to how its distance education programs or correspondence courses meet the prerequisites for licensure or certification in States where none of its enrolled students reside, but does require an institution to disclose whether it has made such determinations and, if it has made a determination, whether its programs meet such prerequisites.
Under proposed § 668.50(c), an institution offering programs solely through distance education or correspondence courses would be required to provide individualized disclosures to students to disclose certain information, but only if certain conditions are met. An individualized disclosure would be providing a disclosure through direct contact, such as through an email or written correspondence, unlike a public disclosure, such as through the program's Web site or in promotional material.
Under proposed § 668.50(c)(1)(i), an institution would be required to provide an individualized disclosure to prospective students when the institution determines that an educational program is being offered solely through distance education or correspondence courses, excluding internships or practicums, does not meet licensure or certification prerequisites in the State of the student's residence. The institution would be required to obtain an acknowledgment from the student that the communication was received prior to the student's enrollment in the program. The Department believes this can be solved relatively easily by including attestation as part of a student's enrollment agreement or other paperwork required for new students by the institution, which an institution would already prepare and maintain.
Under proposed § 668.50(c)(1)(ii), an institution would be required to provide an individualized disclosure to enrolled and prospective students of any adverse action initiated by a State or an accrediting agency related to the institution's programs, including the years in which such actions were initiated, and when the institution determines that its program ceases to meet licensure or certification prerequisites of a State. These individualized disclosures would have to occur within 30 days and 7 days of the institution becoming aware of the event, respectively.
Through these proposed requirements, a student enrolled or planning to enroll in programs offered through distance education or correspondence courses would receive information regarding whether programs or courses are authorized by the State in which he or she lives and whether those programs or courses also meet State prerequisites for licensure and certification. Without such requirements, students could unknowingly enroll in programs that do not qualify them for Federal student aid or that do not fulfill requirements for employment in a particular profession or field, either in the State in which they reside or in the State in which they intend to seek employment.
These requirements would also strengthen the effectiveness of the program integrity triad by ensuring that enrolled and prospective students are aware of any adverse actions a State or accrediting agency has initiated against an institution that may potentially impact the post-secondary success or financial well-being of students. This requirement would also limit the time period for disclosing such information to the past five years, so that institutions would not be required to disclose every adverse action ever made against them, and institutions that have improved over time will be able to distance themselves from an adverse compliance history.
We believe it is important to provide information to students on whatever adverse actions have been initiated against an institution regarding its distance education program or correspondence course regardless of the status of the action. For example, if an institution appeals an adverse action being taken against it by a State, we believe that an institution should still disclose that adverse action to an enrolled or prospective student. However, the institution is permitted to provide qualifying information to the student about any appeal that is being pursued by the institution regarding its distance education program or correspondence course offered by the institution.
Additionally, through these requirements, students would receive information about the complaint processes available to them. This information should be readily available to students as a way to ensure transparency and to protect students from bad actors in the field. We also believe that students should be provided with the complaint process for their State of residence regardless of how their distance education program or correspondence course was authorized.
Providing information to a student about tuition refund policies is also important as it may impact a student's finances and their decision to enroll in a distance education program or correspondence courses. This information can help a student navigate the refund process if they decide to withdraw from a course or program.
Given the multi-State environment in which distance education programs and correspondence courses may be offered, it is important that students understand and make informed decisions about the educational options available to them through distance and correspondence education. As such, these proposed regulations would require that certain individualized disclosures be made to students, but only in certain situations. Under these proposed regulations, when a State or accrediting agency initiates an adverse action against an institution offering programs offered through distance education or correspondence courses or if a program does not meet or ceases to meet prerequisites for State licensure or certification, this information will be directly communicated to enrolled and prospective students. In those situations, these disclosures will help a student evaluate whether enrollment or continued enrollment in a particular program is in his or her best interest.
Overall, the public and individualized disclosures provided under these proposed regulations establish important consumer protections within the distance education field and help enrolled and prospective students make informed choices about postsecondary distance education programs and correspondence courses.
Under Executive Order 12866, it must be determined whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—
(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities in a material way (also referred to as an “economically significant” rule);
(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement 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 stated in the Executive order.
This proposed regulatory action is a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.
We have also reviewed these regulations under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—
(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;
(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and
(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.
Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”
We are issuing these proposed regulations only on a reasoned
We also have determined that this regulatory action would not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions.
In this Regulatory Impact Analysis we discuss the need for regulatory action, the potential costs and benefits, net budget impacts, assumptions, limitations, and data sources, as well as regulatory alternatives we considered. Although the majority of the costs related to information collection are discussed within this RIA, elsewhere in this NPRM under Paperwork Reduction Act of 1995, we also identify and further explain burdens specifically associated with information collection requirements.
The landscape of higher education has changed over the last 20 years. During that time, the role of distance education in the higher education sector has grown significantly. For Fall 1999, eight percent of all male students and ten percent of all female students participated in at least one distance education course.
Some States have entered into reciprocity agreements with other States in an effort to address the issues that distance education presents, such as States having differing and conflicting requirements that institutions of higher education will have to adhere to, potentially causing increased costs and burden for those institutions. For example, as of June 2016, 40 States and the District of Columbia have entered into a State Authorization Reciprocity Agreement (SARA) administered by the National Council for State Authorization Reciprocity Agreements, which establishes standards for the interstate offering of postsecondary distance-education courses and programs. Through a State authorization reciprocity agreement, an approved institution may provide distance education to residents of any other member State without seeking authorization from each member State. However, even where States accept the terms of a reciprocity agreement, that agreement may not apply to all institutions and programs in any given State.
There also has been a significant growth in the number of American institutions and programs enrolling students abroad. As of May 2016, American universities were operating 80 foreign locations worldwide according to information available from the
American institutions operating foreign locations are still relatively new. As such, data about the costs involved in these operations is limited. Some American institutions establishing locations in other countries have negotiated joint ventures and reimbursement agreements with foreign governments to share the startup costs. The Department found no evidence suggesting that institutions make payments to foreign governments in order to operate in the foreign country.
With the expansion of these higher education models, the Department believes it is important to maintain a minimum standard of State approval for higher education institutions. The proposed regulations support States in their efforts to develop standards for this growing sector of higher education. The clarified requirements related to State authorization also support the integrity of the Federal student aid programs by not supplying funds to programs and institutions that are not authorized to operate in a given State.
The proposed regulations:
• Require an institution offering distance education or correspondence courses to be authorized by each State in which the institution enrolls students, if such authorization is required by the State, including through a State authorization reciprocity agreement.
• Define the term “State authorization reciprocity agreement” to be an agreement between two or more States that authorizes an institution located in a State covered by the agreement to provide postsecondary education through distance education or correspondence courses to students in other States covered by the agreement.
• Require an institution to document the State process for resolving complaints from students enrolled in programs offered through distance education or correspondence courses.
• Require that an additional location or branch campus located in a foreign location be authorized by an appropriate government agency of the country where the additional location or branch campus is located and, if at least half of an educational program can be completed at the location or branch campus, be approved by the institution's accrediting agency and be reported to the State where the institution's main campus is located.
• Require that an institution provide public and individualized disclosures to enrolled and prospective students regarding its programs offered solely through distance education or correspondence courses.
The potential primary benefits of the proposed regulations are: (1) Increased transparency and access to institutional and program information, (2) updated and clarified requirements for State authorization of distance education and foreign additional locations, and (3) a process for students to access complaint resolution in either the State in which the institution is authorized or the State in which they reside.
We have identified the following groups and entities we expect to be affected by the proposed regulations:
Students who made public comments during negotiated rulemaking stated that the availability of online courses allowed them to earn credentials in an environment that suited their personal needs. We believe, therefore, that students would benefit from increased transparency about distance education programs. The disclosures of adverse actions against the programs, refund policies, and the prerequisites for licensure and whether the program meets those prerequisites in States for which the institution has made those determinations would provide valuable information that can help students make more informed decisions about which institution to attend. Increased access to information could help students identify programs that offer credentials that potential employers recognize and value. Additionally, institutions would have to provide an individualized disclosure to enrolled and prospective students of adverse actions against the institution and when programs offered solely through distance education or correspondence courses do not meet licensure or certification prerequisites in the student's State of residence. The disclosure regarding adverse actions would help ensure that students have information about potential wrongdoing by institutions. Similarly, disclosures regarding whether a program meets applicable licensure or certification requirements would provide students with valuable information about whether attending the program will allow them to pursue the chosen career upon program completion. The licensure disclosure requires acknowledgment by the student before enrollment, which emphasizes the importance of ensuring students receive that information. It also recognizes that students may have specific plans for using their degree, potentially in a new State of residence where the program would meet the relevant prerequisites.
Students in distance education or at foreign locations of domestic institutions would also benefit from the disclosure and availability of complaint resolution processes that would let them know how to submit complaints to the State in which the main campus of the institution is located or, for distance education students, the students' State of residence. This can help to ensure the availability to students of consumer protections and make it more convenient for students to access those supports.
Institutions will benefit from the increased clarity concerning the requirements and process for State authorization of distance education and of foreign additional locations. Institutions will bear the costs of ensuring they remain in compliance with State authorization requirements, whether through entering into a State authorization reciprocity agreement or researching and meeting the relevant requirements of the States in which they operate distance education programs. The Department does not ascribe specific costs to the proposed State authorization regulations and associated definitions because it is presumed that institutions are complying with applicable State authorization requirements. Additionally, nothing in the proposed regulations would require institutions to participate in distance education. However, in the event that the clarification of the State authorization requirements in the proposed regulations, among other factors, would provide an incentive for more institutions to be involved to offer distance education courses, the Department has estimated some costs as an illustrative example of what institutions can expect from complying with State authorization requirements.
The costs for each institution will vary based on a number of factors, including the institutions' size, the extent to which an institution provides distance education, and whether it participates in a State authorization reciprocity agreement or chooses to obtain authorization in specific States. The Department has estimated annual
These costs are only one example of an arrangement institutions can use to meet distance education authorization requirements, so actual costs will vary. As seen in Table 2 below, the Department applied the costs associated with a SARA arrangement to all 2,301 title IV participating institutions reported as offering distance education programs in IPEDS for a total of $19.3 million annually in direct fees and charges associated with distance education authorization. Additional State fees to institutions applied were $3,000 for institutions under 2,500 FTE, $6,000 for 2,500 to 9,999 FTE, and $10,000 for institutions with 10,000 or more FTE. The Department welcomes comments on the assumptions and estimates presented here and will consider them in the analysis of the final regulation.
Domestic institutions that choose to operate foreign locations may incur costs from complying with the requirements of the foreign country or the State of their main campus, and these will vary based on the location, the State, the percentage of the program offered at the foreign location, and other factors. As with distance education, nothing in the regulation requires institutions to operate foreign locations and we assume that institutions have complied with applicable requirements in operating their foreign locations.
In addition to the costs institutions incur from identifying State requirements or entering a State authorization reciprocity agreement to comply with the proposed regulations, institutions will incur costs associated with the proposed disclosure requirements. This additional workload is discussed in more detail under the
The proposed regulations maintain the important role of States in authorizing institutions and in providing consumer protection for residents. The increased clarity about State authorization should also assist the Federal government in administering the title IV, HEA programs. The proposed regulations would not require States to take specific actions related to authorization of distance education programs. States would choose the systems they establish, their participation in a State authorization reciprocity agreement, and the fees they charge institutions and have the option to do nothing in response to the proposed regulations. Therefore, the Department has not quantified specific annual costs to States based on the proposed regulations.
The proposed regulations are not estimated to have a significant net budget impact in costs over the 2017-2026 loan cohorts. A cohort reflects all
In the absence of evidence that the proposed regulations will significantly change the size and nature of the student loan borrower population, the Department estimates no significant net budget impact from the proposed regulations. While the clarity about the requirements for State authorization and the option to use State authorization reciprocity agreements may expand the availability of distance education; that does not necessarily mean the volume of student loans will expand greatly. Additional distance education could serve as a convenient option for students to pursue their education and loan funding may shift from physical to online campuses. Distance education has expanded significantly already and the proposed regulations are only one factor in institutions' plans within this field. The distribution of title IV, HEA program funding could continue to evolve, but the overall volume is also driven by demographic and economic conditions that are not affected by the proposed regulations and State authorization requirements are not expected to change loan volumes in a way that would result in a significant net budget impact. Likewise, the availability of options to study abroad at foreign locations of domestic institutions offers students flexibility and potentially rewarding experiences, but is not expected to significantly change the amount or type of loans students use to finance their education. Therefore, the Department does not estimate that the requirements that an additional location or branch campus located in a foreign location be authorized by an appropriate government agency of the country where the additional location or branch campus is located and, if at least half of an educational program can be completed at the location or branch campus, be approved by the institution's accrediting agency and be reported to the State where the institution's main campus is located will have a significant budget impact on title IV, HEA programs. The Department welcomes comments on this analysis and will consider them in the development of the final rule.
In developing these estimates, a wide range of data sources were used, including data from the National Student Loan Data System, and data from a range of surveys conducted by the National Center for Education Statistics such as the 2012 National Postsecondary Student Aid Survey. Data from other sources, such as the U.S. Census Bureau, were also used.
In the interest of promoting good governance and ensuring that these proposed regulations produce the best possible outcome, the Department reviewed and considered various proposals from both internal sources as well as from non-Federal negotiators. We summarize below the major proposals that we considered but ultimately declined to adopt in these proposed regulations.
The Department has addressed State authorization during two previous rulemaking sessions, one in 2010 and the other in 2014. In 2010, State authorization of distance education was not a topic addressed in the negotiations, but the Department addressed the issue in the final rule in response to public comment. The distance education provision in the 2010 regulation was struck down in court on procedural grounds, leading to the inclusion of the issue in the 2014 negotiations. The 2014 proposal would have required, in part, an institution of higher education to obtain State authorization wherever its students were located. That proposal would also have allowed for reciprocity agreements between States as a form of State authorization, including State authorization reciprocity agreements administered by a non-State entity. The Department and participants of the 2014 rulemaking session were unable to reach consensus.
As it developed the proposed regulations, the Department considered adopting the 2010 or 2014 proposals. However, the 2010 rule did not allow for reciprocity agreements and did not require a student complaint process for distance education students if a State did not already require it. The 2014 proposal raised concerns about complexity and level of burden involved. The Department therefore used elements of both proposals in formulating these proposed regulations. Using the 2010 rule as a starting point, the proposed regulations allow for State authorization reciprocity agreements and provide a student complaint process requirement to achieve a balance between appropriate oversight and burden level. The Department and non-Federal negotiators reached agreement on the provisions related to foreign locations without considering specific alternative proposals.
Executive Order 12866 and the Presidential memorandum “Plain Language in Government Writing” require each agency to write regulations that are easy to understand.
The Secretary invites comments on how to make these proposed regulations easier to understand, including answers to questions such as the following:
• Are the requirements in the proposed regulations clearly stated?
• Do the proposed regulations contain technical terms or other wording that interferes with their clarity?
• Does the format of the proposed regulations (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce their clarity?
• Would the proposed regulations be easier to understand if we divided them into more (but shorter) sections? (A “section” is preceded by the symbol “§ ” and a numbered heading; for example, § 668.50
• Could the description of the proposed regulations in the
• What else could we do to make the proposed regulations easier to understand?
To send any comments that concern how the Department could make these proposed regulations easier to understand, see the instructions in the
The proposed regulations would affect institutions that participate in the title IV, HEA. The U.S. Small Business Administration (SBA) Size Standards define “for-profit institutions” as “small businesses” if they are independently owned and operated and not dominant in their field of operation with total annual revenue below $7,000,000. The SBA Size Standards define “not-for-profit institutions” as “small organizations” if they are independently owned and operated and not dominant in their field of operation, or as “small entities” if they are institutions controlled by governmental entities with populations below 50,000. Under these definitions, approximately 4,267 of the IHEs that would be subject to the proposed paperwork compliance provisions of the final regulations are small entities. Accordingly, we have prepared this initial regulatory
The Secretary is proposing to amend the regulations governing the title IV, HEA programs to provide clarity to the requirements for, and options to: obtain State authorization of distance education, correspondence courses, and foreign locations; document the process to resolve complaints from distance education students in the State in which they reside; and make disclosures about distance education and correspondence courses.
Section 101(a)(2) of the HEA defines the term “institution of higher education” to mean, in part, an educational institution in any State that is legally authorized within the State to provide a program of education beyond secondary education. Section 102(a) of the HEA provides, by reference to section 101(a)(2) of the HEA, that a proprietary institution of higher education and a postsecondary vocational institution must be similarly authorized within a State. Section 485(a)(1) of the HEA provides that an institution must disclose information about the institution's accreditation and State authorization.
These proposed regulations would affect IHEs that participate in the Federal Direct Loan Program and borrowers. Approximately 60 percent of IHEs qualify as small entities, even if the range of revenues at the not-for-profit institutions varies greatly. Using data from IPEDS, the Department estimates that approximately 4,267 IHEs participating in the title IV, HEA programs qualify as small entities—1,878 are not-for-profit institutions, 2,099 are for-profit institutions with programs of two years or less, and 290 are for-profit institutions with four-year programs. The Department believes that most proprietary institutions that are heavily involved in distance education should not be considered small entities because the scale required to operate substantial distance education programs would put them above the relevant revenue threshold. However, the private non-profit sector's involvement in the field may mean that a significant number of small entities could be affected. The Department also expects this to be the case for foreign locations of domestic institutions, with proprietary institutions operating foreign locations unlikely to be small entities and a number of private not-for-profit classified as small entities involved.
