| Page Range | 59827-60234 | |
| FR Document |
| Page and Subject | |
|---|---|
| 81 FR 60227 - Papah[amacr]naumoku[amacr]kea Marine National Monument Expansion | |
| 81 FR 60018 - Renewal of Approved Information Collection; OMB Control No. 1004-0073 | |
| 81 FR 59985 - Sunshine Act Meeting Notice | |
| 81 FR 59977 - Black Hills National Forest Advisory Board | |
| 81 FR 59985 - Funding Down the State and Partnership Grant Slates From Fiscal Year (FY) 2014; Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) | |
| 81 FR 59987 - Extension of the Application Deadline Date for the Fiscal Year 2016; Promise Neighborhoods Program Grant Application | |
| 81 FR 60011 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of Closed Meetings | |
| 81 FR 60010 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of Closed Meetings | |
| 81 FR 60012 - Center for Scientific Review; Notice of Closed Meetings | |
| 81 FR 60011 - Center for Scientific Review; Notice of Closed Meetings | |
| 81 FR 60124 - Submission for OMB Review; Comment Request | |
| 81 FR 60025 - Membership of the Merit Systems Protection Board's Performance Review Board | |
| 81 FR 59986 - Agency Information Collection Activities; Comment Request; Foreign Schools Eligibility Criteria Apply To Participate in Title IV HEA Programs | |
| 81 FR 60123 - Proposed Collection; Comment Request for Regulation Project | |
| 81 FR 59849 - Definition of Real Estate Investment Trust Real Property | |
| 81 FR 60113 - Eighteenth Meeting of SC-227 Navigation Information on Electronic Maps | |
| 81 FR 60126 - Submission for OMB Review; Comment Request | |
| 81 FR 60124 - Proposed Collection; Comment Request for Form 8038-B | |
| 81 FR 60122 - Proposed Collection; Comment Request for Regulation Project | |
| 81 FR 59983 - United States Global Change Research Program (USGCRP) | |
| 81 FR 59992 - Amador Water Agency; Notice of Preliminary Determination of a Qualifying Conduit Hydropower Facility and Soliciting Comments and Motions To Intervene | |
| 81 FR 59993 - Climax Manufacturing Company; Notice of Application Accepted for Filing, Soliciting Comments, Protests and Motions To Intervene | |
| 81 FR 59990 - Champlain Spinners Power Company Inc., Champlain Spinners Power, LLC; Notice of Transfer of Exemption | |
| 81 FR 59993 - Sacramento Municipal Utility District; Notice of Application Accepted for Filing, Soliciting Comments, Protests and Motions To Intervene | |
| 81 FR 59995 - Commission Information Collection Activities (FERC Form 80, FERC-550, and FERC-549); Comment Request | |
| 81 FR 59994 - Brady Interconnection, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
| 81 FR 59995 - Transcontinental Gas Pipe Line Company, LLC; Notice of Application | |
| 81 FR 59991 - Columbia Gas Transmission, LLC; Notice of Application | |
| 81 FR 60000 - EcoEléctrica, L.P.; Notice of Application | |
| 81 FR 59998 - Combined Notice of Filings #1 | |
| 81 FR 59998 - City of Wadsworth, Ohio; Notice of Teleconference | |
| 81 FR 59981 - Agenda and Notice of Public Meetings of the South Dakota Advisory Committee | |
| 81 FR 60112 - Culturally Significant Objects Imported for Exhibition Determinations: “God's Servant First: The Life and Legacy of Thomas More” Exhibition | |
| 81 FR 60032 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule | |
| 81 FR 60097 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 19.6, Series of Options Contracts Open for Trading, To Allow Wednesday Expirations for SPY Options | |
| 81 FR 60070 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 19.6, Series of Options Contracts Open for Trading, To Allow Wednesday Expirations for SPY Options | |
| 81 FR 60072 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Short Term Option Series Program | |
| 81 FR 60049 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Short Term Option Series Program | |
| 81 FR 60074 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Short Term Option Series Program | |
| 81 FR 60094 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 13-Equities To Eliminate Orders With a Sell “Plus” and Buy “Minus” Instruction and Retain Orders With a “Buy Minus Zero Plus” Instruction, and Make Conforming Changes to Rules 104-Equities, 107B-Equities, 123C-Equities and 1004-Equities | |
| 81 FR 60125 - Submission for OMB Review; Comment Request | |
| 81 FR 60112 - Culturally Significant Objects Imported for Exhibition Determinations: “Medardo Rosso: Experiments in Light and Form” Exhibition | |
| 81 FR 60017 - Notice of Proposed Information Collection for Public Comment on the 2017 American Housing Survey | |
| 81 FR 60016 - 60-Day Notice of Proposed Information Collection: FHA Adjustable Rate Mortgages (ARMS) | |
| 81 FR 60015 - 60-Day Notice of Proposed Information Collection: FHA-Application for Insurance of Advance of Mortgage Proceeds | |
| 81 FR 59865 - Safety Zone; Great Egg Harbor Bay, Marmora, NJ | |
| 81 FR 59978 - Manti-La Sal Resource Advisory Committee | |
| 81 FR 60024 - Notice of Lodging of Proposed Consent Decree Under the Clean Water Act | |
| 81 FR 60026 - Enhancing Participation in NRC Public Meetings | |
| 81 FR 59990 - Extension of a Currently Approved Information Collection for the Weatherization Assistance Program | |
| 81 FR 59990 - Request for Information on the Availability of New Geothermal Electricity in the Salton Sea Area To Serve Regional Federal Load | |
| 81 FR 59902 - BLM Internet-Based Auctions | |
| 81 FR 60020 - 2016 Second Call for Nominations for Certain New Mexico Resource Advisory Councils | |
| 81 FR 59982 - Marine Mammals and Endangered Species; File Nos. 15543-06, 15488-01, 15537-02, 18890, 19091, 19116, 19638, 20283 | |
| 81 FR 60024 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Certificate of Electrical Training and Applications for Mine Safety and Health Administration Approved Tests and State Tests Administered as Part of a Mine Safety and Health Administration Approved Program | |
| 81 FR 60022 - Electronic Collection and Transfer of Import Information: Cessation of PGA Message Set Pilot Program | |
| 81 FR 59987 - Agency Information Collection Activities; Comment Request; Application for Approval To Participate in Federal Student Aid Programs | |
| 81 FR 60021 - Notice of Proposed Information Collection; Request for Comments for 1029-0113 | |
| 81 FR 60013 - 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 59989 - President's Council of Advisors on Science and Technology | |
| 81 FR 60001 - Agency Information Collection Activities; Proposed Collection; Comment Request | |
| 81 FR 60115 - Qualification of Drivers; Exemption Applications; Vision | |
| 81 FR 60114 - Agency Information Collection Activities: Request for Comments for a New Information Collection | |
| 81 FR 59950 - Periodic Reporting | |
| 81 FR 60014 - Agency Information Collection Activities: Arrival and Departure Record (Forms I-94 and I-94W) and Electronic System for Travel Authorization | |
| 81 FR 60117 - Qualification of Drivers; Exemption Applications; Vision | |
| 81 FR 59947 - Safety Zone, Jacksonville Sea and Sky Spectacular; Atlantic Ocean, Jacksonville Beach, FL | |
| 81 FR 59985 - Notice of Intent To Grant Exclusive Patent License to Fox Materials Consulting, LLC; Colorado Springs, CO | |
| 81 FR 59977 - Beartooth Ranger District, Custer Gallatin National Forest; Carbon County, Montana; Greater Red Lodge Vegetation and Habitat Management Project | |
| 81 FR 60023 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Environmental Information (ATF F 5000.29) | |
| 81 FR 60023 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Application and Permit for Permanent Exportation of Firearms (National Firearms Act) ATF F 9 (5320.9) | |
| 81 FR 60005 - Revised Recommendations for Reducing the Risk of Zika Virus Transmission by Blood and Blood Components; Guidance for Industry; Availability | |
| 81 FR 60004 - Submission of Warning Plans for Cigars; Draft Guidance for Industry; Availability | |
| 81 FR 60003 - Patient Safety Organizations: Voluntary Relinquishment From QAISys, Inc. | |
| 81 FR 60007 - National Advisory Committee on Rural Health and Human Services; Notice of Meeting | |
| 81 FR 60113 - Eighty-Sixth SC-147 Traffic Collision & Avoidance Committee Plenary | |
| 81 FR 60019 - Renewal of Approved Information Collection; OMB Control No. 1004-0001 | |
| 81 FR 59927 - Request for Comment on Subpart 400 of Regulation S-K Disclosure Requirements Relating to Management, Certain Security Holders and Corporate Governance Matters | |
| 81 FR 60031 - Information Collection Request; Submission for OMB Review | |
| 81 FR 59981 - Submission for OMB Review; Comment Request | |
| 81 FR 59988 - Meeting Notice; Public Meeting of the Technical Guidelines Development Committee | |
| 81 FR 59978 - Notice of Intent To Request Revision and Extension of a Currently Approved Information Collection | |
| 81 FR 59980 - Advisory Committee on Agriculture Statistics | |
| 81 FR 59950 - Clean Energy Incentive Program Design Details; Extension of Comment Period | |
| 81 FR 59901 - Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2017; Correction | |
| 81 FR 60077 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule | |
| 81 FR 60110 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing of Proposed Rule Change to Delete or Amend Outdated Rule Language | |
| 81 FR 60080 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 13 To Eliminate Orders With a Sell “Plus” and Buy “Minus” Instruction and Retain Orders With a “Buy Minus Zero Plus” Instruction, and Make Conforming Changes to Rules 104, 107B, 123C and 1004 | |
| 81 FR 60031 - Self-Regulatory Organizations; New York Stock Exchange LLC; NYSE MKT LLC; Order Granting an Extension to Limited Exemptions From Rule 612(c) of Regulation NMS in Connection With the Exchanges' Retail Liquidity Programs Until December 31, 2016 | |
| 81 FR 60051 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Adopt FINRA Rule 2030 and FINRA Rule 4580 To Establish “Pay-To-Play” and Related Rules | |
| 81 FR 60089 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Short Term Option Series Program To Allow Wednesday Expirations for SPY Options | |
| 81 FR 60108 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 900.2NY(18A) | |
| 81 FR 60034 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the Handling of Intermarket Sweep Orders | |
| 81 FR 60037 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Liquidity Program Until December 31, 2016 | |
| 81 FR 60083 - Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rules Regarding Qualification, Registration and Continuing Education for Persons Associated With Equity Trading Permit Holders, To Add Definitions, Amend Definitions, and To Make Technical, Non-Substantive and Conforming Amendments to Rules | |
| 81 FR 60099 - Self-Regulatory Organizations; the Options Clearing Corporation; Notice of Filing of Proposed Rule Change Concerning the Options Clearing Corporation's Escrow Deposit Program | |
| 81 FR 60091 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Equities Rule 5.3(i)(3) To Amend the Requirements for the Dissemination of News in Compliance With the Exchange's Immediate Release Policy | |
| 81 FR 60038 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Rules Relating to Pre-Opening Indications and Opening Procedures | |
| 81 FR 60008 - National Institute of Mental Health; Notice of Meeting | |
| 81 FR 60008 - National Center For Complementary & Integrative Health; Notice of Meeting | |
| 81 FR 60009 - Center for Scientific Review; Notice of Closed Meetings | |
| 81 FR 60029 - Instrumentation and Controls Guidance | |
| 81 FR 60119 - Request for Comments of a Previously Approved Information Collection | |
| 81 FR 60000 - Information Collection Being Submitted for Review and Approval to the Office of Management and Budget | |
| 81 FR 60021 - Certain Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers Sanction for Breaches of Administrative Protective Order | |
| 81 FR 59945 - Safety Zone; Blasting, Delaware River | |
| 81 FR 59952 - Endangered and Threatened Wildlife and Plants; 12-Month Finding on a Petition To Delist the Coastal California Gnatcatcher | |
| 81 FR 60025 - Annual Invitation for Public Nominations by U.S. Citizens for Service on NASA Federal Advisory Committees | |
| 81 FR 59869 - Air Plan Approval; Alabama; Cross-State Air Pollution Rule | |
| 81 FR 59919 - Airworthiness Directives; PILATUS AIRCRAFT LTD. Airplanes | |
| 81 FR 59845 - Telemarketing Sales Rule Fees | |
| 81 FR 59976 - National Organic Program: Notice of Draft Guidance on Treated Lumber | |
| 81 FR 59929 - Schedules of Controlled Substances: Temporary Placement of Mitragynine and 7-Hydroxymitragynine Into Schedule I | |
| 81 FR 60112 - Michigan Southern Railroad Company, d/b/a Napoleon, Defiance & Western Railway-Discontinuance of Service Exemption-in Henry County, Ohio | |
| 81 FR 59834 - Airworthiness Directives; The Boeing Company Airplanes | |
| 81 FR 59839 - Airworthiness Directives; Bombardier, Inc. Airplanes | |
| 81 FR 59837 - Airworthiness Directives; Airbus Defense and Space S.A. (Formerly Known as Construcciones Aeronauticas, S.A.) Airplanes | |
| 81 FR 59922 - Airworthiness Directives; Airbus Airplanes | |
| 81 FR 59827 - Airworthiness Directives; Bombardier, Inc. Airplanes | |
| 81 FR 59830 - Airworthiness Directives; The Boeing Company Airplanes | |
| 81 FR 59843 - Airworthiness Directives; Bombardier, Inc. Airplanes | |
| 81 FR 60130 - International Entrepreneur Rule | |
| 81 FR 59934 - TRICARE; Reimbursement of Long Term Care Hospitals and Inpatient Rehabilitation Facilities | |
| 81 FR 59951 - Lease and Interchange of Vehicles; Motor Carriers of Passengers | |
| 81 FR 60120 - Hazardous Materials: Notice of Applications for Special Permits | |
| 81 FR 60122 - Delayed Special Permit Applications | |
| 81 FR 60119 - Hazardous Materials: Notice of Applications for Special Permits | |
| 81 FR 59907 - Access to Federal Employees Health Benefits (FEHB) for Employees of Certain Indian Tribal Employers | |
| 81 FR 60170 - Requirements for Foreign and Domestic Establishment Registration and Listing for Human Drugs, Including Drugs That Are Regulated Under a Biologics License Application, and Animal Drugs | |
| 81 FR 59876 - Approval and Promulgation of Air Quality State Implementation Plans; California; San Joaquin Valley; Moderate Area Plan for the 2006 PM2.5 | |
| 81 FR 59846 - When Obstructions on Certain Tributaries of the Tennessee River Do Not Require a Section 26a Permit from the Tennessee Valley Authority |
Agricultural Marketing Service
Forest Service
National Agricultural Statistics Service
Census Bureau
National Oceanic and Atmospheric Administration
Army Department
Energy Efficiency and Renewable Energy Office
Federal Energy Regulatory Commission
Agency for Healthcare Research and Quality
Centers for Medicare & Medicaid Services
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Substance Abuse and Mental Health Services Administration
Coast Guard
U.S. Customs and Border Protection
Fish and Wildlife Service
Land Management Bureau
Surface Mining Reclamation and Enforcement Office
Alcohol, Tobacco, Firearms, and Explosives Bureau
Drug Enforcement Administration
Federal Aviation Administration
Federal Highway Administration
Federal Motor Carrier Safety Administration
Maritime Administration
Pipeline and Hazardous Materials Safety Administration
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), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Bombardier, Inc. Model BD-700-1A10 and BD-700-1A11 airplanes. This AD was prompted by in-service reports of passenger door tensator spring failures, and qualification testing indicating that non-conforming tensator springs could be susceptible to failure prior to reaching their safe-life limit. This AD requires revising the maintenance or inspection program to incorporate certain temporary revisions, and replacing the passenger door tensator springs with new springs. We are issuing this AD to prevent tensator spring failure, resulting in the inability to open the main passenger door, which could impede evacuation in the event of an emergency.
This AD is effective October 5, 2016.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of October 5, 2016.
For service information identified in this final rule, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
You may examine the AD docket on the Internet at
Fabio Buttitta, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE-171, FAA, New York Aircraft Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone: 516-228-7303; fax: 516-794-5531: email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc. Model BD-700-1A10 and BD-700-1A11 airplanes. The NPRM published in the
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2014-39, dated November 4, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model BD-700-1A10 and BD-700-1A11 airplanes. The MCAI states:
Following the issuance of [Canadian] AD CF-2010-14, additional qualification testing of the passenger door tensator spring, Part Number (P/N) GS321-0580-1, determined that the tensator springs could be susceptible to failure prior to reaching the life limit mandated by [Canadian] AD CF-2010-14.
In addition, there have been in-service reports of passenger door tensator spring failures. Investigation determined that the material used to manufacture the tensator springs [was] improperly heat treated.
The passenger door assembly is installed with four tensator springs that assist the door actuator in opening and closing the door. In-service experience has shown that a failed tensator spring could uncoil and foul up the rotating tensator spools, resulting in the inability to open the main passenger door. The inability to open the main passenger door could impede evacuation in the event of an emergency.
This [Canadian] AD mandates the revision to the approved maintenance schedule to reduce the repetitive discard task interval and mandates the replacement of non-conforming tensator springs.
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.
Bombardier, Inc. requested that we revise the Related Service Information under 1 CFR part 51 section and paragraph (g) of the proposed AD to include Temporary Revision (TR) 5-2-10, dated September 9, 2014, to Part 2, Section 5-10-11, of Bombardier Global 5000 GL 5000 Featuring Global Vision Flight Deck—Time Limits/Maintenance Checks.
We agree to include TR 5-2-10, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global 5000 GL 5000 Featuring Global Vision Flight Deck—Time Limits/Maintenance Checks, as requested by the commenter. Our intent is to correspond with TCCA Canadian AD CF-2014-39, dated November 4, 2014, which includes TR 5-2-9, dated September 9, 2014, to Part 2, Section 5-10-11, of Bombardier Global 5000 GL 5000 Featuring Global Vision Flight
In addition, we have revised paragraph (g) of this AD to refer to Task Number 52-11-41-101 because some TRs include multiple tasks. This AD specifically addresses the passenger door tensator spring, part number GS321-0580-1, and the task number in the TRs for that component is 52-11-41-101.
Bombardier, Inc. requested that we revise paragraph (g)(2) of the proposed AD to read “Model BD-700-1A10 airplanes,” instead of “Model BD-700-1A11 airplanes.”
We agree. This was a typographical error, and has been corrected in paragraph (g)(3) of this AD (paragraph (g)(2) of the proposed AD).
NetJets requested that we revise the proposed AD so that the threshold for the initial spring replacement is based on the AD effective date, and not the TR revision date. NetJets explained that paragraph (g) of the proposed AD specifies that the compliance time for the initial replacement is per the TRs listed in paragraphs (g)(1) through (g)(4) of the proposed AD, or within 30 days after the AD effective date, whichever occurs later. NetJets explained further that the TRs base the threshold from the TR revision date of “Jun 04/2014,” and that by the time the final rule is released, the threshold in the TR will have been exceeded by approximately 2 years. NetJets argued that, therefore, the final rule will effectively mandate a 30-day threshold, which is an undue burden without technical justification.
We do not agree with the request to revise the compliance time in this AD. The compliance time in this AD corresponds with the compliance time in Canadian AD CF-2014-39, dated November 4, 2014. In addition, the commenter did not provide any data to substantiate that extending the compliance time would provide an acceptable level of safety. After considering all the available information, we have determined that the compliance time, as proposed, represents an appropriate interval of time in which the required actions can be performed in a timely manner within the affected fleet, while still maintaining an adequate level of safety. Under the provisions of paragraph (k)(1) of this AD, however, we may consider requests for adjustments to the compliance time if data are submitted to substantiate that such an adjustment would provide an acceptable level of safety. We have made no changes to this AD in this regard.
NetJets requested that we revise the NPRM to add provisions to allow later FAA-approved revisions to the time limits/maintenance checks manuals (TLMCM), so that an approval of an AMOC will not be required to incorporate the currently published TLMCM revision and future revisions. NetJets explained that the TRs specified in paragraphs (g)(1) through (g)(4) of the proposed AD have been incorporated in revisions to the listed TLMCMs.
We find that clarification is necessary. Once operators have incorporated the task in the TR into their maintenance or inspection program, the task cannot be changed without approval of an AMOC. However, once the task in the TR is incorporated into the TLMCM, operators that use the TLMCM are still in compliance because the task has not changed. If a future revision of the TLMCM changes the task, then an AMOC would be needed to use the revised task.
We have revised paragraph (g) of this AD to clarify that the revision may be done by inserting copies of the TRs identified in paragraphs (g)(1) through (g)(5) of this AD into the applicable TLMCM. When the information in a TR has been included in general revisions of the applicable TLMCM, the general revisions may be inserted in the TLMCM, and the TR may be removed.
NetJets requested that we clarify the necessity for the life limit requirement in paragraph (i) of the proposed AD. NetJets stated that paragraph (i) of the proposed AD requires a threshold of “. . . but not exceeding the applicable life limit of the passenger tensator spring . . .” without identifying the referenced life limit, and noted that the listed service information does not include a life limit requirement.
We agree to clarify the requirement specified in paragraph (i) of this AD and the necessity for that requirement. The passenger door assembly is installed with four tensator springs that assist the door actuator in opening and closing the door. In-service experience has shown that a failed tensator spring could uncoil and foul up the rotating tensator spools, resulting in the inability to open the main passenger door. The inability to open the main passenger door could impede evacuation in the event of an emergency. The actions required by this AD are necessary to address the identified unsafe condition.
Paragraph (g) of this AD mandates the revision to the approved maintenance schedule by incorporating TRs to reduce the repetitive discard task interval. Paragraph (i) of this AD mandates, for certain airplanes, the replacement of non-conforming tensator springs within 15 months after the effective date of this AD, but not exceeding the applicable life limit of 1,500 landings for the component as listed in the applicable TRs identified in paragraph (g) of this AD. The replacement is necessary to ensure the airplanes identified in section 1.A., “Effectivity,” of Bombardier Global 5000 Service Bulletin 700-1A11-52-023, dated October 4, 2013; or Bombardier Global Express/Global Express XRS Service Bulletin 700-52-046, dated October 4, 2013, replace the tensator springs within 15 months, as specified in that service information, but not later than the new life limit. We have revised paragraph (i) of this AD to refer to the TRs in paragraph (g) of this AD for the life limit.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
We reviewed the following Bombardier, Inc. service information:
• Bombardier Global 5000 Service Bulletin 700-1A11-52-023, dated October 4, 2013.
• Bombardier Global Express/Global Express XRS Service Bulletin 700-52-046, dated October 4, 2013.
• TR 5-2-7, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global Express XRS BD-700 Time Limits/Maintenance Checks (for Model BD-700-1A10 airplanes).
• TR 5-2-10, dated September 9, 2014, to Part 2, Section 5-10-11, of Bombardier Global 5000 GL 5000 Featuring Global Vision Flight Deck—Time Limits/Maintenance Checks (for Model BD-700-1A11 airplanes).
• TR 5-2-10, dated September 9, 2014, to Part 2, Section 5-10-11, of Bombardier Global 6000 GL 6000 Time Limits/Maintenance Checks (for Model BD-700-1A10 airplanes).
• TR 5-2-13, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global 5000 BD-700 Time Limits/Maintenance Checks (for Model BD-700-1A11 airplanes).
• TR 5-2-44, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global Express BD-700 Time Limits/Maintenance Checks (for Model BD-700-1A10 airplanes).
The service information describes procedures for replacing passenger door tensator springs with new springs. 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 estimate that this AD affects 60 airplanes of U.S. registry.
We also estimate that it would take about 40 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $204,000, or $3,400 per product.
According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective October 5, 2016.
None.
This AD applies to Bombardier, Inc. Model BD-700-1A10 and BD-700-1A11 airplanes, certificated in any category, serial numbers 9002 and subsequent.
Air Transport Association (ATA) of America Code 52, Doors.
This AD was prompted by in-service reports of passenger door tensator spring failures, and qualification testing indicating that non-conforming tensator springs could be susceptible to failure prior to reaching their safe-life limit. We are issuing this AD to prevent tensator spring failure, resulting in the inability to open the main passenger door, which could impede evacuation in the event of an emergency.
Comply with this AD within the compliance times specified, unless already done.
Within 30 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, to incorporate task number 52-11-41-101 as specified in the Temporary Revisions (TRs) identified in paragraphs (g)(1) through (g)(5) of this AD. The compliance time for doing the initial replacement of the passenger door tensator springs with new springs is at the times specified in the applicable TR specified in paragraphs (g)(1) through (g)(5) of this AD, or within 30 days after the effective date of this AD, whichever occurs later. The revision required by this paragraph may be done by inserting copies of the TRs identified in paragraphs (g)(1) through (g)(5) of this AD into the applicable Time Limits/Maintenance Checks manual. When the information in a TR has been included in general revisions of the applicable Time Limits/Maintenance Checks manual, the general revisions may be inserted in the Time Limits/Maintenance Checks manual, and the TR may be removed.
(1) TR 5-2-7, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global Express XRS BD-700 Time Limits/Maintenance Checks (for Model BD-700-1A10 airplanes).
(2) TR 5-2-10, dated September 9, 2014, to Part 2, Section 5-10-11, of Bombardier Global 5000 GL 5000 Featuring Global Vision Flight Deck—Time Limits/Maintenance Checks (for Model BD-700-1A11 airplanes).
(3) TR 5-2-10, dated September 9, 2014, to Part 2, Section 5-10-11, of Bombardier Global 6000 GL 6000 Time Limits/Maintenance Checks (for Model BD-700-1A10 airplanes).
(4) TR 5-2-13, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global 5000 BD-700 Time Limits/Maintenance Checks (for Model BD-700-1A11 airplanes).
(5) TR 5-2-44, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global Express BD-700 Time Limits/Maintenance Checks (for Model BD-700-1A10 airplanes).
After accomplishing the revision required by paragraph (g) of this AD, no alternative actions (
For airplanes identified in section 1.A., “Effectivity,” of Bombardier Global 5000 Service Bulletin 700-1A11-52-023, dated October 4, 2013; or Bombardier Global Express/Global Express XRS Service Bulletin 700-52-046, dated October 4, 2013; except as provided by paragraph (j)(1) or (j)(2) of this AD: Within 15 months after the effective date of this AD, but not exceeding the applicable life limit of the passenger tensator spring identified in the applicable TR specified in paragraphs (g)(1) through (g)(5) of this AD, replace the passenger door tensator springs having part number (P/N) GS321-0580-1, with new springs, in accordance with the Accomplishment Instructions of Bombardier Global 5000 Service Bulletin 700-1A11-52-023, dated October 4, 2013; or Bombardier Global Express/Global Express XRS Service Bulletin 700-52-046, dated October 4, 2013; as applicable.
(1) For airplanes having serial numbers (S/N) 9278 through 9360 inclusive: Replacement of the passenger door tensator springs having P/N GS321-0580-1 with new springs before the effective date of this AD is acceptable for compliance with the requirements of paragraph (i) of this AD. Refer to the task specified in the applicable TRs identified in paragraphs (g)(1) through (g)(5) of this AD for subsequent spring replacements.
(2) For airplanes with serial numbers other than those identified in paragraph (j)(1) of this AD: Accomplishment after the effective date of this AD of the “Time Limits/Maintenance Checks” discard task identified in the applicable service information specified in paragraphs (g)(1) through (g)(5) of this AD is acceptable for compliance with the requirements of paragraph (i) of this AD.
The following provisions also apply to this AD:
(1)
(2)
Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian AD CF-2014-39, dated November 4, 2014, for related information. This MCAI may be found in the AD docket on the Internet at
(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 this AD specifies otherwise.
(i) Temporary Revision 5-2-7, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global Express XRS BD-700 Time Limits/Maintenance Checks.
(ii) Temporary Revision 5-2-10, dated September 9, 2014, to Part 2, Section 5-10-11, of Bombardier Global 5000 GL 5000 Featuring Global Vision Flight Deck—Time Limits/Maintenance Checks.
(iii) Temporary Revision 5-2-10, dated September 9, 2014, to Part 2, Section 5-10-11, of Bombardier Global 6000 GL 6000 Time Limits/Maintenance Checks.
(iv) Temporary Revision 5-2-13, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global 5000 BD-700 Time Limits/Maintenance Checks.
(v) Temporary Revision 5-2-44, dated June 4, 2014, to Part 2, Section 5-10-11, of Bombardier Global Express BD-700 Time Limits/Maintenance Checks.
(vi) Bombardier Global Express/Global Express XRS Service Bulletin 700-52-046, dated October 4, 2013.
(vii) Bombardier Global 5000 Service Bulletin 700-1A11-52-023, dated October 4, 2013.
(3) For service information identified in this AD, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference 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.
We are adopting a new airworthiness directive (AD) for certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes. This AD was prompted by reports of heavy corrosion and chrome damage on the forward and aft trunnion pin assemblies of the right and left main landing gears (MLGs). This AD requires repetitive lubrication of the forward and aft trunnion pin assemblies of the right and left MLGs; repetitive inspections of these assemblies for corrosion and chrome damage, and related investigative and corrective actions if necessary; and installation of new or modified trunnion pin assembly components, which will terminate the repetitive lubrication and repetitive inspections. We are issuing this AD to detect and correct heavy corrosion and chrome damage on the forward and aft trunnion pin assemblies of the right and left MLGs, which could result in cracking of these assemblies and collapse of the MLGs.
This AD is effective October 5, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 5, 2016.
For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
You may examine the AD docket on the Internet at
Alan Pohl, Aerospace Engineer, Airframe Branch, ANM-120S, FAA Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6450; fax: 425-917-6590; email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes. The NPRM published in the
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM and the FAA's response to each comment.
Boeing stated that it concurs with the contents of the NPRM.
Aviation Partners Boeing stated that accomplishing Supplemental Type Certificate (STC) ST00830SE does not affect the accomplishment of the actions specified in the NPRM.
We concur with the commenter. We have redesignated paragraph (c) of the proposed AD as paragraph (c)(1) and added new paragraph (c)(2) in this AD to state that installation of STC ST00830SE does not affect the ability to accomplish the actions required by this final rule. Therefore, for airplanes on which STC ST00830SE is installed, a “change in product” alternative method of compliance (AMOC) approval request is not necessary to comply with the requirements of 14 CFR 39.17.
Delta Airlines (DAL) requested an explanation of how the requirements are different between AD 2014-08-11, Amendment 39-17835 (79 FR 23903, April 29, 2014) (“AD 2014-08-11”) and the NPRM. DAL noted that the requirements of AD 2014-08-11 include an inspection for discrepancies of the transition radius of the MLG forward trunnion pins, and corrective actions if necessary. DAL elaborated that this inspection is for finish damage (scrapes through primer), signs of corrosion, pitting, and scratches in the base metal of that area. DAL pointed out that the NPRM requires a general visual inspection of the MLG forward trunnion pin assembly for signs of corrosion or chrome plating damage, and if either condition is found, a detailed inspection of the forward trunnion pin assembly is required. DAL mentioned that the detailed inspection requires verification that a new seal and retainer configuration is installed, and if the overhaul limits exceed what is specified in the component maintenance manual, replacement of the forward trunnion pin assembly is necessary. DAL reasoned that the forward trunnion pin inspections required by AD 2014-08-11 should be superseded by the proposed forward trunnion pin inspections in the NPRM. DAL stated that the detailed inspection proposed in the NPRM has additional corrective actions if any loose or missing chrome plating is found, beyond what is required in AD 2014-08-11. DAL also conveyed that the inspections for signs of corrosion are the same in the NPRM and AD 2014-08-11.
We agree to provide clarification regarding how the requirements are different between the requirements in the proposed AD and the requirements mandated by AD 2014-08-11. The applicability of the proposed AD includes certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, line numbers 1 through 3526 inclusive. The applicability of AD 2014-08-11 includes certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, line numbers 1423 through 3526 inclusive. Although certain airplane line numbers are included in the applicability of both the proposed AD and AD 2014-08-11, the issues addressed by the NPRM and AD 2014-08-11 are not the same. Furthermore, the inspection instructions in the service information required for accomplishing the actions in the proposed AD are different from the inspection instructions in the service information required by AD 2014-08-11. The inspections in the proposed AD focus on chrome damage and corrosion on the shank of the forward trunnion pins, and the inspections required by AD 2014-08-11 focus on finish scratches and corrosion in the transition radius of the forward trunnion pins. We have not changed this AD regarding this issue.
In addition, we note that the service information required to do the actions required by AD 2014-08-11 (which cites Boeing Special Attention Service Bulletin 737-32-1402, Revision 1, dated February 7, 2013), includes a recommendation by Boeing that operators accomplish the specified actions concurrently with the actions specified in Boeing Special Attention Service Bulletin 737-32-1448 (Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, is the appropriate source of service information for accomplishing the actions required by this AD).
DAL requested clarification regarding the location of the lube fittings for the forward and aft MLG trunnion pin assemblies in paragraph (g) of the NPRM. DAL commented that the NPRM stated to do the repetitive lubrication in accordance with Work Package 1 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. DAL noted that Work Package 1 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, refers to section 12-21-11 of the Boeing 737-600/700/800/900 Aircraft Maintenance Manual (AMM) as an accepted procedure for the repetitive lubrication of the MLG trunnion pin assemblies. DAL stated that section 12-21-11 of the AMM specifically identifies the locations of the trunnion bearing housing and the aft trunnion bearing, but does not specifically identify the locations of the two lube fittings for the forward and aft trunnion pins.
We agree with the commenter that the two lube fittings for the forward and aft trunnion pins are not specifically mentioned in section 12-21-11 of the Boeing 737-600/700/800/900 AMM. These locations are identified as Item [6], “Outer Cylinder,” on page 307 of the AMM. However, there are only three lube fittings associated with Item [6], so it is possible to determine which two fittings are to be used for lubricating the forward and aft trunnion pins. We consulted with Boeing and confirmed that the two lube fittings are located on the bottom of the outer cylinder trunnion, directly under the pins. We have not changed this AD regarding this issue.
DAL requested clarification of certain corrective actions in paragraph (h) of the proposed AD. DAL asked if an operator can replace an affected trunnion pin assembly instead of overhauling it. DAL pointed out that neither the NPRM nor Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, specify the part number of the replacement trunnion pin assembly. DAL asked if an operator can replace an affected pin assembly with any properly approved pin assembly using the Boeing 737 Aircraft Illustrated Parts Catalog, Boeing Drawing 161A0002, “Boeing Model 737-NG Main Landing Gear Component Interchangeability List,” or a similar document.
We agree with the commenter's request for clarification. Operators may elect to replace a trunnion pin assembly with a serviceable unit in lieu of performing an overhaul. However, operators should be aware that some of the existing trunnion pin assemblies require modification. Figures 9, 11, and 12 of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, provide instructions for modifying certain pin assemblies. Note (c) in each of these figures refers to paragraph 2.C.3., “Parts Modified and Reidentified,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, which shows the existing and modified part numbers. For use of other part numbers, such as those identified in the Boeing 737 Aircraft Illustrated Parts Catalog or Boeing Drawing 161A0002, “Boeing Model 737-NG Main Landing Gear Component Interchangeability List,” operators may request an alternative method of compliance in accordance with the procedures specified in paragraph (m) of this AD. We have not changed this AD regarding this issue.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
We reviewed Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. The service information describes procedures for lubricating the forward and aft trunnion pin assemblies on the left and right MLGs, inspecting the forward and aft trunnion pin assemblies for corrosion or damage, and performing corrective actions. In addition, the service information describes procedures for installing a new forward trunnion pin housing assembly, seal, and retainer configuration. 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 estimate that this AD affects 1,023 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this AD.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective October 5, 2016.
None.
(1) This AD applies to certain The Boeing Company Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes, certificated in any category, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015.
(2) Installation of Supplemental Type Certificate (STC) ST00830SE (
Air Transport Association (ATA) of America Code 32, Landing Gear.
This AD was prompted by reports of heavy corrosion and chrome damage of the forward and aft trunnion pin assemblies of the right and left main landing gears (MLGs). We are issuing this AD to detect and correct heavy corrosion and chrome damage of the forward and aft trunnion pin assemblies of the right and left MLGs, which could result in cracking of these assemblies and collapse of the MLGs.
Comply with this AD within the compliance times specified, unless already done.
For airplanes in Groups 1 and 2, Configuration 1, and airplanes in Group 3, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015: Except as required by paragraph (k) of this AD, at the applicable time specified in Table 1 or Table 2 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, lubricate the forward and aft trunnion pin assemblies of the left and right MLGs, in accordance with Work Package 1 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. Repeat the lubrication thereafter at intervals not to exceed those specified in paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. Accomplishment of the actions specified in paragraph (i) of this AD terminates the repetitive lubrication required by this paragraph.
For airplanes in Groups 1 and 2, Configuration 1, and airplanes in Group 3, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015: Except as required by paragraph (k) of this AD, at the applicable time specified in Table 1 or Table 2 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, do a general visual inspection of the left and right MLGs at the forward and aft trunnion pin locations and the visible surfaces of the forward and aft trunnion pin assemblies for signs of corrosion or chrome plating damage and lubricate the forward and aft trunnion pin assemblies, in accordance with Work Package 2 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. Repeat the general visual inspection thereafter at intervals not to exceed those specified in paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015. If any discrepancy is found during any inspection required by this paragraph, before further flight, do all applicable related investigative and corrective actions in accordance with Work Package 2 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737 32-1448, Revision 1, dated May 29, 2015. Accomplishment of the actions required by paragraph (i) of this AD terminates the repetitive inspections required by this paragraph.
For airplanes in Groups 1 and 2, Configuration 1, and airplanes in Group 3, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015: Except as required by paragraph (k) of this AD, at the applicable time specified in Table 1 or Table 2 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, modify and lubricate the left and right MLG trunnion pin assemblies, and do all applicable related investigative and corrective actions, in accordance with Work Package 3 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015.
For airplanes in Groups 1 and 2, Configuration 2, as identified in Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015: At the applicable time specified in Table 3 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, replace the seal, retainer, and support ring assembly with a new seal and retainer configuration; install the forward trunnion pin assembly into the housing assembly; and lubricate the forward and aft trunnion pin assemblies for the left and right MLGs; in accordance with Work Package 4 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015.
Where paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015, specifies a compliance time “from the original issue date on this service bulletin,” this AD requires compliance within the specified compliance time “after the effective date of this AD.”
This paragraph provides credit for the requirements of paragraph (g) of this AD, if those actions were performed before the effective date of this AD using Boeing Special Attention Service Bulletin 737-32-1448, dated May 19, 2011, which is not incorporated by reference in this AD.
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (n)(1) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(1) For more information about this AD, contact Alan Pohl, Aerospace Engineer, Airframe Branch, ANM-120S, FAA Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6450; fax: 425-917-6590; email:
(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (o)(3) and (o)(4) of this AD.
(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) Boeing Special Attention Service Bulletin 737-32-1448, Revision 1, dated May 29, 2015.
(ii) Reserved.
(3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference 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; request for comments.
We are adopting a new airworthiness directive (AD) for certain The Boeing Company Model 777-200 and -300ER series airplanes. This AD requires replacing the low-pressure oxygen flex hoses with new non-conductive low-pressure oxygen flex hoses in the gaseous passenger oxygen system in airplanes equipped with therapeutic oxygen. This AD was prompted by a determination that the low-pressure oxygen flex hoses in the gaseous passenger oxygen system can potentially be conductive. We are issuing this AD to prevent electrical current from passing through the low-pressure oxygen flex hoses in the gaseous passenger oxygen system, which can cause the flex hoses to melt or burn, and a consequent oxygen-fed fire in the passenger cabin.
This AD is effective September 15, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of September 15, 2016].
We must receive comments on this AD by October 17, 2016.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this final rule, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707,
You may examine the AD docket on the Internet at
Susan Monroe, Aerospace Engineer, Cabin Safety and Environmental Systems Branch, ANM-150S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA; phone: 425-917-6457; fax: 425-917-6590; email:
This AD was prompted by a determination that the low-pressure oxygen flex hoses in the gaseous passenger oxygen system can potentially be conductive. Conductive oxygen hoses in the flight compartment were addressed previously in AD 2012-13-05, Amendment 39-17107 (77 FR 41045, July 12, 2012).
The gaseous passenger oxygen system equipped with therapeutic oxygen is not continuously pressurized and must be activated by the flightcrew. Exposure to electrical faults, such as unintended short circuits, can result in localized electrical heating of the low-pressure oxygen flex hoses. This condition, if not corrected, could result in electrical current passing through the low-pressure oxygen flex hoses, which can cause flex hoses to melt or burn, and a consequent oxygen-fed fire in the passenger cabin.
We reviewed Boeing Special Attention Service Bulletin 777-35-0041, dated April 8, 2016. The service information describes procedures for replacing the low-pressure oxygen flex hoses with new non-conductive low-pressure oxygen flex hoses in the gaseous passenger oxygen system in airplanes equipped with therapeutic oxygen. 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 accomplishing the actions specified in Boeing Special Attention Service Bulletin 777-35-0041, dated April 8, 2016. For information on the procedures, see this service information at
There are currently no domestic operators of 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 was not preceded by notice and an opportunity for public comment. 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
Currently, there are no affected U.S.-registered airplanes. If an affected airplane is imported and placed on the U.S. Register in the future, we provide the following cost estimates to comply with this AD:
According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective September 15, 2016.
None.
This AD applies to The Boeing Company Model 777-200 and -300ER series airplanes, certificated in any category, as identified in Boeing Special Attention Service Bulletin 777-35-0041, dated April 8, 2016.
Air Transport Association (ATA) of America Code 35, Oxygen.
This AD was prompted by a determination that the low-pressure oxygen flex hoses in the gaseous passenger oxygen system in airplanes equipped with therapeutic oxygen can potentially be conductive. We are issuing this AD to prevent electrical current from passing through the low-pressure oxygen flex hoses in the gaseous passenger oxygen system, which can cause the flex hoses to melt or burn, and a consequent oxygen-fed fire in the passenger cabin.
Comply with this AD within the compliance times specified, unless already done.
Within 72 months after the effective date of this AD: Replace the low-pressure oxygen flex hoses with new non-conductive low-pressure oxygen flex hoses in the gaseous passenger oxygen system in airplanes equipped with therapeutic oxygen, in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 777-35-0041, dated April 8, 2016.
As of the effective date of this AD, no person may install on any airplane a low-pressure oxygen flex hose having a part number that is specified to be removed from an airplane in the Accomplishment Instructions of Boeing Special Attention Service Bulletin 777-35-0041, dated April 8, 2016.
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (j) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(4) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (i)(4)(i) and (i)(4)(ii) of this AD apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or sub-step is labeled “RC Exempt,” then the RC requirement is removed from that step or sub-step. An AMOC is required for any deviations to RC steps, including substeps and identified figures.
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
For more information about this AD, contact Susan Monroe, Aerospace Engineer, Cabin Safety and Environmental Systems Branch, ANM-150S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA; phone: 425-917-6457; fax: 425-917-6590; 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) Boeing Special Attention Service Bulletin 777-35-0041, dated April 8, 2016.
(ii) Reserved.
(3) For Boeing service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference 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), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for all Airbus Defense and Space S.A. Model CN-235, CN-235-200, and CN-235-300 airplanes. This AD was prompted by reports of main landing gear (MLG) access doors detaching from the airplane as a result of excessive vibration and metal fatigue in the attach fittings. This AD requires modification of the MLG access door by replacing seals in the MLG fairing and, for certain airplanes, adding an additional bolt. We are issuing this AD to prevent a fracture in the MLG access door associated with excessive vibration and metal fatigue in the attach fittings. This condition could lead to MLG access door detachment and consequent impact of flight controls, resulting in reduced control of an airplane.
This AD is effective October 5, 2016.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of October 5, 2016.
For service information identified in this final rule, contact EADS-CASA, Military Transport Aircraft Division (MTAD), Integrated Customer Services (ICS), Technical Services, Avenida de Aragón 404, 28022 Madrid, Spain; telephone +34 91 585 55 84; fax +34 91 585 55 05; email
You may examine the AD docket on the Internet at
Shahram Daneshmandi, Aerospace Engineer, International Branch, ANM 116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1112; fax 425-227-1149.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Defense and Space S.A. Model CN-235, CN-235-200, and CN-235-300 airplanes. The NPRM published in the
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued Airworthiness Directive 2015-0225, dated November 18, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Defense and Space S.A. Model CN-235, CN-235-200, and CN-235-300 airplanes. The MCAI states:
Occurrences of Main Landing Gear (MLG) Access Door detachment were reported. Subsequent investigation determined that the detachments of the MLG Door occurred during maneuvers performed at high speed and with high sideslip angle on airplanes not modified in accordance with the instructions EADS-CASA Service Bulletins (SBs) SB-235-52-0061 and SB-235-52-0068. Based on the investigation results, it was determined that the fracture mechanism was associated with excessive deformation that could produce scooping in the forward edge combined with an excessive vibration of the MLG Access Door.
This condition, if not corrected, could lead to MLG Access Door detachment and consequent impact of flight controls, resulting in reduced control of an airplane and possible injury of persons on the ground.
To address this potential unsafe condition, EADS-CASA issued SB-235-52-0061 and SB-235-52-0068 to provide modification instructions.
For the reasons described above, this [EASA] AD requires modification of MLG Access Doors and prohibits installation of a MLG Access Door sealing part number (P/N) CAN36032R. This [EASA] AD also prohibits installation of not modified MLG Access Doors.
Required actions include modification of the MLG access door by replacing seals in the MLG fairing and, for certain airplanes, adding an additional bolt. You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.
We reviewed the relevant data and determined that air safety and the public interest require adopting this AD as proposed except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
We have reviewed the following service information:
• EADS CASA Service Bulletin SB-235-52-0061, Revision 1, dated October 24, 2014. The service information describes procedures for modifying the MLG access door by installing an additional bolt.
• EADS CASA Service Bulletin SB-235-52-0068, Revision 2, dated January
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 estimate that this AD affects 30 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective October 5, 2016.
None.
This AD applies to Airbus Defense and Space S.A. (formerly known as Construcciones Aeronauticas, S.A.) Model CN-235, CN 235-200, and CN 235-300 airplanes, certificated in any category, all manufacturer serial numbers.
Air Transport Association (ATA) of America Code 52, Doors.
This AD was prompted by reports of main landing gear (MLG) access doors detaching from the airplane as a result of excessive vibration and metal fatigue in the attach fittings. We are issuing this AD to prevent a fracture in the MLG access door associated with excessive vibration and metal fatigue in the attach fittings. This condition could lead to MLG access door detachment and consequent impact of flight controls, resulting in reduced control of an airplane.
Comply with this AD within the compliance times specified, unless already done.
(1) For all airplanes: Within 12 months after the effective date of this AD, modify each MLG access door by installing an improved fairing seal, in accordance with the Accomplishment Instructions of EADS CASA Service Bulletin SB-235-52-0068, Revision 2, dated January 9, 2015.
(2) For all Model CN-235-200 airplanes: Concurrently with the action required in paragraph (g)(1) of this AD, modify each affected MLG access door by installing an additional bolt, in accordance with the Accomplishment Instructions of EADS CASA Service Bulletin SB-235-52-0061, Revision 1, dated October 24, 2014.
(1) This paragraph provides credit for actions required by paragraph (g)(1) of this AD, if those actions were performed before the effective date of this AD, using EADS CASA Service Bulletin SB-235-52-0068, Revision 1, dated October 24, 2014; or SB-235-52-0068, dated July 15, 2002.
(2) This paragraph provides credit for actions required by paragraph (g)(2) of this AD, if those actions were performed before the effective date of this AD using EADS CASA Service Bulletin SB-235-52-0061, dated October 31, 1996.
(1) For airplanes modified as specified in paragraphs (g)(1) and (g)(2) of this AD, as applicable, before the effective date of this AD: As of the effective date of this AD, no person may install a seal having part number CAN36032R on any MLG access door.
(2) For airplanes not modified as specified in paragraphs (g)(1) and (g)(2) of this AD, as applicable, before the effective date of this AD: After accomplishing the actions required by paragraphs (g)(1) and (g)(2) of this AD, as applicable, no person may install a seal having part number CAN36032R on any MLG access door.
(3) As of the effective date of this AD, installation of an MLG access door on an airplane is allowed, provided the MLG access door is modified as required by paragraphs (g)(1) and (g)(2) of this AD, as applicable.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2015-0225, dated November 18, 2015, for related information. You may examine the MCAI on the Internet at
(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (l)(3) and (l)(4) of this AD.
(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 this AD specifies otherwise.
(i) EADS CASA Service Bulletin SB-235-52-0061, Revision 1, Dated October 24, 2014.
(ii) EADS CASA Service Bulletin SB-235-52-0068, Revision 2, dated January 9, 2015.
(3) For service information identified in this AD, contact EADS-CASA, Military Transport Aircraft Division (MTAD), Integrated Customer Services (ICS), Technical Services, Avenida de Aragón 404, 28022 Madrid, Spain; telephone +34 91 585 55 84; fax +34 91 585 55 05; email
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference 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), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. This AD was prompted by the need for more stringent inspection requirements for certain affected components. This AD requires revising the maintenance or inspection program to incorporate certain revised airworthiness limitations (AWL) and require repairs of affected components. We are issuing this AD to detect and correct fatigue cracking in the affected components; such cracking could result in loss of structural integrity.
This AD is effective October 5, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 5, 2016.
For service information identified in this final rule, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone: 514-855-5000; fax: 514-855-7401; email:
You may examine the AD docket on the Internet at
Jeffrey Zimmer, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE-171, FAA, New York Aircraft Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone: 516-228-7306; fax: 516-794-5531.
We issued a supplemental notice of proposed rulemaking (SNPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. The SNPRM published in the
Transport Canada Civil Aviation (TCCA), which is the aviation authority
A revision has been made to Part 2 of the Canadair Regional Jet Maintenance Requirements Manual (MRM), Airworthiness Limitations (AWL), to introduce more stringent inspection requirements for continued airworthiness based on re-analysis, in-service data and/or fatigue testing. Failure to comply with these revised AWL items could lead to an unsafe condition.
This [Canadian] AD is issued to ensure that fatigue cracking of these affected components [and consequent loss of airplane structural integrity] is detected and corrected.
Required actions include revising the maintenance program by incorporating the revised inspection requirements specified in certain TRs. You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the SNPRM and the FAA's response to each comment.
Mr. Aaron Ahern stated that the SNPRM must be denied and considered null and void. Mr. Ahern provided no justification for this statement.
From this statement, we infer that Mr. Ahern is requesting we withdraw the SNPRM. We disagree with the request. It is within our authority to issue ADs to require actions to address unsafe conditions that are not otherwise being addressed (or are not addressed adequately) by normal maintenance procedures. We may address such unsafe conditions by requiring revisions to maintenance or inspection programs as a condition under which airplanes may continue to be operated. We agree with TCCA's finding of an unsafe condition based on analysis, in-service data, and/or fatigue testing. From the data gathered, we have determined that fatigue cracking is likely to exist or develop in certain components of the affected airplanes. As a result, we have determined that the actions required by this AD are necessary to address the identified unsafe condition. We have not changed this final rule in this regard.
Air Wisconsin Airlines Corporation (Air Wisconsin) requested that we revise the proposed AD to allow qualified FAA representatives, such as Designated Engineering Representatives (DERs) and Organization Designation Authorization (ODA) holders, to approve repair methods. Air Wisconsin stated that 14 CFR 121.1109 (Supplemental Inspections) requires a certificate holder's maintenance program to include FAA-approved damage tolerance inspections and procedures. Air Wisconsin pointed out that both DERs and ODAs already perform damage tolerance evaluations (DTEs).
We disagree. While we might authorize a design approval holder's DERs to determine whether a design or repair method complies with a specific requirement of a structural AD, they are not authorized to make the discretionary determination of the applicable requirement. DERs are not authorized to approve repairs as alternative methods of compliance (AMOCs) to ADs, except under specific conditions described in FAA Orders 8110.103, 8100.15, and 8100.37. In addition, this AD already includes a provision for TCCA's Design Approval Organization (DAO) to approve repairs. We have not changed this AD in this regard.
Air Wisconsin requested that we confirm whether repairs that may not have been incorporated per paragraphs (k)(2)(i), (k)(2)(ii), and (k)(2)(iii) of the proposed AD (in the SNPRM) are still considered approved for compliance to this AD under paragraph (k)(2) of the proposed AD (in the SNPRM).
We agree. As long as the previously approved repair meets the requirements of paragraphs (k)(2)(i), (k)(2)(ii), and (k)(2)(iii) of this AD, it does not matter when the repair is actually accomplished. We have clarified paragraph (k)(2)(i) of this AD to reflect this. In response to Air Wisconsin's comment regarding this issue in the NPRM, we had included a provision in paragraph (k)(2)(i) of the proposed AD (in the SNPRM) to allow for previously approved repairs in the inspection area that were approved by the Manager, New York Aircraft Certification Office, ANE-170, FAA; or TCCA; or Bombardier, Inc.'s TCCA DAO, but that provision included the language “the repairs were accomplished.” We have removed that language from paragraph (k)(2)(i) of this AD.
SkyWest Airlines (SkyWest) requested that we revise the SNPRM to reference the latest service information. SkyWest pointed out that Bombardier has issued Revision 10, dated May 10, 2015, of Part 2, Airworthiness Requirements, of the Bombardier CL-600-2B19 Maintenance Requirements Manual (MRM), CSP A-053.
We agree to reference Bombardier Revision 10, dated May 10, 2015, of Part 2, Airworthiness Requirements, of the Bombardier CL-600-2B19 MRM, CSP A-053, as the appropriate source of service information for certain requirements of this AD. We have revised this final rule accordingly.
SkyWest requested that we remove the requirement that repair approvals must refer to the MCAI. SkyWest stated that leaving this paragraph in the AD would require SkyWest to request a large number of AMOCs for their fleet as soon as the AD becomes effective. SkyWest asserts that none of the repair engineering orders (REOs) and general repair engineering orders (GREOs) reference the MCAI, and do not have an inspection method.
We disagree with the request. We are aware of instances of repairs in an affected area that are signed by the foreign authority's authorized delegate, but did not correct the unsafe condition because they were outdated. A repair that references the unsafe condition addressed in the MCAI guarantees an approved repair. A revised service document or AMOC that satisfies the requirements of paragraph (k)(2) of this AD is acceptable. We have not changed this AD in this regard.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the SNPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the SNPRM.
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
Bombardier, Inc. has issued Appendix B—Airworthiness Limitations, of Part 2 Airworthiness Requirements, Revision 10, dated May 10, 2015, of the Bombardier CL-600-2B19 Maintenance Requirements Manual (MRM) CSP A-053. Appendix B provides specific AWLs, including the following AWLs.
• AWL 52-11-131, “Passenger door—piano hinge half on door side.” This AWL describes procedures for a detailed visual inspection of the piano hinge half on the passenger door side.
• AWL 53-11-122, “Windshield center post and bulkhead aft post at FS202.75.” This AWL describes procedures for a special detailed inspection of the windshield center post and bulkhead aft post at fuselage station (FS) 202.75.
• AWL 53-21-118, “Potable water servicing door cut-out and internal structure.” This AWL describes procedures for a detailed visual inspection of the potable water servicing door cut-out and internal structure.
• AWL 53-21-129, “Passenger door—piano hinge half on fuselage side.” This AWL describes procedures for a detailed visual inspection of the piano hinge half of the passenger door on the fuselage side.
• AWL 53-41-199, “FS409.0 +128 vertical posts at BL0.0 and BL18.0 left and right local to WL69.0.” This AWL describes procedures for a special detailed inspection of the FS409.0 +128 left and right vertical posts at buttock line (BL) 0.0 and BL18.0 local to water line (WL) 69.0.
• AWL 53-41-200, “FS409.0 +128 frame cap aft and fwd splice angles at STR21 left and right.” This AWL describes procedures for a detailed visual inspection of the FS409.0 +128 frame cap aft and forward splice angles at stringer 21.
• AWL 53-41-201, “FS559.0 pressure bulkhead web and cap angle local to BL9.0 and BL18.0 left and right.” This AWL describes procedures for a special detailed inspection of the left and right FS559.0 pressure bulkhead web and cap angle local to BL9.0 and BL18.0.
• AWL 53-61-156, “Rear pressure bulkhead forward face below floor.” This AWL describes procedures for a special detailed inspection of the below floor forward face of the rear pressure bulkhead.
• AWL 54-10-105, “Pylon track and support fitting.” This AWL describes procedures for a special detailed inspection of the pylon track and support fitting.
• AWL 54-10-106, “Pylon track and support fitting.” This AWL describes procedures for a special detailed inspection of the pylon track and support fitting.
• AWL 57-21-105, “Lower wing skin, between BL0.0 to wing station (WS) 314.0.” This AWL describes procedures for a detailed visual inspection of the lower wing skin, between BL0.0 to WS314.0.
• AWL 57-21-112, “Lower wing plank splice joints at BL45.0, WS65.75, and WS148.0.” This AWL describes procedures for a special detailed inspection of the lower wing plank splice joints at BL45.0, WS65.75, and WS148.0.
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 estimate that this AD affects 575 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective October 5, 2016.
None.
This AD applies to Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes, certificated in any category, serial numbers 7003 and subsequent.
Air Transport Association (ATA) of America Code 05, Periodic inspections.
This AD was prompted by the need for more stringent inspection requirements for certain affected components. We are issuing this AD to detect and correct fatigue cracking in the affected components, which could result in loss of structural integrity.
Comply with this AD within the compliance times specified, unless already done.
Within 60 days after the effective date of this AD: Revise the maintenance or inspection program, as applicable, to incorporate the revised inspection requirements specified in the AWLs identified in paragraphs (g)(1) through (g)(12) of this AD. These AWLs are identified in Appendix B—Airworthiness Limitations, of Part 2, Airworthiness Requirements, Revision 10, dated May 10, 2015, of the Bombardier CL-600-2B19 Maintenance Requirements Manual (MRM) CSP A-053.
(1) AWL 52-11-131, “Passenger door—piano hinge half on door side.”
(2) AWL 53-11-122, “Windshield center post and bulkhead aft post at FS202.75.”
(3) AWL 53-21-118, “Potable water servicing door cut-out and internal structure.”
(4) AWL 53-21-129, “Passenger door—piano hinge half on fuselage side.”
(5) AWL 53-41-199, “FS409.0+128 vertical posts at BL0.0 and BL18.0 left and right local to WL69.0.”
(6) AWL 53-41-200, “FS409.0+128 frame cap aft and fwd splice angles at STR21 left and right.”
(7) AWL 53-41-201, “FS559.0 pressure bulkhead web and cap angle local to BL9.0 and BL18.0 left and right.”
(8) AWL 53-61-156, “Rear pressure bulkhead forward face below floor.”
(9) AWL 54-10-105, “Pylon track and support fitting.”
(10) AWL 54-10-106, “Pylon track and support fitting.”
(11) AWL 57-21-105, “Lower wing skin, between BL0.0 to WS314.0.”
(12) AWL 57-21-112, “Lower wing plank splice joints at BL45.0, WS65.75, and WS148.0.”
(1) For tasks with phase-in schedules specified in the AWLs identified in paragraphs (g)(1) through (g)(12) of this AD: The initial compliance times are at the applicable times specified in the applicable AWL, or within 60 days after the effective date of this AD, whichever occurs later, except as specified in paragraph (h)(2) of this AD.
(2) For tasks with no phase-in schedules specified in the AWLs identified in paragraphs (g)(1) through (g)(12) of this AD: The initial compliance times are at the applicable times specified in Appendix B—Airworthiness Limitations, of Part 2, Airworthiness Requirements, Revision 10, dated May 10, 2015, of the Bombardier CL-600-2B19 MRM CSP A-053; or within 1,000 flight cycles after the effective date of this AD; whichever occurs later.
If any damage (including, but not limited to, cracking, corrosion, and wear) is found during any inspection required by any AWL specified in paragraph (g) of this AD: Before further flight, repair using a method approved by the Manager, New York Aircraft Certification Office (ACO), ANE-170, FAA; or Transport Canada Civil Aviation (TCCA); or Bombardier, Inc.'s TCCA Design Approval Organization (DAO).
After accomplishing the revisions required by paragraph (g) of this AD, no alternative actions (
The following provisions also apply to this AD:
(1)
(2)
(i) The repairs were approved by the Manager, New York ACO, ANE-170, FAA; or TCCA; or Bombardier, Inc.'s TCCA DAO.
(ii) The repair approval refers to Mandatory Continuing Airworthiness Information (MCAI) Canadian AD CF-2012-13, dated April 10, 2012, and provides an inspection program (inspection threshold, method, and repetitive interval).
(iii) The operator has revised its maintenance or inspection program, as applicable, to include the inspection program (inspection threshold, method, and repetitive interval) for the repair.
(3)
Refer to MCAI Canadian AD CF-2012-13, dated April 10, 2012, for related information. You may examine the MCAI in the AD docket on the Internet at
(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 this AD specifies otherwise.
(i) Appendix B—Airworthiness Limitations, of Part 2, Airworthiness Requirements, of the Bombardier CL-600-2B19 Maintenance Requirements Manual, Revision 10, dated May 10, 2015.
(ii) Reserved.
(3) For service information identified in this AD, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone: 514-855-5000; fax: 514-855-7401; email:
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference 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), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for certain Bombardier, Inc. Model CL-600-2C10 (Regional Jet Series 700, 701, & 702) airplanes. This AD was prompted by two in-service incidents of a loss of all air data information in the flight deck. This AD requires a revision of the airplane flight manual (AFM) emergency procedures section to provide procedures to guide the crew on how to stabilize the airplane airspeed and attitude for continued safe flight when a loss of all air data information has occurred in the flight deck. We are issuing this AD to prevent loss of control when a loss of all air data information has occurred in the flight deck.
This AD is effective October 5, 2016.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of October 5, 2016.
For service information identified in this final rule, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
You may examine the AD docket on the Internet at
Assata Dessaline, Aerospace Engineer, Avionics and Services Branch, ANE-172, FAA, New York Aircraft Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7301; fax 516-794-5531.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc. Model CL-600-2C10 (Regional Jet Series 700, 701, & 702) airplanes. The NPRM published in the
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2015-20, dated July 21, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model CL-600-2C10 (Regional Jet Series 700, 701, & 702) airplanes. The MCAI states:
Two in-service incidents have been reported on CL-600-2C10 aeroplanes regarding a loss of all air data information in the cockpit. The air data information was recovered as the aeroplane descended to lower altitudes. An investigation determined that the root cause in both events was high altitude icing (ice crystal contamination). If not addressed, this condition may affect continued safe flight.
Due to similarities in the air data systems, such events could happen on all Bombardier CRJ models, CL-600-2B19, CL-600-2C10, CL-600-2D15, CL-600-2D24 and CL-600-2E25. Therefore, the corrective actions for these models will be mandated once their respective Airplane Flight Manual (AFM) revisions become available.
This [Canadian] AD mandates the incorporation of AFM procedures to guide the crew to stabilize the aeroplane's airspeed and attitude for continued safe flight.
You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.
We reviewed the relevant data and determined that air safety and the public interest require adopting this AD as proposed
• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM.
Bombardier, Inc. has issued Section 03-19, “Unreliable Airspeed,” of Chapter 3, “Emergency Procedures,” in the Bombardier CRJ Series Regional Jet Model CL-600-2C10 Airplane Flight Manual CSP B-012, Revision 16A, dated November 6, 2015. The service information describes procedures to guide the crew to stabilize the airplane's airspeed and attitude for continued safe flight when a loss of all air data information has occurred in the flight deck. 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 estimate that this AD affects 269 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD is effective October 5, 2016.
None.
This AD applies to Bombardier, Inc. Model CL-600-2C10 (Regional Jet Series 700, 701, & 702) airplanes, certificated in any category, serial numbers 10002 and subsequent.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by two in-service incidents of a loss of all air data information in the flight deck. We are issuing this AD to prevent loss of control when a loss of all air data information has occurred in the flight deck.
Comply with this AD within the compliance times specified, unless already done.
Within 30 days after the effective date of this AD, revise the emergency procedures section of the AFM by incorporating Section 03-19, “Unreliable Airspeed,” of Chapter 3, “Emergency Procedures,” in the Bombardier CRJ Series Regional Jet Model CL-600-2C10 Airplane Flight Manual CSP B-012, Revision 16A, dated November 6, 2015.
The following provisions also apply to this AD:
(1)
(2)
Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2015-20, dated July 21, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(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 this AD specifies otherwise.
(i) Section 03-19, “Unreliable Airspeed,” of Chapter 3, “Emergency Procedures,” in the Bombardier CRJ Series Regional Jet Model CL-600-2C10 Airplane Flight Manual CSP B-012, Revision 16A, dated November 6, 2015.
(ii) Reserved.
(3) For service information identified in this AD, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(5) You may view this service information that is incorporated by reference 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 Trade Commission.
Final rule.
The Federal Trade Commission (the “Commission” or “FTC”) is amending its Telemarketing Sales Rule (“TSR”) by updating the fees charged to entities accessing the National Do Not Call Registry (the “Registry”) as required by the Do-Not-Call Registry Fee Extension Act of 2007.
The revised fees will become effective October 1, 2016.
Copies of this document are available on the Internet at the Commission's Web site:
Ami Joy Dziekan, (202) 326-2648, BCP, Federal Trade Commission, 600 Pennsylvania Avenue NW., Room CC-9225, Washington, DC 20580.
To comply with the Do-Not-Call Registry Fee Extension Act of 2007 (Pub. L. 110-188, 122 Stat. 635) (“Act”), the Commission is amending the TSR by updating the fees entities are charged for accessing the Registry as follows: The revised rule increases the annual fee for access to the Registry for each area code of data from $60 to $61 per area code; increases the maximum amount that will be charged to any single entity for accessing area codes of data from $16,482 to $16,714; and the fee per area code of data during the second six months of an entity's annual subscription period remains $30.
These increases are in accordance with the Act, which specifies that beginning after fiscal year 2009, the dollar amounts charged shall be increased by an amount equal to the amounts specified in the Act, multiplied by the percentage (if any) by which the average of the monthly consumer price index (for all urban consumers published by the Department of Labor) (“CPI”) for the most recently ended 12-month period ending on June 30 exceeds the CPI for the 12-month period ending June 30, 2008. The Act also states that any increase shall be rounded to the nearest dollar and that there shall be no increase in the dollar amounts if the change in the CPI is less than one percent. For fiscal year 2009, the Act specified that the original annual fee for access to the Registry for each area code of data was $54 per area code, or $27 per area code of data during the second six months of an entity's annual subscription period, and that the maximum amount that would be charged to any single entity for accessing area codes of data would be $14,850.
The determination whether a fee change is required and the amount of the fee change involves a two-step process. First, to determine whether a fee change is required, we measure the change in the CPI from the time of the previous increase in fees. The last fees increase was for fiscal year 2015. Accordingly, we calculated the change in the CPI since fiscal year 2015, and the increase was 1.41 percent. Because this change is over the one percent threshold, the fees will change for fiscal year 2017.
Second, to determine how much the fees should increase this fiscal year, we use the calculation specified by the Act set forth above, the percentage change in the baseline CPI applied to the original fees for fiscal year 2009. The average value of the CPI for July 1, 2007 to June 30, 2008 was 211.702; the average value for July 1, 2015 to June 30, 2016 was 238.276, an increase of 12.55 percent. Applying the 12.55 percent increase to the base amount from fiscal year 2009, leads to an increase from $60 to $61 in the fee from last year for access to a single area code of data for a full year for fiscal year 2017. The actual amount is $60.78, but when rounded, pursuant to the Act, the amount is $61. The fee for accessing an additional area code for a half year remains $30 (rounded from $30.39). The maximum amount charged increases to $16,714 (rounded from $16,713.68).
Pursuant to the Paperwork Reduction Act, 44 U.S.C. 3501-3521, the Office of Management and Budget (“OMB”) approved the information collection requirements in the Amended TSR and assigned the following existing OMB Control Number: 3084-0097. The amendments outlined in this Final Rule pertain only to the fee provision (§ 310.8) of the Amended TSR and will not establish or alter any record keeping, reporting, or third-party disclosure requirements elsewhere in the Amended TSR.
Advertising, Consumer protection, Reporting and recordkeeping requirements, Telephone, Trade practices.
Accordingly, the Federal Trade Commission amends part 310 of title 16 of the Code of Federal Regulations as follows:
15 U.S.C. 6101-6108; 15 U.S.C. 6151-6155.
(c) The annual fee, which must be paid by any person prior to obtaining access to the National Do Not Call Registry, is $61 for each area code of data accessed, up to a maximum of $16,714;
(d) Each person who pays, either directly or through another person, the annual fee set forth in paragraph (c) of this section, each person excepted under paragraph (c) from paying the
By direction of the Commission.
Tennessee Valley Authority.
Interpretive Rule.
The Tennessee Valley Authority (TVA) is issuing guidance stating that certain structures, while obstructions across, along, or in certain tributaries of the Tennessee River, do not need a Section 26a permit from TVA, because they have an indiscernible effect on navigation, flood control or public lands or reservations.
Effective August 31, 2016.
Rebecca C. Tolene, Vice President, Natural Resources, Tennessee Valley Authority, Knoxville, Tennessee (865-632-4433).
This interpretive rule is promulgated under the authority of the TVA Act, as amended, 16 U.S.C. 831-831ee.
Section 26a of the TVA Act requires that TVA's approval be obtained prior to the construction, operation, or maintenance of any dam, appurtenant works, or other obstruction affecting navigation, flood control, or public lands or reservations across, along, or in the Tennessee River or any of its tributaries. 16 U.S.C. 831y-1 (2012). TVA's rules governing such approval are codified at 18 CFR part 1304. The rules include a permitting process whereby applicants may request from TVA a permit for various structures such as boat docks, piers, shoreline stabilization projects, dams, and bridges, all of which qualify as “obstructions” under TVA's regulations. An obstruction is generally any man-made physical condition that during its continuance after completion impounds, checks, hinders, restricts, retards, diverts, or otherwise interferes with the movement of water or of objects on or in the water. Over the years, TVA has found that certain obstructions because of their location, the nature of their construction, or both have not discernibly interfered with the operation or management of the TVA reservoir system. In particular, this has occurred at locations across, along, or in certain tributary reaches that are upstream of the control or influence of TVA's reservoir system operations. For the purpose of this rule, these are called upstream tributary reaches. At these locations, certain obstructions have an indiscernible impact on water surface elevations in the reservoir system or the flow or volume of water entering the reservoir system and thereby do not materially interfere with TVA's flood control or navigation responsibilities. Furthermore, at these locations, TVA does not typically own property and therefore construction does not affect or interfere with the management of TVA's property. These obstructions include, but are not limited to, stream bank stabilization, bridges and culverts, stream crossings, fences, launching ramps, boat docks, piers, and certain fills and intakes. For these reasons, TVA has determined that certain obstructions do not require approval pursuant to Section 26a of the TVA Act when located across, along, or in an upstream tributary reach of the Tennessee River.
Conversely, based on years of permitting experience, TVA has found that other obstructions across, along, or in upstream tributary reaches do potentially interfere with the management of TVA's reservoir system. These include, but are not limited to, structures such as dams, impoundments, interbasin transfers and certain water intakes. TVA will continue to require approval of these and other obstructions not set forth in Section III of this Interpretive Rule, when located across, along, or in an upstream tributary reach.
The Tennessee River has a 41,000-square-mile drainage basin. Thousands of miles of upstream tributary reaches ultimately flow into the Tennessee River, making it impractical to identify each upstream tributary reach in this rule. For the purpose of this rule, upstream tributary reaches do
(1) The Tennessee River;
(2) TVA reservoirs, (TVA reservoirs are listed in Table 1);
(3) stream reaches within a TVA reservoir, the 500-year floodplain of the Tennessee River, or both;
(4) stream reaches downstream of a TVA dam (these reaches are listed in Table 2); and
(5) stream reaches where TVA owns property (whether fee-owned property or other property right, such as a right to flood) in or adjacent to the reach (including property adjacent to a TVA reservoir or downstream of a TVA dam).
TVA
TVA hereby clarifies that, going forward, the construction of the following obstructions across, along, or in an upstream tributary reach of the Tennessee River, does not require a Section 26a permit from TVA:
(a) Stream bank, bed, or channel stabilization structures—Natural or man-made obstructions to stabilize and protect banks, beds, or channels of streams or excavated channels (
(b) Stream restoration, enhancement, relocation, or treatment structures—Natural or man-made obstructions for relocating a stream or for restoring or improving the stream's function (
(c) Bridges and culverts including riprap or other stabilization necessary for their construction;
(d) Stream crossings—A stabilized area or a structure (culvert, bridge, or fill) constructed across a stream to provide a travel-way for people, livestock, equipment, or vehicles, including riprap or other stabilization necessary for their construction;
(e) Fences, playgrounds, picnic tables, benches, grills, and other recreational structures;
(f) Launching ramps and marine railways;
(g) Buoys;
(h) Docks, piers, and other water-use facilities;
(i) Decks, gazebos, patios, and other open structures;
(j) Enclosed land-based structures;
(k) Water intakes with a combined peak withdrawal of less than 50,000 gallons per day (0.08 cubic feet per second) and having a pipe diameter less than 6 inches;
(l) Towers, poles, electrical panels, satellite antennas, service lights, signs, and their anchors and foundations;
(m) Outfall structures;
(n) Underground, submarine, or aerial utility pipes and lines and their support structures, anchors or foundations;
(o) Causeways, roads, driveways, and parking lots;
(p) Grading and fill not involving the construction of a dam or impoundment.
Those considering construction of one or more of the above-listed obstructions across, along, or in an upstream tributary reach as defined in this rule are not required to submit an application or design drawings to TVA for approval of a Section 26a permit.
Members of the public are responsible for knowing whether their proposed construction project is located across, along, or in an upstream tributary reach or on TVA property. If your proposed obstruction is located on TVA property, in addition to a Section 26a permit for the obstruction, approval from TVA to use the property may be required. TVA encourages members of the public to seek TVA's help in identifying whether a Section 26a permit or TVA approval to use its property is necessary. For more information or assistance in determining whether your project requires a Section 26a permit, contact TVA at 1-800-882-5263 or visit TVA's Web site at tva.com.
Except as it applies to TVA's regulations implementing Section 26a, this interpretive rule is not a substitute for the requirements of any federal, state, or local statute, regulation, ordinance, or code, including, but not limited to, applicable building codes, now in effect or hereafter enacted.
This guidance reflects TVA's current judgment on the types of obstructions that either individually or cumulatively do not affect navigation, flood control, or public lands or reservations across, along, or in an upstream tributary reach of the Tennessee River. TVA may refine this guidance, if circumstances warrant, in a future
Internal Revenue Service (IRS), Treasury.
Final regulations.
This document contains final regulations that clarify the definition of real property for purposes of the real estate investment trust provisions of the Internal Revenue Code (Code). These final regulations provide guidance to real estate investment trusts and their shareholders.
Julanne Allen of the Office of Associate Chief Counsel (Financial Institutions and Products) at (202) 317-6945 (not a toll-free number).
This document contains amendments to the Income Tax Regulations (26 CFR part 1) relating to real estate investment trusts (REITs). Section 856 of the Code defines a REIT by setting forth various requirements. One of the requirements for a taxpayer to qualify as a REIT is that at the close of each quarter of the taxable year at least 75 percent of the value of its total assets is represented by real estate assets, cash and cash items (including receivables), and Government securities. See section 856(c)(4). Section 856(c)(5)(B) defines
The IRS issued revenue rulings between 1969 and 1975 addressing whether certain assets qualify as real property for purposes of section 856. Specifically, the published rulings address whether assets such as railroad properties,
Written and electronic comments responding to the NPRM were received. The written comments are available for public inspection at
After consideration of all the comments, these final regulations adopt the proposed regulations as revised by this Treasury decision.
The proposed regulations defined the term “land” to include water and air space superjacent to land and natural products and deposits that are unsevered from the land. A commenter requested clarification that land includes water space and air space above ground that the taxpayer does not own. For example, a taxpayer may own a building and purchase air rights superjacent to one or more neighboring buildings to enhance the value of the building the taxpayer owns, or a taxpayer may purchase air rights in anticipation of using those rights to facilitate the future acquisition or development of property. The Treasury Department and the IRS agree that air space or water space superjacent to land each qualify as land even if the taxpayer owns only the air space or water space and does not own an interest in the underlying land. The proposed regulations stated that superjacent water and air space qualify as land, and these final regulations retain the language of the proposed regulations.
The proposed regulations generally defined the term “improvements to land” to mean inherently permanent structures (IPSs) and their structural components. A commenter recommended that these final regulations clarify that clearing, grading, landscaping, and earthen dams should be treated as improvements to land. The Treasury Department and the IRS believe that, to the extent these assets are distinct assets that have value apart from the land, the REIT must analyze these assets separately under these final regulations. For example, if landscaping includes shrubs planted in the ground, the shrubs are within the definition of land in these final regulations so long as the shrubs remain unsevered natural products of the land. If, however, landscaping includes a bench that is a distinct asset, the bench is analyzed under the factors for an IPS in these final regulations to determine whether the bench is real property.
Under the proposed regulations, IPSs include buildings and other inherently permanent structures (OIPSs). To qualify as an OIPS under the proposed regulations, a structure must serve a passive function, such as contain, support, shelter, cover, or protect, and not serve an active function, such as manufacture, create, produce, convert, or transport. Commenters suggested that use of the terms active and passive may cause confusion because, for example, REITs may be engaged in the active conduct of a trade or business within the meaning of section 355(b) solely by virtue of functions with respect to rental activity that produce income qualifying as rents from real property within the meaning of section 856(d).
During the hearing, a commenter stated that REITs may perform certain services and that the requirement that an IPS serve a passive function may be at odds with this permissible activity. This commenter suggested that the requirement be revised to: (1) State that OIPSs serve a real estate-related function; (2) require that the asset not primarily contribute to the production of income other than for the use, occupancy, or financing of space; or (3) not include the terms passive and active when describing permissible and prohibited functions. Other commenters suggested that the function of a distinct asset not be considered in determining whether the distinct asset is an OIPS. These commenters maintained that inherent permanence should be the only requirement for a distinct asset to qualify as an OIPS.
These final regulations do not adopt these suggestions. These final regulations address whether the asset itself has a passive function, not whether the asset is used in an active trade or business or whether income from the asset is income from an active trade or business. The requirement in the proposed regulations and in these final regulations that an asset serve a passive function is intended to be a more precise statement of the distinction previously set forth in § 1.856-3(d) of the 1962 Regulations, which treated as real property certain passive assets but not assets accessory to the operation of a business, including machinery. The Treasury Department and the IRS believe that the terms passive and active, when taken together with the examples in these final regulations, appropriately clarify and illustrate the permissible functions of an OIPS. The passive function requirement neither prohibits a tenant from using a passive asset, such as an office building, in the tenant's active business nor limits a REIT's ability to perform either the services excepted under section 856(d)(7)(C)(ii) or the trustee or director functions permitted by § 1.856-4(b)(5)(ii).
The Treasury Department and the IRS believe that the commenters' suggested real estate-related standard is circular and might support real property treatment for assets that serve active functions. Further, the Treasury Department and the IRS do not agree that inherent permanence alone is a sufficient basis for a distinct asset to be treated as an IPS. For example, the Treasury Department and the IRS continue to believe that some inherently permanent assets, such as large, heavy machinery, do not qualify as real property for purposes of section 856.
A commenter suggested replacing the passive function requirement with a test that focuses on an asset's human factor, which the commenter defined as whether, and the extent to which, human involvement is needed for an asset to function. This commenter contended that human involvement is a characteristic of an active function and, therefore, should be taken into account in determining whether a particular asset is active or passive. The Treasury Department and the IRS disagree and continue to believe that machinery, including automated machinery that functions with little or no human involvement, does not qualify as real property for purposes of section 856.
The proposed regulations listed transport as an active function. Commenters noted that this active function differs from the other four active functions (manufacture, create, produce, and convert) that involve changing the physical nature or character of a commodity or good. Commenters also suggested that some of the assets on the list of types of OIPSs in the proposed regulations, such as railroad tracks and tunnels, help to transport a good or a commodity.
The Treasury Department and the IRS agree that the term transport could be interpreted to describe functions of both passive conduits used for transportation and machines that push or pull items through or along a conduit. The Treasury Department and the IRS intend the term transport to mean to cause to move, and these final regulations retain transport as a prohibited active function of an OIPS. To provide clarity, these final regulations include providing a conduit (such as in the case of a pipeline or electrical wire) or route (as in the case of a road or railroad track) as a permitted passive function of an OIPS.
In addition to other requirements, § 1.856-10(d)(2)(i) of the proposed regulations stated that a distinct asset that serves an active function, such as machinery or equipment, is not a building or OIPS.
Commenters suggested that solar panels can perform dual functions, including a passive function (that is, to shelter) and an active function (that is, to convert (energy)). Commenters stated that solar panels may be used to protect pastures, parking lots, buildings, and other structures from the detrimental effects of solar radiation and to manage temperature through shading. The structures to which solar panels are attached—or even into which they are integrated—may qualify as IPSs under the proposed regulations.
The Treasury Department and the IRS note that the example given by the
Section 1.856-10(d)(2)(ii)(A) of the proposed regulations stated that a building encloses a space within its walls and is covered by a roof. Examples given in § 1.856-10(d)(2)(ii)(B) of the proposed regulations were permanently affixed houses, apartments, hotels, factory and office buildings, warehouses, barns, enclosed garages, enclosed transportation stations and terminals, and stores.
During the hearing, a commenter stated that for appraisal purposes, buildings are considered to be buildings regardless of their permanence. This commenter suggested that these final regulations should adopt standards published by an appraisal organization to define real property.
Section 1.856-3(d) of the 1962 Regulations indicates that inherent permanence is important in determining whether a structure qualifies as real property. A tent, for example, may satisfy the portion of the definition of a building in the proposed regulations that referenced enclosing within its walls a space that is covered by a “roof,” but the impermanent nature of the tent would prevent it from qualifying as a building for purposes of section 856. The purposes of definitions used by appraisal organizations, which focus on valuation, differ from the purposes of definitions used for REIT qualification purposes. For example, although both permanent and impermanent property may be appraised, permanence is of crucial importance in defining real property for REIT qualification purposes. Therefore, these final regulations do not adopt standards published by an appraisal organization.
Another commenter urged the Treasury Department and the IRS to change the definition of building in these final regulations so that the definition does not depend on whether a space is completely enclosed by its walls and covered by a roof. The commenter stated that even an outdoor sports stadium or amphitheater and an unenclosed parking garage that are permanently affixed to land or another IPS may fail to qualify as buildings under the proposed regulations.
The Treasury Department and the IRS agree that these structures may fail to meet the definition of building under the proposed regulations. The Treasury Department and the IRS believe, however, that many outdoor sports stadiums, amphitheaters, and unenclosed parking garages would satisfy the definition of an OIPS in § 1.856-10(d)(2)(iii) of the proposed regulations and that this definition is more appropriate for these structures. Therefore, the definition of building in the proposed regulations is retained in these final regulations.
The proposed regulations stated that, to qualify as an IPS, a distinct asset must be permanently affixed and that if the affixation is reasonably expected to last indefinitely based on all the facts and circumstances, the affixation is considered permanent.
Commenters indicated that the term indefinitely as used in determining whether an asset is an IPS was unclear. A commenter suggested using an asset's useful life as an alternate to indefinitely. The Treasury Department and the IRS have concluded that relying on the useful life of an asset as the measure for permanence would have the effect of treating certain impermanent assets as real property. For example, if an asset has a useful life of two years, it would be inappropriate for the asset to be treated as permanently affixed solely because the asset was reasonably expected to remain in place for two years.
Another commenter provided the example of a REIT that constructs a building on land on which the REIT holds a 99-year ground lease. Upon expiration of the lease, the building is subject to removal. In this case, the building may not be on the land in 100 years. Another commenter provided the example of a building that is subject to condemnation and that will be torn down in the future.