Distance education offers small entities, particularly not-for-profit entities of substantial size that are classified as small entities, an opportunity to serve students who could not be accommodated at their physical locations. Institutions that that choose to provide distance education could potentially capture a larger share of the higher education market. Overall, as of Fall 2013, approximately 13 percent of students receive their education exclusively through distance education while 73 percent took no distance education courses. However, at proprietary institutions almost 52 percent of students were exclusively distance education students and 40 percent had not enrolled in distance education courses. As discussed above, we assume that most of the proprietary institutions offering a substantial amount of distance education are not small entities, but if not-for-profit institutions expand their role in the distance education sector, small entities could increase their share of revenue. On the other hand, small entities that operate physical campuses could face more competition from distance education providers. The potential reshuffling of resources within higher education would occur regardless of the proposed regulations, but the clarity provided by the distance education requirements and the acceptance of State authorization reciprocity agreementss could accelerate those changes.
However, in order to accommodate students through distance learning, institutions would face a number of costs, including the costs of complying with the authorization requirements of the proposed regulations. As with the broader set of institutions, the costs for small entities would vary based on the scope of the distance education they choose to provide, the States in which they operate, and the size of the institution. Applying the same costs from the National Council for State Authorization Reciprocity Agreements as in the Regulatory Impact Analysis, we estimate that small entities will face annual costs of $7.0 million.
Table 3 relates the estimated burden of each information collection requirement to the hours and costs estimated in the
The regulations are not expected to duplicate, overlap, or conflict with existing Federal regulations.
As described above, the Department participated in negotiated rulemaking when developing the proposed regulations, and considered a number of options for some of the provisions. No alternatives were aimed specifically at small entities.
As part of its continuing effort to reduce paperwork and respondent burden, the Department provides the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that: The public understands the Department's collection instructions, respondents can provide the requested data in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the Department can properly assess the impact of collection requirements on respondents.
Sections 600.9 and 668.50 contain information collection requirements. Under the PRA, the Department has submitted a copy of these sections, and an Information Collection Request (ICR) to OMB for its review.
A Federal agency may not conduct or sponsor a collection of information unless OMB approves the collection under the PRA and the corresponding information collection instrument displays a currently valid OMB control number. Notwithstanding any other provision of law, no person is required to comply with, or is subject to penalty for failure to comply with, a collection of information if the collection instrument does not display a currently valid OMB control number.
In the final regulations, we will display the control numbers assigned by OMB to any information collection requirements proposed in this NPRM and adopted in the final regulations.
The following data will be used throughout this section: For the year 2014, there were 2,301 institutions that reported to IPEDS that they had enrollment of 2,834,045 students attending a program through distance education as follows:
1,172 public institutions reported 1,382,900 students attending a program through distance education;
761 private, not-for-profit institutions reported 608,038 students attending a program through distance education;
368 private, for-profit institutions reported 843,107 students attending a program through distance education.
According to information available from the Department's Postsecondary Education Participation System (PEPS), there are currently 80 domestic institutions with identified additional locations in 60 foreign countries; 35 public institutions, 42 private, not-for-profit institutions, and 3 private, for-profit institutions.
The total estimated burden for 34 CFR 600.9 would be 160 hours under OMB Control Number 1845-NEW1.
Under proposed § 668.50(b)(1), an institution would be required to disclose whether or not the program offered through distance education or correspondence courses is authorized by each State in which enrolled students reside. If an institution is authorized through a State authorization reciprocity agreement, the institution would be required to disclose its authorization status under such an agreement.
Under proposed § 668.50(b)(2)(i), an institution authorized by a State agency would be required to disclose the process for submitting complaints to the appropriate State agency in the State in which the main campus of the institution is located, including contact information for the appropriate individuals at those State agencies that handle consumer complaints.
Under proposed § 668.50(b)(2)(ii), an institution authorized by a State authorization reciprocity agreement would be required to disclose the complaint process established by the reciprocity agreement, if the agreement established such a process. An institution would be required to provide a contact responsible for handling such complaints, as set out in the State authorization reciprocity agreement.
Under proposed § 668.50(b)(3), an institution would be required to disclose the process for submitting complaints to the appropriate State agency in the State in which enrolled students reside, including contact information for the appropriate individuals at those State agencies that handle consumer complaints.
Under proposed § 668.50(b)(4), an institution would be required to disclose any adverse actions a State entity has initiated related to the institution's distance education programs or correspondence courses for a five calendar year period prior to the year in which the institution makes the disclosure.
Under proposed § 668.50(b)(5) an institution would be required to disclose any adverse actions an accrediting agency has initiated related to the institution's distance education programs or correspondence courses for a five calendar year period prior to the year in which the institution makes the disclosure.
Under proposed § 668.50(b)(6), an institution would be required to disclose any refund policies for the return of unearned tuition and fees with which the institution is required to comply by any State in which the institution enrolls students in a distance education program or correspondence courses. This disclosure would require publication of the State-specific requirements on the refund policies as well as any institutional refund policies that would be applicable to students enrolled in programs offered through distance education or correspondence courses with which the institution must comply.
Under proposed § 668.50(b)(7), an institution would be required to disclose the applicable educational prerequisites for professional licensure or certification which the program offered through distance education or correspondence course prepares the student to enter for each State in which students reside, and for which the institution has made a determination regarding such prerequisites. For any State for which an institution has not made a determination with respect to the licensure or certification requirement, an institution would be required to disclose a statement to that effect.
The total estimated burden for proposed § 668.50(b) would be 34,515 hours under OMB Control Number 1845-NEW2.
Under proposed § 668.50(c)(1)(i), an institution would be required to provide an individualized disclosure to prospective students when it determines a program offered solely through distance education or correspondence courses does not meet licensure or certification prerequisites in the State of the student's residence.
Under proposed § 668.50(c)(1)(ii), an institution would be required to provide an individualized disclosure to both enrolled and prospective students within 30 days of when it becomes aware of any adverse action initiated by a State or an accrediting agency related to the institution's programs offered through distance education or correspondence courses; or within seven days of the institution's determination that a program ceases to meet licensure or certification prerequisites of a State.
For prospective students who receive any individualized disclosure and subsequently enroll, proposed § 668.50(c)(2) would require an institution to obtain an acknowledgment from the student that the communication was received prior to the student's enrollment in the program.
The total estimated burden for proposed § 668.50(c) would be 690 hours under OMB Control Number 1845-NEW2.
The combined total estimated burden for proposed § 668.50 would be 35,205 hours under OMB Control Number 1845-NEW2.
Consistent with the discussion above, the following chart describes the sections of the proposed regulations involving information collections, the information being collected, and the collections that the Department will submit to OMB for approval and public comment under the PRA, and the estimated costs associated with the information collections. The monetized net costs of the increased burden on institutions, lenders, guaranty agencies, and borrowers, using BLS wage data, available at
The total burden hours and change in burden hours associated with each OMB Control number affected by the proposed regulations follows:
We have prepared an Information Collection Request (ICR) for these information collection requirements. If you want to review and comment on the ICR, please follow the instructions in the
The Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB), and the Department of Education review all comments posted at
In preparing your comments, you may want to review the ICR, including the supporting materials, in
We consider your comments on these proposed collections of information in—
• Deciding whether the proposed collections are necessary for the proper performance of our functions, including whether the information will have practical use;
• Evaluating the accuracy of our estimate of the burden of the proposed collections, including the validity of our methodology and assumptions;
• Enhancing the quality, usefulness, and clarity of the information we collect; and
• Minimizing the burden on those who must respond. This includes exploring the use of appropriate automated, electronic, mechanical, or other technological collection techniques.
Between 30 and 60 days after publication of this document in the
If your comments relate to the ICRs for these proposed regulations, please specify the Docket ID number and indicate “Information Collection Comments” on the top of your comments.
These programs are not subject to Executive Order 12372 and the regulations in 34 CFR part 79.
In accordance with section 411 of the General Education Provisions Act, 20 U.S.C. 1221e-4, the Secretary particularly requests comments on whether these proposed regulations would require transmission of information that any other agency or authority of the United States gathers or makes available.
Executive Order 13132 requires us to ensure meaningful and timely input by State and local elected officials in the development of regulatory policies that have federalism implications. “Federalism implications” means 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. The proposed regulations in § 600.9(c) and (d) may have federalism implications. We encourage State and local elected officials to review and provide comments on these proposed regulations.
You may also access documents of the Department published in the
Colleges and universities, Foreign relations, Grant programs-education, Loan programs-education, Reporting and recordkeeping requirements, Student aid, Vocational education.
Administrative practice and procedure, Colleges and universities, Consumer protection, Grant programs-education, Loan programs-education, Reporting and recordkeeping requirements, Selective Service System, Student aid, Vocational education.
For the reasons discussed in the preamble, the Secretary proposes to amend parts 600 and 668 as follows:
20 U.S.C. 1001, 1002, 1003, 1088, 1091, 1094, 1099b, and 1099c, unless otherwise noted.
(c)(1)(i) If an institution described under paragraph (a)(1) of this section offers postsecondary education through distance education or correspondence courses to students in a State in which the institution is not physically located or in which the institution is otherwise subject to that State's jurisdiction as determined by that State, except as provided in paragraph (c)(1)(ii) of this section, the institution must meet any State requirements for it to be legally offering postsecondary distance education or correspondence courses in that State. The institution must, upon request, document to the Secretary the State's approval.
(ii) If an institution described under paragraph (a)(1) of this section offers postsecondary education through distance education or correspondence courses in a State that participates in a State authorization reciprocity agreement, and the institution is covered by such agreement, the institution is considered to meet State requirements for it to be legally offering postsecondary distance education or correspondence courses in that State, subject to any limitations in that agreement. The institution must, upon request, document its coverage under such an agreement to the Secretary.
(2) If an institution described under paragraph (a)(1) of this section offers postsecondary education through distance education or correspondence courses to students residing in a State in which the institution is not physically located, for the institution to be considered legally authorized in that State, the institution must document that there is a State process for review and appropriate action on complaints from any of those enrolled students concerning the institution—
(i) In each State in which the institution's enrolled students reside; or
(ii) Through a State authorization reciprocity agreement which designates for this purpose either the State in which the institution's enrolled students reside or the State in which the institution's main campus is located.
(d) An additional location or branch campus of an institution, described under paragraph (a)(1) of this section, that is located in a foreign country,
(1) For any additional location at which 50 percent or more of an educational program (as defined in § 600.2) is offered, or will be offered, or at a branch campus—
(i) The additional location or branch campus must be legally authorized by an appropriate government authority to operate in the country where the additional location or branch campus is physically located, unless the additional location or branch campus is physically located on a U.S. military base and the institution can demonstrate that it is exempt from obtaining such authorization from the foreign country;
(ii) The institution must provide to the Secretary, upon request, documentation of such legal authorization to operate in the foreign country, demonstrating that the government authority is aware that the additional location or branch campus provides postsecondary education and that the government authority does not object to those activities;
(iii) The additional location or branch campus must be approved by the institution's recognized accrediting agency in accordance with § 602.24(a) and § 602.22(a)(2)(viii), as applicable;
(iv) The additional location or branch campus must meet any additional requirements for legal authorization in that foreign country as the foreign country may establish;
(v) The institution must report to the State in which the main campus of the institution is located at least annually, or more frequently if required by the State, the establishment or operation of each foreign additional location or branch campus; and
(vi) The institution must comply with any limitations the State places on the establishment or operation of the foreign additional location or branch campus.
(2) An additional location at which less than 50 percent of an educational program (as defined in § 600.2) is offered or will be offered must meet the requirements for legal authorization in that foreign country as the foreign country may establish.
(3) In accordance with the requirements of 34 CFR 668.41, the institution must disclose to enrolled and prospective students at foreign additional locations the information regarding the student complaint process described in 34 CFR 668.43(b).
(4) If the State in which the main campus of the institution is located limits the authorization of the institution to exclude the foreign additional location or branch campus, the foreign additional location or branch campus is not considered to be legally authorized by the State.
20 U.S.C. 1001-1003, 1070a, 1070g, 1085, 1087b, 1087d, 1087e, 1088, 1091, 1092, 1094, 1099c, 1099c-1, 1221e-3, and 3474, unless otherwise noted.
(a)
(b)
(1)(i) Whether the institution is authorized to provide the program by each State in which enrolled students reside; or
(ii) Whether the institution is authorized through a State authorization reciprocity agreement, as defined in 34 CFR 600.2;
(2)(i) If the institution is required to provide a disclosure under paragraph
(ii) If the institution is required to provide a disclosure under paragraph (b)(1)(ii) of this section, and that agreement establishes a complaint process as described in 34 CFR 600.9(c)(2)(ii), a description of the process for submitting complaints that was established in the reciprocity agreement, including contact information for receipt of consumer complaints at the appropriate State authorities;
(3) A description of the process for submitting consumer complaints in each State in which the program's enrolled students reside, including contact information for receipt of consumer complaints at the appropriate State authorities;
(4) Any adverse actions a State entity has initiated, and the years in which such actions were initiated, related to postsecondary education programs offered solely through distance education or correspondence courses at the institution for the five calendar years prior to the year in which the disclosure is made;
(5) Any adverse actions an accrediting agency has initiated, and the years in which such actions were initiated, related to postsecondary education programs offered solely through distance education or correspondence courses at the institution for the five calendar years prior to the year in which the disclosure is made;
(6) Refund policies with which the institution is required to comply by any State in which enrolled students reside for the return of unearned tuition and fees; and
(7)(i) The applicable educational prerequisites for professional licensure or certification for the occupation for which the program prepares students to enter in—
(A) Each State in which the program's enrolled students reside; and
(B) Any other State for which the institution has made a determination regarding such prerequisites;
(ii) If the institution makes a determination with respect to certification or licensure prerequisites in a State, whether the program does or does not satisfy the applicable educational prerequisites for professional licensure or certification in that State; and
(iii) For any State as to which the institution has not made a determination with respect to the licensure or certification prerequisites, a statement to that effect.
(c)
(i) To each prospective student, any determination by the institution that the program does not meet licensure or certification prerequisites in the State of the student's residence, prior to the student's enrollment; and
(ii) To each enrolled and prospective student—
(A) Any adverse action initiated by a State or an accrediting agency related to postsecondary education programs offered by the institution solely through distance education or correspondence study within 30 days of the institution's becoming aware of such action; or
(B) Any determination by the institution that the program ceases to meet licensure or certification prerequisites of a State within 7 days of that determination.
(2) For a prospective student who received a disclosure under paragraph (c)(1)(i) of this section and who subsequently enrolls in the program, the institution must receive acknowledgment from that student that the student received the disclosure and be able to demonstrate that it received the student's acknowledgment.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Final rule.
The U.S. Department of Energy (DOE) is issuing a final rule to amend the test procedures for ceiling fans. DOE is establishing an integrated efficiency metric for ceiling fans, based on airflow and power consumption at high and low speed for low-speed small-diameter ceiling fans; at high speed for high-speed small-diameter ceiling fans; and at up to five speeds for large-diameter ceiling fans. The integrated efficiency metric also accounts for power consumed in standby mode. DOE is also adopting new test procedures for large-diameter ceiling fans, multi-mount ceiling fans, ceiling fans with multiple fan heads, and ceiling fans where the airflow is not directed vertically, and clarifying when these methods must be conducted. Additionally, DOE is adopting the following changes to the current test procedure: Eliminating the test cylinder from the test setup; specifying the method of measuring the distance between the ceiling fan blades and the air velocity sensors during testing; specifying the fan configuration during testing for ceiling fans that can be mounted in more than one configuration; specifying the test method for ceiling fans with heaters; specifying that a ceiling fan is not subject to the test procedure if the plane of rotation of the ceiling fan's blades cannot be within 45 degrees of horizontal; specifying that centrifugal ceiling fans are not subject to the test procedure; specifying that all small-diameter ceiling fans must be mounted directly to the real ceiling for testing; revising the allowable measurement tolerance for air velocity sensors; revising the allowable mounting tolerance for air velocity sensors; revising the testing temperature requirement; requiring measurement axes to be perpendicular to walls; specifying the position of air conditioning vents and doors during testing; specifying operation of room conditioning equipment; specifying the power source and how power measurements are to be made; and specifying stable measurement criteria and a method for determining stability.
The effective date of this rule is August 24, 2016. The final rule changes will be mandatory for representations made with respect to the energy use or efficiency of ceiling fans starting January 23, 2017. The incorporation by reference of certain publications listed in this rule was approved by the Director of the Federal Register on August 24, 2016.
The docket, which includes
A link to the docket Web page can be found at:
For further information on how to review the docket, contact Ms. Lucy deButts at (202) 287-1604 or by email:
This final rule incorporates by reference into part 430 the following industry standards:
(1) ANSI/AMCA Standard 230-15, (“AMCA 230-15”), “Laboratory Methods of Testing Air Circulating Fans for Rating and Certification,” ANSI approved October 16, 2015.
(2) IEC 62301, (“IEC 62301-U”), “Household electrical appliances—Measurement of standby power,” (Edition 2.0, 2011-01).
You can obtain copies of ANSI/AMCA Standard 230-15 from the American National Standards Institute, 25 W. 43rd Street, 4th Floor, New York, NY 10036, 212-642-4900, or
For a further discussion of these standards, see section IV.M.
Title III of the Energy Policy and Conservation Act of 1975 (42 U.S.C. 6291,
Under EPCA, the energy conservation program consists essentially of four parts: (1) Testing, (2) labeling, (3) Federal energy conservation standards, and (4) certification and enforcement procedures. The testing requirements consist of test procedures that manufacturers of covered products must use as the basis for (1) certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA, and (2) making representations about the efficiency of those products. Similarly, DOE must use these test procedures to determine whether the products comply with any relevant standards promulgated under EPCA. (42 U.S.C. 6295(s))
Under 42 U.S.C. 6293, EPCA sets forth the criteria and procedures that DOE must follow when prescribing or amending test procedures for covered products, including ceiling fans. EPCA provides that any test procedures must be reasonably designed to produce test results that measure energy efficiency, energy use, or estimated annual operating cost of a covered product during a representative average use cycle or period of use, and must not be unduly burdensome to conduct. (42 U.S.C. 6293(b)(3))
In addition, if DOE determines that a test procedure amendment is warranted, it must publish proposed test procedures and offer the public an opportunity to present oral and written comments on them. (42 U.S.C. 6293(b)(2)) Finally, in any rulemaking to amend a test procedure, DOE must determine to what extent, if any, the proposed test procedure would alter the measured energy efficiency of any covered product as determined under the existing test procedure. (42 U.S.C. 6293(e))
EPCA established energy conservation standards (design standards) for ceiling fans, as well as requirements for the ceiling fan test procedure. (42 U.S.C. 6295(ff) and 6293(b)(16)(A)(1)) Specifically, EPCA requires that test procedures for ceiling fans be based on the “ENERGY STAR Testing Facility Guidance Manual: Building a Testing Facility and Performing the Solid State Test Method for ENERGY STAR Qualified Ceiling Fans, Version 1.1.” Id. The current DOE ceiling fan test procedure, based on that source, was published in a 2006 final rule (71 FR 71341 (Dec. 8, 2006)), which codified the test procedure in DOE's regulations in the Code of Federal Regulations (CFR) at 10 CFR 430.23(w) and 10 CFR part 430, subpart B, appendix U, “Uniform Test Method for Measuring the Energy Consumption of Ceiling Fans.”
EPCA requires DOE, at least once every 7 years, to conduct an evaluation of the test procedures for all covered products and either amend the test procedures (if the Secretary determines that amended test procedures would more accurately or fully comply with the requirements of 42 U.S.C. 6293(b)(3)) or publish a determination in the
In addition, for covered products with test procedures that do not fully account for standby-mode and off-mode energy consumption, EPCA directs DOE to amend its test procedures to do so with such energy consumption integrated into the overall energy efficiency, energy consumption, or other energy descriptor, if technically feasible. (42 U.S.C. 6295(gg)(2)(A)) If an integrated test procedure is technically infeasible, DOE must prescribe a separate standby-mode and off-mode test procedure for the covered product, if technically feasible. Id. This test procedure rulemaking addresses standby-mode and off-mode power consumption.
DOE is concurrently conducting an energy conservation standards rulemaking for ceiling fans.
This final rule amends DOE's current test procedures for ceiling fans contained in 10 CFR part 430, subpart B, appendix U; 10 CFR 429.32; and 10 CFR 430.23(w). This final rule: (1) Specifies new test procedures for large-diameter ceiling fans, multi-mount ceiling fans, ceiling fans with multiple fan heads, and ceiling fans where the airflow is not directed vertically, and (2) adopts the following changes to the current test procedure: (a) Low-speed small-diameter ceiling fans must be tested at high and low speeds; (b) high-speed small-diameter ceiling fans must be tested at high speed only; (c) large-diameter ceiling fans must be tested at
Additionally, to support the ongoing energy conservation standards rulemaking for ceiling fans, this final rule establishes test procedures for an integrated efficiency metric measured in cubic feet per minute per watt (CFM/W) that is applicable to all ceiling fans for which DOE has proposed energy conservation standards.
EPCA defines a “ceiling fan” as “a non-portable device that is suspended from a ceiling for circulating air via the rotation of fan blades.” (42 U.S.C. 6291(49)) The test procedures described in this final rule apply to any product meeting this definition, including applications where large airflow volume may be needed and highly decorative fans (as discussed in section III.A.4.), except for belt-driven ceiling fans, centrifugal ceiling fans, oscillating ceiling fans, or ceiling fans whose blades' plane of rotation cannot be within 45 degrees of horizontal (see Section III.A.2). All fans that meet the statutory definition of a ceiling fan are ceiling fans and do not fall within the scope of the rulemaking under consideration for commercial and industrial fans and blowers.
DOE previously interpreted the definition of a ceiling fan such that it excluded certain types of ceiling fans commonly referred to as hugger fans. 71 FR 71343 (Dec. 8, 2006). However, in the test procedure final rule for ceiling fan light kits (CFLKs), DOE reinterpreted the definition of ceiling fan to include hugger fans and clarified that the definition also includes fans capable of producing large volumes of airflow. 80 FR 80209 (Dec. 24, 2015)
In the October 2014 test procedure NOPR, DOE proposed that centrifugal ceiling fans (commonly referred to as “bladeless” ceiling fans) would not be required to test such fans according to the ceiling fan test procedure, which would not accurately measure the energy efficiency of such fans. ALA supported this proposal, and DOE received no comments expressing disagreement. (ALA, No. 8 at p. 1) DOE is defining a centrifugal ceiling fan as a ceiling fan for which the primary airflow direction is in the same plane as the rotation of the fan blades. In this final rule, DOE is not requiring manufacturers of centrifugal ceiling fans to test such fans according to the test procedure.
In the ceiling fans test procedure supplemental notice of proposed rulemaking (SNOPR) published on June 3, 2015, DOE proposed that manufacturers are not required to test ceiling fans pursuant to the test procedure if the plane of rotation of the ceiling fan's blades cannot be within 45 degrees of horizontal, as the test procedure is not designed to provide accurate performance data for such fans. 80 FR 31487. In response to this proposal, Big Ass Solutions (BAS) suggested DOE base this exemption on the direction of discharge for the majority of the airflow rather than on the plane of rotation of the ceiling fan's blades. (BAS, No. 13 at pp. 1-2)
DOE considers the two example ceiling fans BAS provided to be centrifugal ceiling fans, which DOE has separately determined will not be subject to this final rule. Therefore, DOE maintains that ceiling fans whose blades' plane of rotation cannot be within 45 degrees of horizontal will not be subject to this final rule.
In the concurrent ceiling fans energy conservation standards NOPR, DOE has proposed to define belt-driven ceiling fans as ceiling fans with a series of one or more fan heads, each driven by a belt connected to one or more motors. However, in the energy conservation standards NOPR, DOE does not propose standards for belt-driven ceiling fans, based on the limited number of basic models and lack of available data. Therefore, although DOE is investigating appropriate test procedures for belt-driven ceiling fans, such fans will not be subject to the test procedure adopted here.
DOE has observed that there are ceiling fans capable of oscillating, either through an oscillation of the axis of rotation of individual fan heads or a rotation in position amongst multiple fan heads. Such fans can be tested according to the appropriate proposed test procedures for ceiling fans with tilt and/or multi-headed fans if the axis of rotation of the fan blades can remain in a fixed position relative to the ceiling (
In the October 2014 test procedure NOPR, DOE proposed definitions for low-volume and high-volume ceiling fans based on airflow volume, blade span, blade edge thickness, and the maximum tip speed of the fan blades. Furthermore, in the test procedure SNOPR, DOE proposed different test procedures for low-volume ceiling fans, high-volume ceiling fans with blade spans less than or equal to seven feet, and high-volume ceiling fans with blade spans greater than seven feet. Specifically, DOE proposed to test all ceiling fans with blade spans less than or equal to seven feet (
In this final rule, DOE is employing different terminology to delineate fans that were previously known as low-volume, high-volume small-diameter, and high-volume. To maintain consistency with the definitions proposed in the concurrent ceiling fans energy conservation standards rulemaking, DOE is defining the following categories of ceiling fans for use in this final rule: (1) A “large-diameter ceiling fan” is a ceiling fan that is greater than seven feet in diameter; (2) A “small-diameter ceiling fan” is a ceiling fan that is less than or equal to seven feet in diameter; (3) A “low-speed small-diameter ceiling fan” is a small diameter ceiling fan that meets both requirements in Table 1; and (4) A “high-speed small-diameter ceiling fan” is a small diameter ceiling fan that fails to meet at least one of the requirements in Table 1. Table 1 indicates maximum speed tip for low-speed small-diameter ceiling fans, depending on blade thickness. The values in Table 1 are based on the Underwriters Laboratory (UL) ceiling fan safety standard (UL Standard 507-1999, “UL Standard for Safety for Electric Fans”) which designates maximum fan tip speeds (for a given thicknesses at the edge of the blades) that are safe for use in applications where the distance between the fan blades and the floor is 10 feet or less. Given the definitions and the requirements set forth in Table 1, DOE notes that any small-diameter ceiling fan with blade edge thickness less than 3.2 mm is necessarily a high-speed small-diameter (HSSD) ceiling fan. DOE also notes that, in response to the ceiling fan energy conservation standards NOPR, ALA provided minor, clarifying edits to the definitions of several fan types, including high-speed small diameter ceiling fans, standard ceiling fans and hugger ceiling fans. (ALA, No. 137
In the October 2014 test procedure NOPR, DOE proposed to define a hugger ceiling fan as “a ceiling fan where the lowest point on the fan blades is no more than ten inches from the ceiling.” Furthermore, DOE proposed to define standard and multi-mount ceiling fans as “a ceiling fan where the lowest point on the fan blades is more than ten inches from the ceiling” and “a ceiling fan that can be mounted in both the standard and hugger ceiling fan configurations,” respectively. Stakeholders did not object to the 10-inch threshold specified in the October 2014 test procedure NOPR, but DOE did receive comments from Emerson and Westinghouse Lighting asking for the inclusion of a blade warpage tolerance. (Emerson, Public Meeting Transcript, No. 83 at pp. 86-87; Westinghouse Lighting, Public Meeting Transcript, No. 83 at p. 89) DOE understands the concern put forth by Emerson and Westinghouse Lighting, but DOE
DOE also proposed regulatory definitions for hugger and standard ceiling fans and other low-speed small-diameter (LSSD) ceiling fans as part of the ceiling fans energy conservation standards rulemaking. Under the proposed definitions, a hugger ceiling fan is “a ceiling fan that is not a very small-diameter ceiling fan, highly-decorative ceiling fan or belt-driven ceiling fan; and where the lowest point on fan blades is ≤ 10 inches from the ceiling; and has a blade thickness of ≥3.2 mm at the edge and a maximum tip speed ≤ the applicable limit in the table in this definition,” and a standard ceiling fan is “a ceiling fan that is not a very small-diameter ceiling fan, highly-decorative ceiling fan or belt-driven ceiling fan; and where the lowest point on fan blades is >10 inches from the ceiling; and has a blade thickness of ≥3.2 mm at the edge and a maximum tip speed ≤ the applicable limit in the table in this definition.” (81 FR 1688 (January 13, 2016)) In both of these definitions, the table referenced is Table 1 above. DOE finalizes these definitions, with minor clarifying edits suggested by ALA (ALA, No. 137
DOE also proposed regulatory definitions for highly-decorative, belt-driven, and very-small diameter ceiling fans as part of the energy conservation standards rulemaking. Because the hugger and standard ceiling fan definitions finalized here invoke these terms, DOE is addressing any comments related to the definitions of these terms here. DOE proposed to define a highly-decorative ceiling fan as “a ceiling fan with a maximum rotational speed of 90 RPM and less than 1,840 CFM airflow at high speed;” a belt-driven ceiling fan as “a ceiling fan with a series of one or more fan heads, each driven by a belt connected to one or more motors;” and a very-small-diameter ceiling fan as “a ceiling fan that is not a highly-decorative ceiling fan or belt-driven ceiling fan; and has one or more fan heads, each of which has a blade span of 18 inches or less.”
ALA did not oppose the inclusion of RPM and CFM in the highly-decorative ceiling fan definition. (ALA, No. 137
DOE understands BAS's concern regarding the potential for disproportionate impact on fans of different diameters if RPM is the sole criterion for determining whether a ceiling fan is highly-decorative, but it is for this reason that a maximum airflow requirement is also part of the definition of a highly-decorative ceiling fan. In regard to BAS's comment that basing the definition of highly-decorative ceiling fans off of tip speed rather than RPM is consistent with the definition for standard and hugger fans, DOE notes that the tip speed limits in the standard and hugger ceiling fan definitions that delineate those fans from high-speed small-diameter ceiling fans are drawn from UL Standard 507 and based on safety considerations for fans installed in the residential sector. EPCA describes highly-decorative ceiling fans as ceiling fans for which air movement performance is a secondary design feature; therefore, the criteria are different for highly-decorative ceiling fans and including an airflow limit in the definition for highly-decorative ceiling fans is consistent with the statutory intent. (42 U.S.C. 6295(ff)(6)(B)(ii)) Furthermore, BAS did not elaborate on the statement that measuring the airflow of highly-decorative fans is more difficult than measuring RPM and blade span, and no other stakeholders expressed concern with measuring the airflow of highly-decorative fans. Therefore, DOE is finalizing the definition of a highly-decorative ceiling fan as “a ceiling fan with a maximum rotational speed of 90 RPM and less than 1,840 CFM airflow at high speed, as determined by sections 3 and 4 of appendix U.”
DOE notes that efficiency performance standards have not been proposed for highly-decorative ceiling fans in the concurrent energy conservation standards rulemaking (81 FR 1688 (January 13, 2016)). If DOE does not establish performance standards for highly-decorative fans, manufacturers would continue to submit certification reports to DOE for such fans with respect to the statutory design standards. Both DOE and manufacturers would determine whether a fan met the definition of a highly decorative fan using the final test procedure, though manufacturers would not be required to submit the supporting information, including any test data, that supports their highly decorative classification as part of their certification submission to DOE. In addition, manufacturers would be required to test highly-decorative fans according to the test procedure established in this final rule to make representations of the energy efficiency of such fans (
The CA IOUs recommended that DOE include in the proposed definition of belt-driven ceiling fans that belt-driven ceiling fans have one or more motors located outside of the fan head. (CA IOUs, No. 144
DOE received no comments in the proposed definition of very-small-diameter ceiling fans; therefore, DOE is finalizing the definition of a very-small-diameter ceiling fan as “a ceiling fan that is not a highly-decorative ceiling fan or belt-driven ceiling fan; and has one or more fan heads, each of which has a blade span of 18 inches or less.”
In the October 2014 test procedure NOPR, DOE proposed a compliance date 180 days after the publication of any final amended test procedures in the
This final rule, which would amend appendix U to Subpart B of 10 CFR 430, would not affect a manufacturer's ability to comply with current energy conservation standards, because DOE does not currently have performance-based standards for ceiling fans as measured by the airflow efficiency. As a result, manufacturers will not need time to re-design and re-tool their ceiling fans to meet any energy conservation standards based on the updated test procedures. The key requirement manufacturers will need to meet prior to the compliance date of the concurrent ceiling fan energy conservation standards is the requirement that any representations of ceiling fan efficiency be based on the test procedures set forth in this final rule on and after the compliance date of this final rule. Because re-tooling and re-design of ceiling fans will not be required, a compliance date 180 days after the publication of this final rule in the
Manufacturers are required to use the revised appendix U for representations of ceiling fan efficiency 180 days after the publication of any final amended test procedures in the
With respect to hugger fans, compliance with requirements related to the ceiling fan reinterpretation (see Section III.A.1) was discussed in the CFLK test procedure final rule. 80 FR 80209 (Dec. 24, 2015) As discussed in that rulemaking, DOE will not assert civil penalty authority for violations of the applicable standards arising as a result of the reinterpretation of the ceiling fan definition before June 26, 2017.
DOE's test procedure for ceiling fans is codified in appendix U to subpart B of part 430 of Title 10 of the CFR; 10 CFR 429.32; and 10 CFR 430.23(w). The current DOE test procedure references the “ENERGY STAR® Testing Facility Guidance Manual: Building a Testing Facility and Performing the Solid State Test Method for ENERGY STAR Qualified Ceiling Fans,” version 1.1.
Although certain proposals in this rulemaking are consistent with version 1.2 of the ENERGY STAR test procedure, including test room dimensions and associated tolerances, DOE has proposed no modification to the 15-minute ceiling fan warm-up time specified in the current DOE test procedure, which is in accordance with the specifications of version 1.1 (as opposed to the 30-minute warm-up time before low speed specified in version 1.2). On this issue, the People's Republic of China (P.R. China) commented that International Electrotechnical Commission (IEC) standard 60879:1986, Performance and Construction of Electric Circulating Fans and Regulators, requires a warm-up time of two hours to achieve steady-state conditions at the test voltage. (P.R. China, No. 17 at p. 3)
DOE determined, however, that a 15-minute warm-up time for testing is sufficient to bring the fan's performance into near-steady-state conditions while still keeping test burden (in this case, time) to a minimum. Therefore, DOE has retained the 15-minute warm-up time in this final rule.