Another commenter suggested that whether an asset is inherently permanent should be based upon an objective analysis of the physical nature of the manner of affixation, rather than on a particular taxpayer's subjective intent. This commenter recommended that if the manner of affixation is of a permanent nature and is consistent with the distinct asset remaining in place indefinitely based on all the facts and circumstances, the affixation is considered permanent. Commenters also urged the Treasury Department and the IRS to provide a statement in the preamble to these final regulations that indefinitely does not mean forever but rather means for the foreseeable future.
The Treasury Department and the IRS do not intend the term indefinitely to mean forever. The proposed regulations stated that whether affixation is reasonably expected to last indefinitely is based on all the facts and circumstances. Section 1.856-10(d)(2)(iv) provides factors that must be taken into account to determine whether a distinct asset is an IPS if that distinct asset is not included in the lists of types of buildings in § 1.856-10(d)(2)(ii)(B) or types of OIPSs in § 1.856-10(d)(2)(iii)(B). These factors provide additional guidance on the meaning of permanent affixation. The primary focus of these factors is on the nature of the distinct asset and the affixation, including the manner in which the distinct asset is affixed, whether the distinct asset is designed to be removed, the damage that removal would cause, and the time and expense required to move the distinct asset. Although one factor includes any circumstances that suggest the expected period of affixation is not indefinite and provides as an example a lease that requires or permits removal of the distinct asset upon the expiration of the lease, the determination of whether a distinct asset is an IPS is based on all of the facts and circumstances.
These final regulations do not adopt these suggestions and, because the Treasury Department and the IRS do not believe additional guidance regarding inherent permanence is necessary, retain the definition of IPS as proposed.
A commenter agreed that state or local definitions of property should not control for purposes of the definition of real property under section 856, but suggested that when a certificate of occupancy or similar license or certification is granted with respect to a structure, the structure be presumed to
Local law standards for a certificate of occupancy or similar license or certification might be inconsistent with the definition of real property for purposes of section 856. For example, local law might permit issuance of a certificate of occupancy for a tent that is not inherently permanent. In addition, this presumption might lead to inconsistent results. For example, two identical assets located in localities that use different standards for licensing might be treated differently for purposes of section 856 because a certificate of occupancy has been granted to one of the assets and not to the other. For these reasons, we believe the suggested presumption would create confusion and administrative difficulty, and, therefore, these final regulations do not adopt this comment.
In generally defining the term structural component, § 1.856-10(d)(3)(i) of the proposed regulations stated, in part, that a structural component is any distinct asset that is a constituent part of and integrated into an IPS, serves the IPS in its passive function, and, even if capable of producing income other than consideration for the use or occupancy of space, does not produce or contribute to the production of such income.
A commenter requested that the words “and related services” be added to the language of § 1.856-10(d)(3)(i). If that request were adopted, structural components would include assets that serve the IPS and even if capable of producing income other than consideration for the use or occupancy of space
The Treasury Department and the IRS have concluded that the definition of structural component in the proposed regulations adequately accounts for the concerns raised by the commenter, and accordingly these final regulations do not incorporate the commenter's suggested revision.
B. Proposed Utility Safe Harbor for Structural Components
A commenter recommended that these final regulations adopt a safe harbor for distinct assets that provide utilities to IPSs. The commenter recognized that the utility-like function aspect of the definition in the proposed regulations underscores the importance of that type of structural component and suggested that a distinct asset that serves a utility-like function with respect to an IPS should be conclusively presumed to be a structural component of that IPS.
The Treasury Department and the IRS note that the list of types of structural components in the proposed regulations included several utility-like systems, such as plumbing systems, central heating and air-conditioning systems, fire suppression systems, central refrigeration systems, and humidity control systems. The Treasury Department and the IRS may add other systems that satisfy the factors in § 1.856-10(d)(3)(iii) to the structural component list through future guidance published in the Internal Revenue Bulletin. The proposed regulations differentiated systems that perform utility-like functions from other distinct assets to permit analysis of these systems as a whole. Under the proposed regulations, once it has been determined that an asset or assets function as a utility-like system, the system is analyzed as a distinct asset basing the determination of whether the system is real property on all of the facts and circumstances and using the factors listed under § 1.856-10(d)(3)(iii) for structural components. A system or asset that provides a utility but that does not qualify as a structural component under the facts and circumstances test under § 1.856-10(d)(3)(iii) (for example, a window air-conditioning unit) is not a structural component.
Because the Treasury Department and the IRS believe that the factors listed under § 1.856-10(d)(3)(iii) for structural components are important to the analysis of systems that provide a utility-like function these final regulations decline to adopt the blanket rule suggested by the commenter.
Section 1.856-10(d)(3)(i) of the proposed regulations stated that a distinct asset is a structural component if the interest held therein is included with an equivalent interest held by the taxpayer in the IPS to which the structural component is functionally related. Commenters suggested that the equivalent interest requirement for structural components be deleted or amended because the requirement: (1) Is inconsistent with industry practices and an asset should qualify as a structural component even if the REIT owns the asset but leases from another party the building served by the structural component; (2) may negatively affect investment in energy efficient and renewable energy assets; (3) was not explained in the proposed regulations and seemingly serves no tax policy purpose; and (4) is contrary to congressional intent, case law, and the treatment of structural components by the IRS in other contexts.
The Treasury Department and the IRS intended that the equivalent interest requirement in the proposed regulations ensure that an asset did not qualify as a structural component unless that asset served real property in which the REIT also had an interest. The Treasury Department and the IRS set forth a similar requirement in Rev. Rul. 73-425, which addresses notes secured by a total energy system. Rev. Rul. 73-425 holds that obligations secured by a mortgage covering a total energy system and the building that the system served qualify as real estate assets. The revenue ruling also holds that an obligation secured only by the total energy system does not qualify as a real estate asset.
The Treasury Department and the IRS believe that, to treat an asset as a structural component, a REIT must hold its interest in the structural component together with a real property interest with respect to the space in the IPS that the structural component serves. For example, a central air-conditioning system is a machine that does not separately qualify as an IPS. A central air-conditioning system that is wholly owned by a REIT may, however, qualify as a structural component if the REIT also holds a real property interest, such as a leasehold interest, with respect to the space in the IPS served by the central air-conditioning system. Limiting the definition of structural component to assets that serve an IPS in which the REIT has a real property interest is consistent with the statutory requirement that REITs invest in real property or interests in real property.
For these reasons, these final regulations provide that a distinct asset qualifies as a structural component only if the REIT holds its interest in the distinct asset together with a real property interest with respect to the space in the IPS that the distinct asset serves. In addition, as illustrated by Rev.
Section 1.856-10(3)(i) of the proposed regulations defined a structural component to include a distinct asset that serves the IPS in its passive function, and, even if capable of producing income other than consideration for the use or occupancy of space, does not produce or contribute to the production of such income. Section 1.856-10(d)(3)(ii) of the proposed regulations furnished a list of distinct assets that are structural components. The proposed regulations also stated that a distinct asset that was not on this list might still be a structural component based on all of the facts and circumstances. In particular, the proposed regulations required the factors listed under § 1.856-10(d)(3)(iii) to be taken into account.
A commenter suggested that the standard for a structural component should be revised so that a structural component is defined as a distinct asset that is intended to protect, preserve, secure, or support the safe operation of the IPS. The commenter suggested that satisfying this standard should be sufficient to determine if a distinct asset is a structural component and, therefore, the structural component factor test under § 1.856-10(d)(3)(iii) of the proposed regulations is unnecessary.
These final regulations do not adopt the commenter's suggestion because the standard suggested would in some circumstances unduly limit the functions a structural component may serve and in other circumstances unduly expand the functions a structural component may serve. The Treasury Department and the IRS do not believe this modification is necessary given these final regulations' requirement that a structural component serve the IPS to which the structural component is constituent in the IPS's passive function. In addition, the Treasury Department and the IRS have concluded that adopting a standard that takes into account a taxpayer's intent regarding an asset may lead to inconsistent results because different taxpayers may have different intentions regarding the same type of distinct asset.
Sections 1.856-10(d)(2)(ii)(B), 1.856-10(d)(2)(iii)(B), and 1.856-10(d)(3)(ii) of the proposed regulations furnished lists of types of distinct assets that would qualify as buildings, OIPSs, and structural components, respectively. A commenter requested that certain other distinct assets be included on these lists. These other distinct assets included car charging stations, healthcare facilities, storage facilities, timber, electrical distribution and redundancy systems, telecommunication systems, and equipment comprising a building management system.
The Treasury Department and the IRS have considered the proposed additions to the lists of qualifying assets and believe that the proposed regulations already addressed the tax treatment of certain of these assets, such as storage facilities and timber. In addition, the Treasury Department and the IRS are not persuaded that the other assets will in all cases satisfy the relevant definition. Therefore, these final regulations do not include these suggested additions to the lists of qualifying assets.
Commenters suggested adding motels, casinos, health care facilities, storage facilities, greenhouses, enclosed stadiums, enclosed shopping malls, museums, municipal buildings, other housing (such as assisted living), parking garages (whether or not fully enclosed), and mixed-use properties combining one or more of the foregoing to the list for buildings under § 1.856-10(d)(2)(ii)(B) of the proposed regulations.
These assets would not always qualify as buildings as defined under the proposed regulations and in these final regulations. For example, casinos may be on an unaffixed barge or riverboat, health care facilities may be in tents, storage facilities may include movable pods, and greenhouses may be structures that are not permanently affixed. Unenclosed parking garages were not within the definition of a building under the proposed regulations but were included in the list of types of OIPSs in § 1.856-10(d)(2)(iii)(B) of the proposed regulations (which included permanently affixed parking facilities). Museums may exist on unaffixed boats, in a room inside a building, or in the open air.
A mixed-use building would still qualify as a building because it encloses space within its walls and is covered by a roof. On the other hand, a mixed-use property comprised of several structures would require a separate analysis of each structure. The suggestions to include municipal buildings and assisted-living facilities focus on the use, rather than the type, of structure. In addition, office buildings, apartments, and houses were already included on the proposed regulations' list.
A distinct asset not on the list may nevertheless qualify as a building, because the list for types of buildings in the proposed regulations is not exclusive. Moreover, many of the requested assets are already included in that list. For these reasons, these final regulations do not include all the requested assets on the list for types of buildings. However, these final regulations include as types of buildings permanently affixed motels, enclosed stadiums and arenas, and enclosed shopping malls.
Some commenters requested certain assets be added to the list under § 1.856-10(d)(2)(iii)(B) of the proposed regulations for types of OIPSs, including energy storage components, solar photovoltaic (PV) panels, related wiring and functionally related transformers, power conditioning equipment, and electrical power inverters and related wiring.
The Treasury Department and the IRS have determined that adding these assets to the list for types of OIPSs is not warranted. Inclusion of these assets would be inconsistent with the requirements that OIPSs serve a passive function and do not serve an active function.
One commenter suggested that the list under § 1.856-10(d)(3)(ii) of the proposed regulations for types of structural components should include special flooring for data centers. The proposed regulations stated that customization of a distinct asset in connection with the rental of space in or on an IPS to which the distinct asset relates does not affect whether the
Another commenter recommended that the list for types of structural components be expanded to include solar energy generating and heating systems and related energy storage equipment. The Treasury Department and the IRS do not believe that solar energy generating and heating systems and related energy storage equipment necessarily satisfy the definition of structural components in § 1.856-10(d)(3) of the proposed regulations but rather believe these assets should be analyzed using all the facts and circumstances and taking into account the factors provided in § 1.856-10(d)(3)(iii) of these final regulations. For these reasons, these final regulations do not adopt the recommendation.
The proposed regulations listed factors to be considered in determining whether a distinct asset (other than a type of building or type of OIPS listed in § 1.856-10(d)(2)(ii)(B) of the proposed regulations or § 1.856-10(d)(2)(iii)(B) of the proposed regulations, respectively) is an IPS. One factor is whether there are any circumstances that suggest the expected period of affixation is not indefinite (for example, a lease that requires or permits removal of the distinct asset upon the expiration of the lease).
One commenter stated that buildings constructed on land subject to a long-term ground lease arguably would not satisfy this factor. Another commenter stated that removal provisions are common in commercial leases and, as a practical matter, such provisions may not be determinative as to whether the asset is ultimately removed by the lessee at the expiration of the lease. This commenter recommended that the factor be changed to any circumstance that suggests the manner of affixation is temporary in nature rather than permanent.
As previously discussed in this preamble, for purposes of section 856, the Treasury Department and the IRS do not intend the term indefinitely to mean forever. Whether a distinct asset qualifies as an IPS depends on all the facts and circumstances including an analysis of the factors in § 1.856-10(d)(2)(iv). For these reasons, this factor is not modified in these final regulations.
For distinct assets other than those listed in § 1.856-10(d)(3)(ii) of the proposed regulations as structural components, the proposed regulations listed factors under § 1.856-10(d)(3)(iii) that must be taken into account in determining whether the distinct asset qualifies as a structural component of an IPS. One of those factors was whether the owner of the property was also the legal owner of the distinct asset. A commenter noted that a REIT may have a leasehold interest in real property and may own a structural component that it installs as part of the real property. An example provided by the commenter is a REIT that leases the shell of a building and then engages independent contractors to complete internal build-outs to customize the shell of the building into a shopping mall.
The Treasury Department and the IRS have considered this comment, along with the comments received regarding the equivalent interest requirement, as discussed in this preamble. Accordingly, these final regulations require that, for a distinct asset to be a structural component, a REIT must hold a legally enforceable real property interest in the space in the IPS that the structural component serves.
Under § 1.856-10(f) of the proposed regulations, an intangible asset is real property or an interest in real property if the asset derives its value from real property or an interest in real property, is inseparable from that real property or interest in real property, and does not produce or contribute to the production of income other than consideration for the use or occupancy of space. Commenters requested inclusion of intangible assets derived from services that produce income other than consideration for the use or occupancy of space, which would include workforce-in-place and customer-based intangibles. The Treasury Department and the IRS believe that intangible assets that are separable from real property or an interest in real property should not qualify as real property. The final regulations clarify that intangible assets that are related to services and that are separable from the real property do not qualify as real property.
Commenters requested that intangible assets related to in-place above-market leases in which the REIT is the lessor and below-market leases in which the REIT is the lessee be treated as qualifying real property. Under section 856(c)(5)(C), a lease of land or improvements thereon is an interest in real property and, therefore, a lease of land or improvements thereon is a real estate asset under section 856(c)(5)(B). A lease of real property that produces both rents from real property under section 856(d)(1) and other income that does not so qualify is, in part, an interest in real property under section 856(c)(5)(C) and, in part, an asset other than an interest in real property. To the extent the portion of the lease that is an interest in real property has value, that portion is a real estate asset under section 856(c)(5)(B). These final regulations have been modified to clarify that an intangible asset may be, in part, an interest in real property and, in part, an asset other than an interest in real property. In addition, these final regulations include an example illustrating the application of these final regulations to an in-place above-market lease that produces both income that qualifies as rents from real property under section 856(d)(1) and other income that does not so qualify.
Section 1.856-10(f)(1) of the proposed regulations generally defined an intangible asset to include certain intangible assets established under generally accepted accounting principles (GAAP) as a result of an acquisition of real property or an interest in real property. Commenters noted that intangible assets may result
The proposed regulations used the acquisition of real property or an interest in real property as an example of a type of transaction in which an intangible asset may be established under GAAP. Under § 1.856-2(d)(3), the term total assets means the gross assets of the REIT determined in accordance with GAAP. Thus, an intangible asset that, in accordance with GAAP, results from a merger, business combination, or stock or asset acquisition may qualify as real property. Because the proposed regulations did not preclude real property treatment of intangible assets resulting from mergers, certain business combinations, or stock or asset acquisitions, the Treasury Department and the IRS have concluded that no change is necessary to the final regulations to accommodate the commenter's concern.
Section 856(c)(5)(C) defines interests in real property to include leaseholds of land or improvements thereon. Section 1.856-10(f)(2) of the proposed regulations stated that, if a license, permit, or other similar right solely for the use, enjoyment, or occupation of land or an IPS is in the nature of a leasehold or easement, that right generally is an interest in real property. However, a license or permit to engage in or operate a business generally is not real property or an interest in real property because the license or permit produces or contributes to the production of income other than consideration for the use or occupancy of space.
Section 1.856-10(g),
A commenter noted that many leases require property to be operated for a specific use. A property owner has an interest in requiring its property to be operated for its intended purpose. The commenter suggested that a specific-purpose lease should not be excluded from the definition of real property as an operating license.
The Treasury Department and the IRS generally agree that a requirement in a lease agreement that property be operated for a specific use does not cause the lease to fail to be treated as an interest in real property. A specific use requirement in a lease is distinguishable from a license or permit to operate a business. Such a requirement is generally a term or condition of a lease requiring that real property be used in the manner permitted by the property owner or landlord and does not constitute a separate grant by a governmental entity of the right to operate a business.
A commenter noted that goodwill is not considered real property for appraisal purposes. The commenter recommended that goodwill be characterized as something other than real property, but nevertheless be provided the same tax treatment as real property. The Treasury Department and the IRS do not agree with this recommendation. Section 856 governs the determination of whether an asset is real property for REIT qualification purposes. Under § 1.856-2(d)(3), the gross assets of the REIT are determined in accordance with GAAP. Therefore an asset determined in accordance with GAAP, such as GAAP goodwill, must for purposes of sections 856 through 859 be accounted for either as real property or as property that is not real property. Although section 856(c)(5)(J)(ii) permits the Secretary to determine that an item of income that is not otherwise qualifying REIT income is considered as gross income that is qualifying REIT income, section 856 does not include a similar provision to permit an asset that is not otherwise real property to be treated as real property.
A commenter requested that the final regulations provide that taxpayers may continue to rely on previously issued letter rulings. Section 11.04 of Rev. Proc. 2016-1
The proposed regulations' applicability date was for calendar quarters beginning after the date that the proposed regulations are published as final regulations in the
The Treasury Department and the IRS understand that an applicability date based on a calendar quarter may have unintended consequences in applying the gross income tests in section 856(c)(2) and (3) because those tests apply on an annual basis. For example, for rents to qualify as rents from interests in real property, the asset from which the rents are derived must qualify as real property. An asset that qualifies as real property before the applicability date, but not on or after the applicability date, would generate rents from real property only during quarters before the applicability date. These final regulations adopt this suggestion and apply to taxable years that begin after the date that the final regulations are published as final regulations in the
A commenter noted that § 1.860G-2(a)(4) references the definition of real property found in § 1.856-3(d) of the 1962 Regulations for purposes of determining whether an obligation is “principally secured by an interest in real property” for regulated mortgage investment conduit qualification purposes. The proposed regulations were proposed to revise § 1.856-3(d) to read as follows: “See § 1.856-10 for the definition of real property.” To the extent other Treasury regulations reference the definition of real property in § 1.856-3(d), § 1.856-3(d), as proposed in the NPRM and as amended by these final regulations, directs taxpayers to apply the definition found in § 1.856-10.
The preamble to the proposed regulations discussed various Code provisions in which the term real property appears. Noting the diverse contexts and varying legislative purposes of the Code provisions in which the term real property appears, the Treasury Department and the IRS requested comments on the extent to which the various meanings of real property that appear in the Treasury regulations should be reconciled.
Several commenters were concerned that the term real property has different meanings as the term is applied for purposes of different Code provisions, which could lead to confusion and inconsistent treatment of taxpayers. A commenter noted that there is no Federal definition of real property and suggested that another Code provision's restrictions on the use of real property should not preclude a REIT from investing in or financing such real property so long as the property is otherwise inherently permanent. Another commenter noted that under section 197, certain intangible assets are amortized as separate assets not associated with another asset. A third commenter requested clarification that the final regulations apply only to the definition of real property for purposes of sections 856 through 859, so that there is no conflict between the REIT provisions and other provisions of the Code that govern the investment tax credit and depreciation.
As discussed in the preamble to the proposed regulations, in drafting the proposed regulations, the Treasury Department and the IRS sought to balance (1) the general principle that common terms used in different provisions should have common meanings with (2) the particular policies underlying the definition used in the REIT provisions. These final regulations retain the language in § 1.856-10(a) of the proposed regulations stating that § 1.856-10 provides definitions for purposes of part II, subchapter M, chapter 1 of the Code. This language addresses the commenters' concerns by limiting the application of the definition of real property under these final regulations to sections 856 through 859.
Some commenters suggested that the proposed regulations would encourage building in, on, or above water, which these commenters suggested is dangerous to water ecosystems and fish habitats. The commenters also suggested that the aftermath of hurricanes such as Katrina and Sandy should have demonstrated to the Government that development near or on water is dangerous to humans and extremely costly.
Neither section 856 nor the regulations thereunder override any environmental rules or regulations that may restrict development in these areas. In defining land, the Treasury Department and the IRS have concluded that it is important to include water space superjacent to land because rights to this water space are analytically indistinguishable from rights to air space superjacent to land, which, as discussed in this preamble, are treated as real property.
Under § 1.856-10(d)(3)(i) of the proposed regulations, to qualify as real property, a structural component must serve an IPS and, even if capable of producing income other than consideration for the use or occupancy of space, must not produce or contribute to the production of such income. The preamble to the proposed regulations indicated that the Treasury Department and the IRS are considering guidance to address the treatment of any income earned when a system that provides electricity to an IPS held by a REIT also transfers excess electricity to a utility company. Commenters questioned whether a structural component would maintain its qualification as real property if the structural component served an IPS in its passive function but also produced a product, such as electricity, that was provided to third parties. One commenter suggested that the relevant test should be whether or not the property has net sales of electricity to the grid. Another commenter noted that the amount of electricity a building may net meter is regulated by the marketplace because utility companies often limit the percentage or amount of electricity that a building may net meter.
The Treasury Department and the IRS are considering whether additional guidance is necessary to address the circumstances under which a distinct asset that serves an IPS may produce electricity that is also sold to third parties and qualify as a structural component of the IPS for REIT purposes. Until additional guidance is published in the Internal Revenue Bulletin, in any taxable year in which (1) the quantity of excess electricity transferred to the utility company during the taxable year from such distinct assets does not exceed (2) the quantity of electricity purchased from the utility company during the taxable year to serve the IPS, the IRS (x) will not treat the transfer of such excess electricity as affecting the qualification of such distinct assets as structural components of the IPS for REIT purposes, (y) will exercise its authority under section 856(c)(5)(J)(i) to treat any income resulting from the transfer of such excess electricity as not constituting gross income for purposes of section 856(c)(2) and (3), and (z) will not treat any net income resulting from the transfer of such excess electricity as constituting net income derived from a prohibited transaction under section 857(b)(6).
Commenters requested that the final regulations address the qualification of renewable energy credits (RECs) as real property. Renewable energy credits are credits issued to a provider of renewable energy and may be freely bought and sold. The owner of a system that produces renewable energy may sell RECs without selling the system or the electricity produced by the system.
Because RECs are intangible assets, the Treasury Department and the IRS have determined that RECs should be analyzed as such under § 1.856-10(f) of these final regulations. Thus, RECs do not qualify as intangible real property assets under these final regulations because RECs may be sold separately
Commenters urged the Treasury Department and the IRS to allow REITs to invest in solar energy sites as a means of furthering clean energy objectives. These commenters requested that investors in solar energy have the same access to REIT financing as investors in conventional energy sources such as natural gas, oil, and other fossil and electric energy property. Other commenters noted that private investment would be encouraged by treating certain electricity generating assets as real property.
Congress has not provided for solar energy assets to be treated differently from other assets for purposes of determining whether the assets qualify as real property under the REIT provisions. For this reason, the final regulations do not adopt this suggestion.
Commenters suggested that sunlight used to power a solar energy site should be considered either real property or an interest in real property. One commenter analogized sunlight and wind to rights to air space, suggested that a REIT should be allowed to sell the rights to the sunlight or wind enjoyed on its property to third parties, and further suggested that a REIT should be able to treat income from the sale of such rights as qualifying income. This commenter posited that the process used to convert sunlight into electricity is analogous to the process inherent in fruit-bearing plants, which are discussed in § 1.856-10(g),
The Treasury Department and the IRS agree that a REIT may lease the air space superjacent to its land, which is an interest in its land, and may allow its tenants access to sunlight and wind. The Treasury Department and the IRS, however, are not aware of an approach that could be used to enable a REIT to rent or grant an interest in sunlight or wind separate from its interest in the land or the air space superjacent to the land. Therefore, these final regulations do not adopt these suggestions.
A commenter suggested that a concentrating solar power system uses assets that differ from PV panels to harvest solar energy. This commenter suggested that a concentrating solar power system, including, for example, a parabolic trough system, should be considered real property under these final regulations.
The Treasury Department and the IRS have concluded that this type of system is comprised of many distinct assets that may serve different functions. As illustrated in § 1.856-10(g),
Section 1.856-10(g) of the proposed regulations provided thirteen examples illustrating the application of the proposed regulations in a variety of factual scenarios.
Each of § 1.856-10(g),
Each of
Section 1.856-10(g),
The Treasury Department and the IRS believe that
Section 1.856-10(g),
Another commenter suggested that cross-connects used in a data center should not be considered real property because the cross-connects produce income that is not for the use or occupancy of space and this income is significant in comparison to the income produced by other assets in a data center.
Section 1.856-10(g),
One commenter requested that the Treasury Department and the IRS update
The Treasury Department and the IRS have concluded that PV modules and inverters that are used in the generation of energy for sale to third parties do not qualify as IPSs under the proposed regulations. The Treasury Department and the IRS do not believe the inclusion of above ground wiring in
Section 1.856-10(g),
A commenter recommended revisions to the statements in
Another commenter requested clarification of the term “occasionally transfers.” This commenter recommended changing “occasionally transfers” to “regularly transfers” in describing the transfer of energy from the solar energy site to a utility company. As discussed in section XI.A. of this preamble, the Treasury Department and the IRS are considering whether additional guidance is necessary to address this commenter's concern. Until the issuance of such additional guidance, the Treasury Department and the IRS (1) will not treat the transfer of the excess electricity as affecting the qualification of the distinct assets as structural components of the IPS for REIT purposes, (2) will exercise its authority under section 856(c)(5)(J)(i) to treat any income resulting from the transfer of the excess electricity as not constituting gross income for purposes of section 856(c)(2) and (3), and (3) will not treat any net income resulting from the transfer of the excess electricity as constituting net income derived from a prohibited transaction under section 857(b)(6).
A commenter noted that even when a building uses all of the solar electricity produced by a solar energy site, such as the one in
Another commenter requested that
Section 1.856-10(g),
One commenter noted that whether the entire system performs an active function is not relevant because the system is composed of distinct assets, each of which must be separately analyzed. The Treasury Department and the IRS believe that
As discussed in section III.A.2. of this preamble, these final regulations include providing a conduit or route as a permitted passive function and retain transport, which has been clarified to mean cause to move, as a prohibited active function. The Treasury Department and the IRS have revised
Another commenter suggested revising
In addition, commenters argued that the compressors within a pipeline transmission system are analogous to elevators and escalators within a building, with the function of moving things or people within an IPS. One commenter noted that compressors may be viewed as performing a propelling function. Another commenter suggested that elevators and escalators serve a building by enabling access to taller
To qualify as a structural component, a distinct asset must serve an IPS in its passive function. The compressors that transport natural gas through the pipeline transmission system in
Section 1.856-10(g),
Section 1.856-10(g),
One commenter stated that in some foreign jurisdictions, a casino license may be more in the nature of a zoning permit that may be transferred to a subsequent buyer. This commenter suggested that a license that runs with the land is more in the nature of a zoning permit. The commenter recommended either deleting
Another commenter noted that the permitted use of a facility for gaming purposes may enhance its value as real estate, apart from the value of the gaming license itself. The commenter also remarked that zoning laws frequently restrict gaming activities or liquor sales to particular geographical areas or locations, which restrictions, in general, favorably affect the value of real estate in these areas or locations.
These final regulations do not adopt these recommendations. Under § 1.856-10(f) of the proposed regulations, whether a license runs with the land is not dispositive in determining whether the license is real property for purposes of sections 856 through 859. The valuation of real property, including any effect that zoning may have on the value of real property, are beyond the scope of these final regulations.
The Treasury Department and the IRS received requests to add additional examples to the final regulations.
Section VII.B. of this preamble describes comments received requesting clarification that intangible assets related to in-place above-market leases in which the REIT is the lessor and below-market leases in which the REIT is the lessee be treated as qualifying real property. As discussed in section VII.B., these final regulations include § 1.856-10(g),
A commenter suggested adding an example applying these final regulations to an electric transmission and distribution system. The Treasury Department and the IRS believe that the distinct assets of an electric transmission and distribution system are similar in many respects to the distinct assets of the solar energy site addressed by § 1.856-10(g),
Another commenter suggested that the final regulations include an example illustrating the components of an in-ground swimming pool. (The proposed regulations listed the pool itself as an OIPS.) The Treasury Department and the IRS are not aware that there have been significant questions concerning whether the various components qualify as real property. Therefore, these final regulations do not include an example addressing whether these components qualify as real property for purposes of sections 856 through 859.
Three commenters viewed the proposed regulations as a substantial expansion of the definition of real property. The Treasury Department and the IRS believe that the proposed regulations and these final regulations generally clarify existing law. These commenters also called for equal application of the tax laws and appear to believe that REITs are a vehicle that some corporations use to avoid taxes. The REIT structure was established by Congress in 1960, and it is not within the scope of these final regulations to change the REIT structure as these commenters suggest.
A commenter requested that the final regulations clarify that buildings can be on or inside of other buildings or IPSs. The Treasury Department and the IRS believe that this comment was adequately addressed by the proposed regulations, which provided that the affixation of an IPS (which may be a building) may be to land or to another IPS. In addition, § 1.856-10(g),
A commenter suggested that appurtenances should be included in the definition of land. The commenter suggested that real estate law provides that an appurtenance encompasses easements and rights of way over another's land to access one's own land. In addition, this commenter suggested that zoning and similar rights should be included in the definition of real property.
Taxpayers should apply § 1.856-10(f)(2) of these final regulations, which addresses the treatment of rights for the use, enjoyment, or occupation of land, to determine whether an appurtenance
A commenter suggested that the final regulations address the definition of rents from real property, eliminate the standard requiring that total assets be based on GAAP, and regulate the type of services that a taxable REIT subsidiary may provide. These issues are beyond the scope of these final regulations.
These final regulations apply to taxable years that begin after August 31, 2016. Under section 856(c)(4), whether a taxpayer loses status as a REIT in one quarter may depend on whether the taxpayer satisfied section 856(c)(4) at the close of one or more prior quarters. For purposes of applying the first sentence of the flush language in section 856(c)(4) to a quarter in a taxable year that begins after August 31, 2016, these final regulations apply in determining whether the taxpayer met the requirements of section 856(c)(4) at the close of prior quarters. Taxpayers may rely on these final regulations for quarters that end before the applicability date.
Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, the proposed regulations preceding these final regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business. No comments were received.
The principal author of these regulations is Julanne Allen, Office of Associate Chief Council (Financial Institutions and Products). However, other personnel from the Treasury Department and the IRS participated in their development.
The IRS revenue rulings and revenue procedure cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS Web site at
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is amended as follows:
26 U.S.C. 7805 * * *
(d)
(a)
(b)
(c)
(d)
(2)
(ii)
(B)
(iii)
(B)
(iv)
(A) The manner in which the distinct asset is affixed to real property;
(B) Whether the distinct asset is designed to be removed or to remain in place indefinitely;
(C) The damage that removal of the distinct asset would cause to the item itself or to the real property to which it is affixed;
(D) Any circumstances that suggest the expected period of affixation is not indefinite (for example, a lease that requires or permits removal of the distinct asset upon the expiration of the lease); and
(E) The time and expense required to move the distinct asset.
(3)
(ii)
(iii)
(A) The manner, time, and expense of installing and removing the distinct asset;
(B) Whether the distinct asset is designed to be moved;
(C) The damage that removal of the distinct asset would cause to the item itself or to the inherently permanent structure to which it is affixed;
(D) Whether the distinct asset serves a utility-like function with respect to the inherently permanent structure;
(E) Whether the distinct asset serves the inherently permanent structure in its passive function;
(F) Whether the distinct asset produces income from consideration for the use or occupancy of space in or upon the inherently permanent structure;
(G) Whether the distinct asset is installed during construction of the inherently permanent structure; and
(H) Whether the distinct asset will remain if the tenant vacates the premises.
(e)
(2)
(i) Whether the item is customarily sold or acquired as a single unit rather than as a component part of a larger asset;
(ii) Whether the item can be separated from a larger asset, and if so, the cost of separating the item from the larger asset;
(iii) Whether the item is commonly viewed as serving a useful function independent of a larger asset of which it is a part; and
(iv) Whether separating the item from a larger asset of which it is a part impairs the functionality of the larger asset.
(f)
(2)
(g)
(ii) The sculpture is not an asset listed in paragraph (d)(2)(iii)(B) of this section, and, therefore, the sculpture is an asset that must be analyzed to determine whether it is an inherently permanent structure using the factors provided in paragraph (d)(2)(iv) of this section. The sculpture—
(A) Is permanently affixed to the building by supports embedded in the building's foundation;
(B) Is not designed to be removed and is designed to remain in place indefinitely;
(C) Would be damaged if removed and would damage the building to which it is affixed;
(D) Will remain affixed to the building after any tenant vacates the premises and will remain affixed to the building indefinitely; and
(E) Would require significant time and expense to move.
(iii) The factors described in this paragraph (g)
(ii) The bus shelters are not permanently affixed enclosed transportation stations or terminals and do not otherwise meet the definition of a building in paragraph (d)(2)(ii) of this section nor are they listed as types of other inherently permanent structures in paragraph (d)(2)(iii)(B) of this section. Therefore, the bus shelters must be analyzed to determine whether they are inherently permanent structures using the factors provided in paragraph (d)(2)(iv) of this section. The bus shelters—
(A) Are not permanently affixed to the land or an inherently permanent structure;
(B) Are designed to be removed and are not designed to remain in place indefinitely;
(C) Would not be damaged if removed and would not damage the sidewalks to which they are affixed;
(D) Will not remain affixed after the local transit authority vacates the site and will not remain affixed indefinitely; and
(E) Would not require significant time and expense to move.
(iii) The factors described in this paragraph (g)
(ii) Walls and central refrigeration systems are listed as structural components in paragraph (d)(3)(ii) of this section and, therefore, are real property. The customization of the freezer walls does not affect their qualification as structural components of REIT E's Cold Storage Warehouse within the meaning of paragraph (d)(3) of this section. Therefore, the freezer walls and central refrigeration system are structural components of REIT E's Cold Storage Warehouse.
(ii) The central heating and air-conditioning system, integrated security system, fire suppression system, and humidity control system are listed as structural components in paragraph (d)(3)(ii) of this section and, therefore, are real property. The customization of these Systems does not affect the qualification of these Systems as structural components of REIT F's building within the meaning of paragraph (d)(3) of this section. Therefore, these Systems are structural components of REIT F's building.
(iii) In addition to wiring and flooring, which are listed as structural components in paragraph (d)(3)(ii) of this section and, therefore, are real property, the Electrical System and telecommunication infrastructure system include equipment used to ensure that the tenant is provided with uninterruptable, stable power and telecommunication services. The Electrical System and telecommunication infrastructure system are not listed in paragraph (d)(3)(ii) of this section, and, therefore, they must be analyzed to determine whether they are structural components of the building using the factors provided in paragraph (d)(3)(iii) of this section. The Electrical System and telecommunication infrastructure system—
(A) Are embedded within the walls and floors of the building and would be costly to remove;
(B) Are not designed to be moved and are designed specifically for the particular building of which they are a part;
(C) Would not be significantly damaged upon removal and, although removing them would damage the walls and floors in which they are embedded, their removal would not significantly damage the building;
(D) Serve a utility-like function with respect to the building;
(E) Serve the building in its passive functions of containing, sheltering, and protecting computer servers;
(F) Produce income as consideration for the use or occupancy of space within the building;
(G) Were installed during construction of the building; and
(H) Will remain in place when the tenant vacates the premises.
(iv) The factors described in this paragraph (g)
(ii) Depending on the needs of a new tenant, the Conventional Partition System may remain in place when a tenant vacates the premises. The Conventional Partition System is integrated into the office building and is designed and constructed to remain in areas not subject to reconfiguration or expansion. The Conventional Partition System can be removed only by demolition, and, once removed, neither the Conventional Partition System nor its components can be reused. Removal of the Conventional Partition System causes substantial damage to the Conventional Partition System itself but does not cause substantial damage to the building.
(iii) Modular Partition Systems are typically removed when a tenant vacates the premises. Modular Partition Systems are not designed or constructed to remain permanently in place. Modular Partition Systems are designed and constructed to be movable. Each Modular Partition System can be readily removed, remains in substantially the same condition as before, and can be reused. Removal of a Modular Partition System does not cause any substantial damage to the Modular Partition System itself or to the building. The Modular Partition System may be moved to accommodate the reconfigurations of the interior space within the office building for various tenants that occupy the building.
(iv) The Conventional Partition System is comprised of walls that are integrated into an inherently permanent structure, and thus are listed as structural components in paragraph (d)(3)(ii) of this section. The Conventional Partition System, therefore, is real property.
(v) The Modular Partition System is not integrated into the building and, therefore, is not listed in paragraph (d)(3)(ii) of this section. Thus, the Modular Partition System must be analyzed to determine whether it is a structural component using the factors provided in paragraph (d)(3)(iii) of this section. The Modular Partition System—
(A) Is installed and removed quickly and with little expense;
(B) Is designed to be moved and is not designed specifically for the particular building of which it is a part;
(C) Is not damaged, and the building is not damaged, upon its removal;
(D) Does not serve a utility-like function with respect to the building;
(E) Serves the building in its passive functions of containing and protecting the tenants' assets;
(F) Produces income only as consideration for the use or occupancy of space within the building;
(G) Was not installed during construction of the building; and
(H) Will not remain in place when a tenant vacates the premises.
(vi) The factors described in this paragraph (g)
(ii) REIT H's PV Modules, mounts, and exit wire are each separately identifiable items. Separation from a mount does not affect the ability of a PV Module to convert photons to electricity. Separation from the equipment to which it is attached does not affect the ability of the exit wire to transmit electricity to the electrical power grid. The types of PV Modules and exit wire that REIT H owns are each customarily sold or acquired as single units. Removal of the PV Modules from the mounts that support them does not damage the function of the mounts as support structures and removal is not costly. The PV Modules serve the active function of converting photons to electricity. Disconnecting the exit wire from the equipment to which it is attached does not damage the function of that equipment, and the disconnection is not costly. The PV Modules, mounts, and exit wire are each distinct assets within the meaning of paragraph (e) of this section.
(iii) The land is real property as defined in paragraph (c) of this section.
(iv) The mounts are designed and constructed to remain in place indefinitely, and they have a passive function of supporting the PV Modules. The mounts are not listed in paragraph (d)(2)(iii)(B) of this section, and, therefore, the mounts are assets that must be analyzed to determine whether they are inherently permanent structures using the factors provided in paragraph (d)(2)(iv) of this section. The mounts—
(A) Are permanently affixed to the land through the concrete foundations or molded concrete anchors (which are part of the mounts);
(B) Are not designed to be removed and are designed to remain in place indefinitely;
(C) Would be damaged if removed;
(D) Will remain affixed to the land after the tenant vacates the premises and will remain affixed to the land indefinitely; and
(E) Would require significant time and expense to move.
(v) The factors described in this paragraph (g)
(vi) The PV Modules convert solar photons into electricity that is transmitted through an electrical power grid for sale to third parties. The conversion is an active function. Thus, the PV Modules are items of machinery or equipment and therefore are not inherently permanent structures within the meaning of paragraph (d)(2) of this section and, so, are not real property. The PV Modules do not serve the mounts in their passive function of providing support; instead, the PV Modules produce electricity for sale to third parties, which is income other than consideration for the use or occupancy of space. Thus, the PV Modules are not structural components of REIT H's mounts within the meaning of paragraph (d)(3) of this section and, therefore, are not real property.
(vii) The exit wire is buried under the ground and transmits the electricity produced by the PV Modules to the electrical power grid. The exit wire was installed during construction of the solar energy site and is designed to remain permanently in place. The exit wire is permanently affixed and is a transmission line, which is listed as an inherently permanent structure in paragraph (d)(2)(iii)(B) of this section. Therefore, the exit wire is real property.
(ii) With the exception of the occasional transfers of excess electricity to a utility company, the Solar Energy Site Assets serve the office building to which they are adjacent, and, therefore, the Solar Energy Site Assets are analyzed to determine whether they are a structural component using the factors provided in paragraph (d)(3)(iii) of this section. The Solar Energy Site Assets—
(A) Are expensive and time consuming to install and remove;
(B) Were designed with the size and specifications needed to serve only the office building;
(C) Will be damaged, but will not cause damage to the office building, upon removal;
(D) Serve a utility-like function with respect to the office building;
(E) Serve the office building in its passive functions of containing, sheltering, and protecting the tenant and the tenant's assets;
(F) Produce income from consideration for the use or occupancy of space within the office building;
(G) Were not installed during construction of the office building; and
(H) Will remain in place when the tenant vacates the premises.
(iii) The factors described in this paragraph (g)
(iv) The result in this
(ii) The pipelines are permanently affixed and are listed as other inherently permanent structures in paragraph (d)(2)(iii)(B) of this section. Therefore, the pipelines are real property.
(iii) Isolation valves and vents are placed at regular intervals along the pipelines to isolate and evacuate sections of the pipelines in case there is need for a shut-down or maintenance of the pipelines. Pressure control and relief valves are installed at regular intervals along the pipelines to provide overpressure protection. The isolation valves and vents and pressure control and relief valves are not listed in paragraph (d)(3)(ii) and, therefore, must be analyzed to determine whether they are structural components using the factors provided in paragraph (d)(3)(iii) of this section. The isolation valves and vents and pressure control and relief valves—
(A) Are time consuming and expensive to install and remove from the pipelines;
(B) Are designed specifically for the particular pipelines for which they are a part;
(C) Will sustain damage and will damage the pipelines if removed;
(D) Do not serve a utility-like function with respect to the pipelines;
(E) Serve the pipelines in their passive function of providing a conduit for natural gas;
(F) Produce income only from consideration for the use or occupancy of space within the pipelines;
(G) Were installed during construction of the pipelines; and
(H) Will remain in place when the tenant vacates the premises.