DOE is applying a single metric based on airflow efficiency to all ceiling fans required to be tested according to the procedure established in this final rule (see Section III.A.2 for a discussion of ceiling fans not required to be tested). Airflow efficiency appears to be a nearly-universal metric used to describe the efficiency of ceiling fans and consists of airflow (
Stakeholders generally agreed with DOE's test procedure NOPR proposal to use airflow efficiency as the efficiency metric for ceiling fans; however, MacroAir suggested DOE use fan efficiency—the amount of wind power produced by the fan divided by the power consumption of the fan—instead. (MacroAir, No. 6 at pp. 1-4) Part of MacroAir's argument for using fan efficiency as opposed to airflow efficiency is that fan efficiency does not overly inflate when revolutions per minute (RPM) are reduced, whereas airflow efficiency tends to be higher at lower fan speeds. DOE analyzed reports from testing over 30 ceiling fans in early 2014 and found that while airflow efficiency does tend to be lower at higher RPM, the reverse is true for fan efficiency: Fan efficiency tends to be lower at lower RPM and higher at higher RPM. Therefore, in the same way that manufacturers could opt to add more lower-RPM speeds on their ceiling fans to increase their overall airflow efficiency, manufacturers could opt to remove lower-RPM speeds on their ceiling fans to increase their overall fan efficiency. DOE notes that lower-RPM speeds consume less energy than higher-RPM speeds, and the removal of lower-RPM speeds eliminates the ability of consumers to use lower speeds when appropriate. Additionally, the fan efficiency calculation provided by MacroAir incorporates blade span as an input, which could result in unintentional market shifts (in this case, toward smaller blade spans). Because airflow efficiency is the metric accepted by the majority of the ceiling fan industry, DOE is using airflow efficiency as the basis of the integrated efficiency metric for ceiling fans in this final rule.
With regard to the integrated efficiency metric, BAS and ALA commented that the metric should incorporate the effect of energy-saving controls (
To apply a single energy efficiency metric to LSSD ceiling fans, DOE is using a weighted average of the airflow and power consumption at high and low fan speeds, defined as the highest available and lowest available speeds, respectively. While most LSSD ceiling fans have one or more speeds between high and low, DOE is using only high and low speed in the metric to limit test burden and avoid confusion regarding the definition of medium speed for ceiling fans with more than three speeds.
In the October 2014 test procedure NOPR, DOE proposed to use hours-of-use results from a Lawrence Berkeley National Laboratory (LBNL) survey of U.S. ceiling fan owners to weight the low and high speed test results in the efficiency metric calculation for LSSD ceiling fans.
In light of ALA's and Hunter's comments and the AcuPOLL survey results, DOE compared the LBNL and AcuPOLL survey results and concluded that both surveys are relevant sources of information that should be taken into account to determine the fraction of time spent at each fan speed. DOE therefore estimated that the fraction of time LSSD ceiling fans were operated at each speed was equal to the simple average of the fractions reported by the LBNL and AcuPOLL surveys: 33% on high speed, 38% on medium speed, and 29% on low speed. When normalized to 100%, the fractions for high and low speed are 53% and 47%, respectively. DOE is weighting the high and low speed test results for LSSD ceiling fans based on these normalized fractions. Therefore, for calculating the overall efficiency for LSSD ceiling fans, DOE apportions the following daily operating hours (based on an overall daily usage of 6.4 hours per day, as proposed in the October 2014 test procedure NOPR): 3.4 hours at high speed, 3.0 hours at low speed, and 17.6 hours in off or standby mode.
The CA IOUs supported DOE's use of airflow efficiency as the metric for ceiling fan efficiency, but are concerned that DOE's proposal to test LSSD ceiling fans at low speed and high speed may not be specific enough. In particular, the CA IOUs suggest DOE require testing of ceiling fans at speeds that provide a specific airflow, which allows for a more direct comparison of the utility provided by ceiling fans. (CA IOUs, No. 15 at pp. 1-3) This suggestion aligned with comments made by BAS and Fanimation regarding HSSD and large-diameter ceiling fans during the October 2014 test procedure NOPR public meeting. (BAS, Public Meeting Transcript, No. 5 at pp. 106-108; Fanimation, Public Meeting Transcript, No. 5 at p. 110) DOE concluded that, while airflow is the main utility provided by ceiling fans, consumers of LSSD ceiling fans are unlikely to select a particular ceiling fan setting based on the specific amount of airflow that speed provides; instead, because LSSD ceiling fans typically have a small number of discrete speeds, consumers are expected to select the setting based on an imprecise determination of whether a given setting is providing too much or too little airflow. DOE also notes that as a consequence of LSSD ceiling fans having discrete speeds, precise airflow comparisons between different LSSD ceiling fans is impossible. Test burden would be added by having to test all available speed settings to determine which settings most closely align with the chosen airflow values. Therefore, in this final rule DOE is requiring all LSSD ceiling fans to be tested at their lowest and highest speed settings, regardless of the airflow volume provided at those settings.
For reasons set forth in the test procedure SNOPR, DOE proposed in the SNOPR to test all ceiling fans with blade spans less than or equal to seven feet according to a test procedure based on air velocity sensor measurements (
In the October 2014 test procedure NOPR, DOE proposed operating hours for HSSD ceiling fans of 12 hours per day. No stakeholders indicated disagreement with the SNOPR testing proposal nor the NOPR's proposed operating hours for HSSD fans; therefore, for calculating the overall efficiency for these ceiling fans, DOE apportions the following daily operating hours: 12 hours at high speed and 12 hours in off or standby mode.
In the test procedure SNOPR, DOE proposed to test all large-diameter ceiling fans at five equally-spaced speeds: 100% (max speed), 80%, 60%, 40%, and 20%. The SNOPR also proposed that each speed other than 100% is given a tolerance of ±1% of the average measured RPM at 100% speed.
DOE has concluded that the proposed tolerance may be too stringent, and perhaps not measurable, given the measurement tolerance of the test lab equipment. On the other hand, BAS's suggested tolerance means in practice that the 2 RPM tolerance would be in effect for any large-diameter ceiling fans that provide 200 RPM or less on high speed (which is a significant fraction of the large-diameter ceiling fan market). According to BAS's proposal, a ceiling fan that only provides 50 RPM at high speed would have a tolerance of ±4% of the average measured RPM at high speed, which DOE believes may be insufficient to ensure repeatability in test measurements. Therefore, in this final rule, DOE specifies an RPM tolerance of the greater of 1 RPM and ±1% of the average measured RPM at 100% speed.
In the test procedure SNOPR, to weight the performance results of the ceiling fans at each of the five speeds, DOE took a simple average of hours-of-use estimates provided by BAS and MacroAir. In doing so, DOE assumed that BAS agreed with DOE's estimate in the October 2014 NOPR of 12 hours of active mode operation per day. (BAS, No. 13 at pp. 5-6) BAS took issue with DOE's assumption and, therefore, disagreed with DOE's overall active mode estimate of 15 hours per day, calculated using a simple average of the 12 hours assumed from BAS and the 18 hours of active mode operation submitted by MacroAir. Id. DOE received no new operating hours estimates that could be used to calculate an alternative active mode operation time for large-diameter ceiling fans; however, based on BAS's comment and the lack of available large-diameter hours-of-use data, DOE has determined that using the active mode time of 12 hours per day originally proposed in the October 2014 test procedure NOPR is the most appropriate and representative estimate. As a result, DOE retains the 12 hours of daily active-mode operation for large-diameter ceiling fans proposed in the October 2014 test procedure NOPR.
In response to the SNOPR, BAS suggested that DOE require testing only at high speed for large-diameter ceiling fans. (BAS, No. 13 at p. 8) BAS also provided examples of multiple large-diameter fans that are unable to operate at those five equally-spaced speeds; therefore, BAS suggests that if testing at multiple speeds is required, DOE report the results of each tested speed separately. (BAS, No. 13 at pp. 4-5) The California investor-owned utilities (CA IOUs) suggested reporting the airflow and power draw of each of the speeds tested, in addition to the weighted airflow efficiency. (CA IOUs, No. 15 at pp. 1-3) BAS added that no reputable source of hours-of-use data exist for large-volume ceiling fans, which would be required to calculate the weighted airflow efficiency of the ceiling fan if such fans are tested at five speeds. (BAS, No. 13 at pp. 5-6)
While hours-of-use for large-diameter ceiling fans have not been well-studied, a more representative ceiling fan efficiency can be calculated by testing large-diameter ceiling fans at multiple speeds and weighting all those speeds equally (when compared to calculating the efficiency at only high speed). Therefore, as explained in more detail in Section III.F.1, DOE will require testing of large-diameter ceiling fans at up to five speeds. For calculating a ceiling fan's overall efficiency, the calculated efficiency at each tested speed will be apportioned active mode operating hours equally (
As discussed in Section III.D.1, DOE is requiring all LSSD ceiling fans to be tested at high and low speeds. DOE has concluded that this approach will yield a more representative airflow efficiency than testing only at high speed, while limiting test burden and avoiding confusion regarding the definition of medium speed for ceiling fans with more than three speeds. In the test procedure SNOPR, DOE proposed to test LSSD ceiling fans at high speed first, and then to test them at low speed. BAS suggested DOE reverse this proposal, requiring low speed to be tested prior to high speed to reduce the likelihood of entrained air affecting the test results. (BAS, No. 13 at p. 7) In light of BAS's suggestion, and because DOE has concluded that there is no compelling reason to test at high speed first, in this final rule, DOE specifies that LSSD ceiling fans be tested at low speed first, and then high speed.
As discussed in Section III.D.2, DOE is requiring all HSSD fans to be tested at high speed only.
In the October 2014 test procedure NOPR, DOE proposed to eliminate the current test procedure requirement to use a test cylinder while conducting airflow measurements. Under the proposed rule, the positioning of the ceiling fan and the air velocity sensors would remain the same as in the current test procedure, but without a test cylinder between them. Additionally, the same effective area and number of sensors as in the current test procedure would be used to calculate the airflow of a low-volume ceiling fan; specifically, to measure the airflow using enough air velocity sensors to record air delivery within a circle 8 inches larger in diameter than the blade span of the ceiling fan being tested.
DOE received unanimous agreement from stakeholders regarding the proposal to eliminate the test cylinder from the test setup. (Hunter, Public Meeting Transcript, No. 83 at pp. 124-125; Fanimation, Public Meeting Transcript, No. 83 at p. 125; BAS, No. 88 at p. 52; American Lighting Association, No. 8 at p. 8) According to DOE testing,
In regard to the effective area and the number of air velocity sensors to use during testing, ALA conducted testing according to the test procedure proposed in the SNOPR and commented that including airflow measurements outside the limits of the proposed sensor setup would provide a more
DOE appreciates ALA's concern that more airflow sensors should be used to characterize small-diameter ceiling fans now that a test cylinder is not required. In regard to requiring 12 sensors for all fans, DOE concluded that this approach would not provide a representative comparison between larger and smaller ceiling fans. This is because the airflow efficiency for all small-diameter ceiling fans would be evaluated across the same effective area, despite ceiling fan guides consistently recommending that consumers scale the size of a ceiling fan to the size of a room (
In regards to the 40 fpm minimum, DOE conducted testing to determine the effect ALA's proposal would have on a fan's measured airflow efficiency. Across nearly 40 fans DOE tested, no sensors recorded an average velocity less than 40 fpm while the fan was operating at high speed; however, average measurements below 40 fpm were observed for some ceiling fans while operating at low speed. Therefore, either the airflow efficiency of some ceiling fans would be calculated using a different effective area at high speed compared to low speed—which DOE believes would not be representative of typical use, as an installed ceiling fan is intended to service the same area regardless of the fan speed setting at which it is operating at a given time—or all sensors specified for a given ceiling fan should be used, because all sensors were required when taking the measurement at high speed. Furthermore, the test results showed that for many fans operating at low speed, a discontinuous set of sensors would meet the 40 fpm average airflow requirement (
In regard to ALA's alternate proposal of using enough airflow sensors to record air delivery within a circle 24 inches larger in diameter than the blade span of the ceiling fan being tested, DOE notes that in practice this would result in adding two extra airflow sensors per sensor arm to the number of sensors specified in the SNOPR, regardless of blade span. This also increases by two the total number of sensors required to be installed in the experimental set up to be able to accommodate testing of the largest small-diameter ceiling fans. Requiring two additional sensors be used during testing may therefore add additional cost burden on the order of $1,000 per sensor to the test procedure without clear evidence that this would result in a more representative measurement.
Therefore, in this final rule DOE has not implemented the proposals set forth by ALA regarding the number of air velocity sensors to be used in the airflow measurement, but requires the usage of the same number of sensors for measuring airflow of small-diameter ceiling fans that was set forth in the TP SNOPR. The number of the sensors being finalized in this test procedure final rule is in line with the number of sensors required by the current DOE and Energy Star test procedures for ceiling fans. Additionally, test labs are already accustomed to testing ceiling fans per the current DOE and Energy Star test procedures, and so retaining the same number of sensors in this final rule would not add any additional test burden.
In the October 2014 test procedure NOPR, DOE proposed to specify that the appropriate vertical position of LSSD ceiling fans in relation to the air velocity sensors should be determined by the position of the lowest point on the ceiling fan blades, rather than “the middle of the fan blade tips.” DOE proposed this because it may be unclear how the “middle of blade tip” measurement specified in the previous test procedure should be made for ceiling fans having non-flat or unusually shaped blades. BAS expressed agreement with this proposal, and no stakeholders expressed disagreement. (BAS, Public Meeting Transcript, No. 83 at p. 132)
Additionally, DOE notes that because HSSD ceiling fans are required to be tested according to the same test procedure prescribed for LSSD ceiling fans, with the exception that only high speed will be tested for HSSD fans (see the discussion in Section III.D.2), this clarification also applies to testing HSSD ceiling fans. DOE, therefore, requires that the appropriate vertical position for LSSD and HSSD ceiling fans (hereinafter collectively referred to as small-diameter ceiling fans) in relation to the air velocity sensors be determined by the position of the lowest point on the ceiling fan blades.
In the October 2014 test procedure NOPR, DOE proposed that if a fan has more than one mounting option that would meet the configuration associated with the definition of a standard ceiling fan (see section III.A.4), that ceiling fan should be tested in the configuration with the smallest distance between the ceiling and the lowest point of the fan blades. Similarly, if a fan has more than one mounting option that would meet the configuration associated with the definition of a hugger ceiling fan (see section III.A.4), that ceiling fan should be tested in the configuration with the smallest distance between the ceiling and the lowest point of the fan blades. DOE received general agreement with this proposal from Westinghouse Lighting, because all ceiling fans would receive equitable treatment (
In the October 2014 test procedure NOPR, DOE proposed that during testing any heater packaged with a ceiling fan should be installed, because an object hanging directly below the fan blades might affect airflow, but switched off. The single stakeholder comment DOE received from Hunter on this proposal was supportive. (Hunter, Public Meeting Transcript, No. 83 at pp. 135) Therefore, DOE requires any heaters packaged with ceiling fans to be installed but switched off during testing.
In the test procedure SNOPR, DOE proposed to require that all small-diameter ceiling fans be mounted to the real ceiling (rather than a false ceiling) for testing. One of the reasons that DOE cited for this proposal was data supplied by BAS in response to the October 2014 test procedure NOPR indicating a decrease in measured efficiency performance when a ceiling fan is mounted to a false ceiling rather than a real ceiling. (BAS, Public Meeting Transcript, No. 5 at pp. 125-126) Other stakeholders expressed agreement with mounting ceiling fans to the real ceiling during testing in the test procedure NOPR public meeting. (Fanimation, Public Meeting Transcript, No. 5 at pp. 129; Minka Group, Public Meeting Transcript, No. 5 at pp. 129) However, ALA requested DOE conduct further testing at an independent test lab to confirm the results supplied by BAS before finalizing a requirement to test with the ceiling fans mounted to the real ceiling. (ALA, No. 14 at pp. 4-5)
DOE performed additional testing of ceiling fans provided by a number of manufacturers in December 2015. For this testing, DOE mounted the ceiling fan to the real ceiling, and adjusted the height of the air velocity sensors, as proposed in the SNOPR. DOE testing confirmed a decrease in measured efficiency when a ceiling fan is mounted to a false ceiling rather than a real ceiling. Based on the testing, DOE concludes that no significant additional test burden will be added by testing ceiling fans mounted to the real ceiling and adjusting the height of the air velocity sensors, relative to mounting the ceiling fans to a false ceiling, keeping the air velocity sensors stationary, and adjusting the height of the false ceiling. There is a one-time cost needed to set up the sensor arms such that the height of the air velocity sensors can be adjusted for all ceiling fans. However, once this has been set-up, there is no additional test burden. Additionally, testing ceiling fans mounted to the real ceiling is more representative of actual use than testing the ceiling fans mounted to a false ceiling. For these reasons, DOE requires mounting the ceiling fan to the real ceiling for testing small-diameter ceiling fans. DOE notes that because HSSD ceiling fans are required to be tested according to the same test procedure prescribed for LSSD ceiling fans, with the exception that only high speed will be tested for HSSD fans (see the discussion in Section III.D.2), this requirement applies to all small-diameter ceiling fans.