(iv) The factors described in this paragraph (g)
(v) Meters are used to measure the natural gas passing into or out of the pipeline transmission system for purposes of determining the end users' consumption. Over long distances, pressure is lost due to friction in the pipeline transmission system. Compressors are required to add pressure to transport natural gas through the entirety of the pipeline transmission system. The meters and compressors do not serve the tanks or pipelines in their passive function of providing a conduit for the natural gas, and are used in connection with the production of income from the sale and transportation of natural gas, rather than as consideration for the use or occupancy of space within the pipelines. The meters and compressors are not structural components within the meaning of paragraph (d)(3) of this section and, therefore, are not real property.
(h)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing two temporary safety zones on the waters of Great Egg Harbor Bay in Marmora, NJ. The first safety zone includes all waters within 250 feet of vessel and machinery conducting demolition operations on the remaining portions of the Route 9, Beesley Point Bridge bascule span. This safety zone is necessary to provide for the safety of life on navigable waters during the demolition and will re-route vessel traffic through an alternate channel to facilitate heavy marine equipment operating in the main navigational channel to remove the bascule span of the bridge and will be in place throughout the entire duration of the demolition work.
The second safety zone includes all waters within 500 yards of a blasting vessel and equipment being used to conduct bridge pile blasting operations, which is the final phase of the demolition of the Route 9, Beesley Point Bridge bascule span. This safety zone will only be enforced during times of explosive detonation. The safety zone will temporarily restrict vessel traffic from transiting or anchoring in a portion of the Great Egg Harbor Bay while pile blasting and removal operations are being conducted to facilitate the removal of bridge piles from the demolished Route 9, Beesley Point Bridge.
This rule is effective without actual notice from August 31, 2016 through October 20, 2016. For the purposes of enforcement, actual notice will be used from August 22, 2016, until August 31, 2016. The second safety zone will be enforced on or about October 1, 2016, only during times of explosive detonation.
To view documents mentioned in this preamble as being available in the docket, go to, type USCG-2016-0665 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rule.
If you have questions about this rule, call or email Marine Science Technician First Class Tom Simkins, U.S. Coast Guard, Sector Delaware Bay, Waterways Management Division, Coast Guard; telephone (215) 271-4889, email
In June of 2013, demolition work began on the Route 9, Beesley Point Bridge between Somers Point and Marmora, NJ. Route 52 Construction, the company performing this demolition work, has completed all demolition of the bridge and piles except the portion of the bridge which has the bascule span opening for the navigational channel.
During this phase of demolition heavy marine equipment, to include a large crane and barge, will be used to remove the large bascule span arms and what is left of the bridge tender house and roadway. The barge and crane must be placed in the navigational channel to properly secure and remove what remains of the bridge.
All piles from the demolished bridge south of the bascule span have been removed. All piles north of the bascule span have been removed with the exception of four piles, which are attached to the bascule span for support. The Coast Guard has reviewed Route 52 Construction's plan to move the main navigational channel 100 feet south of the most southern portion of the remaining bridge to allow vessel traffic to safely pass during the demolition of the bascule span. Once the bascule span is removed, the piles will be removed
The removal of the remaining piles, which are secured to the sea floor bed, will be completed by using explosives, after which the piles and debris will be removed. The Captain of the Port, Delaware Bay, has determined that potential hazards associated with pile blasting and removal operations, beginning on or about October 1, 2016, will be a safety concern for anyone operating within 500 yards of pile blasting and removal operations during times of explosive detonation.
The purpose of this rule is to promote maritime safety and protect vessels from the hazards of bridge demolition and pile blasting operations, and to maintain safety of navigation in the Great Egg Harbor Bay, in the vicinity of the Route 9, Beesley Point Bridge. The rule will provide for a clear transit route for vessels, provide a safety buffer around the crane and barge while demolition operations are conducted, and provide a safety buffer around the blasting vessel during times of explosive detonation.
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the final details for this event were not received by the Coast Guard until August 18, 2016, and the demolition work will begin August 22, 2016. The first safety zone is required by August 22, 2016, for the demolition of the remaining portion of the bridge, and it is impracticable to publish an NPRM and consider comments before that date. Allowing this event to go forward without a safety zone in place would expose mariners and the public to unnecessary dangers associated with bridge demolition operations. The crane and barge must be placed in the main navigational channel to facilitate the removal of the remaining portion of the bridge. Therefore, it is imperative that there is a clear transit route and safety zone around the demolition location.
Furthermore, the second safety zone is needed for blasting operations which will begin on or about October 1, 2016. It is impracticable to publish an NPRM and consider comments due to the short window of time until the operation begins. Allowing this event to go forward without a safety zone in place would expose mariners and the public to unnecessary dangers associated with pile blasting 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
For the second safety zone, the pile blasting operation, two blasting events will occur on consecutive days to complete both piers. Notification for the second safety zone will be a combination of broadcast notice to mariners, local notice to mariners, posted warning signs, 500 yard marine traffic safety zone maintained by the contractor's safety boats during time of explosive detonations, a 10 minute, 5 minutes, and 1 minute warning made by the blasting vessel via VHF-FM channel 16, and warning signals at 5 minutes with 3 short blasts of the air horn, and 1 minute warning of 2 short blasts of the air horn. The schedule of the signals will be posted along with all other required company, Local, State, and Federal signage.
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 potential hazards are associated with demolition and pile blasting operations of the Route 9, Beesley Point Bridge, over the Great Egg Harbor Bay, in Marmora, NJ from August 22, 2016, through October 20, 2016. The rule will provide for a clear transit route for vessels, provide a safety buffer around the crane and barge while demolition operations are conducted, and provide a safety buffer around the blasting vessel during times of explosive detonation.
The rule will minimally impact vessels transiting through the Great Egg Harbor Bay navigational channel, in the vicinity of the Route 9, Beesley Point Bridge because vessels will be able to safely transit through an adequate alternate channel, except during times of explosive detonation. The alternate channel will have the same horizontal clearance and no vertical clearance restriction, similar to the current navigational channel.
On August 22, 2016, demolition work will begin on the remaining portion of the Route 9, Beesley Point Bridge, over the Great Egg Harbor Bay, in Marmora, NJ. The Captain of the Port, Delaware Bay, has determined that the hazards associated with demolition and pile blasting operations require two separate safety zones. The first safety zone will encompass all the navigable waters within 250 feet of the marine equipment and demolition operation. Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port, Delaware Bay, or his designated representative. Vessels wishing to transit the waterway may navigate approximately 100 feet south of the main navigational channel to the alternate navigational channel to safely pass the demolition equipment. An adequate alternate navigational channel will be established 100 feet south of the most southern portion of the bascule span which will have the a horizontal clearance of 60 feet and an unlimited vertical clearance. The alternate navigational channel will be clearly marked with red and green buoys; during the evening the buoys will be lit with red and green lights to signify the channel. The alternate channel will have the same horizontal clearance and no vertical clearance restrictions; the State of New Jersey has marked the channel with best water for passage of vessels. Vessels are requested to contact the demolition crew via VHF-FM channel 13 or 16 to make satisfactory passing arrangement and maintain a safe speed when transiting the alternate navigational channel.
The second safety zone will be enforced starting on or about October 1, 2016, only during times of explosive detonation, and encompasses all navigable waters in the Great Egg Harbor Bay within 500 yards of vessels and machinery being used to conduct pile blasting and removal operations. The duration of the enforcement of the zone is intended to protect personnel, vessels, and the marine environment in these navigable waters while explosive detonation occurs. There will be two blasting events occurring on consecutive days to complete both piers. Actual dates and times of explosive detonation
Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port, Delaware Bay, or his designated representative. No vessels may transit through the safety zone during times of explosives detonation. During pile blasting explosive detonation, vessels will be required to maintain a 500-yard distance from vessels and equipment used to conduct pile blasting and removal operations. This 500 yard radius will be secured by two contractor safety boats in the adjacent waterways. For safety reasons associated with the blasting operation, during times of explosive detonation the alternate navigational channel will be closed. At all other times vessels may transit through the established alternate navigational channel approximately 100 feet south of the southernmost remaining pile of the Route 9, Beesley Point Bridge.
Signs will be posted to identify the blast area and warning signs will be posted with the schedule of the warning signals. The contractor will verify that all vessels and persons are clear of safety zone 10 minutes prior to the scheduled shot time and will remain secured until the blaster gives the “All Clear”. All persons involved with securing the blast zone will be equipped with marine radios. A 10 minute, 5 minutes, and 1 minute warning made by the blasting vessel via VHF-FM channel 16, and warning signals at 5 minutes with 3 short blasts of the air horn, and 1 minute warning of 2 short blasts of the air horn. After every explosive detonation the blasting vessels will give the “All Clear” when the alternate channel is clear for vessels to transit.
We developed this rule after considering numerous statutes and Executive order 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 finding is based on the limited size of the zone and the availability for vessels to transit freely through the alternate channel, around the first safety zone. Vessels will only be affected during times of explosive detonation, where the second safety zone will be enforced. The second safety zone is of a limited size and duration as blasting will occur only for a consecutive two day period. In addition, the zones will be well publicized to allow mariners to make alternative plans for transiting the affected area.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
It is expected that there will be minimal disruption to the maritime community. Before the effective period, the Coast Guard will issue maritime advisories widely available to users of the river to allow mariners to make alternative plans for transiting the affected areas. In addition, vessels may transit around the zone through an alternate channel, except during time of explosive detonation.
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
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 two safety zones, the first encompassing all the waters within 250 feet of demolition operations on the remaining portion of the Route 9, Beesley Point Bridge, over Great Egg Harbor Bay, in Marmora, NJ and the second encompassing all navigable waters in the Great Egg Harbor Bay within 500 yards of vessels and machinery being used to conduct pile blasting and removal operations during times of explosive detonation. 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 docket where indicated under
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)
(2)
(b)
(1) All vessels and persons are prohibited from entering into or moving within the safety zones described in paragraph (a) of this section while they are subject to enforcement, unless authorized by the Captain of the Port, Delaware Bay, or by his designated representative.
(2) Persons or vessels seeking to enter or pass through the safety zones must contact the Captain of the Port, Delaware Bay, or his designated representative to seek permission to transit the area. The Captain of the Port, Delaware Bay can be contacted at telephone number 215-271-4807 or on Marine Band Radio VHF Channel 16 (156.8 MHz).
(3) Vessels may freely transit through the marked alternate channel, approximately 100 feet south of the most southern portion of the bascule span. The alternate channel has a horizontal clearance of 60 feet and unlimited vertical clearance. The alternate channel will be marked with red and green buoys and the buoys will be lit at night. Vessels are requested to contact the demolition crew via VHF-FM channel 13 or 16 to make satisfactory passing arrangement and maintain a safe speed when transiting the alternate navigational channel.
(4) No vessels may transit through the safety zone described in paragraph (a)(2) of this section during times of explosives detonation. During pile blasting detonation, vessels will be required to maintain a 500 yard distance from the blasting vessel and equipment. Within the 500 yards is the alternate channel, approximately 100 feet south of the most southern portion of the bascule span. Therefore no vessel may transit the alternate channel during times of explosive detonation. Actual dates and times of explosive detonation will be announced with a combination of broadcast notice to mariners, local notice to mariners, posted warning signs, 500 yard marine traffic safety zone maintained by the contractors safety boats, 10 minute, 5 minutes, and 1 minute warning made by the blasting vessel via VHF-FM channel 16, and warning signals at 5 minutes with 3 short blasts of the air horn, and 1 minute warning of 2 short blasts of the air horn. The schedule of the signals will be posted along with all other required signage.
(5) This section applies to all vessels except those engaged in the following operations: enforcing laws, servicing aids to navigation, and emergency response vessels.
(c)
(d)
(e)
Environmental Protection Agency.
Final rule.
The Environmental Protection Agency (EPA) is approving portions of the October 26, 2015, State Implementation Plan (SIP) submittal from Alabama concerning the Cross-State Air Pollution Rule (CSAPR). Under CSAPR, large electricity generating units (EGUs) in Alabama are subject to Federal Implementation Plans (FIPs) requiring the units to participate in CSAPR's federal trading program for annual emissions of nitrogen oxides (NO
This rule is effective September 30, 2016.
EPA has established a docket for this action under Docket Identification No EPA-R04-OAR-2016-0294. All documents in the docket are listed on the
Steven Scofield, Air Regulatory Management Section, Air Planning and Implementation Branch, Air, Pesticides and Toxics Management Division, Region 4, U.S. Environmental Protection Agency, 61 Forsyth Street SW., Atlanta, Georgia 30303-8960. Mr. Scofield can be reached by telephone at (404) 562-9034 or via electronic mail at
EPA issued CSAPR in July 2011 to address the requirements of CAA section 110(a)(2)(D)(i)(I) concerning interstate transport of air pollution.
CSAPR includes provisions under which states may submit and EPA will approve SIP revisions to modify or replace the CSAPR FIP requirements while allowing states to continue to meet their transport-related obligations using either CSAPR's federal emissions trading programs or state emissions trading programs integrated with the federal programs.
States can submit two basic forms of CSAPR-related SIP revisions effective for emissions control periods in 2017 or later years.
Under the second alternative—a “full” SIP revision—a state may submit a SIP revision that upon approval replaces a CSAPR federal trading program for the state with a state trading program integrated with the federal trading program, so long as the state trading program is substantively identical to the federal trading program or does not substantively differ from the federal trading program except as discussed above with regard to the allowance allocation and/or applicability provisions.
The CSAPR regulations identify several important consequences and limitations associated with approval of a full SIP revision. First, upon EPA's approval of a full SIP revision as correcting the deficiency in the state's implementation plan that was the basis for a particular set of CSAPR FIP requirements, the obligation to participate in the corresponding CSAPR federal trading program is automatically eliminated for units subject to the state's jurisdiction without the need for a separate EPA withdrawal action, so long as EPA's approval of the SIP is full and unconditional.
Certain CSAPR Phase 2 emissions budgets have been remanded to EPA for reconsideration.
In 2015, EPA proposed to update CSAPR to address Eastern states' interstate air pollution mitigation obligations with regard to the 2008 ozone NAAQS. Among other things, the proposed rule would amend the Phase 2 emissions budget applicable to Alabama units under the CSAPR NO
In the CSAPR rulemaking, EPA determined that air pollution transported from Alabama would unlawfully affect other states' ability to attain or maintain the 1997 and 2006 PM
In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of ADEM Administrative Code rules 335-3-8-.07 through 335-3-8-.38 (establishing Alabama's “TR NO
EPA is approving the portions of Alabama's October 26, 2015, SIP submittal concerning the establishment for Alabama units of CSAPR state trading programs for annual NO
EPA promulgated the FIP provisions requiring Alabama units to participate in the federal CSAPR NO
As noted in EPA's NPRM, the Phase 2 SO
Large electricity generating units in Alabama are subject to additional CSAPR FIP provisions requiring them to participate in the federal CSAPR NO
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations.
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
The SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
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 October 31, 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 it 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, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides.
40 CFR part 52 is amended as follows:
42.U.S.C. 7401
The additions and revision read as follows:
(c) * * *
U.S. Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is approving elements of the state implementation plan revisions (SIP) submitted by California to address Clean Air Act requirements for the 2006 fine particulate matter (PM
This rule is effective on September 30, 2016.
The EPA has established a docket for this action under Docket ID No. EPA-R09-OAR-2014-0636. All documents in the docket are listed on the
Wienke Tax, EPA Region 9, (415) 947-4192,
Throughout this document, “we,” “us” and “our” refer to the EPA.
On January 13, 2015, we proposed to approve SIP revisions submitted by California to address Clean Air Act (CAA or “the Act”) requirements for the 2006 primary and secondary 24-hour PM
The EPA proposed to approve the following elements of the 2012 PM
The EPA proposed to disapprove interpollutant trading ratios identified in these SIP submittals for nonattainment new source review (NNSR) permitting purposes. Finally, the EPA proposed to reclassify the SJV area, including Indian country within it, as a Serious nonattainment area for the 2006 PM
On December 22, 2015, we finalized our January 13, 2015 proposal to reclassify the SJV area from Moderate to Serious for the 2006 PM
As part of our January 13, 2015 proposed action, we proposed to approve the proposed 2014 and 2017 MVEBs for the 2006 PM
On May 18, 2016, we proposed to approve the revised MVEBs submitted on November 13, 2015, which address the 1997 8-hour ozone standards, the 2006 PM
As part of our January 13, 2015 proposed action, the EPA also proposed to approve, in accordance with 40 CFR 93.124, the trading mechanism as described on p. C-32 in Appendix C of the 2012 PM
The budgets that the EPA is approving herein relate to the 2006 PM
The EPA provided a 45-day period for the public to comment on our proposed rule. During this comment period, which ended on February 27, 2015, we received two sets of public comments, one from the SJVUAPCD and another from Earthjustice on behalf of the Central Valley Air Quality Coalition, Greenaction, the Association of Irritated Residents, the Sierra Club—Tehipite Chapter, and Global Community Monitor (Earthjustice).
In our December 22, 2015 final action to reclassify the SJV area as a “Serious” PM
We summarize below and provide our responses to all remaining public comments on our proposed action on the 2012 PM
CAA section 172(b) provides that a state containing a nonattainment area shall submit a plan or plan revision (including the plan items) meeting the applicable requirements of CAA section 172(c) and section 110 on the schedule established by the EPA. Section 172(c) contains, inter alia, the requirement that nonattainment area plans include a “comprehensive, accurate, current inventory” of actual emissions from all sources of the relevant pollutant or pollutants in the area. We believe it is reasonable to read these provisions together as requiring that the state submit an inventory that is comprehensive, accurate, and current at the time the state submitted it to the EPA, rather than requiring that the state continually revise its plan as new emissions data become available.
As explained in our proposed rule, ammonia is a precursor to the formation of PM
Given the severity of PM
Earthjustice also characterizes the EPA's consideration of the sensitivity of ambient concentrations to precursor emissions reductions as a “bad” policy assessment and argues that “looking merely at the sensitivity ratios ignores the fact that pollutants like ammonia have been historically under-regulated and very well may represent the cheapest opportunities for emission reductions.” Earthjustice argues that even if much larger amounts of ammonia reductions would be required to achieve the benefits of a few tons of NO
Earthjustice states that the EPA has correctly proposed to determine that ammonia emissions “contribute significantly” to PM
As explained in our proposed rule, section 189(e) of the Act requires that the control requirements for major stationary sources of direct PM
We evaluated the SJV PM
Based on our evaluation of the precursor demonstrations in the 2012 PM
As explained in our proposed rule, the 2012 PM
We note that, as of the date of our proposed action on the 2012 PM
We respond below to the specific comments pertaining to the six source categories highlighted by Earthjustice.
Given the commenter did not specify the types and/or sizes of off-road equipment for which it believes NO
The significant costs associated with replacing off-road agricultural equipment in the SJV indicate that replacement of such equipment without funding assistance generally is not economically feasible at this time. In addition, the wide variations in the sizes and uses of such equipment in the SJV and the available control technologies indicate that replacement of off-road agricultural equipment in the SJV may not be technically feasible for many types of equipment. Accordingly, we disagree with Earthjustice's suggestion that requirements to replace off-road agricultural equipment are required RACM in the SJV.
As the commenter notes, the SCAQMD has adopted several rules to encourage public agencies and some private entities to shift to the use of lower emissions vehicles,
As explained in Appendix C of the 2012 PM
SJVUAPCD Rule 9510, as adopted December 15, 2005, requires applicants for development projects of certain sizes and certain transportation or transit projects to reduce NO
Consistent with the District's rule amendment commitments in the 2012 PM
SJVUAPCD Rule 4692, as amended September 17, 2009, applies to chain-driven charbroilers used in commercial meat cooking and requires a catalytic oxidizer or alternative controls with a control efficiency of at least 83 percent for PM
The BAAQMD is the only air district that we are aware of that has adopted regulations to reduce emissions from under-fired charbroilers. BAAQMD Regulation 6, Rule 2 (Commercial Cooking Equipment),
According to BAAQMD planning and compliance staff, the control requirements in Regulation 6, Rule 2 for under-fired charbroilers have not yet been implemented in practice.
The SJVUAPCD's 2012 PM
A study conducted by the University of California at Berkeley
We anticipate the CE-CERT research report will help clarify the cost effectiveness of various under-fired charbroiler emission control technologies, some of which are prototypes, which will supplement the earlier Berkeley study to help inform more effective rule development.
Based on these evaluations, we find that SJVUAPCD Rule 4692 implements RACM/RACT for charbroilers for purposes of the 2006 PM
SJVUAPCD Rule 4311, as amended June 18, 2009, limits VOC, NO
As the commenter notes, North Dakota has adopted rules governing flaring in the oil and gas industry, through provisions of the North Dakota Century Code and an Order issued by the Industrial Commission of North Dakota. Section 38-08-06.4 of the North Dakota Century Code allows oil wells to flare gas during the first year of production, and thereafter requires wells either to be capped or to be equipped with approved capture or control measures that, at a minimum, reduce flared gas by at least 60 percent, unless the operator can demonstrate that such measures are not economically feasible.
The SJVUAPCD's 2012 PM
The District has addressed the North Dakota Century Code and the Industrial Commission Order in Appendix C of the “2015 Plan for the 1997 PM
We agree with the District's analysis and conclusion that SJVUAPCD Rule 4311 is at least as stringent as the rules adopted by the other California air districts and the requirements in place in North Dakota. Therefore, we disagree with the commenter's assertion that a performance-based standard like North Dakota's would be more protective than Rule 4311. While Rule 4311 does not set performance targets for reducing flared gas, information in the record indicates that it achieves emission reductions greater than those targets. Table C-11 of the 2015 PM
Based on this assessment, we find that SJVUAPCD Rule 4311 represents RACT for flaring operations in the SJV, and that the alternatives suggested by the commenter would not achieve additional emission reductions.
EPA regulations at 40 CFR 51.1002(c), as effective May 29, 2007, provide that, after January 1, 2011, for purposes of establishing emissions limits to satisfy requirements for RFP and reasonably available control measures/reasonably available control technology (RACM/RACT), states must establish such limits taking into consideration the condensable fraction of direct PM
Chapter 4 of the 2012 PM
The 2012 PM
Specifically, section 5.2 of SJVUAPCD Rule 4692 requires that each chain-driven charbroiler be equipped and operated with a catalytic oxidizer that has a control efficiency of at least 83 percent for PM
We therefore find that the 2012 PM
SJVUAPCD Rule 4565 (Biosolids, Animal Manure, and Poultry Litter Operations), as adopted March 15, 2007, requires that each operator of a composting/co-composting facility with a throughput of at least 100,000 wet tons per year conduct all active or curing composting either in aerated static pile(s) vented to an emission control device with a VOC control efficiency of at least 80 percent by weight, or in an in-vessel composting system vented to an emission control device with a VOC control efficiency of at least 80 percent by weight.
Similarly, SCAQMD Rule 1133.2, as adopted January 10, 2003, generally requires operators of “new” co-composting facilities (
Although SJVUAPCD Rule 4565 does not explicitly require operators of composting/co-composting facilities to achieve specified levels of ammonia emission reductions, as does SCAQMD Rule 1133.2, both rules generally require composting facilities to use enclosures and/or aeration systems vented to an emission control device with a VOC control efficiency of 70 or 80 percent. Given the similarity in the control requirements contained in these rules, we find the requirements of SJVUAPCD Rule 4565 sufficient to satisfy RACM/RACT requirements for ammonia control for the 2006 PM
We also disagree with Earthjustice's claim that the EPA has “proposed to excuse the Plan's failure to analyze ammonia controls” because of the timing of its submission after the D.C. Circuit's decision in
As explained in our proposed rule, sections 172(c)(1) and 189(a)(1)(C) of the Act require that attainment plans for Moderate nonattainment areas provide for the implementation of RACM and RACT for existing sources of PM
SJVUAPCD Rule 4566, as adopted August 18, 2011, requires smaller composting operations to implement at least three turns during active-phase composting and one of several mitigation measures listed in Table 1 of the rule, such as application of water or a finished compost cover, or in the alternative to implement an alternative mitigation measure approved by the APCO and the EPA that demonstrates at least 19 percent reduction, by weight, in VOC emissions.
SCAQMD Rule 1133.3, as adopted July 8, 2011, establishes similar requirements for greenwaste composting operations to periodically turn and water active compost piles and to apply finished compost covers.
According to CARB, the water management requirements in SJVUAPCD Rule 4566 and SCAQMD Rule 1133.3 achieve an ammonia control efficiency of 19 percent, while use of certain kinds of aerated static piles (ASP) vented to a biofilter achieves an ammonia control efficiency ranging from 20 to 99 percent.
Earthjustice asserts that the District's comparison of the stringency of SJVUAPCD Rule 4570 and other California air district rules is insufficient because the District considered only the number of mitigation measures required by each district. Earthjustice states that the District should consider instead the ammonia emissions reductions achieved under each rule. Further, Earthjustice states, if the District finds that other air districts' mitigation measures are more effective in reducing emissions, it should incorporate those measures into its rule.
SJVUAPCD Rule 4570, as amended October 21, 2010, requires that CAFs of certain sizes for dairy cows, other cattle, swine, poultry, and layer hens implement measures to reduce VOC emissions during feed operations, manure management and other CAF processes.
Ammonia emissions from CAF manure processes may be reduced by flushing lanes in freestall barns
In addition, SJVUAPCD Rule 4570 requires each owner/operator of a large dairy CAF that handles or stores solid manure or separated solids outside the animal housing to remove dry manure or separated solids from the facility or cover it with a weatherproof covering from October through May, within 72 hours of collecting it, or to implement an “alternative mitigation measure”
We are aware of only two rules implemented in other areas that explicitly regulate ammonia emissions from dairy facilities—the Idaho CAF Rule and SCAQMD Rule 1127 (Emission Reductions from Livestock Waste).
Additionally, according to information submitted by the SJVUAPCD, the option in the Idaho CAF Rule to cover synthetic lagoons (one of the key mitigation measures in the rule) would not be effective in the SJV and could increase ammonia emissions at CAFs in the SJV.
SCAQMD Rule 1127, as adopted August 6, 2004, applies only to livestock waste (
Additionally, SCAQMD Rule 1127 requires that a dairy operator disposing of manure within the South Coast area remove or contract to remove the manure to a manure processing operation approved in accordance with specific requirements and/or to agricultural land within the SCAQMD approved by local ordinance and/or the regional water quality board for the spreading of manure.
Thus, neither SJVUAPCD Rule 4570 nor SCAQMD Rule 1127 strictly requires dairy CAF operators to promptly remove and dispose of collected manure to minimize ammonia emissions. The commenter has failed to identify any measure implemented in the South Coast or elsewhere that is more stringent than the requirements of SJVUAPCD Rule 4570 for this particular component of the manure handling process.
On balance, we find that SJVUAPCD Rule 4570 is more stringent than the Idaho CAF Rule and SCAQMD Rule 1127 given SJVUAPCD Rule 4570 establishes specific requirements for the frequency of flushing manure from freestall barns, which are a significant source of manure and ammonia emissions at dairy CAFs in SJV, while the Idaho CAF Rule and SCAQMD Rule 1127 contain no analogous requirements. In the absence of specific information about more stringent ammonia control requirements for CAFs that the District could reasonably have implemented by the statutory implementation deadline for RACM/RACT in this area (December 14, 2013), we find the requirements of SJVUAPCD Rule 4570 adequate to satisfy RACM/RACT requirements for CAFs for purposes of the 2006 PM
As the commenter notes, CAA section 189(a)(1)(C) requires that each attainment plan for a Moderate PM
Additionally, we disagree with the commenter's assertion that revisions to SJVUAPCD Rule 4901 (“Wood Burning
Earthjustice also criticizes the EPA's general policy of not including these “waiver measures” in the SIP. Earthjustice argues that requiring the EPA to approve waiver measures into the SIP is not inconsistent with Congress' intent to provide California with “the broadest possible discretion” to develop mobile source measures, and that there is no conflict between CAA sections 110 and 209 that would prevent the EPA from adding these measures to the SIP. Additionally, Earthjustice argues that Congress has not ratified the EPA's policy of excluding waiver measures from SIPs, asserting that the EPA had not affirmatively expressed its policy until recently and that the agency has contradicted this policy in previous statements.
In response to the court's decision, CARB has adopted the necessary waiver measures as revisions to the California SIP and submitted them to the EPA for approval.
Section 182(e)(5) of the CAA authorizes the EPA to approve provisions of an attainment plan for an extreme ozone nonattainment area that anticipate development of new control techniques or improvement of existing control technologies, and to approve an attainment demonstration based on such provisions, if,
As explained in our proposed rule, we generally consider three factors in
We also find that the commitments are enforceable and therefore appropriate for approval under CAA section 110.
Chapter 5 of the 2012 PM
Thus, the District Governing Board's commitment specifies the actions the Board committed to undertake, the dates by which it would take such actions, and the emission reductions (if any) that it would achieve through these actions. We find these commitments specific enough to be enforced by the EPA or by citizens under the CAA and are, therefore, approving them into the California SIP.
We note that the SJVUAPCD has made substantial progress on satisfying the commitments identified in the Plan, as follows:
More fundamentally, Earthjustice asserts, the emissions reductions that may be achieved through the District's incentive programs cannot be credited in a SIP unless they are treated under the EPA's voluntary emissions reductions policy. Earthjustice states that “[t]he requirement to reduce emissions in exchange for incentive funding is not enshrined in any sort of control measure that is included in the [SIP] and enforceable by EPA or citizens” and that, as with “waiver measures,” approval of a strategy built upon these reductions would (again) violate Clean Air Act section 110(a)(2)(A).”
SJVUAPCD Rule 9610, as adopted June 20, 2013, establishes a regulatory framework for the District's quantification of emission reductions achieved through incentive programs and provides opportunities for the EPA, CARB, and the public to review and comment on the District's evaluations on an annual basis. As we stated in our May 19, 2014 proposal to approve Rule 9610, the rule “does not establish any emission limitation, control measure, or other requirement that applies directly to an emission source” and therefore “is not intended to implement the reasonably available control technology (RACT) standard or any other control standard under the Act.”
As part of our proposed action on the 2012 PM
Additionally, to the extent Earthjustice intended to assert that emissions reductions achieved through a state or local incentive program cannot be credited in a SIP except through a SIP submission that satisfies the requirement of the Act as interpreted in EPA guidance, we agree. As we explained in our final action on SJVUAPCD Rule 9610:
We expect the District to address the applicable requirements of the CAA in each individual SIP submittal that relies on incentive programs, and our recommendations in both the proposal and today's final rule are intended to provide the District with general guidance on how these requirements, as interpreted in EPA guidance, apply to future SIP submittals developed pursuant to Rule 9610 and the requirements of the Act. . . . EPA will review each SIP submittal developed pursuant to Rule 9610 (including the necessary evaluation of the applicable incentive program guidelines) on a case-by-case basis, following notice-and-comment rulemaking, to determine whether the applicable requirements of the Act are met [
With respect to Earthjustice's statement that “[t]he requirement to reduce emissions in exchange for incentive funding is not enshrined in any sort of control measure that is included in the [SIP] and enforceable by EPA or citizens,” we note that under longstanding EPA guidance, SIP credit may be allowed for a voluntary or other nontraditional measure only where the State submits enforceable mechanisms to ensure that the emission reductions necessary to meet applicable CAA requirements are achieved—
Earthjustice also states that the Plan's RACM/RACT demonstration cannot support the RFP targets approved by the EPA because it is incomplete, particularly for ammonia. According to Earthjustice, the ammonia RACM/RACT demonstration sets no RACM/RACT requirements and therefore makes it impossible to assess whether the Plan will achieve RFP. Further, Earthjustice says, because the Plan allows ammonia emissions to increase after 2012, it does not provide “annual incremental
Section 172(c)(2) of the Act requires that plan provisions for all PM
As we explained in our proposed rule, the 2012 PM
We also disagree with the commenter's claim that the Plan's RACM/RACT demonstration for ammonia cannot support the RFP targets approved by the EPA because it is incomplete and lacks any RACM/RACT requirements. For the reasons provided above in Response 6 through Response 10, we find the RACM/RACT demonstration in the 2012 PM
Finally, we disagree with Earthjustice's claim that the Plan fails to satisfy the RFP requirement because it allows ammonia emissions to increase after 2012 and, therefore, does not provide annual incremental reductions as required by CAA section 171. As the EPA explained in the preamble to the July 29, 2016 final rule to implement the PM
Consistent with these recommendations, the 2012 PM
As a result of our December 22, 2015 action reclassifying the SJV area as a Serious nonattainment area for the 2006 PM
For all areas designated nonattainment for the 2006 PM
With respect to RFP contingency measures, we explained in our proposed rule that once the SJV area is reclassified as a Serious area, the State would be obligated to demonstrate that the SIP provides for the implementation of BACM and BACT and for attainment as expeditiously as practicable, and no later than 2019.
Following the State's submission of a Serious area plan to provide for attainment of the 2006 PM
The SJVUAPCD further asserts that the District's reliance on the use of a basin-wide average for each pollutant is consistent with the EPA's NNSR regulations at 40 CFR part 51, Appendix S, as well as prior EPA approvals of NNSR programs that mitigate emission increases across an air basin. The District also states that it models local impacts of increased PM
The EPA disagrees with the District's claim that the use of a single trading ratio, even the maximum ratio over an area, is necessarily more equitable or less complex than using multiple ratios. While the use of a single interpollutant trading ratio for all locations in a nonattainment area may be simpler than separate ratios for different geographic zones, the District has provided no rationale concerning the net air quality benefits of such an approach. The impact of emissions of a given pollutant varies by the chemical environment the emissions occur in, and that chemical environment varies by location. The ratio of impacts between emissions of NO
The District suggests that the use of the maximum ratio poses an equity problem for a source whose location-specific ratio is lower, as such a source would have to offset more than it should. However, the use of an average ratio across the entire nonattainment area poses a different equity problem: A source whose location-specific ratio is the maximum would be offsetting less than it should while other sources would have to offset more. Use of different ratios tailored to specific geographic zones would be one way to help address these issues. Although the District correctly notes that a source located to one side of a zone boundary may have a different ratio than one located just to the other side of the boundary, creating potential inequities, we believe such an approach is generally more appropriate and equitable as sources in each zone would offset approximately their fair share. In any case, the EPA will review each technical demonstration accompanying an NNSR SIP submission to determine whether the state's requested interpollutant trading ratio(s) will achieve a net air quality benefit in the PM
The District's methodology for estimating the IPT ratio for conformity purposes is essentially an update (based on newer modeling) of the approach that the EPA previously approved for the 2008 PM
As part of our proposed action on the 2012 PM
As we explained above in Response 13, we are approving the RFP demonstration in the 2012 PM
The 2012 PM
The commenter has not identified any information that compels us to
We note that, because the provisions of 40 CFR part 93, subpart A, apply only with respect to emissions of NO
We note that as a consequence of the EPA's January 20, 2016 final action reclassifying the SJV area as a Serious nonattainment area for the 2006 PM
The EPA is taking final action to approve elements of the following SIP revisions submitted by California to address Clean Air Act requirements for implementation of the 2006 PM
Specifically, under CAA section 110(k)(3), the EPA is proposing to approve the following elements of the 2012 PM
1. The 2007 base year emissions inventories as meeting the requirements of CAA section 172(c)(3);
2. the demonstration that attainment by the Moderate area attainment date of December 31, 2015 is impracticable as meeting the requirements of CAA section 189(a)(1)(B)(ii);
3. the reasonably available control measures/reasonably available control technology demonstration as meeting the requirements of CAA sections 172(c)(1) and 189(a)(1)(C);
4. the reasonable further progress demonstration as meeting the requirements of CAA section 172(c)(2); and
5. SJVUAPCD's commitments to adopt and implement specific rules and measures by the dates specified in Chapter 5 of the 2012 PM
In addition, the EPA is approving the 2017 NO
The EPA is disapproving the PM
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
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 October 31, 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, Ammonia, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
42 U.S.C. 7401
Chapter I, title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(c) * * *
(476) * * *
(ii) * * *
(A) * * *
(
(478) The following plan was submitted on March 4, 2013, by the Governor's Designee.
(i) [Reserved]
(ii) Additional materials.
(A) San Joaquin Valley Unified Air Pollution Control District.
(
(
(
(B) California Air Resources Board.
(
(479) The following plan was submitted on November 6, 2014, by the Governor's Designee.
(i) [Reserved]
(ii) Additional materials.
(A) San Joaquin Valley Unified Air Pollution Control District.
(
(
(B) California Air Resources Board.
(
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule; correction.
This document corrects typographical errors in the final rule that appeared in the August 5, 2016
The final rule published August 5, 2016 (81 FR 52056 through 52141) is corrected as of August 30, 2016.
Christine Grose, (410) 786- 1362.
In FR Doc. 2016-18196 (81 FR 52056 through 52141), the final rule entitled, “Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2017” (hereinafter referred as the FY 2017 IRF PPS final rule), there were typographical errors that are identified and corrected in this correcting document. The correction is applicable as of August 30, 2016.
On page 52118 of the FY 2017 IRF PPS final rule, we inadvertently included a reference to Table 10 instead of Table 18.
On page 52118 of the FY 2017 IRF PPS final rule, we inadvertently included a reference to Table 10 instead of Table 11.
On page 52118 of the FY 2017 IRF PPS final rule, we inadvertently included a reference to Table 10 instead of Table 16.
On page 52118 of the FY 2017 IRF PPS final rule, we inadvertently included a reference to Table 10 instead of Table 17.
On page 52118 of the FY 2017 IRF PPS final rule, in the footnote to Table 10, we inadvertently included a reference to Table 10 instead of Table 17.
On page 52118 of the FY 2017 IRF PPS final rule, in the footnote to Table 10, we inadvertently included a reference to Table 10 instead of Table 16.
On page 52119 of the FY 2017 IRF PPS final rule, in the footnote to Table 11, we inadvertently included a reference to Table 11 instead of Table 10.
On page 52119 of the FY 2017 IRF PPS final rule, in the footnote to Table 13, we inadvertently included a reference to Table 12 instead of Table 10.
On page 52120 of the FY 2017 IRF PPS final rule, in the footnote to Table 14, in two instances, we inadvertently included a reference to Table 14 instead of Table 10.
On page 52120 of the FY 2017 IRF PPS final rule, in the footnote to Table 15, in two instances, we inadvertently included a reference to Table 15 instead of Table 10.
On page 52121 of the FY 2017 IRF PPS final rule, in the footnote to Table 16, we inadvertently included a reference to Table 16 instead of Table 10.
Under 5 U.S.C. 553(b) of the Administrative Procedure Act (APA), the agency is required to publish a notice of the proposed rule in the
In our view, this correcting document does not constitute a rulemaking that would be subject to these requirements. This document merely corrects typographical errors in the preamble of the FY 2017 IRF PPS final rule. The corrections contained in this document are consistent with, and do not make substantive changes to, the policies and payment methodologies that were adopted subject to notice and comment procedures in the FY 2017 IRF PPS final rule. As a result, the correction made through this correcting document is intended to resolve inadvertent typographical errors.
Even if this were a rulemaking to which the notice and comment and delayed effective date requirements applied, we find that there is good cause to waive such requirements. Undertaking further notice and comment procedures to incorporate the corrections in this document into the FY 2017 IRF PPS final rule or delaying the effective date of the corrections would be contrary to the public interest because it is in the public interest to ensure that the rule accurately reflects
In FR Doc. 2016-18196 (81 FR 52056), published August 5, 2016, make the following corrections:
1. On page 52118,
a. In the second column, in the second full paragraph, line 11, the reference “Table 10” is corrected to read “Table 18”.
b. In the third column, in the first partial paragraph, line 2, the reference “Table 10” is corrected to read “Table 11”.
c. In the third column, in the first partial paragraph, line 30, the reference “Table 10” is corrected to read “Table 16”.
d. In the third column, in the first partial paragraph, line 37, the reference “Table 10” is corrected to read “Table 17”.
e. In the footnote to Table 10, the phrase “*We refer readers to Table 10” is corrected to read “*We refer readers to Table 17”.
f. In the footnote to Table 10, the phrase “^We refer readers to Table 10” is corrected to read “^We refer readers to Table 16”.
2. On page 52119,
a. In the footnote to Table 11, the phrase “*We refer readers to the Table 11” is corrected to read “*We refer readers to the Table 10”.
b. In the footnote to Table 13, the phrase “*We refer readers to the Table 12” is corrected to read “*We refer readers to the Table 10”.
3. On page 52120,
a. In the footnote to Table 14, the phrase “*We refer readers to the Table 14” is corrected to read “*We refer readers to the Table 10”.
b. In the footnote to Table 14, the phrase “**As is illustrated in Table 14” is corrected to read “**As is illustrated in Table 10”.
c. In the footnote to Table 15, the phrase “*We refer readers to the Table 15” is corrected to read “*We refer readers to the Table 10”.
d. In the footnote to Table 15, the phrase “***As is illustrated in Table 15” is corrected to read “***As is illustrated in Table 10”.
4. On page 52121, in the footnote to Table 16, the phrase “**As illustrated in Table 16” is corrected to read “**As illustrated in Table 10”.
Bureau of Land Management, Interior.
Final rule.
This procedural rule amends certain provisions of the oil and gas regulations administered by the Bureau of Land Management (BLM) to recognize that the BLM is authorized to use either oral or internet-based auction procedures to conduct oil and gas lease sales under the Mineral Leasing Act of 1920, as amended (MLA). The changes made by this rule update the BLM's regulations to be consistent with the National Defense Authorization Act for Fiscal Year (FY) 2015 (NDAA), which specifically granted the BLM the authority to use internet-based bidding for its competitive oil and gas lease sales.
This rule is effective on August 31, 2016.
For questions on technical issues, contact Jully McQuilliams, Senior Mineral Leasing Specialist, by telephone at 202-912-7156, or by email to
This rule makes minor amendments to the BLM regulations governing onshore oil and gas lease sales to make them consistent with existing statutory authority that allows the BLM to use either oral or internet-based auction procedures.
The MLA authorizes the Secretary of the Interior to lease federally owned deposits of oil and gas and the lands containing those deposits in the manner provided for in the Act. 30 U.S.C. 181-287. The Secretary has delegated responsibility for implementing that authority to the BLM. Prior to 2015, the BLM was authorized to conduct oil and gas lease sales using only oral auction methods.
Recognizing the costs associated with holding in-person oil and gas lease sales and the opportunities for increased efficiency provided by an internet-based system, Congress, in 2008, directed the Secretary of the Interior, through the BLM, to conduct an oil and gas leasing internet pilot program. Consolidated Appropriations Act, 2008, Public Law 110-161, Sec. 117, 121 Stat. 2120 (2007). Accordingly, the BLM conducted an internet-based auction pilot in 2009, offering parcels located on BLM-managed lands in Colorado to test the feasibility of internet-based lease sales. The purpose of the pilot was to evaluate the potential costs and benefits to the Federal Government and lease sale participants from using such a system. For this pilot, the BLM relied on a system that had been developed by a private entity.
As outlined in a subsequent report to Congress submitted in February 2012, which presented the results of the 2009 internet-based auction pilot, the BLM found that transitioning to internet-based lease sales would have immediate
As a result of this auction pilot, the Secretary recommended in his report that Congress amend the MLA to allow the BLM maximum discretion to use either in-person or internet-based procedures to conduct competitive lease sales for BLM-managed onshore oil and gas resources.
Consistent with the Secretary's recommendations, in the NDAA, Congress amended the MLA at 30 U.S.C. 226(b)(1) to authorize the Secretary of the Interior to “conduct onshore lease sales through Internet-based bidding methods.”
The NDAA does not modify parcel selection, bidder eligibility, auction style, or payment requirements, which will continue to apply regardless of the method selected by the BLM to conduct a particular oil and gas lease sale. The BLM will also continue to award leases to the highest responsible qualified bidder at its competitive auctions, pursuant to the MLA. Consistent with existing regulations at 43 CFR subpart 3110, if a parcel offered for sale does not sell at a competitive auction, it will be available on a noncompetitive basis in the BLM State Offices with jurisdiction over the areas where the parcels are located for the period of time set forth in the regulations.
The BLM has determined that this procedural rule is necessary because the BLM's existing regulations refer only to oral auction or oral bidding, even though the BLM is statutorily authorized to use either oral or internet-based auction procedures to conduct its oil and gas lease sales. To implement the new authority provided by the NDAA, this rule amends 43 CFR subparts 3100, 3110, and 3120 to add the phrase “or internet-based” after every reference to “oral” auctions or bidding. Specific changes are made to the following provisions: 43 CFR 3103.3-2, 3110.1, 3110.2, 3120.1-2, 3120.3-7, 3120.5-1, 3120.5-2, 3120.5-3, and 3120.6.
This rule does not make any other changes to the regulations in 43 CFR chapter II. It does not change the parcel selection, bidder eligibility, auction style, or payment requirements for the BLM's competitive oil and gas lease sales. This rule merely makes minor technical amendments that give the BLM the option to conduct lease sales either in person or over the internet consistent with applicable statutory authority.
As explained in the Background Section of this Preamble, this rule makes minor, non-substantive, technical amendments to the BLM's rules governing oil and gas lease sales. These changes involve agency organization, procedure or practice, and do not create rights or impose obligations on members of the public. As a result, under section 553(b)(3)(A) of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3)(A), this rule may be published without notice and comment procedures. Because the rule relates solely to agency procedure and practice and merely restates the terms of the statute it implements, it is not substantive, and therefore is also not subject to the 30-day delayed effective date for substantive rules under section 553(d) of the APA. 5 U.S.C. 553(d). This rule is therefore effective immediately upon publication in the
The U.S. Court of Appeals for the District of Columbia has emphasized that the “critical feature” of a rule that satisfies the so-called procedural exception to the APA's notice-and-comment requirements is that the rule “covers agency actions that do not themselves alter the rights or interests of parties, although it may alter the manner in which the parties present themselves or their viewpoints to the agency.”
Moreover, when a rule merely restates the statute it implements, APA notice-and-comment procedures are unnecessary.
While Executive Order (E.O.) 12866 does not apply to “(r)egulations or rules
E.O. 13563 reaffirms the principles of E.O. 12866, while calling for improvements in the nation's regulatory system to promote predictability, reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory objectives. This E.O. 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, where appropriate. The BLM developed this rule in a manner consistent with these requirements.
The Regulatory Flexibility Act (RFA) requires an agency to prepare a regulatory flexibility analysis for rules unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. However, the RFA applies only to rules for which an agency is required to first publish a proposed rule. See 5 U.S.C. 603(a) and 604(a). Because no notice of proposed rulemaking is required, the RFA does not require an initial or final regulatory flexibility analysis of this rule.
This rule is not a major rule under 5 U.S.C. 804(2) of the Small Business Regulatory Enforcement Fairness Act. This rule:
(a) Does not have an annual effect on the economy of $100 million or more.
(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, Indian, or local government agencies or geographic regions.
(c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises.
This rule merely makes procedural changes involving agency organization, procedure, or practice, by adding the option, consistent with applicable statutory authority, for the BLM to use internet-based bidding in addition to oral auctions for its competitive oil and gas lease sales.
Under the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531
Under the criteria in section 2 of E.O. 12630, this rule does not have any significant takings implications. This rule will not impose conditions or limitations on the use of any private property. Therefore, this rule does not require a Takings Implication Assessment.
Under the criteria in section 1 of E.O. 13132, this rule does not have Federalism implications that warrant the preparation of a Federalism summary impact statement. The management of Federal mineral leases is the responsibility of the Secretary of the Interior. This rule does not impose administrative costs on States or local governments. This rule also does not substantially and directly affect the relationship between the Federal and State governments. Because this rule does not alter that relationship, this rule does not require a Federalism summary impact statement.
This rule complies with the requirements of E.O. 12988. Specifically, this rule:
a. Meets the criteria of section 3(a), which requires that agencies review all regulations to eliminate errors and ambiguity and write them to minimize litigation.
b. Meets the criteria of section 3(b)(2), which requires that agencies write all regulations in clear language using clear legal standards.
Under E.O. 13175, the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951, May 4, 1994), the Department of the Interior (DOI) Policy on Consultation with Indian Tribes (Dec. 1, 2011), and the DOI Departmental Manual, part 512, section 2, the BLM evaluated possible effects of the rule on Federally recognized Indian tribes. The DOI strives to strengthen its government-to-government relationship with Indian tribes through a commitment to consultation with Indian tribes and recognition of their right to self-governance and tribal sovereignty. The BLM determined that this rule has no tribal implications because the BLM does not conduct oil and gas lease sales for Indian tribal, corporate, or allotted lands. Thus, Indian tribal governments are not impacted by the changes made by this rule, and consultation is not required.
This rule will modify 43 CFR 3103.3-2, 3110.1, 3110.2, 3120.1-2, 3120.3-7, 3120.5-1, 3120.5-2, 3120.5-3, and 3120.6 to recognize that the BLM is statutorily authorized to use either oral or internet-based auctions to conduct its oil and gas lease sales. None of these regulations has required an Office of Management and Budget (OMB) control number in the past, nor do they require an OMB control number as revised. They are within 5 CFR 1320.3(h)(1), which provides an exception from Paperwork Reduction Act requirements for affirmations, certifications, or acknowledgements as long as they entail no burden other than that necessary to identify the respondent, the date, the respondent's address, and the nature of the instrument. This rule does not contain any new information collection requirements, and therefore, does not require a submission to the OMB under the Paperwork Reduction Act.
This rule is procedural in nature; therefore, it qualifies for categorical exclusion under 43 CFR 46.210(i). As a result, a detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required. The BLM
Under E.O. 13211, agencies are required to prepare and submit to OMB a Statement of Energy Effects for significant energy actions. This Statement must include a detailed statement of “any adverse effects on energy supply, distribution, or use (including a shortfall in supply, price increases, and increased use of foreign supplies)” for the action, and reasonable alternatives and their effects. Section 4(b) of E.O. 13211 defines a “significant energy action” as “any action by an agency (normally published in the
Government contracts, Mineral royalties, Oil and gas reserves, Public lands—mineral resources, Reporting and recordkeeping requirements, Surety bonds.
Government contracts, Oil and gas exploration, Public lands—mineral resources, Reporting and recordkeeping requirements.
Government contracts, Oil and gas exploration, Public lands—mineral resources, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, the BLM amends 43 CFR parts 3100, 3110, and 3120 as follows:
30 U.S.C. 189 and 359; 43 U.S.C. 1732(b), 1733, and 1740; the Energy Policy Act of 2005 (Pub. L. 109-58); and the National Defense Authorization Act for Fiscal Year 2015 (Pub. L. 113-291, 128 Stat. 3762).
(a) * * *
(2) On leases issued from offers filed after December 22, 1987, and on competitive leases issued from successful bids placed at oral or internet-based auctions conducted after December 22, 1987, a minimum royalty in lieu of rental of not less than the amount of rental which otherwise would be required for that lease year.
16 U.S.C. 3101
(b) * * * Such lands shall become available for a period of 2 years beginning on the first business day following the last day of the competitive oral or internet-based auction, or when formal nominations have been requested as specified in § 3120.3-1 of this title, or the first business day following the posting of the Notice of Competitive Lease Sale, and ending on that same day 2 years later. * * *
(a) Offers filed for lands available for noncompetitive offer or lease, as specified in §§ 3110.1(a)(1) and 3110.1(b) of this title, shall receive priority as of the date and time of filing as specified in § 1821.2-3(a) of this title, except that all noncompetitive offers shall be considered simultaneously filed if received in the proper BLM office any time during the first business day following the last day of the competitive oral or internet-based auction, or when formal nominations have been requested as specified in § 3120.3-1 of this title, on the first business day following the posting of the Notice of Competitive Lease Sale. * * *
16 U.S.C. 3101
(b) Lease sales shall be conducted by a competitive oral or internet-based bidding process.
The minimum bid, first year's rental and administrative fee shall be refunded to all nominators who are unsuccessful at the oral or internet-based auction.
(a) Parcels shall be offered by oral or internet-based bidding. * * *
(b) A winning bid shall be the highest oral or internet-based bid by a qualified bidder, equal to or exceeding the national minimum acceptable bid. * * *
(c) Two or more nominations on the same parcel when the bids are equal to
(c) The winning bidder shall submit the balance of the bonus bid to the proper BLM office within 10 working days after the last day of the oral or internet-based auction.
(c) If a bid is rejected, the land shall be reoffered competitively under this subpart with any noncompetitive offer filed under § 3110.1(a) of this title retaining priority, provided no bid is received in an oral or internet-based auction.
Lands offered at the oral or internet-based auction that received no bids shall be available for filing for noncompetitive lease for a 2-year period beginning the first business day following the auction at a time specified in the Notice of Competitive Lease Sale.
U.S. Office of Personnel Management.
Notice of proposed rulemaking.
The U.S. Office of Personnel Management (OPM) is issuing a Notice of Proposed Rulemaking to address the implementation of certain provisions of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended (ACA) making Federal employee health insurance accessible to employees of certain Indian tribal entities. The ACA includes authorization for Indian tribes, tribal organizations, and urban Indian organizations that carry out certain programs to purchase coverage, rights, and benefits under the Federal Employees Health Benefits (FEHB) Program for their employees. Tribal employers and tribal employees will be responsible for the full cost of benefits, plus an administrative fee.
Chelsea Ruediger, Senior Policy Analyst (202) 606-0004.
You may submit comments, identified by RIN number “3206-AM40” using any of the following methods:
The U.S. Office of Personnel Management (OPM) is issuing a notice of proposed rulemaking to extend certain Federal employee benefits to employees of certain Indian tribal employers. The Patient Protection and Affordable Care Act (Pub. L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), as amended (ACA) extended eligibility to purchase coverage, rights, and benefits under the Federal Employees Health Benefits (FEHB) Program to employees of those Indian tribes and tribal organizations carrying out programs under the Indian Self-Determination and Education Assistance Act (ISDEAA), and urban Indian organizations carrying out programs under title V of the Indian Health Care Improvement Act (IHCIA). This regulation includes program rules for tribal employers and tribal employees in accordance with chapter 89 of title 5, United States Code. The new regulatory provisions are set forth in new subpart N, part 890 of title 5 of the Code of Federal Regulations.
These proposed rules, which codify previously issued guidance, adopt the FEHB program for Federal employees under 5 U.S.C. 89 with slight variations to meet the needs of the tribal population. OPM performed consultation and developed sub-regulatory guidance in 2011-2012 to administer the program. OPM has been operating the program since then and tribal employers began purchasing FEHB for their employees on March 22, 2012 with an insurance coverage effective date of May 1, 2012. As of the publication date of this proposed rule, 19,540 tribal employees and 90 tribes are participating in the program. These proposed rules codify the program as set forth in previous guidance after extensive work understanding tribal population needs.
Section 10221 of the ACA enacted the entire text of S. 1790 as reported on December 16, 2009 by the Senate Committee on Indian Affairs to Public Law 111-148. S. 1790 revised and extended the IHCIA, including adding a new section 409 to the IHCIA (codified at 25 U.S.C. 1647b).
This proposed regulation refers to tribes, tribal organizations, and urban Indian organizations that are entitled to access insurance under section 409 as “tribal employers.” Moreover, because the term “employee” as used in 5 U.S.C. chapter 89 is a statutorily defined term, OPM refers to a tribal employer's employees who are eligible to enroll in FEHB as “tribal employees.”
Where practicable, this regulation provides for the administration of benefits by and for tribal employers and tribal employees in the same manner as these benefits are administered by and for Federal agencies and Federal employees. There may be some instances for which there is no established procedure in place for the Federal Government, such as the procedure and timeline by which tribal employers certify entitlement to purchase FEHB. When there are no established procedures in place, OPM has proposed a procedure.
OPM has worked in consultation with tribal leaders to establish program rules.
Under Executive Order 13175, OPM has an obligation to engage in “regular and meaningful consultation and collaboration with tribal officials in the development of Federal policies that have tribal implications.” OPM is committed to fulfilling this obligation.
Following the passage of the ACA, OPM published a series of policy papers
A Tribal Technical Workgroup composed of tribal human resource representatives and OPM operational and policy staff was established when developing this regulation and in support of the implementation of the Tribal FEHB Program. The primary purpose was to ensure system requirements for enrollment processing were completed according to the needs of tribal employers.
Additional tribal consultative actions included collaborating with the Department of Health and Human Services (HHS) to conduct in-person briefings for tribal communities across the country, focusing on the implementation of the ACA.
OPM representatives have attended more than 20 tribal conferences and meetings to provide information and consultation about the Tribal FEHB Program since its inception. In addition, OPM has hosted training sessions for interested tribes and tribal organizations on numerous occasions. Tribal Benefits Administration Letters (TBAL) are released and distributed to participating tribal employers regularly, just as they are for Federal agencies. Questions following the release of a TBAL are directed to OPM's dedicated Tribal Desk. The Tribal Desk is available during regular business hours and is answered by the OPM staff who administer the program. Whenever possible, OPM has created direct lines of communication and fostered collaboration between tribal employers and OPM employees.
When important program changes occur, OPM issues Dear Tribal Leader Letters (DTLL) to notify tribes, tribal organizations and urban Indian organizations. An example was the DTLL issued describing the revision of the original “all-or-nothing” policy. The original policy had required a tribal employer to enroll all of their billing units. Due to concerns raised by tribal employers, OPM amended that policy to allow tribal employers to select which of their billing units will receive FEHB and which will not. As a result, interest in FEHB enrollment has increased.
OPM's obligation to consult with tribal officials is ongoing. OPM will consider the public comment period of this proposed rule as an important consultation period. Tribal leaders will be alerted of the publication of this proposed rule and the process for submitting formal comments with a DTLL. As appropriate, OPM will conduct meetings with tribal officials to address components of this proposed rule. A DTLL will also be issued in tandem with the publication of a final rule.
The FEHB Program was established in 1960 to provide health benefits to Federal employees, annuitants, spouses, and children. Approximately 8.2 million employees, annuitants, and family members are now covered. Federal employees can choose among various forms of health plans, including nationwide Fee-for-Service (FFS) plans, local Health Maintenance Organizations (HMO), Consumer-Driven Health Plans (CDHP), and High-Deductible Health Plans (HDHP). FEHB plans typically cover inpatient and outpatient hospital care, primary care and specialist doctor visits, and pharmacy benefits. Some FEHB plans offer limited routine vision and dental benefits.
Currently, there are three FEHB enrollment categories: (1) Self only; (2) self plus one; and (3) self and family. A self only enrollment covers only the enrollee. A self plus one enrollment covers the enrollee and one designated eligible family member. A self and family enrollment covers the enrollee and all eligible family members. Eligible family members include a spouse and/or child(ren) under age 26 (including married children, adopted children, and stepchildren). A child age 26 or over who is incapable of self-support because of a mental or physical disability that existed before age 26 is also an eligible family member. A foster child may be covered if the child lives with the employee in a parent-child relationship and the employee expects to raise the child to adulthood.
A newly eligible Federal employee can enroll in any FEHB plan available in his or her geographic region within 60 days of becoming eligible. FEHB coverage is effective the first day of the pay period after the enrollment request is received by the Federal employee's employing office and that follows a pay period during any part of which the employee is in pay status. Federal employees can enroll, cancel enrollment, increase or decrease enrollment, or change plans or options during the annual open season usually held from mid-November to mid-December. Any changes made during open season are effective for the following calendar year. Enrollees can also change enrollment in conjunction with a qualifying life event (QLE), such as marriage, divorce, birth or adoption of a child, change in employment status that affects insurance coverage or cost, or a move outside of an HMO's service area.
The employing Federal agency pays a Government contribution of approximately 72 percent of the weighted average of premiums in effect for each calendar year. The Government contribution to any individual plan is capped at 75 percent of premium. FEHB plans generally require enrollee cost sharing in the form of calendar year deductibles, copayments, and/or coinsurance for covered services.
Section 890.1402 defines several terms used in the new subpart N of Part 890. This section also includes a series of deemed references. Defining these terms and identifying deemed references are necessary to make clear how OPM will modify and apply existing regulations to govern tribal employers' purchase of FEHB for tribal employees.
The new subpart N refers to and incorporates many other subparts of part 890 that govern how the FEHB Program functions. The deemed references make it clear that references to statutory terms such as “employee,” and other terms used throughout part 890 will be deemed references to “tribal employee,” and other terms as appropriate, in context, to govern tribal employers' purchase of FEHB for its tribal employees pursuant to the ACA.
Entitlement to offer FEHB coverage, rights, and benefits will be available to any tribe, tribal organization, or urban Indian organization carrying out at least one of the programs under the ISDEAA or Title V of the IHCIA as specified in section 409 of the IHCIA. The terms “ tribe,” “ tribal organization,” and “ urban Indian organization” are defined in the IHCIA. Those definitions, set forth below, are incorporated by reference in the regulatory text at § 890.1402 which defines the term “ tribal employer.” The term “ tribal employer” is used to refer to any of these entities that fulfill the requirements to be entitled to purchase FEHB for its employees.
A tribe is any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or group or regional or village corporation as defined in or established pursuant to the Alaska
A tribal organization is the recognized governing body of any Indian tribe; any legally established organization of Indians which is controlled, sanctioned, or chartered by such governing body or which is democratically elected by the adult members of the Indian community to be served by such organization and which includes the maximum participation of Indians in all phases of its activities: That in any case in which a contract is let or grant made to an organization to perform services benefiting more than one Indian tribe, the approval of each such Indian tribe shall be a prerequisite to the letting or making of such contract or grant. 25 U.S.C. 1603(26), incorporating by reference 25 U.S.C. 450b(l) (definition of “ tribal organization”).
An urban Indian organization is a non-profit corporate body situated in an urban center, governed by an urban Indian controlled board of directors, and providing for the maximum participation of all interested Indian groups and individuals, which body is capable of legally cooperating with other public and private entities for the purpose of performing the activities described in section 1653(a) of this title. 25 U.S.C. 1603(29).
For purposes of this regulation, tribes and tribal organizations carrying out at least one program under the ISDEAA, and urban Indian organizations carrying out at least one program under Title V of the IHCIA, are entitled to purchase FEHB for their employees. If the tribal employer ceases to carry out one of these programs, entitlement to purchase FEHB ceases at the end of the calendar year in which the tribal employer ceased to carry out one of those programs.
If OPM determines that a tribal employer is not entitled to purchase FEHB, the tribal employer may appeal that decision to OPM. OPM retains sole authority for deciding entitlement.
OPM has defined the term “ tribal employee” in § 890.1402 broadly to mean a common law employee of a tribal employer. This section incorporates the regulatory standard under the Federal employment tax regulations, (which, for this purpose, includes Federal Insurance Contributions Act tax and Federal income tax withholding), which generally provides that an individual is a common law employee if the tribal employer has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. This determination is based on all the facts and circumstances. The section then indicates that this determination is to be guided by a list of 20 factors
OPM recognizes that there may be very limited cases in which a tribal employer has determined that a worker is a common law employee but has also determined that no Federal employment taxes are due with respect to the worker. Under these circumstances, OPM will defer to the tribal employer's reasonable determination that the worker is a common law employee for purposes of eligibility to enroll in FEHB.
Each tribal employer entitled to access Federal insurance will be able to offer FEHB coverage, rights, and benefits to all of its tribal employees, not just those carrying out functions under the ISDEAA or IHCIA title V programs. OPM has determined that tribal employees (who, by definition, are common law employees) engaged in governmental or commercial operations, such as casino or hospitality operations, will be eligible to enroll in FEHB if it is purchased by their tribal employer. As discussed below, individuals who retire from employment with a tribal employer lose their status as tribal employees upon retirement and their enrollment will terminate.
A tribal employer carrying out programs under the ISDEAA or Title V of the IHCIA may purchase FEHB for employees of one or more billing units carrying out programs or activities under their contract. Once a tribal employer has enrolled at least one billing unit carrying out programs or activities under ISDEAA or IHCIA, the tribal employer may enroll one or more billing units that are not carrying out programs or activities under ISDEAA or IHCIA. Section 890.1405 establishes that all eligible full-time and part-time tribal employees of each participating billing unit of a tribal employer must be offered the opportunity to enroll in FEHB. Intermittent, seasonal, and temporary tribal employees will be treated similarly to intermittent, seasonal and temporary Federal employees. However, under § 890.102(k), the tribal employer may choose not to extend coverage to certain intermittent, seasonal, and temporary employees if written notification is provided to the Director of OPM.
Tribal employers may not segment tribal employee populations by offering a different set of health benefits to different groups of tribal employees within a single billing unit. An exception to this rule is if tribal employees within a billing unit are offered alternative coverage as part of a collective bargaining agreement.
As described in § 890.1405(e), family members of tribal employees will be eligible for coverage in FEHB under substantially the same terms as family members of Federal employees. One exception is that former spouses of tribal employees may not enroll in FEHB under the Civil Service Retirement Spouse Equity Act. This is because Spouse Equity coverage is linked to the former spouse's entitlement to a portion of a Federal employee's annuity. Another exception is that if the tribal employee dies while employed, a surviving spouse cannot continue FEHB enrollment or enroll in his or her own right, unless the surviving spouse is also FEHB-eligible through his or her employment. This is because continuing FEHB eligibility for surviving spouses of Federal employees is linked to a survivor annuity.
Section 890.1406 states that correction of enrollment errors will take place according to the same terms as for Federal employees. Requirements for tribal employees' appeals of eligibility and enrollment decisions are described in § 890.1415.
Section 890.1403 explains that a tribal employer is entitled to purchase FEHB if payment, defined by § 890.1402 as all premiums plus administrative fees, are currently deposited in the Employees Health Benefits Fund, as required by the authorizing statute. This section
Section 890.1413 describes how payment will work for tribal employers participating in FEHB. Tribal employer and tribal employee contributions for FEHB will be handled similarly for tribal employees as for Federal employees, with the tribal employer responsible for contributing a share of premium that is at least equivalent to the share of premium that the Federal Government contributes for Federal employees. The percentage contribution requirements are described in 5 U.S.C. 8906. The FEHB contributions for part-time tribal employees working between 16 and 32 hours per week may be pro-rated in accordance with the terms applicable to part-time Federal employees. FEHB enrollment for tribal employees on unpaid leave may be continued in a manner similar to Federal employees on unpaid leave under 5 CFR 890.502(b), as long as the full premium is paid.
The tribal employer's FEHB contribution percentage must equal or exceed the contribution that the Federal Government would make each month for a Federal employee for the same plan. Tribal employers may elect to pay a greater tribal employer contribution, but may not pay a lesser amount than the Federal Government contribution for each plan. There is no cap on the percentage of premium that a tribal employer may contribute. The tribal employer may vary the contribution by type of enrollment (self only, self plus one, self and family) but must treat tribal employees in a uniform manner. As an example, a tribal employer could contribute 100% for all tribal employees in self only or self plus one enrollments and 90% for all tribal employees in self and family enrollments. Tribal employers may not vary the tribal employer contribution in order to encourage or discourage enrollment in any particular plan or plan option. Tribal employers may choose to vary the contribution amounts for each billing unit, provided each billing unit meets the requirements set forth above.
In addition, the tribal employer is required to pay an administrative fee, in an amount set by OPM each year, for each tribal employee's enrollment on a monthly basis. This fee covers the costs of a paymaster to perform the collection and remittance functions that is performed for Federal employees by Federal payroll offices. The paymaster is the entity designated by OPM as responsible for receiving FEHB premiums from the tribal employer, forwarding premiums to the Employees Health Benefits Fund, and maintaining enrollment records for all participating tribal employers. Tribal employers may not charge this fee to tribal employees. The total aggregate amount for tribal employees' and tribal employer's share of the premium and the administrative fee must be available for receipt by the paymaster on an agreed upon date set in the agreement with the tribal employer.
Section 890.1404 establishes a process by which tribal employers may demonstrate entitlement and elect to purchase, FEHB for their tribal employees. The tribal employer must notify OPM by email or telephone of the intention to purchase FEHB. Through an agreement described in § 890.1404(b), OPM will confirm: (1) The tribal employer's contact information; (2) the date that FEHB coverage will begin; (3) the approximate number of tribal employees eligible to enroll; (4) the tribal employer's agreement not to make available to FEHB-eligible tribal employees alternate tribal employer-sponsored health insurance coverage concurrent with FEHB; (5) the tribal employer is entitled to participate in the FEHB by carrying out at least one program under ISDEAA or title V of IHCIA; (6) the tribal employer's acknowledgement that participation in FEHB makes the tribal employer subject to Federal Government audit with respect to such participation and to OPM authority to direct the administration of the program; (7) the tribal employer's agreement to establish or identify an independent dispute resolution panel to adjudicate appeals of determinations made by a tribal employer regarding an individual's status as a tribal employee; (8) the tribal employer's agreement to supply necessary enrollment information, payment of the tribal employer and tribal employee share of premium and payment of an administrative fee to the paymaster; (9) the tribal employer's agreement to notify OPM in the event that the tribal employer is no longer carrying out at least one program under the ISDEAA or title V of IHCIA, and (10) the tribal employer's agreement to abide by other terms and conditions of participation.
Section 890.1404(c) allows a tribal employer to elect to purchase FEHB at any time. The election to purchase FEHB will commit the tribal employer to purchase FEHB at least through the remainder of the calendar year in which the election is made. Elections will be automatically renewable year to year unless revoked by the tribal employer or terminated by OPM. Section 890.1404(d) allows a tribal employer to revoke its election to purchase FEHB with 60 days' notice to OPM. If a tribal employer revokes an election to purchase FEHB, that tribal employer may only re-elect to purchase FEHB during the first annual open enrollment season that occurs at least twelve months after the election is revoked. If the tribal employer revokes an election to participate a second time, the tribal employer may only re-elect to purchase FEHB during the first open season that falls at least twenty-four months after the second revocation. Section 890.1404(f) states that OPM maintains final authority to determine entitlement of a tribal employer to purchase FEHB.
A tribal employer that begins to carry out a program under ISDEAA or Title V of IHCIA after this rule is effective may notify OPM of its intention to purchase benefits after the entitlement is established. Section 890.1407 states that a tribal employer electing to purchase FEHB for its employees may not concurrently make contributions toward non-FEHB tribal employer-sponsored health insurance to any tribal employee eligible for FEHB. However, a tribal employer electing FEHB may concurrently offer non-FEHB dental, vision, or disability coverage. This requirement will keep tribal employees' enrollment conditions aligned with those of Federal employees.
Section 890.1405(f) establishes that eligibility to enroll in FEHB does not cause any tribal employee to be identified or characterized as a Federal employee, nor does it convey any additional rights or privileges of Federal employment. There may be circumstances in which a tribal employee is also an FEHB-eligible Federal employee. In such a case, the tribal employee may participate in FEHB through either employer. A tribal employee who is also a Federal employee cannot enroll in FEHB through both employers. FEHB enrollments may be transferred between Federal employing offices and tribal employers in a similar manner as transfer of enrollments between Federal agencies.
Section 890.1405 describes tribal employee eligibility for enrollment in FEHB. Tribal employees will be able to enroll in FEHB after an agreement
The enrollment process for tribal employees into FEHB is described in § 890.1407. Tribal employers must establish an initial enrollment opportunity for tribal employees. After that initial enrollment opportunity, for plan years during which a tribal employer's election to offer FEHB is in place, the FEHB enrollment period for tribal employees will be the same as for Federal employees: Up to 60 days after becoming a new tribal employee or changing to an eligible position, during the annual open season, or 31 days before to 60 days after experiencing a qualifying life event. The effective date of enrollment for tribal employees will be the same as for Federal employees under parts 890 or 892, depending on premium conversion status. Upon enrollment in the FEHB Program, tribal employees will choose among the same nationwide and local FEHB plans that are available to Federal employees.
Section 890.1408 describes the circumstances under which a tribal employee may change enrollment type, plan, or option. These changes are allowed and will take effect under the same circumstances as for Federal employees. Changes may be restricted if the tribal employer has a premium conversion plan in effect (pre-tax treatment of premiums) and the tribal employee has elected premium conversion.
Section 890.1409 establishes that a tribal employee may cancel his or her FEHB coverage or decrease his or her enrollment only under the same circumstances as a Federal employee. If the tribal employee has elected premium conversion, this cancellation or change is restricted.
Section 890.1410 establishes that FEHB enrollment will terminate when employment with the tribal employer ends due to resignation, dismissal, or retirement, or when the tribal employer discontinues its purchase of FEHB. Termination of enrollment does not refer to a voluntary cancellation by the tribal employee during a period of continued employment. Upon termination of enrollment, the tribal employee will receive a 31-day temporary extension of coverage without premium contribution from the tribal employee or tribal employer and will have an opportunity to convert to an individual policy. Tribal employees whose FEHB enrollment terminates due to separation from tribal employment (unless the separation is for gross misconduct) are also eligible for temporary continuation of FEHB coverage (TCC), described at 5 U.S.C. 8905a and 5 CFR part 890 subpart K.
If an FEHB enrollment is terminated due to the death of the tribal employee, the tribal employee's spouse and covered children are entitled to a 31-day temporary extension of coverage and opportunity to convert to an individual policy. Covered children, if any, may elect TCC and may cover the tribal employee's surviving spouse as a member of family.
Section 890.1410(f) establishes that insufficient payment from the tribal employer to the paymaster can result in termination of enrollment for all of the tribal employer's tribal employees affected by the paymaster's failure to obtain current deposit. In such a case, FEHB enrollment for all affected tribal employees will be terminated according to a process determined by OPM. FEHB enrollment of all tribal employees affected by the paymaster's failure to obtain current deposit will be terminated effective as of midnight on the last day of the month in which premium payment was received. These tribal employees will be entitled to a 31-day temporary extension of coverage without additional premium contribution and the opportunity to convert to an individual policy. In the event that a tribal employer elects to purchase FEHB and does not pay premiums for the first month in which payment is due, no 31-day temporary extension of coverage or opportunity to convert to an individual policy will be provided. Termination of enrollment due to non-payment of premiums in either case will not result in an opportunity to enroll in TCC since current tribal employees do not meet the conditions for TCC enrollment. Tribal employers will have full responsibility for communicating notice of termination of enrollment, and accompanying rights and obligations, to their tribal employees. Any outstanding premium due for coverage in arrears will be treated as a debt owed solely by the tribal employer.
Tribal employees and certain family members whose FEHB coverage terminates under certain circumstances can elect to purchase temporary continuation of coverage (TCC) for up to 18 or 36 months. Section 890.1411 establishes the criteria for TCC participation for tribal employees and their family members. In general, tribal employees who are enrolled in FEHB and separate from tribal employment, except for reasons of gross misconduct, may elect to purchase TCC. Certain formerly covered family members, including children or stepchildren who no longer meet the requirements of a covered family member, and former spouses, may elect TCC. The surviving spouse of a deceased enrollee who was enrolled in FEHB is not eligible to elect TCC, but may be covered by the TCC enrollment of an eligible child.
The administrative fee is the same as would apply to a former Federal employee enrolled in TCC. The administrative fee described in § 890.1413(e) would not apply to a TCC enrollment of a tribal employee or family member.
Section 890.1412 establishes that a tribal employee in non-pay status or with insufficient pay to cover the premium costs may continue FEHB enrollment for up to 365 days. Tribal employees in non-pay status due to uniformed service are entitled to continue FEHB enrollment for up to 24 months. After termination, the tribal employee and covered family members are entitled to a 31-day temporary extension of coverage without premium contribution, and conversion to an individual policy.
Section 890.1412 also establishes that a temporary tribal employee who has insufficient pay to cover the employee share of FEHB premiums may choose a less expensive plan. If the tribal employee does not or cannot move to a less expensive plan, the FEHB enrollment will be terminated and the enrollee is entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy.
If a tribal employee moves from an FEHB-eligible to a FEHB ineligible position, the FEHB enrollment can continue if there has not been a break in service of more than three days. If there has been a break in service of longer than three days, FEHB enrollment will terminate at midnight of
Section 890.1414 describes the responsibilities of the tribal employer. These include premium payment, eligibility determinations, enrollment, establishment of appeals process, communications regarding FEHB, and notification requirements.
Section 890.1415 requires that a tribal employer establish or identify an independent panel to resolve disputes about eligibility of individuals for FEHB enrollment. This panel must be authorized to adjudicate such disputes and enforce eligibility and enrollment determinations. The tribal employer must inform tribal employees of this avenue for dispute resolution. Decisions of the independent panel must be written, a record of evidence considered by the panel must be retained and available for OPM review, and the panel decisions remain subject to final OPM authority.
Section 890.1416 describes the procedures for (1) filing claims for payment or service; and (2) invoking the provisions for court review of disputed claims. Both situations will follow the established procedures for Federal employees.
Section 890.1417 states that an FEHB enrollment cannot be continued into retirement from employment with a tribal employer. This is a statutory requirement as the law entitles tribal employers to purchase FEHB for employees but it does not extend that entitlement to permit tribal employers to purchase FEHB for retirees.
A Federal annuitant may continue FEHB into retirement and any enrollment in, or coverage as a family member under FEHB during employment with a tribal employer will count toward the “five-year rule.” The “five-year rule” generally requires five years of pre-retirement FEHB enrollment, or coverage as a family member, in order to continue FEHB into retirement. Section 890.1417 further states that a Federal annuitant who has continued FEHB into retirement and who begins post-retirement employment with a tribal employer that has elected to purchase FEHB may transfer the FEHB enrollment with his or her Federal retirement system to an enrollment with the tribal employer in a similar manner as that used for Federal annuitants re-employed by Federal agencies.
Section 890.1418 establishes that tribal employees who are not also Federal employees, but are receiving worker's compensation benefits in leave without pay status for more than 365 days under programs run by the U.S. Department of Labor may not be enrolled in FEHB.
OPM has examined the impact of this proposed rule as required by Executive Order 12866 and Executive Order 13563, which directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public, health, and safety effects, distributive impacts, and equity), and based on that analysis, it has determined that it is an economically significant rule. A regulatory impact analysis must be prepared for economically significant rules.
As part of the ACA, section 10221 incorporated and enacted S. 1790, the Indian Health Care Improvement Reauthorization and Extension Act of 2009, resulting in the addition of section 409 to the IHCIA. Section 409 allows tribes, tribal organizations and urban Indian organizations carrying out specific programs under Federal law to purchase the rights and benefits FEHB Program for their employees. As the administrator of the FEHB, OPM has extended eligibility to entitled tribal employees within the meaning of section 409. Section 409 has been implemented and over 16,000 tribal employees are currently covered by FEHB. Federal regulations are necessary to protect the interests of all stakeholders, memorialize processes and procedures, and provide transparency.
The costs, benefits and transfers assessed in remaining portions of this regulatory impact analysis reflect existing FEHB coverage of tribal employees. This analysis is consistent with the guidance provided in OMB Circular A-4.
Health insurance coverage improves access to health care services, including preventive services, improves clinical outcomes, financial security, and decreases uncompensated care.
While the exact benefits of health insurance are difficult to quantify, evidence supports that American Indians and Alaska Natives could benefit more from health insurance than the average population. According to a 2013 Kaiser Family Foundation report, American Indians and Alaska Natives were more likely than other nonelderly adult Americans to report being in fair or poor health, being overweight or obese, having diabetes and cardiovascular disease, and experiencing frequent mental distress.
The Indian Health Service (IHS), which provides services through a network of hospitals, clinics, and health stations to about 2.2 million American Indians and Alaska Natives, has historically been underfunded. Access to services varies significantly by location and funds are insufficient to meet health care needs. According to the Federal Disparity Index, in 2010 the IHS funds covered less than 60% of those needed to pay for coverage equivalent to that of Federal employees.
Health services not available through direct care must be purchased through the Purchased/Referred Care (PRC) (formerly Contract Health Services)
The sources referenced above illustrate the health disparities specific to the Native American population. Expanding healthcare access to this group not only addresses this disparity and generates benefits to the individual, but also generates societal benefits in the form of decreased healthcare costs for chronic illnesses, increased employee productivity, and a healthier population that are the result of expanding access to healthcare to any group.
In the following section, costs associated with this rule are analyzed for the following groups: Tribal employers, tribal employees, the Tribal Insurance Processing System (TIPS) (the system used by the current paymaster), OPM, and FEHB carriers. Most of the costs described below either result in a direct benefit to the individual or are transfers from one group to another. For example, costs incurred by tribal employees (premiums, deductibles, copays, etc.) result in individual benefits in the form of improved health outcomes. Costs incurred by tribal employers to cover premiums are a benefit to tribal employees. OPM has determined that the total dollar amounts do meet the threshold for this to be considered an economically significant rule.
OPM analyzed actual fiscal year 2015 enrollment data for the over 16,000 tribal employees enrolled in the FEHB Program and found the annual cost of enrollment to be $168.5 million. This includes both premiums and the administrative fee added to each tribal FEHB enrollment. The administrative fee covers the costs of program administration for the paymaster.
Premiums in the FEHB Program have increased between 3-6% each year for the last five years, below increases in the commercial market. As enrollment increases, total spending on premium costs will increase. However, the administrative fee will likely decrease as administrative costs are spread among a growing number of enrollments.
To cover the cost of program administration, this proposed rule includes an administrative fee assessed on a per contract basis, paid by the tribal employer.
For fiscal year 2015, the administrative fee was $15.15 per contract; for fiscal year 2016 it is $12. This fee is adjusted to align with actual programmatic costs. As enrollment increases, this cost will go down as the costs of maintaining TIPS will be spread among more enrollments.
The cost of coverage for each tribal employer depends upon the number of enrollees covered, the health plans selected by those enrollees, and the portion of the premium paid by the employer.
Currently, the largest number of employees enrolled for one tribal employer is just under 4,000 and the smallest tribal employers have just one employee enrolled.
The average cost per enrollment in the program, including the administrative fee, is estimated at approximately $10,172.
Tribal employers are required by this rule to contribute to the premium for tribal employees at least the same as the Federal government does for its employees and may contribute more, up to 100% of the premium costs. The Federal government contribution is statutorily defined as the lesser of 72% of the weighted average of all premiums or 75% of the plan premium.
Based on averages for fiscal year 2015, a tribal employer may pay from just over $7,000 to over $40 million, depending on the number of tribal employees covered and percentage of premium contributed by the tribal employer. Of course, actual costs will vary based on plan selection.
Tribal employers assess the cost of participating and recognize that participation in the FEHB Program is a business decision made by the employers themselves. It often is a decision made by comparing the cost of other forms of health coverage and coverage through the FEHB Program. For those tribes that choose to participate it can be assumed that the benefits outweigh the costs of participation.
Costs for tribal employees depend upon the plan selected, enrollment type, and the percentage of premium contributed by the tribal employer. Based on FY15 data, the average cost for an annual enrollment is approximately $10,035
Other costs such as copays, deductibles, and coinsurance are also the responsibility of the tribal employee, to the extent that such cost sharing is not otherwise prohibited by Federal law. These costs differ based on plan selection and utilization. Individual enrollment in the FEHB Program is voluntary so it can be assumed that the benefits to the individual of enrolling in tribal employer-sponsored coverage outweigh the costs of enrollment.
Annual costs for administering TIPS, incurred by the paymaster, are described in the chart below. These costs are covered by the administrative fee paid by tribal employers.
Implementation of the Tribal FEHB Program began in fiscal year 2011. In addition to policy development and tribal consultation costs, OPM contracted with a paymaster to develop an electronic enrollment portal for tribal employers. Development of the Tribal Insurance Processing System (TIPS) cost approximately $3.9 million. OPM received approximately $3 million in funds from the Department of Health and Human Services' (HHS) Health Insurance Reform Implementation Fund and covered the remaining costs from funds appropriated to OPM.
OPM continues to incur costs associated with managing the Tribal FEHB Program. These costs are not covered by the administrative fee included in each tribal enrollment. See the chart below for Full Time Equivalent in FY2012-FY2015.
The impact on carriers is relatively small, as tribal enrollments are a very small percentage of the over 4 million FEHB enrollments. Premiums cover claims costs, administrative costs, plus a small profit known as the service charge.
While this rule meets the thresholds in Executive Orders 12866 and 13563 to be deemed an economically significant rule, many of the associated costs constitute transfers among involved parties. Under the provisions of this rule, participation in the FEHB Program is voluntary for both tribal employers and tribal employees. This, in conjunction with the relationship between costs incurred and the benefits of offering coverage, indicates that the benefits of this rule outweigh the costs.