In the October 2014 test procedure NOPR, DOE proposed to change the air velocity sensor measurement tolerances from the current test procedure (based on ENERGY STAR guidance manual v1.1) value of 1% to 5%, the stringency required by ENERGY STAR guidance manual v1.2. Hunter and ALA supported this proposal, and no stakeholders opposed the proposal. (Hunter, Public Meeting Transcript, No. 83 at p. 136; ALA, No. 8 at p. 8) Therefore, DOE requires an air velocity sensor measurement tolerance not to exceed 5% for testing small-diameter ceiling fans. It is worth noting that the ENERGY STAR guidance manuals explicitly list “suggested equipment”, including air velocity sensors, to be used for ENERGY STAR testing. The test procedure established by this final rule includes equipment specifications, including tolerances, but does not list specific equipment. Note that some “suggested equipment” in the ENERGY STAR guidance manuals may not meet the equipment specifications included in this test procedure, so testing laboratories should check their equipment and ensure that it is capable of meeting the specifications being adopted in this final rule.
The proposed regulatory text for testing small-diameter ceiling fans in the test procedure SNOPR required mounting the air velocity sensors every four inches along each sensor arm, as specified in the current ENERGY STAR test procedure. BAS suggested DOE alter this requirement to specify a tolerance of 1/16″. (BAS, No. 13 at p. 6) DOE agrees that having a specified tolerance for the air velocity sensor mounting interval is useful and would not significantly alter the measured test results; therefore, in this final rule DOE specifies the air velocity sensors be mounted every 4″ ± 1/16″ along the sensor arm.
ALA commented that there are problems with variation in the results of DOE's proposed ceiling fan test procedure that will raise the cost of manufacturer compliance. ALA's members observed these issues by testing the same ceiling fan at different test labs and by testing identical ceiling fans at the same test lab. According to ALA, separate tests of the same ceiling fan at different test labs produced test results that vary by as much as 31 percent; and separate tests of identical ceiling fans at the same test lab produced results that vary by as much as 15 percent. ALA stated that the variability in test results is beyond commercially reasonable tolerances for ceiling fan manufacturers. They concluded that these problems will effectively require manufacturers to adopt much larger-than-customary “safety factors” in their ceiling fan design and development processes to ensure that the significant variation in test results will not result in finding of noncompliance by DOE. (ALA, No. 139 at pp. 5-6)
Lutron commented that while they do not manufacture ceiling fans, they agree with the concerns of the fan industry with regard to the impact of changing test procedures and the concerns over data consistency. (Lutron, No. 141 at p. 3)
In response to these concerns, DOE conducted a thorough review of all available test data to identify opportunities to decrease testing variation. During this review, DOE found that sudden temperature variations in the test room are the primary driver of test result variations. The hot-wire anemometer sensors typically used to measure air velocity sense a change in temperature induced by the flow of air. Hot-wire anemometer sensors must have the ability to store heat, a property known as thermal mass, to make such measurements. The rate at which a hot-wire anemometer loses stored heat to air flowing at a given velocity is fixed based on the hot-wire anemometer's physical and material properties. If the rate at which the hot-wire anemometer loses stored heat is different than the rate at which the temperature in the test room is changing, the measurements of that hot-wire anemometer will vary. While the hot-wire anemometers typically have temperature compensating functions, the thermal mass of a hot-wire
DOE considered many options to address the temperature control and air velocity measurement issues, including alternative air velocity sensors and changes to test room specifications related to temperature control. DOE determined that hot-wire anemometers are still the preferred sensor for air velocity measurements. DOE did not find an alternative air velocity measurement sensor type or apparatus that would produce significantly better air velocity measurements at similar cost, effectiveness, or industry familiarity. In addition, changes to the test room specifications related to temperature control could result in additional test burden due to capital investment in new equipment or test room renovations. Ultimately, DOE found in its review of available test data that average air velocity measurements did not vary significantly between axes for all tests. This leads DOE to believe that reducing variation is achievable without using alternative air velocity sensors or specifying significant changes to the test room and equipment. Instead, in this final rule, DOE is adopting the following provisions to minimize test procedure output variation:
• Specifying criteria for air velocity and power measurements that indicate stable measurements.
• Require measurement axes be perpendicular to test room walls.
• Require forced-air space conditioning equipment be turned off during air velocity measurements, but allow for conditioning equipment that does not supply air to the test room, such as radiant conditioning equipment, to be left on.
• Require voltage be measured within 6 inches of connection supplied with fan.
These provisions are modifications to those proposed in the June 2015 test procedure SNOPR. The June 2015 SNOPR proposed air velocity and power measurements and tolerances on each. A lab should be able to measure air velocity and power in the same way it would have per the test procedure proposed in the SNOPR. 80 FR 31500-31502 (June 3, 2015) The stability criteria established by this final rule specify that air velocity and power be measured until variation in those measurements is satisfactorily limited. The SNOPR proposed axes be perpendicular to walls or directed into corners. 80 FR 31500, 31501 (June 3, 2015) This document maintains the requirement for axes perpendicular to walls but disallows axes directed into the corners because of a higher degree of observed output variation when using this configuration. The SNOPR proposed to turn off space-conditioning equipment during air velocity measurements. 80 FR 31501 (June 3, 2015) This document maintains that requirement for forced-air equipment, but allows non-forced-air equipment to remain on. This allowance is a zero-burden method for improving temperature control and in turn, minimizing test result variation. The SNOPR proposed voltage measurements. 80 FR 31501 (June 3, 2015) This document clarifies where this measurement should be taken to minimize test result variation. DOE does not expect these provisions to change measured efficiency, only improve measurement repeatability. Also, DOE does not expect these provisions to result in significant increases in test burden.
In this final rule, DOE is establishing stability criteria to minimize test result variation. These stability criteria are in terms of acceptable air velocity and power measurement variation. Subsequent measurements must be made until stable measurements are achieved. Stable measurements are achieved when: (1) The average air velocity for all axes for each sensor varies by less than 5% compared to the average air velocity measured for that same sensor in a successive set of air velocity measurements, and (2) average power consumption varies by less than 1% in a successive set of power consumption measurements. Variations that do not meet those criteria indicate that a significant change in temperature likely occurred during the test and results will vary too significantly. DOE is adopting a provision that measurements that do not meet the definition of stable measurements are prohibited from being used in the test result. Instead, this final rule specifies that the measurement of air velocity and power be repeated until stable measurements are achieved. DOE understands that this will result in tests that require at least two iterations of measurements in each axis for each speed tested to achieve stable measurements and a valid test. These iterations represent additional test time and therefore burden. Each additional axis is 100 additional seconds plus the time it may take a sensor arm to travel to another axis if a single, sweeping sensor arm is being used. DOE estimates additional measurements to meet stability criteria to be less than 10 minutes total for four additional axes of measurements (
Requiring measurement axes to be perpendicular to test room walls will reduce air swirl patterns that can occur in test room corners and potentially lead to unstable test measurements. This provision should not result in any additional test burden because no additional time or materials are needed.
Requiring forced-air space conditioning equipment be turned off during air velocity measurements, but allowing for conditioning equipment that does not supply air to the test room to be left on, is similar to what DOE proposed in the SNOPR. The difference in the provision being adopted in this final rule and the SNOPR proposal is that forced-air and non-forced air space conditioning equipment are differentiated and non-forced air space conditioning equipment can be left on during air velocity measurements. Allowing non-forced air space conditioning equipment to operate during air velocity measurements will help keep test room temperature conditions stable. Allowing forced-air space conditioning equipment to remain on during air velocity measurements may also help keep test room temperature stable, but the air supplied
Requiring test voltage be measured within 6 inches of the connection supplied with the fan avoids variations in measurements that may result from measuring voltage at varying distances from the supplied connection. Wires have losses that are proportional to length. Consequently, a voltage measurement taken 12 inches from the supplied connection will be different than a measurement taken 6 inches from the supplied connection. Putting limits on the distance of the voltage measurement will minimize differences in test results that may otherwise result between test labs or iterations of the test in a given lab.
In the test procedure SNOPR, the proposed regulatory text for testing small-diameter ceiling fans required the air delivery room temperature be kept at 76 F ± 2 F during testing, which is in line with the current DOE test procedure for ceiling fans (which is based on the ENERGY STAR test procedure v. 1.1). BAS suggested DOE update this requirement to 70 F ± 5 F, which aligns with the ENERGY STAR test procedure v. 1.2. BAS indicated that tightening the air temperature requirements results in significant burden on the test lab, and also noted that the anemometers and associated software used by the test labs automatically correct for changes in temperature and humidity. (BAS, No. 13 at p. 7) DOE has concluded that relaxing the temperature requirement from 76 F ± 2 F to 70 F ± 5 F will not significantly impact the measured test results if stable measurement criteria are achieved and will align with the requirements of the current industry-standard test procedure; therefore, in this final rule, DOE specifies the air delivery room temperature to be 70 F ± 5 F during testing. Stable measurement criteria are described in more detail in section III.E.9.
The proposed regulatory text for testing of small-diameter ceiling fans in the test procedure SNOPR indicates that the air delivery room's air conditioning vents must be closed three minutes prior to and during testing. BAS suggested DOE update this language to indicate that air delivery room doors should also be closed during testing, but that the air conditioning vents and doors may be open between test sessions to maintain space conditions. (BAS, No. 13 at p. 7) DOE agrees with BAS's suggestion, and notes that further down in that same section of the regulatory text the procedure requires the test lab to “close all doors and vents.” In this final rule, DOE requires that all doors and vents must be closed three minutes prior to and during testing, but that they may be opened when testing is not taking place (
The proposed regulatory text for testing all fans in the test procedure SNOPR instructs the test lab to measure power consumption of the fan, but it does not specify how the fan power should be measured in the case of fans operated with multi-phase electricity. BAS suggested DOE specify that active (real) power be measured in all phases simultaneously, as many large-diameter ceiling fans are operated with three-phase electricity. (BAS, No. 13 at p. 8) DOE agrees with BAS's suggestion, which will alleviate any confusion from measuring power consumption of fans utilizing multi-phase electricity. DOE also notes that this requirement aligns with the power measurement requirements set forth in AMCA 230-15. In this final rule, DOE specifies that active (real) power must be measured simultaneously in all phases for all ceiling fans required to be tested using the test procedure.
The test procedure SNOPR also instructs that the tests be conducted with the fan connected to a supply circuit with a specific voltage according to the fan's rating (120 V or 240 V), but it does not specify how to test fans that are rated for use with both single-phase and multi-phase electricity. AMCA and BAS made the following suggestions: (1) Test voltage at the rated voltage of the variable-speed device, or the rated voltage of the motor if no variable-speed control exists; (2) test the fan at the mean input voltage if a voltage range is specified; (3) test and rate fans capable of operating with single- and multi-phase power under both conditions; and (4) test fans with multiple voltage ranges, but the same phase power, at the mean of the lowest input voltage range. (AMCA, No. 140 at p. 3; BAS, No. 138 at pp. 16-20)
DOE appreciates the comments received regarding test input voltage, and agrees that a provision should be made to test certain fans that are not rated for use with 120 V or 240 V. DOE also agrees that if multiple voltage ranges are specified for a given ceiling fan, the ceiling fan should be tested according to the lower voltage range. DOE therefore finalizes the following supply voltage requirements for all tested ceiling fans: The supply voltage must be: (1) 120 V if the ceiling fan's minimum rated voltage is 120 V or the lowest rated voltage range contains 120 V, (2) 240 V if the ceiling fan's minimum rated voltage is 240 V or the lowest rated voltage range contains 240 V, or (3) the ceiling fan's minimum rated voltage (if a voltage range is not given) or the mean of the lowest rated voltage range, in all other cases.
In regard to the comments about testing and rating ceiling fans that can be operated on both single- and multi-phase power under both conditions, DOE has determined that LSSD and HSSD fans are typically operated on single-phase circuits whereas large diameter fans are typically operated on multi-phase circuits. Therefore, DOE specifies in this final rule that LSSD and HSSD fans capable of operating with single- and multi-phase power be tested with single-phase power, and large diameter fans capable of operating with single- and multi-phase power be tested with multi-phase power. DOE will further allow manufacturers to test such fans in the other configuration (
The proposed regulatory text for testing all fans in the test procedure SNOPR instructs the test lab to conduct the appropriate test procedure based, in part, on the blade span of the ceiling fan, but it does not clearly articulate if or how the blade span is to be measured. BAS suggested that the blade span of a particular ceiling fan be determined as follows: (1) The blade span should be defined as the diameter of the largest circle swept by any part of the fan blade assembly, including any blade attachments; and (2) The rated blade span of a particular ceiling fan should be the average or the larger of the measured blade spans of the multiple samples required for testing. (BAS, No. 138
In the October 2014 test procedure NOPR, DOE proposed to incorporate AMCA 230-12 by reference. An updated version of AMCA 230 published on October 16, 2015. DOE is incorporating by reference AMCA 230-15 in this final rule. The test procedure specified in AMCA 230-15 is fundamentally equivalent to the test procedure specified in AMCA 230-12 (
In regard to the test procedure SNOPR proposal to limit the blade span applicable for testing to 24 feet, BAS suggested that DOE not have a maximum blade span limit at all, which would align with AMCA 230-15. (BAS, No. 13 at p. 7) DOE notes that it is currently unaware of any commercially-available large-diameter fans with blade spans greater than 24 feet. Because larger ceiling fans are not currently commercially available, DOE cannot confirm that that the test procedure will produce reliable results for fans larger than 24 feet in diameter. In addition, DOE prefers to align the scope of the test procedure with the scope of the concurrent energy conservation standards rulemaking for ceiling fans, which includes fans with blade spans less than or equal to 24 feet. Therefore, in this final rule DOE confirms that the test procedure is applicable to ceiling fans up to 24 feet in diameter.
BAS supported the test room dimensions proposed in the SNOPR and no stakeholders expressed disagreement. (BAS, No. 13 at p. 6) In this final rule DOE requires the following test room dimensions for large-diameter ceiling fans: (1) The minimum distance between the ceiling and the blades of a ceiling fan being tested shall be 40% of the ceiling fan blade span; (2) the minimum distance between the floor and the blades of the fan shall be the larger of 80% of the ceiling fan blade span or 4.6 m;
DOE also notes that the efficiency metric for large-diameter ceiling fans is to be calculated based on the fan efficiency at up to five speeds (see the discussion provided in Section III.D.3). Table 2 provides the requirements for selecting which speeds to test and how to weight the efficiency results at each tested speed for calculating the weighted efficiency metric.
Therefore, DOE requires all large-diameter ceiling fans to be tested according to AMCA 230-15, but with the modification that the number of speeds to be tested is as set forth in Table 2.
Because multi-mount ceiling fans can be installed in configurations associated with both standard and hugger ceiling fans, DOE proposed in the October 2014 test procedure NOPR to test multi-mount ceiling fans in both configurations: (1) In the configuration associated with standard ceiling fans, while minimizing the distance between the ceiling and the lowest part of the fan blades, and (2) in the configuration associated with hugger ceiling fans, while minimizing the distance between the ceiling and the lowest part of the fan blades. DOE received feedback from BAS indicating agreement with this proposal. (BAS, Public Meeting Transcript, No. 83 at p. 81) However, ALA suggested DOE revise this proposal to allow manufacturers to choose to test multi-mount fans in either both configurations or only the configuration associated with hugger ceiling fans, as that configuration should provide a conservative measured efficiency when compared to the efficiency measurement in the configuration associated with standard ceiling fans. (ALA, No. 8 at p. 8)
AcuPoll survey data submitted by ALA suggest that a significant fraction of multi-mount ceiling fans are installed in the configuration associated with hugger fans and a significant fraction are installed in the configuration associated with standard fans, and DOE cannot know the installation configuration
In the October 2014 test procedure NOPR, DOE proposed to test ceiling fans with multiple fan heads according to the following: (1) A single fan head is to be tested, with the fan head in the same position as when a fan with a single head is tested, such that it is directly over sensor 1 (
In response, multiple stakeholders expressed agreement with DOE's proposal. (Fanimation, Public Meeting Transcript, No. 83 at p. 138; Matthews Fan Company, Public Meeting Transcript, No. 83 at p. 138; Minka Group, Public Meeting Transcript, No. 83 at p. 138; ALA, No. 8 at p. 8) Therefore, DOE requires all multi-head ceiling fans to be tested in accordance with the aforementioned provisions proposed in the October 2014 test procedure NOPR.
In the October 2014 test procedure NOPR, for ceiling fans where the airflow is not directed vertically, DOE proposed to adjust the ceiling fan head such that the airflow is as vertical as possible and oriented along one of the four sensor axes. In this proposal, the distances between the lowest point on the fan blades and the air velocity sensors should be the same as for all other LSSD ceiling fans. Then, instead of measuring the air velocity for only those sensors directly beneath the ceiling fan, the air velocity should be measured at all sensors along the axis for which the airflow is oriented, as well as the axis oriented 180 degrees with respect to that axis. Using the same total number of sensors as would be utilized if the airflow was directly downward, the airflow should be calculated based on the continuous set of sensors with the largest air velocity measurements. The effective area used to calculate airflow under this proposal would be the same as for an un-tilted ceiling fan with the same blade span.