Administrative practice and procedure, Government employees, Health insurance.
For the reasons set forth in the preamble, OPM amends 5 CFR part 890 to read as follows:
5 U.S.C. 8913; Sec. 890.303 also issued under Sec. 50 U.S.C. 403p, 22 U.S.C. 4069c and 4069c-1; Subpart L also issued under Sec. 599C of Public Law 101-513, 104 Stat. 2064, as amended; Sec. 890.102 also issued under Secs. 11202(f), 11232(e), 11246(b) and (c) of Public Law 105-33, 111 Stat. 251; Sec. 721 of Public Law 105-261, 112 Stat. 2061 unless otherwise noted; Sec. 890.111 also issued under Sec. 1622(b) of Public Law 104-106, 110 Stat. 515. Subpart N issued under Sec. 10221, Pub. L. 111-148, 124 Stat 935 [25 U.S.C. 1647b].
This subpart sets forth the conditions for coverage, rights, and benefits under Chapter 89 of title 5, United States Code, according to the provisions of 25 U.S.C. 1647b.
(a) In this subpart—
(b) In this subpart, wherever reference is made to other subparts of Part 890:
(1) A reference to employee is deemed a reference to tribal employee;
(2) A reference to employer is deemed a reference to tribal employer;
(3) A reference to enrollee is deemed a reference to a tribal employee in whose name the enrollment is carried;
(4) A reference to employing agency, employing office, or agency is deemed a reference to tribal employer, and/or if the reference involves the subject of a paymaster function, the paymaster, as appropriate;
(5) A reference to United States, Federal Government, or Government in the capacity of an employer is deemed a reference to tribal employer;
(6) A reference to Federal Service or Government Service is deemed a reference to employment with a tribal employer;
(7) A reference to annuitant, survivor annuitant, or an individual with entitlement to an annuity is deemed inapplicable in the context of this subpart; and
(8) A reference incorporated into this subpart that does not otherwise apply to tribal employees and tribal employers shall have no meaning and is deemed inapplicable in the context of this subpart.
(a) A tribal employer shall be entitled to purchase coverage, rights, and benefits for its tribal employees under chapter 89 of title 5, United States Code, if payment for the coverage, rights, and benefits for the period of employment with such tribal employer is currently deposited in the Employees Health Benefits Fund.
(b) Payment will be considered currently deposited if received by the Employees Health Benefits Fund before, during, or within fourteen days after the end of the month covered by the payment.
(c) Purchase of FEHB coverage by a tribal employer confers all the rights and benefits of FEHB as set forth in subpart N to the tribal employer and tribal employee.
(a) A tribal employer that intends to purchase FEHB for its tribal employees shall notify OPM by email or telephone.
(1) A tribal employer must purchase FEHB for at least one billing unit carrying out programs or activities under the tribal employer's ISDEAA or IHCIA contract.
(2) For so long as a tribal employer continues to purchase FEHB for at least one billing unit carrying out programs or activities under a tribal employer's ISDEAA or IHCIA contract, the tribal employer may purchase FEHB for one or more billing units without regard to whether they are carrying out programs or activities under the tribal employer's ISDEAA or IHCIA contract.
(b) A tribal employer must enter into an agreement with OPM to purchase FEHB. This agreement will include:
(1) The name, job title, and contact information of the individual responsible for health insurance coverage decisions for the tribal employer,
(2) The date on which the tribal employer will begin to purchase FEHB coverage,
(3) The approximate number of tribal employees who will be eligible to enroll,
(4) A certification that the eligible tribal employees within the enrolling billing unit will not have alternate tribal employer-sponsored health insurance coverage available concurrent with FEHB,
(5) A certification and documentation demonstrating that the tribal employer is entitled to purchase FEHB as either: An Indian tribe or tribal organization carrying out at least one program under the Indian Self-Determination and Education Assistance Act; or an urban Indian organization carrying out at least one program under Title V of the Indian Health Care Improvement Act,
(6) Agreement by the tribal employer that its purchase of FEHB makes the tribal employer responsible for administering the program in accordance with this subpart, subject to Federal Government audit with respect to such purchase and administration, and subject to OPM authority to direct the administration of the program, including but not limited to the correction of errors,
(7) Agreement that the tribal employer will establish or identify an independent dispute resolution panel to adjudicate appeals of determinations
(8) A certification that the tribal employer will supply necessary enrollment information and payment to the paymaster,
(9) Agreement to provide notice to OPM in the event that the tribal employer is no longer carrying out at least one program under the ISDEAA or title V of IHCIA, and
(10) Other terms and conditions as appropriate.
(c) A tribal employer may make an initial election to purchase FEHB at any time. A tribal employer purchasing FEHB shall commit to purchase FEHB for at least the remainder of the calendar year in which the agreement is signed. Elections will be automatically renewable year to year unless revoked by the tribal employer or terminated by OPM.
(d) If a tribal employer revokes the initial election, OPM must be given 60 days notice. The tribal employer may not re-elect to purchase FEHB until the first annual open season that falls at least twelve months after the revocation. If the tribal employer revokes an election to participate a second time, the tribal employer may not re-elect to purchase FEHB until the first open season that falls at least twenty-four months after the second revocation.
(e) OPM maintains final authority, in consultation with the United States Department of the Interior and the United States Department of Health and Human Services,to determine whether a tribal employer is entitled to purchase FEHB as either:
(1) An Indian tribe or tribal organization carrying out at least one program under the Indian Self-Determination and Education Assistance Act; or
(2) An urban Indian organization carrying out at least one program under Title V of the Indian Health Care Improvement Act. If a tribe, tribal organization or urban Indian organization believes it has been improperly denied the entitlement to purchase FEHB, it may appeal the denial to OPM. The appeal will be given an independent level of review within OPM and the decision on review will be final.
(a)(1) A tribal employee who is a full-time or part-time common law employee of a tribal employer is eligible to enroll in FEHB if that tribal employer has elected to purchase FEHB coverage for the tribal employees of that tribal employer's billing unit, except that a tribal employee described in paragraph (b) of this section is not eligible to enroll in FEHB.
(2) Status as a tribal employee under § 890.1402(a) for purposes of eligibility to enroll in FEHB is initially made based on a reasonable determination by the tribal employer. OPM maintains final authority to correct errors regarding FEHB enrollment as set forth at § 890.1406.
(3) Retirees, annuitants, volunteers, compensationers under Federal worker's disability programs past 365 days, and others who are not common law employees of the tribal employer are not eligible to enroll under this subpart.
(b) The following tribal employees are not eligible to enroll in FEHB:
(1) A tribal employee whose employment is limited to one year or less and who has not completed one year of continuous employment, including any break in service of 5 days or less;
(2) A tribal employee who is expected to work less than 6 months in one year;
(3) An intermittent tribal employee—a non-full-time tribal employee without a prearranged regular tour of duty;
(4) A beneficiary or patient employee in a Government or tribal hospital or home; and
(5) A tribal employee paid on a piecework basis, except one whose work schedule provides for full-time service or part-time service with a regular tour of duty.
(c) Notwithstanding paragraphs (b)(1), (2), and (3) of this section a tribal employee working on a temporary appointment, a tribal employee working on a seasonal schedule of less than 6 months in a year, or a tribal employee working on an intermittent schedule, for whom the tribal employer expects the total hours in pay status (including overtime hours) plus qualifying leave without pay hours to be at least 130 hours per calendar month, is eligible to enroll in FEHB according to terms described in § 890.102(j) unless the tribal employer provides written notification to the Director as described in § 890.102(k).
(d) The tribal employer initially determines eligibility of a tribal employee to enroll in FEHB, eligibility of family members, and eligibility of tribal employee to change enrollment. The tribal employer's initial decision may be appealed pursuant to § 890.1415.
(e) A tribal employee who is eligible and enrolls in FEHB under this subpart will have the option of enrolling in any FEHB open fee-for-service plan or health maintenance organization (HMO), consumer driven health plan (CDHP), or high deductible health plan (HDHP) available to Federal employees in the same geographic location as the tribal employee. The tribal employee will have the same choice of self only, self plus one, or self and family enrollment as is available to Federal employees.
(f) Family members of tribal employees will be covered by FEHB according to terms described at § 890.302. Children of tribal employees, whether married or not married, and whether or not dependent, are covered under a self and family enrollment or a self plus one enrollment (if the child is the designated covered family member) up to the age of 26. Former spouses of tribal employees are not former spouses as described at 5 U.S.C. 8901(10) and are not eligible to elect coverage under subpart H.
(g) Eligibility for FEHB under this subpart does not identify an individual as a Federal employee for any purpose, nor does it convey any additional rights or privileges of Federal employment.
Correction of errors regarding FEHB enrollment for tribal employees takes place according to the terms described in § 890.103.
(a)
(b)
(2) After the initial enrollment opportunity, described in § 890.1407(b)(1), tribal employees are subject to the same initial enrollment
(3) A tribal employee who enrolls after the initial enrollment opportunity and who does not elect premium conversion through his or her tribal employer's premium conversion plan, if one is available, will be subject to the enrollment and qualifying life event rules described at § 890.301 and effective dates described at § 890.301(b) and (f).
(4) A tribal employee who enrolls after the initial enrollment opportunity and who elects premium conversion through his or her tribal employer's premium conversion plan, if one is available, will be subject to the enrollment rules, qualifying life event rules and effective dates described at §§ 892.207, 892.208 and 892.210 of this chapter (together with § 890.301 as referenced therein).
(a) A tribal employee enrolled under this subpart may increase or decrease his or her enrollment, or may change enrollment from one plan or option to another, as described in § 890.301 (for tribal employees who did not elect premium conversion) or Part 892 (for tribal employees who did elect premium conversion).
(b) A change in enrollment type, plan, or option under this section becomes effective as described in § 890.301 (for tribal employees who did not elect premium conversion) or Part 892 (for tribal employees who did elect premium conversion).
(a) A tribal employee enrolled under this subpart may cancel enrollment as described at § 890.304(d) or decrease his or her enrollment as described at § 890.301. A tribal employee who does not participate in premium conversion may cancel his or her enrollment or decrease his or her enrollment at any time by request to the tribal employer, unless there is a legally binding court or administrative order requiring coverage of a child as described at § 890.301(g)(3). A tribal employee who participates in premium conversion may cancel his or her enrollment as provided by § 892.209 or decrease his or her enrollment as provided by § 892.208 of this chapter only during open season or because of and consistent with a qualifying life event.
(b) A cancellation of enrollment becomes effective as described at § 890.304(d). A decrease in enrollment becomes effective as described in § 890.301(e)(2).
(c) A tribal employee who cancels his or her enrollment under this section or decreases his or her enrollment may reenroll or increase his or her enrollment only during open season or because of and consistent with a qualifying life event.
(a)
(2) A former tribal employee who is separated under this subpart due to resignation, dismissal, or retirement and covered family members are entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(b)
(2) If, at the time of death, the deceased tribal employee was enrolled in self and family FEHB coverage:
(i) The surviving spouse is entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401;
(ii) The covered children of the deceased tribal employee are entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(3) If, at the time of death, the deceased tribal employee was enrolled in self plus one FEHB coverage, only the designated covered family member is entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(c)
(i) The day on which he or she ceases to be a family member; or
(ii) The day the tribal employee's enrollment terminates, unless the family member is entitled to continued coverage under the enrollment of another.
(2) Family members who lose coverage under this subsection are entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(d)
(2) Following the termination described in § 890.1410(d)(1), enrolled tribal employees and covered family members are entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(e)
(f)
(2) Enrollments of all of the tribal employer's tribal employees affected by the paymaster's failure to obtain current deposit of payment will be terminated effective midnight of the last day of the month for which payment was received.
(3) In the case of termination of enrollment due to non-payment, affected tribal employees will be entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401. The 31-day extension of
(4) In the event that a tribal employer elects to purchase FEHB for its tribal employees but does not currently deposit payment in the first month that it is due, the enrollment of tribal employees affected by the paymaster's failure to obtain current deposit of payment will be terminated effective midnight of the last day of the month for which payment was not currently deposited. Tribal employees affected by the paymaster's failure to obtain current deposit of payment will not be entitled to a 31-day temporary extension of coverage and may not convert to an individual policy as described at § 890.401.
(5) Any outstanding premium due for coverage in arrears will be treated as a debt owed solely by the tribal employer.
(a) For purposes of this subpart, temporary continuation of coverage (TCC) is described by 5 U.S.C. 8905a and subpart K. The administrative fee for TCC for tribal employees is the same as for Federal employees, with no specific tribal administrative fee as described in § 890.1413(e).
(b) A former tribal employee who is separated under this subpart due to resignation, dismissal, or retirement may elect TCC, unless the separation is due to gross misconduct as defined in § 890.1102.
(c) Eligibility for TCC for tribal employees following procedures provided in § 890.1103 of subpart K, except that former spouses of tribal employees are not eligible for TCC.
(a)
(b)
(c)
(d)
(e)
(2) Enrollment is reinstated on the date the tribal employee is restored to duty in an eligible position with the tribal employer upon return from Uniformed Service, pursuant to applicable law, provided that the tribal employer continues to purchase FEHB for its tribal employees in the affected tribal employee's billing unit on that date.
(a) Premium contributions and withholdings described at §§ 890.501 and 890.502 must be paid by the tribal employer and the tribal employee, except that the term OPM as used in § 890.502(c) is deemed to be a reference to the paymaster, as appropriate, for purposes of this subpart. There is no Government contribution as that term is used in 5 U.S.C 8906.
(b)
(2) There is no cap on the percentage of premium that a tribal employer may contribute, as long as the contribution and withholding arrangement is not designed to encourage or discourage enrollment in any particular plan or plan option;
(3) A tribal employer may vary the contribution amount by type of FEHB enrollment (self only, self plus one, self and family), providing it is done in a uniform manner and meets the requirements described in § 890.1413(b)(1) and (2); and
(4) A tribal employer may vary the contribution amount by billing unit, providing each billing unit meets the requirements described in § 890.1413(b)(1)-(3).
(c) A tribal employer may, but is not required to, prorate the tribal employer and tribal employee share of premium attributable to enrollment of its part-time tribal employees working between 16 and 32 hours per week by prorating shares in proportion to the percentage of time that a tribal employee in a comparable full time position is regularly scheduled to work.
(d) Tribal employee and tribal employer contributions to premiums under this subpart will be aggregated by the tribal employer. The tribal employee and tribal employer contributions must be available for receipt by the paymaster on an agreed upon date. The paymaster will receive the premium contributions together with the fee described at paragraph (e) of this section and will deposit the payment into the Employees Health Benefits Fund described in 5 U.S.C. 8909.
(e) A fee determined annually by OPM will be charged in addition to premium for each enrollment of a tribal employee. The fee may be used for other purposes as determined by OPM. The fee must be paid entirely by the tribal employer as part of the payment to purchase FEHB for tribal employees, and must be available for collection by the paymaster, together with the aggregate tribal employee and tribal employer contributions, in time to be currently deposited into the Employees Health Benefits Fund described in 5 U.S.C. 8909.
(a) The tribal employer pays premiums for tribal employees enrolled under this subpart pursuant to §§ 890.1403 and 890.1413.
(b) The tribal employer must determine the eligibility of individuals who attempt to enroll for coverage under this subpart and enroll those it finds eligible.
(c) The tribal employer must determine whether eligible tribal employees have eligible family member(s) and allow coverage under a self plus one or self and family enrollment as described in § 890.302 for those it finds eligible.
(d) The tribal employer must establish or identify an independent dispute resolution panel for reconsideration of enrollment and eligibility decisions as described in § 890.1415.
(e) The tribal employer has the following notification responsibilities. The tribal employer must:
(1) Notify OPM and tribal employees in writing of intent to revoke election to purchase FEHB at least 60 days before such revocation described at § 890.1404(d);
(2) Promptly notify tribal employees and OPM if there is a change in the tribal employer's entitlement to purchase FEHB described at § 890.1410(d);
(3) Promptly notify affected tribal employees of termination of enrollment due to non-payment, the 31-day temporary extension of coverage and its ending date described at § 890.1410(f)(2)-(3); and
(4) Promptly notify affected tribal employees of termination of enrollment due to non-payment described at § 890.1410(f)(4).
(a) The tribal employer shall establish or identify an independent dispute resolution panel to adjudicate appeals of determinations made by a tribal employer denying an individual's status as a tribal employee eligible to enroll in FEHB or denying a change in the type of enrollment (
(b) Under procedures set forth by the tribal employer, an individual may file a written request to the independent dispute resolution panel to reconsider an initial decision of the tribal employer under this subpart. A reconsideration decision made by the panel must be issued to the individual in writing and must fully state the findings and reasons for the findings. The panel may consider information from the tribal employer, the individual, or another source. The panel must retain a file of its documentation until December 31 of the 3rd year after the year in which the decision was made, and must provide the file to OPM upon request.
(c) If the panel determines that the individual is ineligible to enroll in FEHB as a tribal employee or to change enrollment, the individual may request that OPM reconsider the denial. Such a request must be made in writing and any decision by OPM will be binding on the tribal employer.
(d) OPM may request a panel decision file during the retention period described at paragraph (b) of this section. Panel decisions remain subject to final OPM authority to correct errors, as set forth in § 890.1406.
(a) Tribal employees may file claims for payment or service as described at § 890.105.
(b) Tribal employees may invoke the provisions for court review described at § 890.107(b)-(d).
(a) An FEHB enrollment cannot be continued into retirement from employment with a tribal employer.
(b) A Federal annuitant may continue FEHB enrollment into retirement from Federal service if the requirements of 5 U.S.C. 8905(b) for carrying FEHB coverage into retirement are satisfied through enrollment, or coverage as a family member, either through a Federal employing office or a tribal employer, or any combination thereof.
(c) A Federal annuitant who is employed after retirement by a tribal employer in an FEHB eligible position may participate in FEHB through the tribal employer. In such a case, the Federal annuitant's retirement system will transfer the FEHB enrollment to the tribal employer, in a similar manner as for a Federal annuitant who is employed by a Federal agency after retirement.
(d) A tribal employee who becomes a survivor annuitant as described in 890.303(d)(2) is entitled to reinstatement of health benefits coverage as a Federal employee would under the same circumstances.
A tribal employee who is not also a Federal employee who becomes eligible for one of the Department of Labor's disability compensation programs may not continue FEHB coverage in leave without pay status past 365 days.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Supplemental notice of proposed rulemaking (NPRM); reopening of the comment period.
We are revising an earlier NPRM for all PILATUS AIRCRAFT LTD. Models PC-12, PC-12/45, PC-12/47, and PC-12/47E airplanes that would supersede AD 2014-22-01. This proposed AD results from mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as a need to incorporate new revisions into the Limitations section, Chapter 4, of the FAA-approved maintenance program (
We must receive comments on this proposed AD by October 17, 2016.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact PILATUS AIRCRAFT LTD., Customer Service Manager, CH-6371 STANS, Switzerland; telephone: +41 (0) 41 619 33 33; fax: +41 (0) 41 619 73 11; Internet:
You may examine the AD docket on the Internet at
Doug Rudolph, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4059; fax: (816) 329-4090; email:
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We proposed to amend 14 CFR part 39 with an NPRM for all PILATUS AIRCRAFT LTD. Models PC-12, PC-12/45, PC-12/47, and PC-12/47E airplanes that would supersede AD 2014-22-01, which was published in the
The airworthiness limitations are currently defined and published in the Pilatus PC-12 Aircraft Maintenance Manual(s) (AMM) under Chapter 4, Structural, Component and Miscellaneous—Airworthiness Limitations Section (ALS) documents. The limitations contained in these documents have been identified as mandatory for continued airworthiness.
Failure to comply with these instructions could result in an unsafe condition.
EASA issued AD 2014-0170 requiring the actions as specified in ALS, Chapter 4 of AMM report 02049 issue 28, for PC-12, PC-12/45 and PC-12/47 aeroplanes, and Chapter 4 of AMM report 02300 issue 11, for PC-12/47E aeroplanes.
Since that AD was issued, Pilatus issued Chapter 4 of PC-12 AMM report 02049 issue 31, and Chapter 4 of PC-12 AMM report 02300 issue 14 (hereafter collectively referred to as `the applicable ALS' in this AD), to incorporate new six-year and ten-year inspection intervals for several main landing gear (MLG) attachment bolts, and an annual inspection interval for the MLG shock absorber attachment bolts, which was previously included in the AMM Chapter 5 annual inspection. After a further review of the in-service data, Pilatus issued Service Letter (SL) 186, extending the special compliance time applicable for the MLG bolts inspection.
For the reasons described above, this AD retains the requirements of EASA AD 2014-0170, which is superseded, and requires the accomplishment of the new maintenance tasks, as described in the applicable ALS.
Since the NPRM was issued, PILATUS AIRCRAFT LTD. has issued new revisions to the Limitations section, Chapter 4, to be incorporated into the FAA-approved maintenance program (
PILATUS AIRCRAFT LTD. has issued Structural, Component and Miscellaneous—Airworthiness Limitations, document 12-A-04-00-00-00A-000A-A, dated July 12, 2016, and Structural and Component Limitations—Airworthiness Limitations, document 12-B-04-00-00-00A-000A-A, dated July 19, 2016. 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 have considered the following comments received on the NPRM.
Johan Kruger of Pilatus Aircraft requested incorporating a newly issued revision of the Limitation section, Chapter 4, of each applicable maintenace manual into the proposed AD.
Johan Kruger of Pilatus Aircraft stated that in the Aircraft Maintenance Manual (AMM) Airworthines Limitations Section (ALS) 12-A-04-00-00-00A-000A-A, the Supplemental Structural Inspection Document (SSID) part has been updated with kit numbers and brought in line with Service Bulletin (SB) SB 04-009. The commenter stated that the changes were coordinated with the FAA, who concurred that no new limitations are incorporated in the ALS. The AMM/ALS 12-B-04-00-00-00A-000A-A has also been updated by introducing an inspection of the passenger oxygen (drop down mask) system if installed, and this change was also coordinated with the FAA. Since the drop down O2 system is only required by European operation requirements and not currently earmarked for the United States, it is also not introducing new limitations for U.S. operators.
We agree with the commenter and have changed this supplemental NPRM based on this comment.
Johan Kruger of Pilatus Aircraft and Blake Morley of Aero Air, LLC requested changing the compliance time for inspecting the main landing gear (MLG) attachment bolts. The commenters stated that the compliance time in the proposed AD is causing confusion because the way it is currently stated, which is “within the next 6 years . . . or within the next 3 months . . . whichever occurs later,” does not makes sense because 6 years
Johan Kruger of Pilatus Aircraft stated that, in the ALS Notes, Note 1 (ALS 12-B-04) and Note 3 (ALS 12-A-04) respectively, the inspection is to be done by a specific date, and he wants those dates incorporated into this proposed AD. Blake Morley of Aeroa Air, LLC stated that EASA has also adopted the grace period extension in EASA AD 2016-0083, stating: “Note 1: For the purpose of this AD, the thresholds and intervals include `special' compliance times for certain tasks as defined in the applicable ALS, and the `special' compliance time for the inspection of MLG bolts, as defined in SL 186.” Blake Morley also requested the “3-month” grace period compliance time be changed to “before December 31, 2016.”
We partially agree with the commenters. We do agree that the compliance times for the inspection of the MLG attachment bolts needs to be corrected to reflect before or upon the accumulation of time-in-service (TIS) on the MLG attachment bolts instead of the TIS on the airplane, which then makes the 3-month grace period more applicable. We have changed this supplemental NPRM action based on this portion of the comment.
We do not agree with using a specific date as a compliance time. There is no correlation with the requested dates and the unsafe condition. The mere fact that the service document or an international civil aviation authority's AD refers to a calendar date is not enough to justify using a calendar date in a U.S. AD. We have not changed this supplemental NPRM action based on this portion of the comment.
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.
Certain changes described above expand the scope of the NPRM. As a result, we have determined that it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this supplemental NPRM.
We estimate that this proposed AD will affect 770 products of U.S. registry. We also estimate that it would take about 1.5 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $98,175, or $127.50 per product. This breaks down as follows:
• Incorporating new revisions into the Limitations section, Chapter 4, of the FAA-approved maintenance program (
• New inspections of the MLG attachment bolts: 1 work-hour with no parts cost for fleet cost of $65,450 or $85 per product.
In addition, we estimate that any necessary corrective actions (on-condition costs) that must be taken based on the proposed inspections, would take about 1 work-hour and require parts costing approximately $100 for a cost of $185 per product. We have no way of determining the number of products that may need these necessary corrective actions.
The only costs that would be imposed by this proposed AD over that already required by AD 2014-22-01 is the costs associated with the insertion of the revised Limitation section and the MLG attachment bolts inspection and replacement as necessary.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by October 17, 2016.
This AD replaces AD 2014-22-01, 39-18005 (79 FR 67343, November 13, 2014).
This AD applies to PILATUS AIRCRAFT LTD. Models PC-12, PC-12/45, PC-12/47, and PC-12/47E airplanes, all manufacturer serial numbers (MSNs), certificated in any category.
Air Transport Association of America (ATA) Code 5: Time Limits.
This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as a need to incorporate new revisions into the Limitations section, Chapter 4, of the FAA-approved maintenance program (
Unless already done, do the actions in paragraphs (f)(1) through (6) of this AD:
(1) Before further flight after October 5, 2016 (the effective date of this AD), insert the following revisions into the Limitations section of the FAA-approved maintenance program (
(i) STRUCTURAL, COMPONENT AND MISCELLANEOUS—AIRWORTHINESS LIMITATIONS, Data module code 12-A-04-00-00-00A-000A-A, dated July 12, 2016, of the Pilatus Model type—PC-12, PC-12/45, PC-12/47, Aircraft Maintenance Manual (AMM), Document No. 02049, 12-A-AM-00-00-00-I, revision 32, dated July 18, 2016; and
(ii) STRUCTURAL AND COMPONENT LIMITATIONS—AIRWORTHINESS LIMITATIONS, Data module code 12-B-04-00-00-00A-000A-A, dated July 19, 2016, of the Pilatus Model type—PC-12/47E MSN-1001-UP, Aircraft Maintenance Manual (AMM), Document No. 02300, 12-B-AM-00-00-00-I, revision 15, dated July 30, 2016.
(2) The new limitations section revisions listed in paragraphs (f)(1)(i) and (ii) of this AD specify the following:
(i) Establish inspections of the MLG attachment bolts,
(ii) Specify replacement of components before or upon reaching the applicable life limit, and
(iii) Specify accomplishment of all applicable maintenance tasks within certain thresholds and intervals.
(3) Only authorized Pilatus Service Centers can do the Supplemental Structural Inspection Document (SSID) as required by the documents in paragraphs (f)(1)(i) and (ii) of this AD because deviations from the type design in critical locations could make the airplane ineligible for this life extension.
(4) If no compliance time is specified in the documents listed in paragraphs (f)(1)(i) and (ii) of this AD when doing any corrective actions where discrepancies are found as required in paragraph (f)(2)(iii) of this AD, do these corrective actions before further flight after doing the applicable maintenance task.
(5) During the accomplishment of the actions required in paragraph (f)(2) of this AD, including all subparagraphs, if a discrepancy is found that is not identified in the documents listed in paragraphs (f)(1)(i) and (ii) of this AD, before further flight after finding the discrepancy, contact PILATUS AIRCRAFT LTD. at the address specified in paragraph (h) of this AD for a repair scheme and incorporate that repair scheme.
(6) Before or upon accumulating 6 years time-in-service (TIS) on the MLG attachment bolts or within the next 3 months TIS after October 5, 2016 (the effective date of this AD), whichever occurs later, inspect the MLB attachment bolts for cracks and corrosion and before further flight take all necessary corrective actions.
The following provisions also apply to this AD:
(1)
(i) Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector (PI) in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.
(ii) AMOCs approved for AD 2014-22-01, 39-18005 (79 FR 67343, November 13, 2014) are not approved as AMOCs for this AD.
(2)
Refer to MCAI European Aviation Safety Agency (EASA) AD No. 2016-0083, dated April 28, 2016, for related information. You may examine the MCAI on the Internet at
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for all Airbus Model A330-200 Freighter, -200, and -300 series airplanes; and Airbus Model A340-500, and -600 series airplanes. This proposed AD was prompted by reports that non-conforming aluminum alloy was used to manufacture several structural parts on the inboard flap. This proposed AD would require identification of the potentially affected inboard flap parts, a one-time eddy current inspection to identify which material the parts are made of, and depending on findings, replacement with serviceable parts. We are proposing this AD to detect and correct structural parts of inboard flaps made of nonconforming aluminum alloy, which could result in reduced structural integrity of the airplane.
We must receive comments on this proposed AD by October 17, 2016.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email:
You may examine the AD docket on the Internet at
Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone: 425-227-1138; fax: 425-227-1149.
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2016-0082, dated April 27, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition all Airbus Model A330-200 Freighter, -200, and -300 series airplanes; and Airbus Model A340-500, and -600 series airplanes. The MCAI states:
Following an Airbus quality control review on the final assembly line, it was discovered that non-conforming aluminium alloy was used to manufacture several structural parts on the inboard flap.
This condition, if not detected and corrected, could reduce the structural integrity of the aeroplane.
To address this potential unsafe condition, Airbus issued Service Bulletin (SB) A330-57-3120 and SB A340-57-5036 to provide instructions to identify and inspect the potentially affected parts.
For the reasons described above, this [EASA] AD requires identification of the potentially affected inboard flap parts, a one-time Special Detailed Inspection (SDI) [eddy current measurement] to identify which material they are made of and, depending on findings, replacement with serviceable parts.
You may examine the MCAI in the AD docket on the Internet at
We reviewed Airbus Service Bulletin A330-57-3120, dated September 18, 2015; and Airbus Service Bulletin A340-57-5036, dated September 18, 2015. The service information describes procedures for inspecting inboard flaps using eddy current inspection methods. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.
We estimate that this proposed AD affects 31 airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
We estimate the following costs to do any necessary replacements that would be required based on the results of the proposed inspection. We have no way of determining the number of airplanes that might need these replacements:
According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. The cost of purchasing a flap spare is not available. As a result, we have included only labor costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by October 17, 2016.
None.
This AD applies to Airbus Model A330-223F and -243F airplanes; A330-201, -202, -203, -223, and -243 airplanes; A330-301, -302, -303, -321, -322, -323, -341, -342, and -343 airplanes; A340-541 airplanes; and A340-642 airplanes; certificated in any category, all manufacturer serial numbers.
Air Transport Association (ATA) of America Code 57, Wings.
This AD was prompted by reports that nonconforming aluminum alloy was used to manufacture several structural parts on the inboard flap. We are issuing this AD to detect and correct structural parts of inboard flaps made of nonconforming aluminum alloy, which could result in reduced structural integrity of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Within 24 months after the effective date of this AD: Inspect each left-hand (LH) and right-hand (RH) inboard flap, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-57-3120, dated September 18, 2015; and Airbus Service Bulletin A340-57-5036, dated September 18, 2015; as applicable; to identify the serial number. A review of airplane delivery and maintenance records is acceptable in lieu of inspecting the inboard flaps, provided those records can be relied upon for that purpose and the serial number of the affected parts can be conclusively identified from that review. The serial numbers of affected inboard flaps are identified in figure 1 to paragraph (g) of this AD.
Airbus Service Bulletin A330-57-3120, dated September 18, 2015; and Airbus Service Bulletin A340-57-5036, dated September 18, 2015; list the serial numbers of potentially affected LH and RH inboard flaps and the corresponding airplane serial number on which these parts were installed during production. The airplane serial number list is for information only, as it cannot be excluded that a potentially affected inboard flap has been removed from an airplane and later re-installed on another airplane.
For each affected inboard flap, within 6 years after the effective date of this AD, or within 12 years after the date of the flap first operation, whichever occurs first, accomplish an eddy current conductivity measurement, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-57-3120, dated September 18, 2015; or Airbus Service Bulletin A340-57-5036, dated September 18, 2015; as applicable.
The date of first operation is shown in figure 1 to paragraph (g) of this AD as day, month, year (dd/mm/yy).
If a part manufactured from non-conforming material is detected during the eddy current inspection required by paragraph (h) of this AD, within 30 days after doing the eddy current inspection, replace the affected part using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA).
As of the effective date of this AD, an inboard flap may be installed on any airplane, provided the part is a serviceable part. A serviceable part is:
(1) A part that is not listed by serial number in figure 1 to paragraph (g) of this AD; or
(2) A part that has a serial number listed in figure 1 to paragraph (g) of this AD, but which has passed an eddy current conductivity measurement in accordance with the Accomplishment Instructions of Airbus Service Bulletin A330-57-3120, dated September 18, 2015; or Airbus Service
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2016-0082, dated April 27, 2016, for related information. This MCAI may be found in the AD docket on the Internet at
(2) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone: +33 5 61 93 36 96; fax: +33 5 61 93 45 80; email:
Securities and Exchange Commission.
Request for comment.
The Commission is requesting public comment on certain disclosure requirements in Regulation S-K relating to management, certain security holders, and corporate governance matters contained in Subpart 400. This request is part of an initiative by the Division of Corporation Finance to review the disclosure requirements in Regulation S-K to consider ways to improve them for the benefit of investors and registrants. Comments received in response to this request for comment will also inform the Commission's study on Regulation S-K, which is required by Section 72003 of the Fixing America's Surface Transportation Act (“FAST Act”).
Comments should be received on or before October 31, 2016.
Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Use the Federal eRulemaking Portal (
• Send paper comments to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
Eduardo A. Aleman, Special Counsel, Office of Rulemaking, Division of Corporation Finance, at (202) 551-3430, 100 F Street NE., Washington, DC 20549.
Over the years, the Commission has evaluated its disclosure regime and engaged periodically in rulemakings designed to enhance its disclosure and registration requirements.
These efforts, in addition to this request for comment, are part of a comprehensive evaluation of the Commission's disclosure requirements recommended in the staff's Report on Review of Disclosure Requirements in Regulation S-K (“S-K Study”), which was mandated by Section 108 of the Jumpstart Our Business Startups Act (“JOBS Act”).
• Determine how best to modernize and simplify such requirements in a manner that reduces the costs and burdens on issuers while still providing all material information;
• Emphasize a company-by-company approach that allows relevant and material information to be disseminated to investors without boilerplate language or static requirements while preserving completeness and comparability of information across registrants; and
• Evaluate methods of information delivery and presentation and explore methods for discouraging repetition and the disclosure of immaterial information.
The initiative to review the disclosure requirements in Regulation S-K is intended to result in recommendations and proposals that will improve our disclosure system for the benefit of investors and registrants. The purpose of this request for comment is to solicit public input on Subpart 400 of Regulation S-K, which requires certain disclosures about a registrant's management, certain security holders, and corporate governance matters.
• Item 401 of Regulation S-K generally requires certain disclosures about a registrant's directors, executive officers, promoters and control persons.
• Item 402 of Regulation S-K generally requires disclosure of all plan and non-plan compensation awarded to, earned by, or paid to a registrant's named executive officers and directors.
• Item 403 of Regulation S-K generally requires a description of the security ownership of certain beneficial owners and management.
• Item 404 of Regulation S-K generally requires a description of certain transactions with related persons, promoters and certain control persons.
• Item 405 of Regulation S-K generally requires a registrant to identify certain persons who failed to file on a timely basis, as disclosed in certain forms, reports required by Section 16(a) of the Securities Exchange Act
• Item 406 of Regulation S-K generally requires disclosures about whether the registrant has adopted a code of ethics that applies to certain of the registrant's executive officers, or persons performing similar functions, and, if it has not adopted such a code of ethics, an explanation why it has not done so.
• Item 407 of Regulation S-K generally requires certain corporate governance disclosure about director independence, board meetings, various board committees (
In connection with the staff's continuing Disclosure Effectiveness Initiative and corresponding work on the FAST Act mandate, the Commission welcomes public comments on the issues that the staff should consider in conducting its review of Subpart 400 of Regulation S-K, including, among other things, how best to modernize and
By the Commission.
Drug Enforcement Administration, Department of Justice.
Notice of intent.
The Administrator of the Drug Enforcement Administration is issuing this notice of intent to temporarily schedule the opioids mitragynine and 7-hydroxymitragynine, which are the main active constituents of the plant kratom, into schedule I pursuant to the temporary scheduling provisions of the Controlled Substances Act. This action is based on a finding by the Administrator that the placement of these opioids into schedule I of the Controlled Substances Act is necessary to avoid an imminent hazard to the public safety. Any final order will impose the administrative, civil, and criminal sanctions and regulatory controls applicable to schedule I controlled substances under the Controlled Substances Act on the manufacture, distribution, possession, importation, and exportation of, and research and conduct of instructional activities of these opioids.
August 31, 2016.
Michael J. Lewis, Office of Diversion Control, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598-6812.
Any final order will be published in the
The Drug Enforcement Administration (DEA) implements and enforces titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended. 21 U.S.C. 801-971. Titles II and III are referred to as the “Controlled Substances Act” and the “Controlled Substances Import and Export Act,” respectively, and are collectively referred to as the “Controlled Substances Act” or the “CSA” for the purpose of this action. The DEA publishes the implementing regulations for these statutes in title 21 of the Code of Federal Regulations (CFR), chapter II. The CSA and its implementing regulations are designed to prevent, detect, and eliminate the diversion of controlled substances and listed chemicals into the illicit market while providing for the legitimate medical, scientific, research, and industrial needs of the United States. Controlled substances have the potential for abuse and dependence and are controlled to protect the public health and safety.
Under the CSA, each controlled substance is classified into one of five schedules based upon its potential for abuse, its currently accepted medical use in treatment in the United States, and the degree of dependence the drug or other substance may cause. 21 U.S.C. 812. The initial schedules of controlled substances established by Congress are found at 21 U.S.C. 812(c), and the current list of all scheduled substances is published at 21 CFR part 1308.
Section 201 of the CSA, 21 U.S.C. 811, provides the Attorney General with the authority to temporarily place a substance into schedule I of the CSA for two years without regard to the requirements of 21 U.S.C. 811(b) if she finds that such action is necessary to avoid an imminent hazard to the public safety. 21 U.S.C. 811(h)(1). In addition, if proceedings to control a substance are initiated under 21 U.S.C. 811(a)(1), the Attorney General may extend the temporary scheduling for up to one year. 21 U.S.C. 811(h)(2).
Where the necessary findings are made, a substance may be temporarily scheduled if it is not listed in any other schedule under section 202 of the CSA, 21 U.S.C. 812, or if there is no exemption or approval in effect for the substance under section 505 of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 355. 21 U.S.C. 811(h)(1). The Attorney General has delegated scheduling authority under 21 U.S.C. 811 to the Administrator of the DEA. 28 CFR 0.100.
Section 201(h)(4) of the CSA, 21 U.S.C. 811(h)(4), requires the Administrator to notify the Secretary of the Department of Health and Human Services (HHS) of his intention to temporarily place a substance into schedule I of the CSA.
To find that placing a substance temporarily into schedule I of the CSA is necessary to avoid an imminent hazard to the public safety, the Administrator is required to consider three of the eight factors set forth in section 201(c) of the CSA, 21 U.S.C.
A substance meeting the statutory requirements for temporary scheduling may only be placed in schedule I. 21 U.S.C. 811(h)(1). Substances in schedule I are those that have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. 21 U.S.C. 812(b)(1).
Mitragynine and 7-hydroxymitragynine are the main active constituents of the plant
Kratom, which contains the main active alkaloids mitragynine and 7-hydroxymitragynine, has a long history of use in Southeast Asia as an opium substitute. Kratom is also known in Southeast Asia as thang, thom, krathom, kakuam, ketum, and biak. In recent years, the presence of the psychoactive plant kratom has increased dramatically on the recreational market in the United States due to its opioid-like effects. Numerous vendors selling kratom have appeared in the past few years, markedly increasing its availability.
Kratom preparations, which contain the main active alkaloids mitragynine and 7-hydroxymitragynine, are easily obtained from smoke shops and over the Internet. The Internet is the most utilized source for the purchase of kratom products, making kratom just “a click” away for users. In the United States, law enforcement has seized kratom/mitragynine products in the following forms: powder/plant, powder, plant or vegetable material, capsules, tablets, liquids, gum/resin, and drug patch.
Since abusers obtain kratom, which contains the main active alkaloids mitragynine and 7-hydroxymitragyine, through unknown sources, the identity, purity, and quantity of these substances are uncertain and inconsistent, thus posing significant adverse health risks to users. Several studies have analyzed the concentrations of mitragynine
Evidence suggests that kratom, which contains the main active alkaloids mitragynine and 7-hydroxymitragynine, is abused individually, and with other psychoactive substances. In a 2016 publication, the Centers for Disease Control (CDC) characterized kratom exposures reported to poison centers and uploaded to the National Poison Data System (NPDS)
Kratom does not have an approved medical use in the United States and has not been studied as a treatment agent in the United States. Kratom has a history of being used as an opium substitute in Southeast Asia. Kratom has also been used to self-treat chronic pain and withdrawal symptoms from opioid use. Especially concerning, reports note users have turned to kratom as a replacement for other opioids, such as heroin.
In the United States, kratom is misused to self-treat chronic pain and opioid withdrawal symptoms, with users reporting its effects to be comparable to prescription opioids. Users have also reported dose-dependent psychoactive effects to include euphoria, simultaneous stimulation and relaxation, analgesia, vivid dreams, and sedation (at higher
Information from the published literature, poison control centers data, and medical examiner data, suggests that kratom, which contains the main active alkaloids mitragynine and 7-hydroxymitragynine, is abused by a diverse population to include recreational opioid users, young adults, and adults. The most commonly described route of administration of kratom, which contains the main active alkaloids mitragynine and 7-hydroxymitragynine, is oral. The leaves are typically brewed and ingested as a tea; however, smoking, chewing the raw leaves (done traditionally), and ingestion of kratom capsules or resin extracts have also been reported.
The abuse of kratom, containing the main active alkaloids mitragynine and 7-hydroxymitragynine, is increasing in the United States and remains extremely concerning for law enforcement and public health. As the abuse of the plant increases, as demonstrated by the increasing availability per border encounters,
Reports from law enforcement indicate that kratom is being imported for widespread distribution to the public within the United States.