In response to this proposal, Fanimation expressed agreement, and no other stakeholders provided comment. (Fanimation, Public Meeting Transcript, No. 83 at p. 140) In this final rule, DOE requires ceiling fans where the airflow is not directed vertically to be tested in accordance with the aforementioned provisions proposed in the October 2014 test procedure NOPR.
In the 2014 test procedure NOPR, DOE proposed to add standby mode power consumption testing for all ceiling fans sold with hardware to maintain any of the standby functions defined in 42 U.S.C. 6295(gg)(1)(A)(iii)(II) either (1) installed
All stakeholders expressed agreement with DOE's proposal to include standby testing. However, BAS noted that the proposed method of incorporating standby power losses into the airflow efficiency metric could penalize very efficient ceiling fans while boosting the efficiency of lower-efficiency ceiling fans, and BAS provided example data for support. (BAS, Public Meeting Transcript, No. 5 at pp. 100-102)
DOE appreciates BAS's review of the proposed method for incorporating standby loss into the airflow efficiency metric; however, DOE notes that BAS's assertion that high-efficiency ceiling fans are disproportionately penalized for any standby consumption is based on a comparison of the measured efficiency calculated using the existing ENERGY STAR test procedure and the measured efficiency calculated using the test procedure proposed in the October 2014 test procedure NOPR. Using this comparison, BAS found that an efficient ceiling fan having 1.5 W of power consumption in standby mode has a calculated efficiency approximately 13% lower than the efficiency calculated using the current ENERGY STAR test method. BAS also found that less efficient ceiling fans with standby power consumption actually received an increase in calculated efficiency using the proposed test method. When comparing the measured efficiency using the proposed test method with and without standby, however, DOE concluded that all ceiling fans with standby power consumption receive an efficiency penalty relative to the calculated efficiency assuming no standby power consumption. DOE notes that this approach penalizes more efficient ceiling fans more than less efficient ceiling fans for an equal amount of standby power consumption; however, this reflects the fact that equivalent standby power consumption represents a larger fraction of the overall power consumption for more efficient ceiling fans. In other words, the effect of including standby power consumption for a more efficient fan is not greater in absolute terms, but rather greater only relative to the energy used by that fan in active mode. This is a result of incorporating standby mode into any integrated efficiency metric, as required by 42 U.S.C. 6295(gg)(2). Therefore, DOE retains the method proposed in the October 2014 test procedure NOPR for incorporating standby power consumption into the integrated efficiency metric.
Ceiling fan manufacturers must submit certification reports for each basic model before it is distributed in commerce per 10 CFR 429.12. Components of similar design may be substituted without additional testing, if the substitution does not affect the energy consumption of the ceiling fan. (10 CFR 429.11) Ceiling fan certification reports must follow the product-specific sampling and reporting requirements specified in 10 CFR 429.32. Consistent with the dates specified for use in section III.B, ceiling fan manufacturers are required to calculate ceiling fan efficiency utilizing the calculations provided in revised appendix U. Upon the compliance date of any amended energy conservation standards for ceiling fans, manufacturers would be required to follow the revised reporting requirements provided at 10 CFR 429.32 for each ceiling fan basic model.
The Office of Management and Budget has determined that test procedure rulemakings do not constitute “significant regulatory actions” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993). Accordingly, this action was not subject to review under the Executive Order by the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB).
The Regulatory Flexibility Act (5 U.S.C. 601
DOE reviewed this final rule under the provisions of the Regulatory Flexibility Act and the policies and procedures published on February 19, 2003. The final rule prescribes test procedure amendments that would be used to determine compliance with any amended energy conservation standards that DOE may prescribe for ceiling fans. DOE has prepared a final regulatory flexibility analysis (FRFA) for this rulemaking. The FRFA describes potential impacts on small businesses associated with ceiling fan testing requirements.
DOE has transmitted a copy of this FRFA to the Chief Counsel for Advocacy of the Small Business Administration for review.
A description of the need for, and objectives of, the rule is set forth elsewhere in the preamble and not repeated here.
DOE received no comments specifically on the initial regulatory flexibility analysis prepared for this rulemaking. Comments on the economic impacts of the rule are discussed elsewhere in the preamble and did not necessitate changes to the analysis required by the Regulatory Flexibility Act.
The Small Business Administration did not submit comments on DOE's proposed rule.
For the manufacturers of the covered ceiling fan products, the Small Business Administration (SBA) has set a size threshold, which defines those entities classified as “small businesses” for the purposes of the statute. DOE used the SBA's small business size standards to
DOE reviewed ALA's list of ceiling fan manufacturers,
In the ceiling fan light kit test procedure final rule, DOE reinterpreted the EPCA definition of ceiling fan to include hugger fans and stated that ceiling fans that produce large volumes of airflow (
DOE research indicates that all ceiling fans currently on the market, including large-diameter ceiling fans, appear to meet the EPCA design standards. For large-diameter ceiling fans, DOE searched for product specifications on the Web sites of manufacturers of large-diameter ceiling fans and from Web sites of retailers of HSSD ceiling fans. Only one large-diameter ceiling fan model was found with a light kit, and the fan controls were separate from the lighting controls for that fan. Most large-diameter ceiling fans appeared to be capable of operating at more than one speed (typically with an adjustable speed control).
Based on this research, DOE does not expect any cost of complying with the design requirements for small business manufacturers of large-diameter ceiling fans. DOE discusses the costs of testing in the following section.
DOE establishes test procedures that measure energy efficiency or energy use of a representative average use cycle for a given product, and that are not unduly burdensome to conduct. If the concurrent rulemaking regarding energy conservation standards for ceiling fans results in efficiency performance standards, DOE would require testing for certification of two ceiling fans per basic model, the minimum sample size required by 10 CFR 429.11. To determine the potential cost of the final test procedure on small ceiling fan manufacturers of HSSD and large-diameter ceiling fans under a potential energy conservation standard for ceiling fans, DOE estimated the cost of testing two ceiling fans. The cost of testing was then multiplied over the estimated number of basic models produced by a small manufacturer. The estimated cost of testing HSSD and large-diameter ceiling fans is discussed in further detail below.
DOE estimated the cost to test HSSD ceiling fans, based on estimates from third-party testing facilities of the cost to perform the current ENERGY STAR test procedure for ceiling fans, which is similar to DOE's final test procedure, and the changes in cost associated with the key differences between the two test procedures. DOE expects that the following modifications would impose a change in test burden compared to the current ENERGY STAR test procedure: (1) The requirement to test at only one fan speed instead of three speeds; (2) the elimination of the requirement to use a test cylinder; (3) the requirement to mount the ceiling fan to the real ceiling; (4) the reduced warm up time before testing at low speed, (5) the requirement to conduct standby-mode testing, and (6) specifying criteria for air velocity and power measurements that indicate stable measurements. In total, DOE estimates that these changes reduce the typical time to perform the final test procedure by one hour compared to the ENERGY STAR test procedure, as described below.
(1) Testing at only one speed instead of three yields a total test time that is approximately 70 minutes shorter than the ENERGY STAR test procedure. DOE specifies that only high speed is to be tested. Based on test quotes from third-party labs, DOE estimates that the average cost for each speed is $87.50 per speed. Therefore, testing at only one speed instead of three reduces the total test cost by $175 per ceiling fan.
(2) Not requiring use of a test cylinder eliminates any potential costs associated with purchasing new test cylinders. If the test procedure required the use of test cylinders, then a new cylinder would be necessary to test any ceiling fan with a diameter that does not correspond to one of the cylinders in a test lab's existing inventory. Based on discussions with third-party testing facilities, DOE estimates that new test cylinders would cost approximately $2,000-3,000 per cylinder. By not using a cylinder, these costs will be avoided. Not requiring a test cylinder also shortens the test time of DOE's final test procedure relative to ENERGY STAR's test procedure for all HSSD ceiling fans, because time is not required to put a test cylinder in place for each test (estimated to take 15 minutes).
(3) Requiring mounting ceiling fans to the real ceiling involves a one-time lab cost for a mechanism that allows for the adjustment of the height of the air velocity sensors to keep the distance between the bottom of the fan blades and the air velocity sensor heads at a specified vertical distance (43 inches). Based on the materials employed and test quotes from third-party labs, DOE estimates the one-time cost to construct a mechanism to allow for the
(4) Requiring 15 minutes of warm up time before testing at low speed compared to 30 minutes in the ENERGY STAR test procedure further reduces the relative amount of time required for DOE's final test procedure by 15 minutes.
(5) Requiring standby-mode testing for ceiling fans with standby functionality yields an additional cost for such fans. Using the quotes provided by third-party testing facilities, DOE estimates that the standby test for all ceiling fans with standby functionality costs $200 per basic model.
(6) Specifying criteria for air velocity and power measurements that indicate stable measurements may increase test time and require one-time capital costs. If stability criteria are not met after taking air velocity and power measurements in each axis, these measurements must be repeated until stability criteria are met. Measurements in each additional axis is 100 additional seconds plus the time it may take a sensor arm to travel to another axis if a single, sweeping sensor arm is being used. DOE estimates this to be less than 10 minutes total if four additional axes of measurements are needed to meet stability criteria. Even if four additional measurements in all four axes are necessary, only 40 minutes of additional test time would be required. DOE recognizes that some labs may need to make investments in facility upgrades to improve temperature control to meet these stability criteria. These upgrades could include low-cost weatherization techniques like adding weather stripping to test-room doors or adding insulation. More costly improvements, like switching from forced-air to non-forced-air space-conditioning equipment, are unlikely but may be necessary. Even the most costly upgrade of adding insulation and switching to a non-forced-air conditioning system would only be a one-time cost on the order of $5,000. Once these upgrades to the test room are completed, they can be used to test all HSSD ceiling fans, and therefore do not add substantial test cost thereafter.
In addition, DOE expects that the following modifications as described in section III.E would impose no additional test burden compared to the current ENERGY STAR test procedure: (7) Specifying that the vertical position in relation to the air velocity sensors be determined by the position of the lowest point on the ceiling fan blades, (8) specifying that ceiling fans should be tested in the configuration that minimizes the distance between the ceiling and the lowest part of the fan blades, (9) requiring that any heaters packaged with ceiling fans to be installed but switched off during testing, (10) revised allowable measurement tolerance for air velocity sensors, (11) revised allowable mounting tolerance for air velocity sensors, (12) revised testing temperature requirement, (13) requiring that all doors and vents must be closed during testing, (14) specifying that active (real) power must be measured simultaneously in all phases, (15) requiring measurement axes be perpendicular to test room walls, (16) require forced-air space conditioning equipment be turned off during air velocity measurements, but allow for conditioning equipment that does not supply air to the test room, such as radiant conditioning equipment, to be left on, and (17) requiring voltage be measured within 6 inches of connection supplied with fan.
Based on all of the differences between the final test procedure and the ENERGY STAR test procedure, and estimates from third-party testing facilities of the labor costs associated with these differences, DOE estimates that the final test procedure for HSSD ceiling fans will cost $1,325 on average per basic model, once the mechanism for the adjustment of the height of the air velocity sensors is constructed, and the insulation and non-forced-air conditioning system is added, if necessary. DOE did not find accurate data on the percentage of HSSD ceiling fans with standby capability, though DOE located some HSSD ceiling fans without standby capability in Web searches. To provide a conservative cost estimate, DOE made the assumption that all HSSD ceiling fans should be tested for standby power. Using the standby test quote of $200 per basic model, DOE estimates that the total test cost for the final test procedure and standby testing for single-headed HSSD ceiling fans will be $1,525.
For the four small business manufacturers of HSSD ceiling fans that DOE identified, the number of basic models produced per manufacturer varies significantly from one to approximately 30. Therefore, based on the test cost per ceiling fan basic model, the testing cost in the first year would range from approximately $1,525 to $45,750 for small manufacturers of HSSD ceiling fans. DOE expects this cost to be lower in subsequent years because only new or redesigned ceiling fan models would need to be tested.
In response to stakeholder comments, DOE considered alternatives to the test procedure established by this final rule. Specifically, DOE considered requiring additional sensors for HSSD fan testing. DOE found that additional sensors would cost an estimated $1,000 per sensor added, but found no evidence that additional sensors would improve how well the test procedure represents an HSSD fan's typical energy use. Consequently, DOE decided not to adopt provisions for additional sensors.
DOE estimated the cost to test a large-diameter ceiling fan based on discussions with testing facilities capable of performing the AMCA 230 test procedure as well as cost estimates based on the time and labor costs necessary to perform the test procedure on large-diameter ceiling fans. DOE estimates that the one-time cost for a lab to buy a load-cell, a fabricated load-cell frame, power meter, and one air velocity sensor is approximately $4,500. Based on test quotes, DOE estimates that the test procedure for large-diameter ceiling fans will cost manufacturers on average $7,500 per basic model for testing at up to five speeds. Using the standby test quote of $200 per basic model, DOE estimates that the total test cost for the final test procedure and standby testing for a large-diameter ceiling fans will be $7,700.
For the three small business manufacturers of large-diameter ceiling fans that DOE identified, the number of basic models produced per manufacturer varies from one to 30. Therefore, based on the test cost per ceiling fan basic model, the testing cost in the first year would range from approximately $7,700 to $231,000 for small manufacturers of large-diameter ceiling fans. DOE expects this cost to be lower in subsequent years because only new or redesigned ceiling fan models would need to be tested.
DOE considered a number of industry and governmental test procedures that measure the efficiency of ceiling fans to develop the test procedure in today's rulemaking. There appear to be two common approaches to testing ceiling fans: An approach based on using air velocity sensors to calculate airflow, such as the current DOE test procedure for ceiling fans, ENERGY STAR's test procedure, and CAN/CSA-C814-10, and an approach based on using a load cell to measure thrust, such as AMCA 230.
In principle, either approach could be used to measure the airflow efficiency of all ceiling fans, but maintaining consistency with industry practice would minimize test burden for all ceiling fan manufacturers. Though a load-cell based approach appears to be a potentially simpler method of estimating airflow efficiency, in industry, ceiling fans less than or equal to 7 feet in diameter, have historically been tested according to the air-velocity sensor based approach. Large-diameter ceiling fans, on the other hand, have historically been tested according to the load-cell based approach. It also appears to be cost-prohibitive to scale up the air-velocity sensor based approach to the large-diameter ceiling fans currently on the market given the number of sensors that would be required to cover ceiling fans 24 feet in diameter and the cost of constructing an appropriate rotating sensor arm. Therefore, DOE adopted the less burdensome approach in this final rule.
DOE also adopted a number of other measures in this final rule that will minimize impacts to small businesses: (1) Retaining the 15-minute warm-up time (see section III.C); (2) Eliminating the test cylinder from the test setup for HSSD ceiling fans (see section III.E.1); (3) Mounting HSSD ceiling fans to the real ceiling, rather than a false ceiling, for testing (see section III.E.6); (4) Relaxing the allowable measurement tolerance for the air velocity sensors used in testing HSSD ceiling fans (see section III.E.7); and (5) Relaxing the test room temperature tolerance (see section III.E.9).
Manufacturers of ceiling fans must certify to DOE that their products comply with any applicable energy conservation standards. In certifying compliance, manufacturers must first obtain test data for their products according to the DOE test procedures, including any amendments adopted for those test procedures on the date that compliance is required. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including ceiling fans.
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.
In this final rule, DOE amends its test procedure for ceiling fans to more accurately measure the energy consumption of these products. DOE has determined that this rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999), imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this final rule and determined that it 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. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of this final rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) No further action is required by Executive Order 13132.
When reviewing existing regulations or promulgating new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (Feb. 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; (3) provide a clear legal standard for affected conduct rather than a general standard; and (4) promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this final rule meets the relevant standards of Executive Order 12988.
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
DOE has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 1988), that this regulation will not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.
Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed this final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.
Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use if the regulation is implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.
This regulatory action to amend the test procedure for measuring the energy efficiency of ceiling fans is not a significant regulatory action under Executive Order 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects.
Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91; 42 U.S.C. 7101), DOE must comply with section 32 of the Federal Energy Administration Act of 1974, as amended by the Federal Energy Administration Authorization Act of 1977. (15 U.S.C. 788; FEAA) Section 32 essentially provides in relevant part that, where a proposed rule authorizes or requires use of commercial standards, the notice of proposed rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Attorney General and the Chairman of the Federal Trade Commission (FTC) concerning the impact of the commercial or industry standards on competition.
The final rule incorporates testing methods contained in the following commercial standards: ANSI/AMCA Standard 230-15, “Air Movement and Control Association Laboratory Methods of testing Air Circulating Fans for Rating and Certification” and IEC 62301:2011, “Household Electrical Appliances—Measurement of Standby Power.” The Department has evaluated these standards and is unable to conclude whether they fully comply with the requirements of section 32(b) of the FEAA (
In this final rule, DOE is incorporating by reference specific sections of the following industry standards: (1) ANSI/AMCA Standard 230-15 (“AMCA 230-15”), “Air Movement and Control Association Laboratory Methods of Testing Air Circulating Fans for Rating and Certification,” and (2) IEC 62301-U (Edition 2.0, 2011-01), “Household Electrical Appliances—Measurement of Standby Power.”