According to press announcements released in 2014 and 2016, the FDA requested the seizure, by US Marshals, of more than 25,000 pounds of raw kratom material, nearly 90,000 bottles of dietary supplements labeled as containing kratom, and over 100 cases of products labeled as kratom, respectively.
Drug reports pertaining to the trafficking, distribution, and abuse of kratom/mitragynine
Growing concern over the use of kratom is reflected in the increased requests for analyses of mitragynine and 7-hydroxymitragynine in human toxicology panels (blood/urine samples)
Evidence from poison control centers in the United States also shows that there is an increase in the number of individuals abusing kratom, which contains the main active alkaloids mitragynine and 7-hydroxymitragynine. As such, there has been a steady increase in the reporting of kratom exposures by poison control centers. The American Association of Poison Control Centers identified two exposures to kratom between 2000 and 2005. Additionally, the Texas Poison Center Network (TPCN), which is comprised of six poison centers that service the State of Texas, reported 14 exposures to kratom between January 2009 and September 2013. Between January 2010 and December 2015 U.S. poison centers received 660 calls related to kratom exposure. During this time, there was a tenfold increase in the number of calls received, from 26 in 2010 to 263 in 2015.
Furthermore, the abuse and addictive properties of kratom, which contains the main active alkaloids mitragynine, and 7-hydroxymitragynine, have prompted at least 15 countries,
Internationally, the increased presence and abuse of kratom, containing the main active alkaloids mitragynine and 7-hydroxymitragynine, have garnered the attention of the International Narcotics Control Board (INCB).
The use of kratom and associated products, which contains the main active alkaloids mitragynine and 7-hydroxymitragine, pose an imminent hazard to public safety. These substances produce opioid-like effects, making their abuse a serious public health concern. Information from published literature, public health officials, and poison control center data demonstrate that the use of kratom, which contains the main active alkaloids mitragynine and 7-hydroxymitragynine, has caused numerous adverse effects on users.
In a 2016 publication, the CDC characterized kratom exposures reported to poison centers and uploaded to the NPDS from January 2010 through December 2015.
Information from the scientific literature also demonstrates the health risks associated with kratom use. Reports of hepatotoxicity, psychosis, seizure, weight loss, insomnia, tachycardia, vomiting, poor concentration, hallucinations, and death associated with kratom use have been documented. Additionally, published case reports describe events where individuals sought medical care for the purported use of kratom. Some examples of the reported adverse events involving kratom exposure are described in the 3-factor analysis.
Numerous deaths associated with kratom, which contains the main active constituents mitragynine and 7-hydroxymitragynine, have been reported indicating that this substance is a serious public health threat. In 2016, DEA has received correspondences from public/state officials which indicate that there were a significant number of overdoses and traffic fatalities directly, or indirectly, involving kratom.
Since abusers obtain kratom, which contains the main active alkaloids mitragynine and 7-hydroxymitragyine, through unknown sources, the identity, purity, and quantity of these substances are uncertain and inconsistent, thus posing significant adverse health risks to users. According to the FDA, in a letter dated May 18, 2016, there are no approved new drug applications, or investigational new drug applications for mitragynine or 7-hydroxymitragynine. As such, kratom products have no accepted medical use
In accordance with 21 U.S.C. 811(h)(3), based on the available data and information, summarized above, the continued uncontrolled manufacture, distribution, reverse distribution, importation, exportation, conduct of research and chemical analysis, possession, and abuse of mitragynine and 7-hydroxymitragynine pose an imminent hazard to the public safety. The DEA is not aware of any currently accepted medical uses for these substances in the United States. A substance meeting the statutory requirements for temporary scheduling, 21 U.S.C. 811(h)(1), may only be placed in schedule I. Substances in schedule I are those that have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. Available data and information for mitragynine and 7-hydroxymitragynine indicate that these substances have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. As required by section 201(h)(4) of the CSA, 21 U.S.C. 811(h)(4), the Administrator, through a letter dated May 6, 2016, notified the Assistant Secretary of the Department of Health and Human Services of the DEA's intention to temporarily place these substances in schedule I.
This notice of intent initiates an expedited temporary scheduling action and provides the 30-day notice pursuant to section 201(h) of the CSA, 21 U.S.C. 811(h). In accordance with the provisions of section 201(h) of the CSA, 21 U.S.C. 811(h), the Administrator considered available data and information, herein set forth the grounds for his determination that it is necessary to temporarily schedule mitragynine and 7-hydroxymitragynine in schedule I of the CSA, and finds that placement of these opioid substances into schedule I of the CSA is necessary in order to avoid an imminent hazard to the public safety.
Because the Administrator hereby finds that it is necessary to temporarily place these opioids into schedule I to avoid an imminent hazard to the public safety, any subsequent final order temporarily scheduling these substances will be effective on the date of publication in the
The CSA sets forth specific criteria for scheduling a drug or other substance. Regular scheduling actions in accordance with 21 U.S.C. 811(a) are subject to formal rulemaking procedures done “on the record after opportunity for a hearing” conducted pursuant to the provisions of 5 U.S.C. 556 and 557. 21 U.S.C. 811. The regular scheduling process of formal rulemaking affords interested parties with appropriate process and the government with any additional relevant information needed to make a determination. Final decisions that conclude the regular scheduling process of formal rulemaking are subject to judicial review. 21 U.S.C. 877. Temporary scheduling orders are not subject to judicial review. 21 U.S.C. 811(h)(6).
Section 201(h) of the CSA, 21 U.S.C. 811(h), provides for an expedited temporary scheduling action where such action is necessary to avoid an imminent hazard to the public safety. As provided in this subsection, the Attorney General may, by order, schedule a substance in schedule I on a temporary basis. Such an order may not be issued before the expiration of 30 days from (1) the publication of a notice in the
Inasmuch as section 201(h) of the CSA directs that temporary scheduling actions be issued by order and sets forth the procedures by which such orders are to be issued, the DEA believes that the notice and comment requirements of section 553 of the Administrative Procedure Act (APA), 5 U.S.C. 553, do not apply to this notice of intent. In the alternative, even assuming that this notice of intent might be subject to section 553 of the APA, the Administrator finds that there is good cause to forgo the notice and comment requirements of section 553, as any further delays in the process for issuance of temporary scheduling orders would be impracticable and contrary to the public interest in view of the manifest urgency to avoid an imminent hazard to the public safety.
Although the DEA believes this notice of intent to issue a temporary scheduling order is not subject to the notice and comment requirements of section 553 of the APA, the DEA notes that in accordance with 21 U.S.C. 811(h)(4), the Administrator will take into consideration any comments submitted by the Assistant Secretary with regard to the proposed temporary scheduling order.
Further, the DEA believes that this temporary scheduling action is not a “rule” as defined by 5 U.S.C. 601(2), and, accordingly, is not subject to the requirements of the Regulatory Flexibility Act (RFA). The requirements for the preparation of an initial regulatory flexibility analysis in 5 U.S.C. 603(a) are not applicable where, as here, the DEA is not required by section 553 of the APA or any other law to publish a general notice of proposed rulemaking.
Additionally, this action is not a significant regulatory action as defined by Executive Order 12866 (Regulatory Planning and Review), section 3(f), and, accordingly, this action has not been reviewed by the Office of Management and Budget (OMB).
This action will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132 (Federalism) it is determined that this action does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.
Administrative practice and procedure, Drug traffic control, Reporting and recordkeeping requirements.
For the reasons set out above, the DEA proposes to amend 21 CFR part 1308 as follows:
21 U.S.C. 811, 812, 871(b), unless otherwise noted.
(h) * * *
(28) Mitragynine (to include synthetic equivalents as well as mitragynine naturally contained in the plant of the genus and species name:
(29) 7-Hydroxymitragynine (to include synthetic equivalents as well as 7-hydroxymitragynine naturally contained in the plant of the genus and species name:
Office of the Secretary, Department of Defense (DoD).
Proposed rule.
The Department of Defense, Defense Health Agency, is proposing to revise its reimbursement of Long Term Care Hospitals (LTCHs) and Inpatient Rehabilitation Facilities (IRFs). Proposed revisions are in accordance with the statutory provision at title 10, United States Code (U.S.C.), section 1079(i)(2) that requires TRICARE payment methods for institutional care be determined, to the extent practicable, in accordance with the same reimbursement rules as apply to payments to providers of services of the same type under Medicare. Our regulation includes a definition for “Hospital, long-term (tuberculosis, chronic care, or rehabilitation).” This rule proposes to delete this definition and create separate definitions for “Long Term Care Hospital” and “Inpatient Rehabilitation Facility” in accordance with Centers for Medicare & Medicaid Services (CMS) classification criteria. Under TRICARE, LTCHs and IRFs (both freestanding rehabilitation hospitals and rehabilitation hospital units) are currently paid the lower of a negotiated rate (if they are a network provider) or billed charges (if they are a non-network provider). Although Medicare's reimbursement methods for LTCHs and IRFs are different, it is prudent to propose adopting both the Medicare LTCH and IRF Prospective Payment System (PPS) methods simultaneously to align with our statutory requirement to utilize the same reimbursement system as Medicare. This proposed rule sets forth the proposed regulation modifications necessary for TRICARE to adopt Medicare's LTCH and IRF Prospective Payment Systems and rates applicable for inpatient services provided by LTCHs and IRFs to TRICARE beneficiaries.
Written comments received at the address indicated below by October 31, 2016 will be accepted.
You may submit comments, identified by docket number or Regulatory Information Number (RIN) and title, by either of the following methods:
Sharon Seelmeyer, Defense Health Agency (DHA), Medical Benefits and Reimbursement Section, telephone (303) 676-3690.
This rule publishes TRICARE's proposed modifications to our regulation that are necessary to adopt the Medicare LTCH Prospective Payment System and rates. This is in accordance with the statutory requirement that for TRICARE institutional services “payments shall be determined to the extent practicable in accordance with the same reimbursement rules as apply to payments to providers of services of the same type under [Medicare].” Medicare pays LTCHs using a LTCH Prospective Payment System (PPS) which classifies LTCH patients into distinct Diagnosis-Related Groups (DRGs). The patient classification system groupings are called Medicare Severity Long Term Care Diagnosis Related Groups (MS-LTC-DRGs), which are the same DRG groupings used under the Medicare acute hospital inpatient prospective payment system (IPPS), but that have been weighted to reflect the resources required to treat the medically complex patients treated at LTCHs.
On January 26, 2015, a TRICARE proposed rule was published in the
On August 22, 2014, the CMS final rule on updating the annual payment rates for the Medicare PPS for inpatient hospital services provided by LTCHs was published in the
TRICARE pays for most hospital care under the TRICARE DRG-based payment system, which is similar to Medicare's, but some hospitals are exempt from the TRICARE DRG-based payment system. LTCHs are currently exempt from the TRICARE DRG-based payment system and are paid by TRICARE at the lower of a negotiated rate (if they are a network provider) or billed charges (if they are a non-network provider). Paying billed charges is fiscally imprudent and inconsistent with TRICARE's governing statute. Paying LTCHs under Medicare's methods is prudent, because it reduces government costs without affecting beneficiary access to services or quality; it is practicable, because it can be implemented without major costs; and it is harmonious with the statute because the statute states that TRICARE shall determine its payments for institutional services to the extent practicable in accordance with Medicare's payment rates. Our legal authority for this portion of the proposed rule is 10 U.S.C. 1079(i)(2).
This rule also publishes proposed TRICARE regulation modifications necessary to adopt the Medicare IRF Prospective Payment System (PPS) and rates. This is in accordance with the statutory requirement that for TRICARE institutional services “payments shall be determined to the extent practicable in accordance with the same reimbursement rules as apply to payments to providers of services of the same type under [Medicare].” Medicare pays IRFs using an IRF Prospective Payment System (PPS) which classifies IRF patients into one of 92 case-mix groups (CMGs).
Similarly to LTCHs, IRFs, (both freestanding rehabilitation hospital and rehabilitation hospital units) are currently exempt from the TRICARE DRG-based payment system and are paid by TRICARE at the lower of a negotiated rate (if they are a network provider) or billed charges (if they are a non-network provider). As discussed earlier, paying billed charges is fiscally imprudent and inconsistent with TRICARE's governing statute. Paying IRFs under a method similar to Medicare's is prudent, practicable, and harmonious with the statute. Our legal authority for this portion of the proposed rule is 10 U.S.C. 1079(i)(2).
TRICARE proposes to reimburse LTCHs for inpatient care using Medicare's LTCH PPS using Medicare's MS-LTC-DRGs. Under the proposed TRICARE LTCH PPS reimbursement methodology, payment for a TRICARE patient will be made at a predetermined, per-discharge amount for each MS-LTC-DRG. The TRICARE LTCH PPS reimbursement methodology would include payment for all inpatient operating and capital costs of furnishing covered services (including routine and ancillary services), but not certain pass-through costs (
The Pathway for SGR Reform Act of 2013 directed CMS to make significant changes to the payment system for LTCHs. The law directs CMS to establish two different types of LTCH PPS payment rates depending on whether or not the patient meets certain clinical criteria: (1) Standard LTCH PPS payment rates; and (2) lower site-neutral LTCH PPS payment rates that are generally based on the Medicare acute hospital IPPS rates. Site-neutral patients include LTCH patients who do not use prolonged mechanical ventilation during their LTCH stay or who did not spend three or more days in the intensive care unit (ICU) during their prior acute care hospital stay. The law transitions the payment reductions in FY16 and FY17 by requiring payment based on a 50/50 blend of the standard LTCH PPS rate and the site-neutral LTCH PPS rate for site-neutral patients. In FY17, when we anticipate implementing the TRICARE LTCH PPS payment changes, we propose that TRICARE adopt Medicare's FY17 LTCH PPS payment policies, which will include Medicare's payment of site-neutral cases with Medicare's 50/50 blended payment for site-neutral patients. Medicare has not yet set the payment for site neutral cases for FY 2018, however, we will follow that payment rate once it is determined. For example, if the blended payment rate ends by FY18, we would also follow Medicare and all TRICARE site-neutral LTCH patients would receive the site-neutral payment (without a blend with the standard LTCH PPS rate). If implementation of the TRICARE LTCH PPS is delayed beyond FY17, there will be no transition period for site-neutral patients. Rather, TRICARE will adopt the Medicare LTCH PPS methodology applicable at the time of TRICARE implementation.
TRICARE proposes to reimburse IRFs for inpatient care using Medicare's IRF PPS which pays a prospectively-set, fixed payment per discharge based on a patient's classification into one of 92
This proposed rule removes outdated definitions in 32 CFR 199.2 for “Hospital, long-term (tuberculosis, chronic care, or rehabilitation)” and “Long-term hospital care” and adds a new definition for “Long-Term Care Hospital (LTCH)” as well as adding a new definition for “Inpatient Rehabilitation Facility (IRF).” The new definitions are based on CMS' LTCH and IRF classifications. Our review of the data shows that there were no facilities reimbursed under our existing LTCH or IRF reimbursement methodologies that will not meet the new proposed definitions. The TRICARE requirements for both LTCHs and IRFs to be authorized institutional providers have been added to 32 CFR 199.6.
The economic impact of the proposed rule is anticipated to reduce DoD allowed amounts to LTCHs by approximately $77 million during implementation if that occurs as planned in FY17, when TRICARE site-neutral cases will be paid based on a transitional 50/50 blended payment and $87 million if implemented in FY18 when site-neutral payments are fully phased-in. If implementation is delayed beyond FY17, TRICARE will use the Medicare fully phased in site-neutral payments for site-neutral patients. This proposed rule is also anticipated to reduce DoD allowed amounts to IRFs by approximately $53 million in FY17.
Patients with clinically complex problems, such as multiple acute or chronic conditions, may need hospital care for an extended period of time. LTCHs represent a relatively small number of hospitals (approximately 424 under Medicare), which treat a critically ill population with complex needs and long lengths of stay. Per 32 Code of Federal Regulations (CFR) 199.14(a)(1)(ii)(D)(
Medicare created a PPS for LTCHs effective with the cost reporting period beginning on or after October 1, 2002. The MS-LTC-DRG system under Medicare's LTCH PPS classifies patients into distinct diagnostic groups based on their clinical characteristics and expected resource needs. The patient classification groupings, which are the same groupings used under the inpatient acute care hospital groupings (
TRICARE often adopts Medicare's reimbursement methods but delays implementation generally until any transition phase is complete for the Medicare program. CMS included a 5-year transition period when it adopted LTCH PPS for Medicare, under which LTCHs could elect to be paid a blended rate for a set period of time. This transition period ended in 2006. Following the transition phase, in 2008 Medicare adopted an LTCH-specific DRG system, which uses MS-LTC-DRGs, as the patient classification method for LTCHs. In FY16, Medicare will begin its adoption of a site-neutral payment system for LTCHs. Beginning in FY16 and continuing in FY17, CMS is phasing in a site-neutral payment methodology; during the transition period in FY16 and FY17, for site-neutral patients, 50 percent of the allowed amount will be calculated using the site-neutral payment methodology and 50 percent will be calculated using the current full LTCH PPS standard federal payment rate methodology. Beginning in FY18, all Medicare payments for site-neutral patients will be calculated using the site-neutral payment methodology. Given TRICARE's statutory requirement to adopt Medicare's reimbursement methods when practicable, TRICARE is proposing to adopt Medicare's LTCH PPS reimbursement method for our beneficiaries, including the Medicare site-neutral payment methodology. TRICARE will adopt the Medicare payment methodology that is in place at the time of TRICARE's implementation. For example, for an FY17 implementation, we will follow Medicare and use a 50/50 blend of the site-neutral method and the full LTCH PPS payments for site-neutral patients use a 50/50 blend. If implementation is delayed beyond FY17, TRICARE will use the Medicare site-neutral payments for site-neutral patients.
Under 10 U.S.C. 1079(i)(2), the amount to be paid to hospitals, skilled nursing facilities, and other institutional providers under TRICARE, “shall be determined to the extent practicable in accordance with the same reimbursement rules as apply to payments to providers of services of the same type under [Medicare].” Based on 1079(i)(2), TRICARE is proposing to adopt Medicare's LTCH PPS as the methodology to reimburse TRICARE authorized LTCHs. A change is needed to conform to the statute.
For TRICARE, we were able to identify complete claims information for 678 patients who were Active Duty Service Members (ADSMs), their dependents, or retirees and their dependents who were not eligible for the TRICARE For Life program (referred to as non-TFL), and 56 TFL LTCH admissions in FY14, for which TRICARE was the primary payer for patients with no other health insurance (referred to as non-Other Health Insurance (OHI)). We also identified 27 non-TFL and 3 TFL non-OHI LTCH admissions in FY14 with incomplete claims data, and excluded these claims from the analysis. TRICARE allowed charges for non-TFL beneficiaries were approximately $73 million in FY14. We found that the average TRICARE allowed amount for non-TFL beneficiaries was approximately $107,000 in FY14, which is significantly
For TFL beneficiaries for whom TRICARE was the primary payer, TRICARE paid approximately $19 million in allowed charges in FY14. In cases where TRICARE is the primary payer for LTCH care of TFL beneficiaries, such as when a Medicare beneficiary exhausts his/her day limits, TRICARE is paying billed charges. Reimbursing using methods similar to the Medicare LTCH PPS methodology would have reduced TRICARE allowed charges for TFL beneficiaries by approximately $15 million in FY14.
Shifting to methods similar to the Medicare LTCH PPS methodology would have reduced TRICARE allowed charges to LTCHs for non-TFL and TFL beneficiaries by $60 million in FY14 and is expected to reduce allowed charges by $77 million in FY17, assuming that site-neutral payments will be based on a 50/50 blend of the standard LTCH PPS rate and the site-neutral LTCH PPS rate. We projected savings in FY17 by first projecting costs under TRICARE's current policy for reimbursing LTCHs. We assumed that the costs would increase by 7 percent per year from FY14 to 17 reflecting increases in both TRICARE admissions to LTCHs under current policy and increases in TRICARE billed charges. We then projected the costs under the proposed policy assuming that under the Medicare LTCH-PPS the combination of admissions and higher reimbursement rates would increase costs by 3 percent per year. This percentage annual increase in TRICARE allowed amounts using the LTCH-PPS is less than the current policy percentage increase to reflect lower rates of increases in LTCH reimbursement rates under the LTCH-PPS (in comparison to TRICARE billed charges) and fewer LTCH admissions due to the phased in implementation of the Medicare LTCH site-neutral policy. The difference between the current policy and proposed policy amounts was equal to savings of $77 million in FY17, assuming partial phase-in of site-neutral payments.
As discussed above, TRICARE's current payment method results in TRICARE reimbursing LTCHs substantially more than Medicare does for equivalent inpatient care. Adopting Medicare's LTCH PPS methodology is practicable. Even though the beneficiary populations differ between Medicare and TRICARE non-TFL beneficiaries, we have found that the distribution of LTCH cases by diagnosis groups is similar between the two populations. To adjust for the differences in use by the TRICARE and Medicare populations, we considered developing TRICARE-specific weights and rates. However, TRICARE has a low volume of admissions to LTCHs, so calculating weights and rates for TRICARE admissions to LTCHs is impracticable. We are able to calculate our own weights for admissions to general hospitals on an annual basis because of the volume of TRICARE admissions to general hospitals; however, it would be difficult to determine a new set of TRICARE LTCH weights because of the small number of TRICARE admissions. For example, there were only about 700 TRICARE admissions in FY14 in the approximately 750 MS-LTC-DRG groups. Only four MS-LTC-DRGs had 25 or more TRICARE admissions in FY14 and only 14 had ten or more TRICARE admissions in that year. Approximately 600 MS-LTC-DRGs had no TRICARE LTCH admissions. Consequently, we are proposing to adopt the weights and rates used currently in Medicare's MS-LTC-DRGs.
Further, TRICARE proposes to adopt Medicare's LTCH PPS to include short-stay outliers, the 25 percent threshold payment adjustment, site-neutral payments, interrupted stay policy, the method of payment for preadmission services, and high-cost outlier payments. TRICARE also proposes to incorporate Medicare's Long Term Care Hospital Quality Reporting (LTCHQR) payment adjustments for TRICARE LTCHs that reflect Medicare's annual payment update for that facility. TRICARE is not establishing a separate reporting requirement for hospitals, but will utilize Medicare's payment adjustments resulting from their LTCHQR Program. Please see Medicare's final rule [CMS-1632-F; CMS-1632-CN2] RIN 0938-AS41.
IRFs are free standing rehabilitation hospitals and rehabilitation units in acute care hospitals that provide an intensive rehabilitation program. Per 32 CFR 199.14(a)(1)(ii)(D)(
Medicare created a PPS for IRFs effective with the cost reporting period beginning in January 2002. Section 4421 of the Balanced Budget Act of 1997 (Pub. L. 105-33) modified how Medicare payment for IRF services is to be made by creating Section 1886(j) of the Social Security Act, which authorized the implementation of a per-discharge prospective payment system for inpatient rehabilitation hospitals and rehabilitation units of acute care hospitals—referred to as IRFs. As required by Section 1886(j) of the Act, the Federal rates reflect all costs of furnishing IRF services (routine, ancillary, and capital related). CMS included a 9-month transition period when it adopted the IRF PPS for Medicare, under which IRFs could elect to be paid a blended rate. The transition period ended October 1, 2002. Following the transition period, payment to all IRFs was based entirely on the prospective payment.
Under 10 U.S.C. 1079(i)(2), the amount to be paid to hospitals, skilled nursing facilities, and other institutional providers under TRICARE, “shall be determined to the extent practicable in accordance with the same reimbursement rules as apply to payments to providers of services of the same type under [Medicare].” Based on 1079(i)(2), TRICARE is proposing to adopt Medicare's reimbursement methodology to reimburse TRICARE authorized IRFs. A change is needed to conform to the statute.
For TRICARE, we were able to identify complete claims information for 2,929 TRICARE beneficiaries discharged from IRFs in FY14 where TRICARE was the primary payer. TRICARE allowed charges for these beneficiaries was approximately $121 million in FY14. These allowed amounts were equal to 74 percent of billed charges, indicating that there were significant discounts offered by IRFs. Excluding Children's and Veterans (VA) hospital claims, which are not paid under the IRF-PPS,
Given TRICARE's statutory requirement to adopt Medicare's reimbursement methods when practicable, TRICARE is proposing to adopt Medicare's IRF PPS reimbursement method for its beneficiaries who receive rehabilitative care in IRFs. TRICARE proposes to adopt Medicare's IRF PPS and include Medicare's adjustments for interrupted stays, short stays of less than three days, short-stays transfers (defined as transfers to another institutional setting with an IRF length of stay less than the average length for the CMG), and high-cost outliers. TRICARE proposes to not adopt Medicare's low-income payment (LIP) adjustment for IRFs, because TRICARE does not adjust for Disproportionate Share in acute care hospitals under the TRICARE DRG system. TRICARE also proposes to incorporate Medicare's Inpatient Rehabilitation Hospital Quality Reporting (IRFQR) payment adjustments for TRICARE IRFs, that reflect Medicare's annual payment update for that facility. TRICARE is not establishing a separate reporting requirement for hospitals, but will utilize Medicare's payment adjustments resulting from their IRFQR Program. Please see Medicare's final rule [CMS-1632-F; CMS-1632-CN2] RIN 0938-AS41.
Our analysis found that the TRICARE pediatric LTCH patients and Medicare populations have similar diagnoses and that the estimated TRICARE costs in each MS-LTC-DRG group are similar to those in Medicare. There are very few TRICARE LTCH cases for patients under age 17; however, these pediatric cases have similar diagnoses as other TRICARE LTCH admissions. Therefore, we propose to adopt the same LTCH PPS methodology for pediatric patients in LTCHs as we are for all other TRICARE beneficiaries.
We are inviting comments on this proposal and welcome feedback on whether the MS-LTC-DRG weights are appropriate for pediatric cases. We also welcome options and alternative approaches for consideration in establishing LTCH reimbursement for pediatric beneficiaries.
In 2014, approximately 50 patients under the age of 17 received IRF care under TRICARE. Approximately 38 percent of those TRICARE pediatric IRF cases were treated at Children's hospitals, which are exempt from Medicare's IRF PPS. TRICARE is proposing that pediatric rehabilitation cases at Children's hospitals would also be exempt under the TRICARE IRF PPS and instead paid under the TRICARE DRG system. Pediatric cases treated at TRICARE IRFs would be paid under the TRICARE IRF PPS.
VA hospitals specialize in treating injured veterans and provide access to rehabilitative care. VA hospitals are not Medicare authorized IRFs (because they are Federal hospitals) and they do not use Medicare's IRF PPS method. TRICARE allows VA hospitals to provide inpatient rehabilitation care to TRICARE beneficiaries, and VA hospitals provide care for over 200 TRICARE patients each year (mostly Active Duty Service Members (ADSMs)). VA hospitals will continue to be paid under existing methodologies.
DoD has examined the impacts of this proposed rule as required by Executive Orders (E.O.s) 12866 (September 1993, Regulatory Planning and Review) and 13563 (January 18, 2011, Improving Regulation and Regulatory Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and the Congressional Review Act (5 U.S.C. 804(2)).
E.O.s 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any one year).
We estimate that the effects of the LTCH and IRF provisions that would be implemented by this rule would not result in LTCH or IRF revenue reductions exceeding $100 million in any one year individually; however, when combined, revenue reductions would exceed $100 million, making this rulemaking “economically significant” as measured by the $100 million threshold. We have prepared Regulatory Impact Analyses that, to the best of our ability, presents the costs and benefits of the rulemaking. This proposed rule is anticipated to reduce DoD allowed amounts to LTCHs by $77 million and to IRFs by $53 million in FY17.
Under the Congressional Review Act, a major rule may not take effect until at least 60 days after submission to Congress of a report regarding the rule. A major rule is one that would have an annual effect on the economy of $100 million or more or have certain other impacts. This Notice of Proposed Rule Making is a major rule under the Congressional Review Act.
The RFA requires agencies to analyze options for regulatory relief of small businesses if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals are considered to be small entities, either by being nonprofit organizations or by meeting the Small Business Administration (SBA) identification of a small business (having revenues of $34.5 million or less in any one year). For purposes of the RFA, we have determined that the majority of LTCHs and all IRFs would be considered small entities according to the SBA size standards. Individuals and States are not included in the definition of a small entity. Therefore, this Rule would have a significant impact on a substantial number of small entities. The Regulatory Impact Analyses, as well as the contents contained in the preamble, also serves as the Regulatory Flexibility Analysis.
Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any one year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $140 million. This Proposed Rule will not mandate any requirements for State, local, or tribal governments or the private sector.
This rule will not impose significant additional information collection requirements on the public under the Paperwork Reduction Act of 1995 (44 U.S.C. 3502-3511). Existing information collection requirements of the TRICARE and Medicare programs will be utilized. We do not anticipate any increased costs to hospitals because of paperwork, billing, or software requirements since we are keeping TRICARE's billing/coding requirements (
This rule has been examined for its impact under E.O. 13132, and it does not contain policies that have federalism implications that would 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, consultation with State and local officials is not required.
The TRICARE LTCH PPS and the TRICARE IRF PPS encompass all Medicare-classified LTCHs and IRFs that are also authorized by TRICARE and that have inpatient stays for TRICARE beneficiaries, except for hospitals in States that are paid by Medicare and TRICARE under a waiver that exempts them from Medicare's inpatient prospective payment system or the CHAMPUS DRG-based payment system, respectively. Currently, only Maryland hospitals operate under such a waiver.
The alternatives that were considered, the changes that we are proposing, and the reasons that we have chosen these options are discussed below.
Under the method discussed here, TRICARE's LTCH payments per discharge would decrease by an average of 45-75 percent for most LTCHs. Because the impact of moving from a charge-based reimbursement method to Medicare's method would produce such large reductions in the TRICARE allowed amounts for LTCH care, we considered a 4-year phase-in of this approach. Under this option, one portion of the payment would continue to be paid as the billed charge and the remaining portion would be paid under the Medicare approach. In the first year, 75 percent of the payment would be based on billed charges and in each subsequent year this portion would be reduced by 25 percentage points so that by the fourth year the billed charge portion would be zero points.
For the following reasons, we have determined that a transition period is unnecessary because the Medicare-based payment amounts will have a minimal impact on overall LTCH payments and to any particular LTCH under TRICARE. First, the TRICARE payments to LTCHs will be equal to Medicare's LTCH payments. The Medicare Payment Advisory Committee (MedPAC) is an independent congressional agency which advises the U.S. Congress on issues affecting the Medicare program. MedPAC's most recent research indicates that Medicare LTCHs have a positive Medicare margin. Second, the number of TRICARE discharges from LTCHs is very small in comparison to the number of Medicare discharges in LTCHs each year. In FY14, there were 764 discharges to LTCHs in which TRICARE was the primary payer (including the 30 discharges with incomplete data). Medicare, in comparison, had approximately 138,000 discharges to LTCHs in 2013. Thus, in aggregate, the TRICARE LTCH claims are a very small percentage of the industry's claims (about one-half of one percent). Third, we found that in FY14 there were only 5 LTCHs with 15 or more TRICARE admissions. For all but two TRICARE LTCHs, we found that TRICARE admissions accounted for less than six percent of the number of Medicare discharges. Of the 212 LTCHs with TRICARE discharges, we found that 154 had 3 or fewer discharges in FY14 and that 208 Medicare LTCHs had no admissions in FY14 where TRICARE was the primary payer. Thus, the number of TRICARE discharges at any one LTCH is small and TRICARE is a small portion of LTCH revenues. Fourth, we do not think that there will be access problems for TRICARE beneficiaries. MedPAC has analyzed LTCH access for Medicare patients and concluded that Medicare beneficiaries have continued access to LTCHs under the Medicare payment methodology proposed here as evidenced by an increasing supply of providers and an increasing number of LTCH stays. Given that the TRICARE LTCH rates will equal Medicare LTCH rates and will have a limited impact on overall LTCH payments, we do not anticipate access problems for TRICARE beneficiaries. Further, by statute, hospitals that participate under Medicare are required to agree to accept TRICARE reimbursement. In summary, for these four reasons we do not think that a transition period is necessary, but we invite comments on this approach.
Under the method discussed here, TRICARE's IRF payments per discharge would decrease by 30-40 percent for most IRFs. Because the impact of moving from a charge-based reimbursement method to Medicare's method would produce such large reductions in the TRICARE allowed amounts for IRF care, we considered a 3-year phase-in of this approach. Under this option, one portion of the payment would continue to be paid as the billed charge and the remaining portion would be paid under the Medicare approach. In the first year, two-thirds of the payment would be based on billed charges and in each subsequent year this portion would be reduced by one-third so that by the third year the billed charge portion would be zero points.
For the following reasons, we have determined that a transition period is unnecessary because the Medicare-based payment amounts will have a minimal impact on overall LTCH payments and to any particular LTCH under TRICARE. First, the TRICARE payments to IRFs will be equal to Medicare's IRF payments. The Medicare Payment Advisory Committee (MedPAC) is an independent congressional agency which advises the U.S. Congress on issues affecting the Medicare program. MedPAC's most recent research from March 2015 indicates that Medicare IRFs generally have positive Medicare margins. Thus, we think that IRFs will earn a positive margin from TRICARE. Second, the number of TRICARE discharges from IRFs is very small in comparison to the number of Medicare IRF discharges each year. In FY14, there were 2,681 IRF
We analyzed the impact of TRICARE implementing a new method of payment for LTCHs. The proposed method is Medicare's LTCH payment method, which uses the Medicare MS-LTC-DRG system for cases that meet specific clinical criteria to qualify for the standard LTCH PPS payment rates and, as of FY17, the Medicare IPPS MS-DRG system for all other (site-neutral) patients. Our analysis compares the impact on allowed charges of the new methodology compared to current TRICARE methodology (where TRICARE pays billed charges or discounts off of these billed charges for all LTCH claims).
The data used in developing the quantitative analyses presented below are taken from TRICARE allowed charge data from October 2013 to September 2014. We drew upon various sources for the data used to categorize hospitals in Table 1, below. We attempted to construct these variables using information from Medicare's FY14 Impact file to verify that each provider was in fact a Medicare LTCH. One limitation is that for individual hospitals, some miscategorizations are possible. We were unable to match 30 hospital claims from 6 LTCHs to the FY14 Impact file, and as a result, these claims were excluded from the analysis. All Maryland LTCHs were also excluded from the analysis. After we removed the excluded claims which we could not assign charge and hospital classification variables for, we used the remaining hospitals and claims as the basis for our analysis.
Using allowed charge data from 2014, the FY14 Medicare MS-LTC-DRG and MS-DRG weights, the FY14 Medicare LTCH and IPPS national base payment rates, the FY14 Medicare high cost outlier fixed thresholds, and the FY14 wage index adjustment factors, we simulated TRICARE allowed amounts in FY14 using the proposed LTCH prospective payment method. We focused the analysis on TRICARE claims where TRICARE was the primary payer because only these TRICARE payments will be affected by the proposed reforms.
We analyzed the impact of TRICARE implementing a new method of payment for IRFs. The proposed method is Medicare's IRF prospective payment system (PPS) method, which pays a prospectively-set fixed payment per discharge based on a patient's classification into one of 92 case-mix groups (CMGs). Our analysis compares the impact on allowed charges of the new methodology compared to current TRICARE methodology (where TRICARE pays billed charges or discounts off of these billed charges for all IRF claims).
The data used in developing the quantitative analyses presented below are taken from TRICARE allowed charge data from October 2013 to September 2014. We drew upon various sources for the data used to categorize hospitals in Table 1, below. We attempted to construct these variables using information from Medicare's FY16 IRF rate setting file and the Medicare Provider file to verify that each TRICARE IRF provider was in fact a Medicare IRF. One limitation is that for individual hospitals, some miscategorizations are possible. We were unable to match 78 IRF claims from 23 IRFs to Medicare provider numbers within the FY16 IRF rate setting file or the October 2015 Medicare IRF PSF file, and as a result, these claims were excluded from the analysis. We also excluded all Children's Hospital (4 hospitals, 22 discharges) and all Veterans hospital (12 Veterans hospitals, 226 discharges) claims because these hospitals are not paid under the Medicare IRF-PPS. After we removed the excluded claims which we could not assign charge and hospital classification variables for, we used the remaining hospitals and claims as the basis for our analysis.
The impact of adopting the Medicare IRF-PPS is difficult to estimate because there is insufficient diagnosis information on the TRICARE claims to classify TRICARE patients into a CMG. Because we were unable to classify TRICARE discharges into one of the 92 Medicare CMGs, we took an alternative approach to estimate the costs of adopting the Medicare IRF-PPS system. Our approach is based on first calculating the facility-specific “Medicare” costs for TRICARE IRF discharges at each IRF using the FY14 TRICARE billed charges at that IRF and the Medicare cost-to-charge ratio (CCR) for that IRF. We then used Medicare payment and cost data from the FY16 Medicare IRF rate setting file to calculate the Medicare margin at each IRF. In a third step of our approach we multiplied the estimated cost of each TRICARE discharge calculated in the first step by the IRF-specific margin to get an estimate of the allowed amount that would be paid by TRICARE under the Medicare IRF-PPS for each discharge. Under “current policy” we assumed that TRICARE IRF costs would increase by 6 percent per year from FY14 to FY17 to reflect increases in billed charges. We then projected the costs under the proposed policy, assuming that under the Medicare IRF-PPS, costs would increase by 2.5 percent per year from FY14 to FY17. Under the Medicare IRF-PPS, the percentage annual increase of 2.5 percent in TRICARE allowed amounts is less than the percentage increase under current policy due to slower increases in Medicare IRF reimbursement rates (in comparison to TRICARE billed charges). The difference between the current and the proposed policy was equal to $53 million in FY17. As a result, this approach allows us to estimate the change in allowed amounts under the Medicare method without having CMG
Table 1, Impact of TRICARE LTCH Rule in FY14, Assuming Full Implementation of the Medicare Site-Neutral Payment Policy, below, presents the results of our analysis of FY14 TRICARE claims data. This table categorizes LTCHs which had TRICARE inpatient stays in FY14 by various geographic and special payment consideration groups to illustrate the varying impacts on different types of LTCHs. The first column represents the number of LTCHs in FY14 in each category which had inpatient stays in which TRICARE was the primary payer. The second column shows the number of TRICARE discharges in each category. The third column shows the average TRICARE allowed amount per discharge in FY14. The fourth column shows the simulated average allowed amount per discharge under the Medicare LTCH payment method, assuming full implementation of the Medicare site-neutral payment policy. The fifth column shows the percentage reduction in the allowed amounts under the full implementation of the Medicare site-neutral method relative to the current allowed amounts.
The first row in Table 1 shows the overall impact on the 222 LTCHs included in the analysis. The next three rows of the table contain hospitals categorized according to their urban/rural status in FY14 (large urban, other urban, and rural). The second major grouping is by LTCH bed-size category, followed by TRICARE network status of the LTCH. The fourth grouping shows the LTCHs by regional divisions while the final grouping is by LTCH ownership status.
We estimate that in FY14, assuming full implementation of the Medicare site-neutral payment policy, TRICARE allowed amounts to LTCHs would have decreased by 67 percent in comparison to allowed amounts paid to LTCHs under the current TRICARE policy. For all groups of LTCHs, allowed amounts under the proposed payment methodology would have been reduced.
The following discussion highlights some of the changes in allowed amounts among LTCH classifications. Ninety-six percent of all TRICARE LTCH admissions were to urban LTCHs. Allowed amounts would have decreased by 69 percent for large urban, 64 percent for other urban, and 71 percent for rural LTCHs.
Very small LTCHs (1-24 beds) would have had the least impact; allowed amounts would have been reduced by 49 percent. The change in payment methodology would have had the greatest impact on large LTCHs (125 or more beds), where allowed amounts would have been reduced by about 72 percent.
The change in LTCH payment methodology would have a larger impact on TRICARE non-network LTCHs than network LTCHs because network LTCHs currently offer a discount off billed charges while non-network LTCHs do not. Allowed charges to non-network LTCHs would have declined by 74 percent, in comparison to 64 percent for in-network hospitals. We found that network hospitals on average provide a 30 percent discount off billed charges for non-TFL TRICARE beneficiaries and that 79 percent of all TRICARE LTCH discharges were in-network in FY14.
LTCHs in various geographic areas would have been affected differently due to this change in payment methodology. The two regions with the largest number of TRICARE claims, the South Atlantic and West South Central region, would have had an average decrease of 68 and 69 percent in allowed charges respectively, which are very similar to the overall average of 67 percent. LTCHs in the East North Central and West North Central regions would have had the lowest reductions in allowed charges: 59 and 45 percent, respectively.
Seventy-nine percent of all TRICARE LTCH discharges in FY14 were in proprietary (for-profit) LTCHs, and these facilities would have had their allowed amounts reduced by approximately 68 percent. The decline in allowed amounts for voluntary (not-for-profit) LTCHs would have been less than for-profit hospitals (63 percent).
Table 2, Impact of TRICARE IRF Rule in FY14, presents the results of our analysis of FY14 TRICARE claims data. This table categorizes IRFs which had TRICARE inpatient stays in FY14 by various geographic and special payment consideration groups to illustrate the varying impacts on different types of IRFs. The first column represents the number of IRFs in FY14 in each category which had inpatient stays in which TRICARE was the primary payer. The second column shows the simulated number of TRICARE discharges in each category. The third column shows the average TRICARE allowed amount per discharge in FY14. The fourth column shows the average allowed amount per discharge under the Medicare IRF payment method, excluding the LIP adjustment. The fifth column shows the percentage reduction in the allowed amounts under the Medicare payment method relative to the current TRICARE allowed amounts.
The first row in Table 2 shows the overall impact on the 568 IRFs included in the analysis. The next two rows of the table categorize hospitals according to their geographic location in FY14 (urban and rural). The second major grouping is whether the IRF is a freestanding facility or a part of a hospital unit, followed by a grouping for TRICARE network status. The fourth grouping is whether the IRF is a teaching facility and the fifth groups IRFs by Census division. The final grouping is by IRF ownership status.