AMCA 230-15 is an industry-standard test procedure for measuring the airflow efficiency of commercial and industrial ceiling fans. The test procedure in this final rule references Section 3 through Section 9 of AMCA 230-15 (except sections 5.1 and 9.5 and Test Figures 2 and 3), which specify the test apparatus, general instructions, procedure, and calculations for measuring airflow efficiency. AMCA 230-15 is available from the American National Standards Institute, 25 W. 43rd Street, 4th Floor, New York, NY 10036, 212-642-4900, or
IEC 62301-U is an industry-standard test procedure for measuring the standby power draw of electrical appliances (including ceiling fans). The test procedure in this final rule references Section 4.3.1 through Section 5.3.2 of IEC 62301-U (except sections 5.1 and 5.2), which specify the test apparatus, general instructions, procedure and calculations for measuring standby power consumption. Copies of IEC 62301-U are available from the International Electrotechnical
As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of this rule before its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(2).
The Secretary of Energy has approved publication of this final rule.
Confidential business information, Energy conservation, Household appliances, Imports, Reporting and recordkeeping requirements.
Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Imports, Incorporation by reference, Intergovernmental relations, Small businesses.
For the reasons stated in the preamble, DOE amends parts 429 and 430 of chapter II, subchapter D of Title 10, Code of Federal Regulations, as set forth below:
42 U.S.C. 6291-6317.
(a)
(1) The requirements of § 429.11 are applicable to ceiling fans; and
(2) For each basic model of ceiling fan selected for testing, a sample of sufficient size must be randomly selected and tested to ensure that—
(i) Any represented value of the efficiency or airflow is less than or equal to the lower of:
(A) The mean of the sample, where:
And
(B) The lower 90 percent confidence limit (LCL) of the true mean divided by 0.9, where:
And
(ii) Any represented value of the wattage is greater than or equal to the higher of:
(A) The mean of the sample, where:
And
(B) The upper 95 percent confidence limit (UCL) of the true mean divided by 1.1, where:
And
42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
(b) * * *
(3) ANSI/AMCA Standard 230-15 (“AMCA 230-15”), “Laboratory Methods of Testing Air Circulating Fans for Rating and Certification,” ANSI approved October 16, 2015, IBR approved for appendix U to this subpart, as follows:
(i) Section 3—Units of Measurement;
(ii) Section 4—Symbols and Subscripts; (including Table 1—Symbols and Subscripts);
(iii) Section 5—Definitions (except 5.1);
(iv) Section 6—Instruments and Section Methods of Measurement;
(v) Section 7—Equipment and Setups (except the last 2 bulleted items in 7.1—Allowable test setups);
(vi) Section 8—Observations and Conduct of Test;
(vii) Section 9—Calculations (except 9.5); and
(viii) Test Figure 1—Vertical Airflow Setup with Load Cell (Ceiling Fans).
(p) * * *
(6) IEC 62301 (“IEC 62301-U”), Household electrical appliances—Measurement of standby power, (Edition 2.0, 2011-01), IBR approved for appendix U to this subpart, as follows:
(i) Section 4.3—General conditions for measurements: Power supply: Section 4.3.1—Supply voltage and frequency (first paragraph only),
(ii) Section 4.3—General conditions for measurements: Power supply: Section 4.3.2—Supply voltage waveform;
(iii) Section 4.4—General conditions for measurements: Power measuring instruments;
(iv) Section 5.3—Measurements: Procedure: Section 5.3.1—General (except the last bulleted item), and
(v) Section 5.3—Measurements: Procedure: Section 5.3.2—Sampling method (first two paragraphs and Note 1).
(w)
Prior to January 23, 2017, manufacturers must make any representations with respect to the energy use or efficiency of ceiling fans as specified in Section 2 of this appendix (other than hugger ceiling fans, multi-mount ceiling fans in the hugger configuration, and large-diameter ceiling fans) in accordance with the results of testing pursuant either to this appendix, or to the applicable test requirements set forth in 10 CFR parts 429 and 430, as they appeared in the 10 CFR parts 200 to 499 edition revised as of January 1, 2016. On or after January 23, 2017, manufacturers of ceiling fans, as specified in Section 2 of this appendix, must make any representations with respect to energy use or efficiency in accordance with the results of testing pursuant to this appendix.
1. Definitions:
1.1.
1.2.
1.3.
1.4.
1.5.
1.6.
1.7.
1.8.
1.9.
1.10.
1.11.
1.12.
1.13.
1.14.
1.15.
1.16.
1.17.
1.18.
1.19.
1.20.
1.21.
1.22.
1.23.
2. Scope:
The provisions in this appendix apply to ceiling fans except:
(1) Ceiling fans where the plane of rotation of a ceiling fan's blades is not less than or
(2) Centrifugal ceiling fans;
(3) Belt-driven ceiling fans; and
(4) Oscillating ceiling fans.
The test apparatus and test measurement used to determine energy performance depend on the ceiling fan's blade span. For each tested ceiling fan, measure the lateral distance from the center of the axis of rotation of the fan blades to the furthest fan blade edge from the center of the axis of rotation, and multiply this distance by two. The blade span for a basic model of ceiling fan is then calculated as the arithmetic mean of this distance across each ceiling fan in the sample, rounded to the nearest inch.
3.1. General instructions.
3.1.1. Record measurements at the resolution of the test instrumentation. Round off calculations to the number of significant digits present at the resolution of the test instrumentation, except for blade span, which is rounded to the nearest inch. Round the final ceiling fan efficiency value to the nearest whole number as follows:
3.1.1.1. A fractional number at or above the midpoint between the two consecutive whole numbers shall be rounded up to the higher of the two whole numbers; or
3.1.1.2. A fractional number below the midpoint between the two consecutive whole numbers shall be rounded down to the lower of the two whole numbers.
3.1.2. For multi-head ceiling fans, the effective blade span is the blade span (as specified in section 3) of an individual fan head, if all fan heads are the same size. If the fan heads are of varying sizes, the effective blade span is the blade span (as specified in section 3) of the largest fan head.
3.2. Test apparatus for low-speed small-diameter and high-speed small-diameter ceiling fans: All instruments are to have accuracies within ±1% of reading, except for the air velocity sensors, which must have accuracies within ±5% of reading or 2 feet per minute (fpm), whichever is greater. Equipment is to be calibrated at least once a year to compensate for variation over time.
3.2.1.
(1) The air delivery room dimensions are to be 20 ± 0.75 feet x 20 ± 0.75 feet with an 11 ± 0.75 foot-high ceiling. The control room shall be constructed external to the air delivery room.
(2) The ceiling shall be constructed of sheet rock or stainless plate. The walls must be of adequate thickness to maintain the specified temperature and humidity during the test. The paint used on the walls, as well as the paint used on the ceiling material, must be of a type that minimizes absorption of humidity and that keeps the temperature of the room constant during the test (
(3) The room must not have any ventilation other than an air conditioning and return system used to control the temperature and humidity of the room. The construction of the room must ensure consistent air circulation patterns within the room. Vents must have electronically-operated damper doors controllable from a switch outside of the testing room.
3.2.2.
(1) Make sure the transformer power is off. Hang the ceiling fan to be tested directly from the ceiling, according to the manufacturer's installation instructions. Hang all non-multi-mount ceiling fans in the fan configuration that minimizes the distance between the ceiling and the lowest point of the fan blades. Hang and test multi-mount fans in two configurations: The configuration associated with the definitions of a standard fan that minimizes the distance between the ceiling and the lowest point of the fan blades and the configuration associated with the definition of a hugger fan that minimizes the distance between the ceiling and the lowest point of the fan blades.
(2) Connect wires as directed by manufacturer's wiring instructions.
(3) With the ceiling fan installed, adjust the height of the air velocity sensors to ensure the vertical distance between the lowest point on the ceiling fan blades and the air velocity sensors is 43 inches.
(4) Either a rotating sensor arm or four fixed sensor arms can be used to take airflow measurements along four axes, labeled A-D. Axes A, B, C, and D are at 0, 90, 180, and 270 degree positions. Axes A-D must be perpendicular to the four walls of the room. See Figure 1 of this appendix.
(5) Minimize the amount of exposed wiring. Store all sensor lead wires under the floor, if possible.
(6) Place the sensors at intervals of 4 ± 0.0625 inches along a sensor arm, starting with the first sensor at the point where the four axes intersect. Do not touch the actual sensor prior to testing. Use enough sensors to record air delivery within a circle 8 inches larger in diameter than the blade span of the ceiling fan being tested. The experimental set-up is shown in Figure 2 of this appendix.
(7) Table 1 of this appendix shows the appropriate number of sensors needed per each of four axes (including the first sensor at the intersection of the axes) for common fan sizes.
(8) Install an RPM (revolutions per minute) meter, or tachometer, to measure RPM of the ceiling fan blades.
(9) Use an RMS sensor capable of measuring power with an accuracy of ±1% to measure ceiling fan power consumption. If the ceiling fan operates on multi-phase power input, measure the active (real) power in all phases simultaneously. Measure test voltage within 6” of the connection supplied with the ceiling fan.
(10) Complete any conditioning instructions provided in the ceiling fan's instruction or installation manual must be completed prior to conducting testing.
3.2.3.
Hang a multi-headed ceiling fan from the ceiling such that one of the ceiling fan heads is centered directly over sensor 1 (
3.2.4. Test Set-Up for Ceiling Fans with Airflow Not Directly Downward
For ceiling fans where the airflow is not directly downward, adjust the ceiling fan head such that the airflow is as vertical as possible prior to testing. For ceiling fans where a fully vertical orientation of airflow cannot be achieved, orient the ceiling fan (or fan head, if the ceiling fan is a multi-head fan) such that any remaining tilt is aligned along one of the four sensor axes. Instead of measuring the air velocity for only those sensors directly beneath the ceiling fan, the air velocity is to be measured at all sensors along that axis, as well as the axis oriented 180 degrees with respect to that axis. For example, if the tilt is oriented along axis A, air velocity measurements are to be taken for all sensors along the A-C axis. No measurements would need to be taken along the B-D axis in this case. All other aspects of test set-up remain unchanged from sections 3 through 3.2.2.
3.3. Active mode test measurement for low-speed small-diameter and high-speed small-diameter ceiling fans.
3.3.1.
(1) Maintain the room temperature at 70 degrees ± 5 degrees Fahrenheit and the room humidity at 50% ± 5% relative humidity during the entire test process.
(2) If present, the ceiling fan light fixture is to be installed but turned off during testing.
(3) If present, any heater is to be installed but turned off during testing.
(4) If present, turn off any oscillating function causing the axis of rotation of the fan head(s) to change relative to the ceiling during operation prior to taking airflow measurements. Turn on any oscillating function prior to taking power measurements.
(5) The supply voltage shall be:
(i) 120 V if the ceiling fan's minimum rated voltage is 120 V or the lowest rated voltage range contains 120 V,
(ii) 240 V if the ceiling fan's minimum rated voltage is 240 V or the lowest rated voltage range contains 240 V, or
(iii) The ceiling fan's minimum rated voltage (if a voltage range is not given) or the mean of the lowest rated voltage range, in all other cases. The test voltage shall not vary by more than ±1% during the tests.
(6) Test ceiling fans rated for operation with only a single- or multi-phase power supply with single- or multi-phase electricity, respectively. Measure active (real) power in all phases continuously when testing. Test ceiling fans capable of operating with single- and multi-phase electricity with single-phase electricity. DOE will allow manufacturers of ceiling fans capable of operating with single- and multi-phase electricity to test such fans with multi-phase power and make representations of efficiency associated with both single and multi-phase electricity if a manufacturer desires to do so, but the test results in the multi-phase configuration will not be valid to assess compliance with any amended energy conservation standard.
(7) Conduct the test with the fan connected to a supply circuit at the rated frequency.
(8) Measure power input at a point that includes all power-consuming components of the ceiling fan (but without any attached light kit or heater energized).
3.3.2.
Measure the airflow (CFM) and power consumption (W) for HSSD ceiling fans until stable measurements are achieved, measuring at high speed only. Measure the airflow and power consumption for LSSD ceiling fans until stable measurements are achieved, measuring first at low speed and then at high speed. Airflow and power consumption measurements are considered stable if:
(1) The average air velocity for all axes for each sensor varies by less than 5% compared to the average air velocity measured for that same sensor in a successive set of air velocity measurements, and
(2) Average power consumption varies by less than 1% in a successive set of power consumption measurements. These stability criteria are applied differently to ceiling fans with airflow not directly downward. See section 4.1.2 of this appendix.
Step 1: Set the first sensor arm (if using four fixed arms) or single sensor arm (if using a single rotating arm) to the 0 degree Position (Axis A). If necessary, use a marking as reference. If using a single rotating arm, adjust the sensor arm alignment until it is at the 0 degree position by remotely controlling the antenna rotator.
Step 2: Set software up to read and record air velocity, expressed in feet per minute (FPM) in 1 second intervals. (Temperature does not need to be recorded in 1 second intervals.) Record current barometric pressure.
Step 3: Allow test fan to run 15 minutes at rated voltage and at high speed if the ceiling fan is an HSSD ceiling fan. If the ceiling fan is an LSSD ceiling fan, allow the test fan to run 15 minutes at the rated voltage and at low speed. Turn off all forced-air environmental conditioning equipment entering the chamber (
Step 4: Begin recording readings. Take 100 airflow velocity readings (100 seconds run-time) and save these data. If using a rotating sensor arm, this is axis A. For all fans except multi-head fans and fans capable of oscillating, measure power during the interval that air velocity measurements are taken. Record the average value of the power measurement in watts (W).
Step 5: Similarly, take 100 air velocity readings (100 seconds run-time) for Axes B, C, and D; save these data as well. Measure power as described in Step 4. If using four fixed sensor arms, take the readings for all sensor arms simultaneously.
Step 6: Repeat Steps 4 and 5 until stable measurements are achieved.
Step 7: Repeat steps 1 through 6 above on high fan speed for LSSD ceiling fans. Note: Ensure that temperature and humidity readings are maintained within the required tolerances for the duration of the test (all tested speeds). Forced-air environmental conditioning equipment may be used and doors and vents may be opened between test sessions to maintain environmental conditions.
Step 8: If testing a multi-mount ceiling fan, repeat steps 1 through 7 with the ceiling fan in the ceiling fan configuration (associated with either hugger or standard ceiling fans) not already tested.
If a multi-head ceiling fan includes more than one category of ceiling fan head, then test at least one of each unique category. A fan head with different construction that could affect air movement or power consumption, such as housing, blade pitch, or motor, would constitute a different category of fan head.
Step 9: For multi-head ceiling fans, measure active (real) power consumption in all phases simultaneously at each speed continuously for 100 seconds with all fan heads turned on, and record the average value at each speed in watts (W).
For ceiling fans with an oscillating function, measure active (real) power consumption in all phases simultaneously at each speed continuously for 100 seconds with the oscillating function turned on. Record the average value of the power measurement in watts (W).
For both multi-head ceiling fans and fans with an oscillating function, repeat power consumption measurement until stable power measurements are achieved.
3.4. Test apparatus for large-diameter ceiling fans:
The test apparatus and instructions for testing large-diameter ceiling fans must conform to the requirements specified in sections 3 through 7 of AMCA 230-15 (incorporated by reference, see § 430.3), with the following modifications:
3.4.1. The test procedure is applicable to large-diameter ceiling fans up to 24 feet in diameter.
3.4.2. A “ceiling fan” is defined as in 10 CFR 430.2.
3.4.3. The supply voltage shall be (1) 120 V if the ceiling fan's minimum rated voltage is 120 V or the lowest rated voltage range contains 120 V, (2) 240 V if the ceiling fan's minimum rated voltage is 240 V or the lowest rated voltage range contains 240 V, or (3) the ceiling fan's minimum rated voltage (if a voltage range is not given) or the mean of the lowest rated voltage range, in all other cases.
3.4.4. Test ceiling fans rated for operation with only a single- or multi-phase power supply with single- or multi-phase electricity, respectively. Test ceiling fans capable of operating with single- and multi-phase electricity with multi-phase electricity. DOE will allow manufacturers of ceiling fans capable of operating with single- and multi-phase electricity to test such fans with single-phase power and make representations of efficiency associated with both single and multi-phase electricity if a manufacturer desires to do so, but the test results in the single-phase configuration will not be valid to assess compliance with any amended energy conservation standard.
3.5. Active mode test measurement for large-diameter ceiling fans:
(1) Calculate the airflow (CFM) and measure the active (real) power consumption (W) in all phases simultaneously for ceiling fans at the speeds specified in Table 2.
(2) When testing at speeds other than high speed (
3.5.1. Measure active (real) power consumption in all phases simultaneously at a point that includes all power-consuming components of the ceiling fan (but without any attached light kit or heater energized).
3.5.2. Measure active (real) power consumption in all phases simultaneously continuously at the rated voltage that represents normal operation over the time period for which the load differential test is conducted.
3.6. Test measurement for standby power consumption.
(1) Measure standby power consumption if the ceiling fan offers one or more of the following user-oriented or protective functions:
☐ ☐o The ability to facilitate the activation or deactivation of other functions (including active mode) by remote switch (including remote control), internal sensor, or timer.
☐ Continuous functions, including information or status displays (including clocks), or sensor-based functions.
(2) Measure standby power consumption after completion of active mode testing and after the active mode functionality has been switched off (
3.6.1. Allow 3 minutes between switching off active mode functionality and beginning the standby power test. (No additional time before measurement is required.)
3.6.2. Simultaneously in all phases, measure active (real) power consumption continuously for 100 seconds, and record the average value of the standby power measurement in watts (W).
3.6.3. Determine power consumption according to section 5.3.2 of IEC 62301-U, or by using the following average reading method. Note that a shorter measurement period may be possible using the sample method in section 5.3.2 of IEC 62301-U.
(1) Connect the product to the power supply and power measuring instrument.
(2) Select the mode to be measured (which may require a sequence of operations and could require waiting for the product to automatically enter the desired mode) and then monitor the power.
(3) Calculate the average power using either the average power method or the accumulated energy method. For the average power method, where the power measuring instrument can record true average power over an operator selected period, the average power is taken directly from the power measuring instrument. For the accumulated energy method, determine the average power by dividing the measured energy by the time for the monitoring period. Use units of watt-hours and hours for both methods to determine average power in watts.
(1) The efficacy of a ceiling fan is the
(2) Calculate fan efficiency using the average of both sets of airflow and power measurements from the successive sets of measurements that meet the stability criteria.
(3) To calculate the measured airflow for HSSD and LSSD ceiling fans, multiply the average air velocity measurement at each sensor from section 3.3 of this appendix (for high speed for HSSD ceiling fans, and for high and low speeds for LSSD ceiling fans) with the sensor's effective area (explained below), and then sum the products to obtain the overall measured airflow at the tested speed. Using the airflow and the power consumption measurements from sections 3.3 and 3.5 of this appendix (for all tested settings for large-diameter ceiling fans) calculate the efficiency for any ceiling fan as follows:
(4) Table 3 of this appendix specifies the daily hours of operation to be used in calculating ceiling fan efficiency:
(5) Calculate the effective area corresponding to each sensor used in the test method for small-diameter ceiling fans with the following equations:
(6) For sensor 1, the sensor located directly underneath the center of the ceiling fan, the effective width of the circle is 2 inches, and the effective area is:
(7) For the sensors between sensor 1 and the last sensor used in the measurement, the effective area has a width of 4 inches. If a sensor is a distance
(8) For the last sensor, the width of the effective area depends on the horizontal displacement between the last sensor and the point on the ceiling fan blades furthest radially from the center of the fan. The total area included in an airflow calculation is the area of a circle 8 inches larger in diameter than the ceiling fan blade span (as specified in section 3 of this appendix).
(9) Therefore, for example, for a 42-inch ceiling fan, the last sensor is 3 inches beyond the end of the ceiling fan blades. Because only the area within 4 inches of the end of the ceiling fan blades is included in the airflow calculation, the effective width of the circle corresponding to the last sensor would be 3 inches. The calculation for the effective area corresponding to the last sensor would then be:
(10) For a 46-inch ceiling fan, the effective area of the last sensor would have a width of 5 inches, and the effective area would be:
4.1.1.
To determine the airflow at a given speed for a multi-head ceiling fan, sum the measured airflow for each fan head included in the ceiling fan (a single airflow measurement can be applied to identical fan heads, but at least one of each unique fan head must be tested). The power consumption is the measured power consumption with all fan heads on. Using the airflow and power consumption measurements from section 3.3 of this appendix, calculate
4.1.2.
Using a set of sensors that cover the same diameter as if the airflow were directly downward, the airflow at each speed should be calculated based on the continuous set of sensors with the largest air velocity measurements. This continuous set of sensors must be along the axis that the ceiling fan tilt is directed in (and along the axis that is 180 degrees from the first axis). For example, a 42-inch fan tilted toward axis A may create the pattern of air velocity shown in Figure 3 of this appendix. As shown in Table 1 of this appendix, a 42-inch fan would normally require 7 active sensors. However because the fan is not directed downward, all sensors must record data. In this case, because the set of sensors corresponding to maximum air velocity are centered 3 sensor positions away from the sensor 1 along the A axis, substitute the air velocity at A axis sensor 4 for the average air velocity at sensor 1. Take the average of the air velocity at A axis sensors 3 and 5 as a substitute for the average air velocity at sensor 2, take the average of the air velocity at A axis sensors 2 and 6 as a substitute for the average air velocity at sensor 3, etc. Lastly, take the average of the air velocities at A axis sensor 10 and C axis sensor 4 as a substitute for the average air velocity at sensor 7. Stability criteria apply after these substitutions. For example, air velocity stability at sensor 7 are determined based on the average of average air velocity at A axis sensor 10 and C axis sensor 4 in successive measurements. Any air velocity measurements made along the B-D axis are not included in the calculation of average air velocity.
Fish and Wildlife Service, Interior.
Final rule.
This rule prescribes the hunting seasons, hours, areas, and daily bag and possession limits for migratory game birds. Taking of migratory birds is prohibited unless specifically provided for by annual regulations. This rule permits the taking of designated species during the 2016-17 season.
This rule takes effect on July 25, 2016.
You may inspect comments received on the migratory bird hunting regulations during normal business hours at the Service's office at 5275 Leesburg Pike, Falls Church, Virginia. You may obtain copies of referenced reports from the street address above, or from the Division of Migratory Bird Management's Web site at
Ron W. Kokel, Division of Migratory Bird Management, U.S. Fish and Wildlife Service, (703) 358-1714.
On August 6, 2015, we published in the
On October 20-21, 2015, we held open meetings with the Flyway Council Consultants, at which the participants reviewed information on the current status of migratory game birds and developed recommendations for the 2016-17 regulations for these species.
On December 11, 2015, we published in the
The final rule described here is the final in the series of proposed, supplemental, and final rulemaking documents for migratory game bird hunting regulations for 2016-17 and deals specifically with amending subpart K of 50 CFR part 20. It sets hunting seasons, hours, areas, and limits for migratory game bird species. This final rule is the culmination of the rulemaking process for the migratory game bird hunting seasons, which started with the August 6, 2015, proposed rule. As discussed elsewhere in this document, we supplemented that proposal on December 11, and published final season frameworks on March 28, 2016, that provided the season selection criteria from which the States selected these seasons. This final rule sets the migratory game bird hunting seasons based on that input from the States. We previously addressed all comments in the March 28
The programmatic document, “Second Final Supplemental Environmental Impact Statement: Issuance of Annual Regulations Permitting the Sport Hunting of Migratory Birds (EIS 20130139),” filed with the Environmental Protection Agency (EPA) on May 24, 2013, addresses NEPA compliance by the Service for issuance of the annual framework regulations for hunting of migratory game bird species. We published a notice of availability in the
Section 7 of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) will review all significant rules. OIRA has reviewed this rule and has determined that this rule is significant because it would have an annual effect of $100 million or more on the economy.
Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.
An updated economic analysis was prepared for the 2013-14 season. This analysis was based on data from the newly released 2011 National Hunting and Fishing Survey, the most recent year for which data are available (see discussion in Regulatory Flexibility Act, below). This analysis estimated consumer surplus for three alternatives for duck hunting (estimates for other species are not quantified due to lack of data). The alternatives were: (1) Issue restrictive regulations allowing fewer days than those issued during the 2012-13 season, (2) issue moderate regulations allowing more days than those in alternative 1, and (3) issue liberal regulations identical to the regulations in the 2012-13 season. For the 2013-14 season, we chose Alternative 3, with an estimated consumer surplus across all flyways of $317.8-$416.8 million. For the 2016-17 season, we have also chosen alternative 3. We also chose Alternative 3 for the 2009-10, the 2010-11, the 2011-12, the 2012-13, the 2014-15, and the 2015-16 seasons. The 2013-14 analysis is part of the record for this rule and is available at
The annual migratory bird hunting regulations have a significant economic impact on substantial numbers of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
This rule is a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. For the reasons outlined above, this rule will have an annual effect on the economy of $100 million or more.
This final rule does not contain any new information collection that requires approval under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
• 1018-0019—North American Woodcock Singing Ground Survey (expires 5/31/2018).
• 1018-0023—Migratory Bird Surveys (expires 6/30/2017). Includes Migratory Bird Harvest Information Program, Migratory Bird Hunter Surveys, Sandhill Crane Survey, and Parts Collection Survey.
We have determined and certify, in compliance with the requirements of the Unfunded Mandates Reform Act, 2 U.S.C. 1502
The Department, in promulgating this rule, has determined that this rule will not unduly burden the judicial system and that it meets the requirements of sections 3(a) and 3(b)(2) of Executive Order 12988.
In accordance with Executive Order 12630, this rule, authorized by the Migratory Bird Treaty Act (16 U.S.C. 703-712), does not have significant takings implications and does not affect any constitutionally protected property rights. This rule will not result in the physical occupancy of property, the physical invasion of property, or the regulatory taking of any property. In fact, this rule allows hunters to exercise otherwise unavailable privileges and, therefore, reduces restrictions on the use of private and public property.
Executive Order 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. While this rule is a significant regulatory action under Executive Order 12866, it is not expected to adversely affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action and no Statement of Energy Effects is required.
In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175, and 512 DM 2, we have evaluated possible effects on Federally recognized Indian tribes and have determined that there are no effects on Indian trust resources. However, in the August 6
Due to the migratory nature of certain species of birds, the Federal Government has been given responsibility over these species by the Migratory Bird Treaty Act. We annually prescribe frameworks from which the States make selections regarding the hunting of migratory birds, and we employ guidelines to establish special regulations on Federal Indian reservations and ceded lands. This process preserves the ability of the States and tribes to determine which seasons meet their individual needs. Any State or Indian tribe may be more restrictive than the Federal frameworks at any time. The frameworks are developed in a cooperative process with the States and the Flyway Councils. This process allows States to participate in the development of frameworks from which they will make selections, thereby having an influence on their own regulations. These rules do not have a substantial direct effect on fiscal capacity, change the roles or responsibilities of Federal or State governments, or intrude on State policy or administration. Therefore, in
The preliminary proposed rulemaking (August 6
The rulemaking process for migratory game bird hunting, by its nature, operates under a time constraint as seasons must be established each year or hunting seasons remain closed. However, we intend that the public be provided extensive opportunity for public input and involvement in compliance with Administrative Procedure Act requirements. Thus, when the preliminary proposed rulemaking was published, we established what we believed were the longest periods possible for public comment and the most opportunities for public involvement. We also provided notification of our participation in multiple Flyway Council meetings, opportunities for additional public review and comment on all Flyway Council proposals for regulatory change, and opportunities for additional public review during the Service Regulations Committee meeting. Therefore, we believe that sufficient public notice and opportunity for involvement have been given to affected persons.
Further, States need sufficient time to communicate these season selections to their affected publics, and to establish and publicize the necessary regulations and procedures to implement these seasons. Thus, we find that “good cause” exists, within the terms of 5 U.S.C. 553(d)(3) of the Administrative Procedure Act, and therefore, under authority of the Migratory Bird Treaty Act (July 3, 1918), as amended (16 U.S.C. 703-711), these regulations will take effect less than 30 days after publication. Accordingly, with each conservation agency having had an opportunity to participate in selecting the hunting seasons desired for its State or Territory on those species of migratory birds for which open seasons are now prescribed, and consideration having been given to all other relevant matters presented, certain sections of title 50, chapter I, subchapter B, part 20, subpart K, are hereby amended as set forth below.
Exports, Hunting, Imports, Reporting and recordkeeping requirements, Transportation, Wildlife.
For the reasons set out in the preamble, title 50, chapter I, subchapter B, part 20, subpart K of the Code of Federal Regulations is amended as follows:
Migratory Bird Treaty Act, 40 Stat. 755, 16 U.S.C. 703-712; Fish and Wildlife Act of 1956, 16 U.S.C. 742 a-j; Public Law 106-108, 113 Stat. 1491, Note Following 16 U.S.C. 703.
The following annual hunting regulations provided for by §§ 20.101 through 20.106 and 20.109 of 50 CFR 20 will not appear in the Code of Federal Regulations because of their seasonal nature.
Subject to the applicable provisions of the preceding sections of this part, areas open to hunting, respective open seasons (dates inclusive), shooting and hawking hours, and daily bag and possession limits for the species designated in this section are prescribed as follows:
Shooting and hawking hours are one-half hour before sunrise until sunset.
(a)
(b)
Subject to the applicable provisions of the preceding sections of this part, areas open to hunting, respective open seasons (dates inclusive), shooting and hawking hours, and daily bag and possession limits for the species designated in this section are prescribed as follows:
Shooting and hawking hours are one-half hour before sunrise until sunset. Area descriptions were published in the March 28, 2016,
Subject to the applicable provisions of the preceding sections of this part, areas open to hunting, respective open seasons (dates inclusive), shooting and hawking hours, and daily bag and possession limits for the species designated in this section are prescribed as follows:
Shooting and hawking hours are one-half hour before sunrise until sunset except as otherwise noted. Area descriptions were published in the March 28, 2016,
(a)
Unless otherwise noted, the seasons listed below are for mourning and white-winged doves. Daily bag and possession limits are in the aggregate for the two species.
(b)
Subject to the applicable provisions of the preceding sections of this part, areas open to hunting, respective open seasons (dates inclusive), shooting and hawking hours, and daily bag and possession limits for the species designated in this section are prescribed as follows:
Shooting and hawking hours are one-half hour before sunrise until sunset except as otherwise noted. Area descriptions were published in the March 28, 2016,
Subject to the applicable provisions of the preceding sections of this part, areas open to hunting, respective open seasons (dates inclusive), shooting and hawking hours, and daily bag and possession limits for the species designated in this section are prescribed as follows:
Shooting and hawking hours are one-half hour before sunrise until sunset, except as otherwise noted. Area descriptions were published in the March 28, 2016,
(a)
(b)
Within the special sea duck areas, the daily bag limit is 5 scoters, eiders, and long-tailed ducks in the aggregate, including no more than 4 scoters, 4 eiders, and 4 long-tailed ducks. Possession limits are three times the daily bag limit. These limits may be in addition to regular duck bag limits only during the regular duck season in the special sea duck hunting areas.
(c)
(d)
(e)
Duck Limits: The daily bag limit of 6 ducks may include no more than 4 mallards (no more than 2 of which may be females), 1 mottled duck, 1 black duck, 2 pintails, 2 canvasbacks, 2 redheads, 3 scaup, and 3 wood ducks. The possession limit is three times the daily bag limit.
Merganser Limits: The daily bag limit is 5 mergansers and may include no more than 2 hooded mergansers. In States that include mergansers in the duck bag limit, the daily limit is the same as the duck bag limit, of which only 2 may be hooded mergansers. The possession limit is three times the daily bag limit.
Duck and Merganser Limits: The daily bag limit of 7 ducks (including mergansers) may include no more than 2 female mallards, 2 pintails, 2 redheads, 3 scaup, and 2 canvasbacks. The possession limit is three times the daily bag limit.
Coot and Common Moorhen Limits: Daily bag and possession limits are in the aggregate for the two species.
(f)
The following seasons are open only to youth hunters. Youth hunters must be accompanied into the field by an adult at least 18 years of age. This adult cannot duck hunt but may participate in other open seasons.
Subject to the applicable provisions of the preceding sections of this part, areas open to hunting, respective open seasons (dates inclusive), shooting and hawking hours, and daily bag and possession limits on the species designated in this section are as follows:
Shooting and hawking hours are one-half hour before sunrise until sunset, except as otherwise noted. Area descriptions were published in the March 28, 2016,
Federally authorized, State-issued permits are issued to individuals, and only the individual whose name and address appears on the permit at the time of issuance is authorized to take sandhill cranes at the level allowed by the permit, in accordance with provisions of both Federal and State regulations governing the hunting season. The permit must be carried by the permittee when exercising its provisions and must be presented to any law enforcement officer upon request. The permit is not transferable or assignable to another individual, and may not be sold, bartered, traded, or otherwise provided to another person. If the permit is altered or defaced in any way, the permit becomes invalid.
Subject to the applicable provisions of the preceding sections of this part, areas open to hunting, respective open seasons (dates inclusive), shooting and hawking hours, and daily bag and possession limits on the species designated in this section are as follows:
Shooting hours are one-half hour before sunrise until sunset, except as otherwise restricted by State regulations. Hunting is by State permit only.
Federally authorized, State-issued permits are issued to individuals, and only the individual whose name and address appears on the permit at the time of issuance is authorized to take swans at the level allowed by the permit, in accordance with provisions of both Federal and State regulations governing the hunting season. The permit must be carried by the permittee when exercising its provisions and must be presented to any law enforcement officer upon request. The permit is not transferable or assignable to another individual, and may not be sold, bartered, traded, or otherwise provided to another person. If the permit is altered or defaced in any way, the permit becomes invalid.
Subject to the applicable provisions of the preceding sections of this part, areas open to hunting, respective open seasons (dates inclusive), hawking hours, and daily bag and possession limits for the species designated in this section are prescribed as follows:
Hawking hours are one-half hour before sunrise until sunset except as otherwise restricted by State regulations.
Area descriptions were published in the March 28, 2016 (81 FR 17302)
Limits: The daily bag limit may include no more than 3 migratory game birds, singly or in the aggregate. The possession limit is three times the daily bag limit. These limits apply to falconry during both regular hunting seasons and extended falconry seasons, unless further restricted by State regulations. The falconry bag and possession limits are not in addition to regular season
Although many States permit falconry during the gun seasons, only extended falconry seasons are shown below. Please consult State regulations for details.
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