The following discussion highlights some of the changes in allowed amounts among IRF classifications. Ninety-five percent of all TRICARE IRF admissions were to urban IRFs. Allowed amounts would have decreased by 45 percent for urban IRFs and 21 percent for rural IRFs.
The change in payment methodology would have resulted in a 54 percent reduction in the allowed amounts for IRFs that are part of a hospital unit. In comparison, freestanding IRF payments would have been reduced by 27 percent.
The change in IRF payment methodology would have a larger impact on TRICARE non-network IRFs than network IRFs because network IRFs currently offer a discount off billed charges while non-network IRFs do not. Allowed charges to non-network IRFs would have declined by 59 percent, in comparison to 42 percent for in-network hospitals. We found that network hospitals on average provide a 32 percent discount off billed charges for non-OHI TRICARE beneficiaries and that 89 percent of all TRICARE IRF discharges were in-network in FY14.
We also found that the change in IRF payment methodology would have a larger impact on teaching hospitals, where payments would have been reduced by 49 percent, in comparison to non-teaching hospitals, where payments would have been reduced by 43 percent. Approximately 83 percent of all TRICARE IRF discharges were from non-teaching IRF facilities.
IRFs in various geographic areas will be affected differently due to this change in payment methodology. The two regions with the largest number of TRICARE claims, the East North Central (787 discharges) and West South Central (611 discharges), would have had an average decrease of 40 and 45 percent in allowed charges respectively. IRFs in the North East and Middle Atlantic would have had the lowest reductions in allowed charges of 20 percent. The Mountain, East South Central, and Pacific regions would have had the highest reductions of between 53 and 54 percent.
Forty-two percent of all TRICARE IRF discharges in FY14 were in proprietary (for-profit) IRFs, and these facilities would have had their allowed amounts reduced by approximately 39 percent. The decline in allowed amounts for voluntary (not-for-profit) and government-owned IRFs would have been slightly more than proprietary hospitals (47 and 48 percent respectively).
Claims, Dental health, Health care, Health insurance, Individuals with disabilities, Military personnel.
Accordingly, 32 CFR part 199 is proposed to be amended as follows:
5 U.S.C. 301; 10 U.S.C. chapter 55.
The additions read as follows:
(b) * * *
(b) * * *
(4) * * *
(v) Long Term Care Hospital (LTCH). LTCHs must meet all the criteria for classification as an LTCH under 42 CFR part 412, subpart O, as well as all of the requirements of this Part in order to be considered an authorized LTCH under the TRICARE program.
(A) In order for the services of LTCHs to be covered, the hospital must comply with the provisions outlined in paragraph (b)(4)(i) of this section. In addition, in order for services provided by such hospitals to be covered by TRICARE, they must be primarily for the treatment of the presenting illness.
(B) Custodial or domiciliary care is not coverable under TRICARE, even if rendered in an otherwise authorized LTCH.
(C) The controlling factor in determining whether a beneficiary's stay in a LTCH is coverable by TRICARE is the level of professional care, supervision, and skilled nursing care that the beneficiary requires, in addition to the diagnosis, type of condition, or degree of functional limitations. The type and level of medical services required or rendered is controlling for purposes of extending TRICARE benefits; not the type of provider or condition of the beneficiary.
(xvi) Critical Access Hospitals (CAHs). CAHs must meet all conditions of participation under 42 CFR 485.601 through 485.645 in relation to TRICARE beneficiaries in order to receive payment under the TRICARE program. If a CAH provides inpatient psychiatric services or inpatient rehabilitation services in a distinct part unit, the distinct part unit must meet the conditions of participation in 42 CFR 485.647, with the exception of being paid under the inpatient prospective payment system for psychiatric facilities as specified in 42 CFR 412.1(a)(2) or the inpatient prospective payment system for rehabilitation hospitals or rehabilitation units as specified in 42 CFR 412.1(a)(3). Upon implementation of TRICARE's IRF PPS in 199.14(a)(10), if a CAH provides inpatient rehabilitation services in a distinct part unit, the distinct part unit shall be paid under TRICARE's IRF PPS.
(xviii) Inpatient Rehabilitation Facility (IRF). IRFs must meet all the criteria for classification as an IRF under 42 CFR part 412, subpart B, and meet all applicable requirements established in this part in order to be considered an authorized IRF under the TRICARE program.
(A) In order for the services of inpatient rehabilitation facilities to be covered, the facility must comply with the provisions outlined in paragraph (b)(4)(i) of this section. In addition, in order for services provided by these facilities to be covered by TRICARE, they must be primarily for the treatment of the presenting illness.
(B) Custodial or domiciliary care is not coverable under TRICARE, even if rendered in an otherwise authorized inpatient rehabilitation facility.
(C) The controlling factor in determining whether a beneficiary's stay in an inpatient rehabilitation facility is coverable by TRICARE is the level of professional care, supervision, and skilled nursing care that the beneficiary requires, in addition to the diagnosis, type of condition, or degree of functional limitations. The type and level of medical services required or
The revisions and additions read as follows:
(a) * * *
(1) * * *
(ii) * * *
(D) * * *
(
(
(
(E) Hospitals which do not participate in Medicare. With the exceptions of CAHs, in addition to LTCHs and IRFs which must be Medicare-participating providers upon implementation of TRICARE's LTCH and IRF PPS, it is not required that a hospital be a Medicare-participating provider in order to be an authorized TRICARE provider. However, any hospital which is subject to the CHAMPUS DRG-based payment system and which otherwise meets CHAMPUS requirements but which is not a Medicare-participating provider (having completed a form HCA-1514, Hospital Request for Certification in the Medicare/Medicaid Program and a form HCFA-1561, Health Insurance Benefit Agreement) must complete a participation agreement with TRICARE. By completing the participation agreement, the hospital agrees to participate on all CHAMPUS inpatient claims and to accept the CHAMPUS-determined allowable amount as payment in full for these claims. Any hospital which does not participate in Medicare and does not complete a participation agreement with TRICARE will not be authorized to provide services to TRICARE beneficiaries.
(3) * * *
(i) For admissions on or after December 1, 2009, inpatient services provided by a CAH, other than services provided in psychiatric and rehabilitation distinct part units, shall be reimbursed at allowable cost (
(9) Reimbursement for inpatient services provided by an LTCH. (i) In accordance with 10 U.S.C. 1079(i)(2), TRICARE payment methods for institutional care shall be determined, to the extent practicable, in accordance with the same reimbursement rules as those that apply to payments to providers of services of the same type under Medicare. The TRICARE-LTC-DRG reimbursement methodology shall be in accordance with Medicare's Medicare Severity Long Term Care Diagnosis Related Groups (MS-LTC-DRGs) as found in regulation at 42 CFR part 412, subpart O. Inpatient services provided in hospitals subject to the Medicare LTCH Prospective Payment System (PPS) and classified as LTCHs and also as specified in 42 CFR parts 412 and 413 will be paid in accordance with the provisions outlined in sections 1886(d)(1)(B)(IV) and 1886 (m)(6) of the Social Security Act and its implementing Medicare regulation (42 CFR parts 412, 413, and 170) to the extent practicable. Under the above governing provisions, TRICARE will recognize, to the extent practicable, in accordance with 10 U.S.C. 1079(i)(2), Medicare's LTCH PPS methodology to include the relative weights, inpatient operating and capital costs of furnishing covered services (including routine and ancillary services), interrupted stay policy, short-stay and high cost outlier payments, the 25 percent threshold payment adjustment, site-neutral payments, wage adjustments for variations in labor-related costs across geographical regions, cost-of-living adjustments, payment adjustments associated with the quality reporting program, method of payment for preadmission services, and updates to the system.
(ii) Exemption. The TRICARE LTCH PPS methodology under this paragraph does not apply to hospitals in States that are reimbursed by Medicare and TRICARE under a waiver that exempts them from Medicare's inpatient prospective payment system or the TRICARE DRG-based payment system, respectively.
(10) Reimbursement for inpatient services provided by Inpatient Rehabilitation Facilities. (i) In accordance with 10 U.S.C. 1079(i)(2), TRICARE payment methods for institutional care shall be determined to the extent practicable, in accordance with the same reimbursement rules as those that apply to payments to providers of services of the same type under Medicare. The TRICARE IRF PPS reimbursement methodology shall be in accordance with Medicare's IRF PPS as found in 42 CFR part 412. Inpatient services provided in IRFs subject to the Medicare IRF prospective payment system (PPS) and classified as IRFs and also as specified in Subpart B of 42 CFR part 412 will be paid in accordance with the provisions outlined in section 1886(j) of the Social Security Act and its implementing Medicare regulation found at 42 CFR 412 subpart P to the extent practicable. Under the above governing provisions, TRICARE will recognize, to the extent practicable, in accordance with 10 U.S.C. 1979(i)(2), Medicare's IRF PPS methodology to include the relative weights, payment rates covering all operating and capitals costs of furnishing rehabilitative services adjusted for wage variations in labor-related costs across geographical regions, adjustments for 60 percent compliance threshold, teaching adjustment, rural adjustment, high-cost outlier payments, payment adjustments associated with the quality reporting program, and updates to the system. TRICARE will not adopt Medicare's low-income payment adjustment under TRICARE's IRF PPS.
(ii) Exemption. The TRICARE IRF PPS methodology under this paragraph does not apply to hospitals in States that are reimbursed by Medicare and TRICARE under a waiver that exempts them from Medicare's inpatient prospective payment system or the TRICARE DRG-based payment system, respectively.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to establish a temporary safety zone on the waters of the Tinicum Range, Eddystone Range, Chester Range, and Marcus Hook Range, in the Delaware River from December 1, 2016 to March 15, 2016. The safety zone would temporarily restrict vessel traffic from transiting or anchoring in a portion of the Delaware River while rock blasting, dredging, and rock removal operations are being conducted to facilitate the Delaware River Main Channel Deepening project for the main navigational channel of the Delaware River. This action is needed to protect personnel, vessels, and the marine environment from potential hazards created by rock blasting, dredging, and rock removal operations. We invite your comments on this proposed rulemaking.
Comments and related material must be received by the Coast Guard on or before September 30, 2016.
You may submit comments identified by docket number USCG-2016-0715 using the Federal eRulemaking Portal at
If you have questions about this rulemaking, call or email MST1 Thomas Simkins, Sector Delaware Bay Waterways Management Division, U.S. Coast Guard; telephone 215-271-4889, email
The Army Corps of Engineers (ACOE) is sponsoring a project, termed “The Deepening,” in which dredging operations are taking place in the Delaware River and Bay navigational channel deepening the channel to 45 feet. The project goal is to maintain a minimum depth of 45 feet to accommodate larger vessel traffic entering the Sector Delaware Bay Zone. The upcoming portion of the project requires the deepening of the Delaware River from Tiniucm Range, south, through Marcus Hook Rang, in which the topography consist of mostly rock bottom. To satisfy the minimum project depth of 45 feet the ACOE has hired Great Lakes Dredging Company to perform rock blasting operations, dredging, and removal of rock in Tinicum Range, Eddystone Range, Chester Range, and Marcus Hook Range, in the Delaware River from December 1, 2016, to March 15, 2017. The Captain of the Port, Delaware Bay, has determined that potential hazards associated with rock blasting, dredging, and rock removal operations, will be a safety concern for anyone within 500 yards of rock blasting, dredging, and rock removal operations. This proposed rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the operational area.
The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters within a 500-yard radius of rock blasting, dredging, and rock removal operations. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231; 33 CFR 1.05-1 and 160.5; and Department of Homeland Security Delegation No. 0170.1.
This proposed rule would establish a safety zone from December 1, 2016, through March 15, 2017. The safety zone would cover all navigable waters in the Delaware River within 500 yards of vessels and machinery being used by personnel to conduct rock blasting, dredging, and rock removal. The duration of the zone is intended to protect personnel, vessels, and the marine environment in these navigable waters while operations are being conducted.
For the duration of the project, in the vicinity of the rock blasting, rock removal, and dredging operation, one side of the main navigational channel will be closed due to the drill boat APACHE being unable to relocate for vessel traffic while conducting rock blasting and removal operations. Additionally there is a potential for blasted rock to be within the navigational channel causing a navigational safety hazard for vessels transiting the safety zone. Vessels wishing to transit the safety zone in the main navigational channel may do so if they can make satisfactory passing arrangements with drill boat APACHE, dredge TEXAS, or dredge NEW YORK in accordance with the navigational rules in 33 CFR subchapter E via VHF-FM channel 13 at least 30 minutes prior to arrival. If vessels are unable to make satisfactory passing arrangements with the drill boat APACHE, dredge TEXAS, or dredge NEW YORK they may request permission from the Captain of the Port, or his designated representative, on VHF-FM channel 16. All vessels must operate at the minimum safe speed necessary to maintain steerage and reduce wake.
No vessels may transit through the safety zone during times of explosives detonation. During rock blasting detonation, vessels would be required to maintain a 500 yard distance from the drill boat APACHE. The drill boat APACHE will make broadcasts, via VHF-FM channels 13 and 16, at 15 minutes, 5 minutes, and 1 minute prior to detonation, as well as a countdown to detonation on VHF-FM channel 16. The drill boat APACHE will also raise a red flag signifying when a detonation is occurring. The 500 yard radius will be secured by a contracted security vessel on either side of the blast area. Security vessels will ensure the blasting area is clear prior to explosive detonation. Sector Delaware Bay will ensure significant notice is given to the maritime community of dates and times of blasting via broadcast notice to mariners on VHF-FM channel 16. After every explosive detonation, a survey will be conducted to ensure the navigational channel is clear for vessels to transit. The drill boat APACHE will broadcast, via VHF-FM channels 13 and 16, when the survey has been completed
We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes 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 size, location, duration, and traffic management of the safety zone. The Coast Guard does not anticipate any significant economic impact because the safety zone would be enforced in an area and in a manner that does not conflict with transiting commercial and recreational traffic, except for the short periods of time when explosive detonation evolutions are being conducted. The blasting detonations will not occur more than three times a day. At all other times, at least one side of the main navigational channel would be open for vessels to transit. Moreover, the Coast Guard will work in coordination with the pilots to ensure vessel traffic is limited during the times of detonation and Broadcast Notice to Mariners are made via VHF-FM marine channels 13 and 16 when blasting operations will occur.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to anchor in or transit the safety zone 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 proposed rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This proposed rule would not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and 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 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 proposed rule would not result in such an expenditure, we do discuss the effects of this 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 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 proposed rule involves a safety zone in force from December 1, 2016, through March 15, 2017, that prohibits entry within 500 yards of vessels and machinery being used by personnel conducting rock blasting, dredging, and rock removal operations within Tinicum Range, Eddystone Range, Chester Range, and Marcus Hook Range. It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction M16475.1D. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under
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 applies, and provide a reason for each suggestion or recommendation.
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 NPRM as being available in the docket, and all public comments, will be in our online docket at
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:
33 U.S.C 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(1) All vessels and persons are prohibited from entering into or moving within the safety zone unless authorized by the Captain of the Port, Delaware Bay, or by his designated representative.
(2) Vessels wishing to transit the safety zone, described in paragraph (a) of this section, in the main navigational channel, may do so if they can make satisfactory passing arrangements with the drill boat APACHE, dredge TEXAS, or dredge NEW YORK in accordance with the Navigational Rules in 33 CFR subchapter E via VHF-FM channel 13 at least 30 minutes prior to arrival. If vessels are unable to make satisfactory passing arrangements with the drill boat APACHE, dredge TEXAS, or dredge NEW YORK, they may request permission from the Captain of the Port, or his designated representative, on VHF-FM channel 16.
(3) No vessels may transit through the safety zone during times of explosives detonation. During rock blasting detonation, vessels are required to maintain a 500 yard distance from the drill boat APACHE. The drill boat APACHE will make broadcasts, via VHF-FM channels 13 and 16, at 15 minutes, 5 minutes, and 1 minute prior to detonation, as well as a countdown to detonation on VHF-FM channel 16. The drill boat APACHE will also raise a red flag signifying when a detonation is occurring. The 500 yard radius will be secured by contracted security vessel on either side of the blast area. Security vessel will ensure the blasting area is clear prior to explosive detonation. Sector Delaware Bay will ensure significant notice is given to the maritime community of dates and times of blasting via broadcast notice to mariners on VHF-FM channel 16.
(4) After every explosive detonation, a survey will be conducted to ensure the navigational channel is clear for vessels to transit. The drill boat APACHE will broadcast, via VHF-FM channels 13 and 16, when the survey has been completed and the channel is clear to transit. Vessels granted permission to transit through the safety zone must proceed as directed by the designated representative of the Captain of the Port and contact the drill boat APACHE on VHF-FM channel 13 to make satisfactory passing arrangements in accordance with the navigational rules in 33 CFR subchapter E.
(5) This section applies to all vessels except vessels that are engaged in the following operations: enforcing laws; servicing aids to navigation, and emergency response vessels.
(c)
(d)
(e)
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to establish a safety zone on the waters of the Atlantic Ocean east of Jacksonville Beach, Florida during the Jacksonville Sea and Sky Spectacular. This safety zone will be enforced daily 10 a.m. to 4:30 p.m., from November 2 through November 6, 2016. This proposed rulemaking would prohibit persons and
Comments and related material must be received by the Coast Guard on or before September 30, 2016.
You may submit comments identified by docket number USCG-2016-0271 using the Federal eRulemaking Portal at
If you have questions about this proposed rulemaking, call or email Lieutenant Allan Storm, Sector Jacksonville, Waterways Management Division, U.S. Coast Guard; telephone (904) 714-7616, email
On February 22, 2016, the City of Jacksonville submitted a marine event application to the Coast Guard for the Jacksonville Sea and Sky Spectacular that will take place from 10 a.m. to 4:30 p.m. on November 2 through November 6, 2016. The air show will consist of various flight demonstrations over the Atlantic Ocean, just offshore from Jacksonville Beach, FL. Over the years, there have been unfortunate instances of aircraft mishaps that involve crashing during performances at various air shows around the world. Occasionally, these incidents result in a wide area of scattered debris in the water that can damage property or cause significant injury or death to the public observing the air shows. The Captain of the Port (COTP) Jacksonville has determined that a safety zone is necessary to protect the general public from hazards associated with aerial flight demonstrations.
The purpose of the rulemaking is to ensure the safety of vessels and persons during the air show on the navigable waters of the Atlantic Ocean in Jacksonville Beach, FL. The Coast Guard proposes this rulemaking under authority in 33 U.S.C. 1231.
The COTP proposes to establish a safety zone from 10 a.m. to 4:30 p.m. on November 2 through November 6, 2016. The safety zone will encompass all waters within an area approximately three miles parallel to the shoreline, and one half mile out into the Atlantic Ocean offshore from Jacksonville Beach, Florida. The duration of the zone is intended to ensure the safety of the public and these navigable waters during the aerial flight demonstrations. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. The regulatory text the Coast Guard is proposing appears at the end of the document.
The Coast Guard developed this proposed rule after considering numerous statutes and Executive orders (E.O.s) related to rulemaking. A summary of the statutory analyses, analyses of E.O.s, and discussion of First Amendment rights of protestors is included below.
E.O.s 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 size, location, duration, and time-of-day of the safety zone. Vessel traffic would be able to safely transit around this safety zone which would impact a small designated area of the Atlantic Ocean for six and a half hours on each of the five days the air show is occurring. Moreover, the Coast Guard would issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone, and the rule would allow vessels to seek permission to enter the zone.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard 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 safety zone 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 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This proposed rule would not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under E.O. 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in E.O. 13132.
Also, this proposed rule does not have tribal implications under E.O. 13175, Consultation and Coordination with
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, the Coast Guard discusses the effects of this rule elsewhere in this preamble.
The Coast Guard analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves a safety zone that will help protect the general public from hazards associated with aerial flight demonstrations occurring during the air show, and will be in effect from 10 a.m. to 4:30 p.m. on November 2 through November 6, 2016.
It is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of Commandant Instruction M16475.lD. A preliminary environmental analysis checklist and Categorical Exclusion Determination are available in the docket where indicated under
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Public participation is essential to effective rulemaking, and the Coast Guard will consider all comments and related materials 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 applies, and provide a reason for each suggestion or recommendation.
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
To view comments, as well as documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) Persons and vessels desiring to enter, transit through, anchor in, or remain within the regulated area may contact the Captain of the Port Jacksonville by telephone at 904-714-7557, or a designated representative via VHF-FM radio on channel 16, to request authorization. If authorization is granted by the Captain of the Port Jacksonville or a designated representative, all persons and vessels receiving such authorization must comply with the instructions of the Captain of the Port Jacksonville or a designated representative.
(3) The Coast Guard will provide notice of the regulated area through Broadcast Notice to Mariners via VHF-FM channel 16 and by on-scene designated representatives.
(d)
Postal Regulatory Commission.
Notice of proposed rulemaking.
The Commission is noticing a recent filing requesting that the Commission initiate an informal rulemaking proceeding to consider changes to analytical principles relating to periodic reporting (Proposal Three). This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
On August 22, 2016, the Postal Service filed a petition pursuant to 39 CFR 3050.11 requesting that the Commission initiate an informal rulemaking proceeding to consider changes in analytical principles used to prepare the Postal Service's periodic reports.
Proposal Three relates to the design and operation of the In-Office Cost System (IOCS). The proposal concerns changes in the IOCS city carrier sampling methodology and the development of city carrier costs. The Postal Service states that the proposal utilizes census data from the Time and Attendance Collection System (TACS) and the Delivery Operations Information System (DOIS) to develop a new cluster sampling approach. Petition, Proposal Three at 1. This new sampling approach permits data collectors to take on-site readings in the mornings when city carriers conduct the majority of their in-office work.
The Commission establishes Docket No. RM2016-11 for consideration of matters raised by the Petition. More information on the Petition may be accessed via the Commission's Web site at
1. The Commission establishes Docket No. RM2016-11 for consideration of the matters raised by the Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Three), filed August 22, 2016.
2. Comments by interested persons in this proceeding are due no later than October 11, 2016.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Lyudmila Y. Bzhilyanskaya to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Environmental Protection Agency (EPA).
Proposed rule; extension of comment period.
On June 30, 2016, the Environmental Protection Agency (EPA) proposed a rule titled, “Clean Energy Incentive Program Design Details.” The EPA is extending the comment period on the proposed rule, which was scheduled to close on September 2, 2016, by 60 days until November 1, 2016. The EPA is making this change to allow for requested tribal consultation in response to the proposed rule.
The public comment period for the proposed rule published in the
The EPA has established a docket for the proposed rulemaking (available at
For additional submission methods, the full EPA public comment policy, and general guidance on making effective comments, please visit
For additional information on this action, contact Dr. Tina Ndoh, Sector Policies and Programs Division, Office of Air Quality Planning and Standards (D243-04), Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 541-2750; email address:
A number of tribes working on comments for the Clean Energy Incentive Program (CEIP) Design Details proposed rule (81 FR 42940; June 30, 2016) have asked for additional consultation to better understand the issues related to the interaction between state plans and projects on tribal land that may qualify for the CEIP. Because of the interest of a number of tribes, the EPA believes it is appropriate to extend the comment period to allow for the requested tribal consultations and to provide tribes time to incorporate any information from those consultations in their comments. The EPA extended the initial comment period at 81 FR 47325 (July 21, 2016). The EPA is further extending the comment period for the CEIP Design Details proposal by 60 days, to November 1, 2016.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of intent.
FMCSA announces its intent to issue a rulemaking concerning revisions to its May 27, 2015, final rule titled “Lease and Interchange of Vehicles; Motor Carriers of Passengers.” The Agency received numerous petitions for reconsideration of the final rule and determined that amendments should be considered in response to some of the petitions. The aspects of the 2015 final rule to be reconsidered are discussed later in this document. In addition, FMCSA will hold a roundtable discussion on the scope of the issues to be addressed in the forthcoming rulemaking. The meeting will be public and will seek public input regarding the assignment of responsibility for safety violations to the correct party. Individuals with diverse experience, expertise, and perspectives are encouraged to attend. If all comments have been exhausted prior to the end of the session, the session may conclude early. The Agency intends to complete any regulatory action(s) taken in response to the petitions before January 1, 2018.
Ms. Loretta Bitner, (202) 385-2428,
On May 27, 2015, FMCSA published a final rule concerning the lease and interchange of passenger-carrying commercial motor vehicles (CMVs) (80 FR 30164). The purpose of the rule is to identify the motor carrier operating a passenger-carrying CMV that is responsible for compliance with the Federal Motor Carrier Safety Regulations (FMCSRs) and ensure that a lessor surrenders control of the CMV for the full term of the lease or temporary exchange of CMV(s) and driver(s). The Agency received 37 petitions for reconsideration which have been filed in the public docket referenced above. Upon review of these requests, FMCSA concluded that some have merit. FMCSA, therefore, extended the compliance date of the final rule from January 1, 2017, to January 1, 2018 (82 FR 13998; March 16, 2016) to allow the Agency time to complete its analysis and amend the rule where necessary.
Petitioners made the following substantive arguments, which the Agency will address in subsequent rulemaking.
The petitioners generally argued that FMCSA has taken a regulatory scheme from the trucking industry and applied it to the bus industry, which has a vastly different operating structure and liability regimen. Moreover, the application of these truck regulations to the bus industry offers no additional protection to the public from illegal or unsafe bus operators. Instead, the final rule simply adds administrative costs and reduces operational flexibility for bus operators.
Petitioners further stated that the final rule creates an economic and regulatory burden on passenger carriers that already operate safely and have a high degree of compliance. Some of the petitioners argue that those lease requirements will not stop carriers that choose to violate the regulations, yet will burden those who already operate safely and compliantly.
A petitioner stated that while it supports efforts to identify and address chameleon carriers or carriers that may try to operate under the cloak of another carrier, the final rule does not accomplish this goal and in fact provides a roadmap for irresponsible carriers to operate legally under the authority of another carrier.
One carrier stated that it had identified several instances where the final rule lacks sufficient clarity to enable it to comply, and that these issue areas have an effect on all of its operations. The final rule also adds administrative costs and reduces operational flexibility for charter and tour bus operations, which will, in the end, reduce connectivity and transportation options for the traveling public.
Another carrier argued that the three 2008 crashes cited in the September 20, 2013 notice of proposed rulemaking (NPRM) involved a tire failure, driver error, and an insurance issue (78 FR 57822), and that nothing in the final rule would have prevented any of these crashes. The commenter also named two insurance companies that have restrictions in their policies that prohibit the use of non-owned equipment and non-employed drivers, which were major concerns of the NPRM.
Many of the objections raised by petitioners can be addressed by providing additional explanation. However, some of the issues discussed below may require regulatory changes; they fall into four major categories.
(1) Exclusion of “chartering” (
(2) Amending the CMV requirements for the location of temporary markings for leased/interchanged vehicles. The petitioners argued that the frequent marking changes needed during leases or interchanges would be impractical and unnecessary because the information required is recorded on the driver's records of duty status for roadside inspectors and safety investigators to review; carriers will have to depend completely on their drivers to properly change vehicle markings dozens of times per day in remote locations; and it is unlikely that a member of the public is going to understand the significance of the markings in the event that he or she focuses on the temporary “operated by” markings rather than the permanent markings on the bus representing the vehicle owner.
(3) Changing the requirement that carriers notify customers within 24 hours when they subcontract service to other carriers. Petitioners argued that a 24-hour deadline is impractical because if an emergency maintenance issue occurs, it may not be possible to notify the customer in a timely manner, particularly if the issue occurs on the weekend, when the customer's offices are closed, and the start time is before the customer's Monday opening time.
(4) Expanding the 48-hour delay in preparing a lease to include emergencies when passengers are not actually on board a bus. Sometimes events requiring a replacement vehicle might occur when there are no passengers on a vehicle, such as when Amtrak or airline service is suspended or disrupted and buses are needed to transport stranded passengers. A bus operator contracted to provide the rescue service might need to obtain additional drivers and vehicles from other carriers to meet the demand. There might be a last minute maintenance or mechanical issue, or driver illness, that arises late in the evening or during the night (such as on a multi-day charter or tour trip), or just prior to picking up a group for a charter or scheduled service run.
FMCSA plans to issue a rulemaking notice to address the four areas of concern listed above. The Agency believes that less burdensome regulatory alternatives that would not adversely impact safety could be adopted before the January 1, 2018. The Agency denies the petitions for reconsideration of all other aspects of the final rule. These petitions either would have impaired the purpose of the final rule or did not include practical alternatives.
The Agency will provide petitioners with written notification of these decisions at a later date.
FMCSA will hold a public roundtable to discuss the four issue areas discussed above. The public will have an opportunity to speak about these issues and provide the Agency with information on how to address them. All public comments will be placed in the docket of this rulemaking. Details concerning the schedule and location of the roundtable, as well as procedural information for participants, will follow in a subsequent
Fish and Wildlife Service, Interior.
Notice of 12-month petition finding.
We, the U.S. Fish and Wildlife Service (Service), announce a 12-month finding on a petition to remove the coastal California gnatcatcher (
The finding announced in this document was made on August 31, 2016.
This finding, as well as supporting documentation we used in preparing this finding, is available on the Internet at
G. Mendel Stewart, Field Supervisor, Carlsbad Fish and Wildlife Office, 2177 Salk Avenue, Suite 250, Carlsbad, CA 92008; by telephone at 760-431-9440; or by facsimile at 760-431-5901. If you use a telecommunications device for the deaf (TDD), please call the Federal Information Relay Service (FIRS) at 800-877-8339.
Under the Endangered Species Act of 1973, as amended (ESA or Act; 16 U.S.C. 1531
Since the coastal California gnatcatcher was first identified as a category 2 candidate species in 1982, it has been the subject of numerous
The coastal California gnatcatcher (
In our 2010 5-year review, we reported an estimate of 1,324 gnatcatcher pairs over an 111,006-acre (ac) (44,923-hectare (ha)) area on lands owned by city, county, State, and Federal agencies (public and quasi-public lands) of Orange and San Diego Counties (Service 2010, p. 8). We indicated that this study sampled only a portion of the U.S. range of the subspecies (the coastal regions), and that it was limited to 1 year (Winchell and Doherty 2008, p. 1,324). Standardized, rangewide population trends and occupancy estimates for the coastal California gnatcatcher (within the United States or Mexico) are not available at this time given the limited and incomplete survey information as well as the variability in the survey methods and reporting.
Since the publication of the 2010 5-year review, we have received the following results from limited surveys of the coastal California gnatcatcher within the U.S. portion of the range:
(1) 25 nests (with 11 successes out of 29 nesting attempts) within the Western Riverside County Multi-Species Habitat Conservation Plan (Western Riverside County MSHCP) for the year 2014 in eight of the plan's designated core areas (Biological Monitoring Program 2015,p. 8);
(2) 122 pairs and 33 single males (155 territories) within the City of Carlsbad (under the San Diego County Multiple Habitat Conservation Plan (San Diego County MHCP) in 2013, an increase of 28 territories from 2010 despite little change in survey area (City of Carlsbad 2013, p. 2);
(3) for Orange County, 12.7 percent occupancy within the Central Reserve and 34.3 percent occupancy in the Coastal Reserve (plus 17 other incidental observations) (Leatherman Bioconsulting 2012, p. 5); and
(4) 436 occupied sites for the coastal California gnatcatcher on Marine Corps Base Camp Pendleton (Camp Pendleton) (San Diego County) in 2014, including 122 territorial males, 283 pairs, and 31 family groups, with an additional 53 transient individuals identified (Tetra Tech 2015, p. ii). We will continue to work with our partners to gather data on coastal California gnatcatcher populations and trends.
Since listing, we have updated information regarding the range of the subspecies. In our 2010 5-year review (Service 2010, pp. 6, 8; Table 1), we presented our estimate of the existing range of the coastal California gnatcatcher at that time. We also updated the extent of the subspecies' range in Baja California, Mexico, using the coastal sage scrub vegetation map prepared by Rebman and Roberts (2012, p. 22) and observations of California gnatcatchers (all subspecies of
For additional information on the general biology and life history of the coastal California gnatcatcher, please see our most recent 5-year status review (Service 2010), available at the following Web sites:
On May 29, 2014, we received a combined petition from the Center for Environmental Science, Accuracy, and Reliability; Coalition of Labor, Agriculture and Business; Property Owners Association of Riverside County; National Association of Home
The factors for listing, delisting, or reclassifying species are described at 50 CFR 424.11. We may delist a species only if the best scientific and commercial data available substantiate that it is neither endangered nor threatened. Delisting may be warranted as a result of: (1) Extinction; (2) recovery; or (3) a determination that the original scientific data used at the time the species was listed, or interpretation of that data, were in error.
The petition did not assert that the coastal California gnatcatcher is extinct, nor do we have information in our files indicating that the coastal California gnatcatcher is extinct. The petition did not assert that the coastal California gnatcatcher has recovered and is no longer an endangered species or threatened species, nor do we have information in our files indicating the coastal California gnatcatcher has recovered (further detail on the status of the coastal California gnatcatcher is presented in the
The petition asserts that the original scientific data used at the time the species was classified were in error and that the best available scientific data show no support for the taxonomic recognition of the coastal California gnatcatcher as a distinguishable subspecies (Thornton and Schiff 2014, p. 1). The petition's assertions are primarily based on the results of genetic and ecological analyses published in Zink
The petition asserts that the morphological information originally used to distinguish the subspecies is flawed, citing published and unpublished critiques, alternative analyses, and other interpretations of morphological characteristics of California gnatcatchers (Thornton and Schiff 2014, pp. 14-21). The petition also contends that available genetic data do not support the coastal California gnatcatcher as a distinguishable subspecies (Thornton and Schiff 2014, p. 28). As evidence, the petition cites two published scientific articles in particular, Zink
The petition discusses the results of both Zink
The petition also provides results from an ecological niche model from Zink
On December 31, 2014, we published in the
In response to our information request associated with the status review of the subspecies, we received more than 39,000 letters. Most responders submitted form letters that opposed delisting of the coastal California gnatcatcher. Some submitted additional reports and references for our consideration. New information submitted included survey and trend data for localized areas, information related to effectiveness of regulatory mechanisms, information on restoration efforts, and information on threats to the subspecies and its habitat in the United States and in Mexico.
Additionally, multiple parties submitted critical analyses of information presented in the petition and in Zink
One commenter expressed support for the petition's arguments and the conclusions reached by Zink
Given the diverse and conflicting information submitted by the public and members of the scientific community in response to our request for information (79 FR 78775; December 31, 2014), we convened a scientific review panel. Through a Science Advisory Services contract process, the Service contracted Amec Foster Wheeler Infrastructure and Environment, Inc. (hereafter Amec Foster Wheeler) to assemble a panel of independent experts to provide individual input on the available data concerning the subspecies designation of the coastal California gnatcatcher. Amec Foster Wheeler selected six panelists in accordance with peer review and scientific integrity guidelines from the Office of Management and Budget's
Prior to the workshop, the Service prepared a list of relevant literature and
The workshop was held at the Carlsbad Fish and Wildlife Office on August 17-18, 2015. The purpose of the workshop was to provide a forum for the panelists to review the summary documents provided and to discuss the issues relevant to the taxonomic and systematic issues for the subspecies (see workshop agenda in Amec 2015, p. A-1). During the contracting process, the Service developed a Statement of Work with five suggested questions that the panelists consider during the workshop regarding the taxonomy and systematics issues related to the coastal California gnatcatcher. These are provided in the Amec Foster Wheeler science panel report (Amec 2015, p. A-2). Service personnel did not participate in the workshop discussions or interact with the panelists, with the exception of a brief question-and-answer session on the second day when the panelists requested clarification related to previous Federal actions and Service policies (for example, the DPS policy).
In our Statement of Work, we indicated that the panelists (to be selected by Amec) would include avian genetic and taxonomic researchers as well as experts in avian phylogeographic studies. We also requested that the Contractor would have sufficient experience and understanding in the field of genetics in order to be able to lead and facilitate the discussion of the panelists. The proposal for the facilitated expert panel workshop submitted by Amec to the Service on May 5, 2015 (revised May 13, 2015), included a summary of the six panelists' experience (ranging from 19 to 35 years each) and general areas of expertise in the fields of molecular genetics, avian conservation genetics, avian systematics, conservation genetics, population genetics, and avian molecular genetics. One of the panelists selected by Amec was subsequently replaced due to a scheduling conflict. The proposal also included the qualifications of the facilitator and Amec's Project Manager. We received the panelists' individual curriculum vitae with the draft and final workshop reports. After reviewing the panelists' individual curriculum vitae, we confirmed the six panelists are qualified experts in the fields of molecular genetics, avian conservation genetics, avian systematics, conservation genetics, population genetics, and avian molecular genetics. The Project Manager also noted in Amec's proposal that several panelists had requested that their individual memoranda be presented in the final report without attribution. Although we did not have knowledge of the attribution of the individual memorandums to the six panelists, we determined that all panelists are subject matter experts qualified to evaluate the scientific information presented in the petition. Additional details about the workshop process and the panelist discussions are available in the science panel summary report (Amec 2015, pp. 5-7).
After the workshop, each panelist individually prepared a memorandum that addressed topics relevant to the scientific information presented in the petition (for example, Zink
The panelists were not asked to reach a consensus. However, all six panelists found that the arguments presented by Zink
• The criteria used to distinguish subspecies should include multiple lines of evidence, such as morphology, genetics, and ecology. As such, the use of phylogenetic criteria alone to distinguish (or fail to distinguish) the coastal California gnatcatcher as a subspecies is not appropriate.
• Patterns of differentiation should be applied based on proposed mechanisms of evolution and the geologic age at which those events occurred, and the appropriate tools must be applied to adequately test those hypotheses. Based on the biogeographic history of the region, the infraspecific divergence in the coastal California gnatcatcher is of recent origin (less than 12,000 years before present, see Zink
• Relatedly, the amount of divergence in a small number of neutral genetic markers (genes that are not subject to selective pressures and, therefore, change slowly over time through accumulation of random changes) is likely to be small and unlikely to demonstrate genetic differences between subspecies.
• The genetic analyses conducted by Zink
• Panelists generally concurred that genetic studies that examine neutral genetic markers should not overturn existing subspecies boundaries, especially when divergence is not detected.
Panelists provided detailed information on the limitations of the conclusions that can be made based on the analyses presented in Zink
In late 2015, Zink
The petition asserts that the coastal California gnatcatcher should be delisted. Working within the framework of the regulations for making delisting determinations, as discussed above, the petition asserts that the original data we used in our recognition of the coastal California gnatcatcher as a subspecies, and thus a listable entity under the Act, were in error. In determining whether to recognize the coastal California gnatcatcher as a valid (distinguishable) subspecies, we must base our decision on the best available scientific and commercial data. Additionally, we must provide transparency in application of the Act's definition of species through careful review and analyses of all the relevant data. Under section 3 of the Act and our implementing regulations at 50 CFR 424.02, a “species” includes any subspecies of fish or wildlife or plants, and any distinct population segment of any species of vertebrate fish or wildlife which interbreeds when mature. As such, a “species” under the Act may include any taxonomically defined species of fish, wildlife, or plant; any taxonomically defined subspecies of fish, wildlife, or plant; or any distinct population segment of any vertebrate species as determined by us per our Policy Regarding the Recognition of District Vertebrate Population Segments (61 FR 4721; February 7, 1996).
Our implementing regulations provide further guidance on determining whether a particular taxon or population is a species or subspecies for the purposes of the Act: “the Secretary shall rely on standard taxonomic distinctions and the biological expertise of the Department and the scientific community concerning the relevant taxonomic group” (50 CFR 424.11). For each species, section 4(b)(1)(A) of the Act mandates that we use the best scientific and commercial data available for each individual species under consideration. Given the wide range of taxa and the multitude of situations and types of data that apply to species under review, the application of a single set of criteria that would be applicable to all taxa is not practical or useful. In addition, because of the wide variation in kinds of available data for a given circumstance, we do not assign a priority or weight to any particular type of data, but must consider it in the context of all the available data for a given species.
For purposes of being able to determine what is a listable entity under the Act, we must necessarily follow a more operational approach and evaluate and consider all available types of data, which may or may not include genetic information, to determine whether a taxon is a distinguishable species or subspecies. As a matter of practice, and in accordance with our regulations, in deciding which alternative taxonomic interpretations to recognize, the Service will rely on the professional judgment available within the Service and the scientific community to evaluate the most recent taxonomic studies and other relevant information available for the subject species. Therefore, we continue to make listing decisions based solely on the basis of the best scientific and commercial data available for each species under consideration on a case-specific basis.
In making our determination whether we recognize the coastal California gnatcatcher as a distinguishable subspecies, and thus, whether the petitioned action is warranted, we will consider all available data that may inform the taxonomy of the coastal California gnatcatcher, such as ecology, morphology, genetics, and behavior. In particular, in this review, we focus on evaluating all new submitted and available data and analyses, including but not limited to the 2014 petition, the
We do not address the petition's critiques or its citations to analyses and alternative interpretations of Atwood's morphological data (Thornton and Schiff 2014, pp. 14-21). In our 2011 90-day finding (76 FR 66255; October 26, 2011), we noted that on March 27, 1995, the Service published in the
In our 2011 90-day finding (76 FR 66255; October 26, 2011), we provided a summary of our use of Atwood's morphological data as a part of a large suite of previous studies. We continue to consider those data to be part of the best scientific and commercial data available regarding taxonomy of the coastal California gnatcatcher. Furthermore, on September 15, 1995, the U.S. District Court for the District of Columbia dismissed with prejudice the lawsuit by the Building Industry Association of Southern California and other plaintiffs that sought to overturn the listing of the coastal California gnatcatcher. As part of that lawsuit, the court ordered the Service to release to the public the underlying data that formed the basis for Dr. Atwood's taxonomic conclusions. Given the court's 1995 ruling upholding the Service's recognition of the coastal California gnatcatcher as a valid subspecies, and the fact that no new data were presented by petitioners regarding morphological characteristics of California gnatcatchers, we do not further examine the petition's arguments about morphological data in this 12-month finding.
We also do not discuss the petition's assertions that because the Service has relied on mtDNA evidence in evaluating other species or subspecies for listing under the Act (Thornton and Schiff 2014, Exhibit D), we may not discount such information here. As discussed above, we base each listing decision on the best scientific and commercial data available for the individual species under consideration. Those data may or may not include results of genetic evaluations, including mtDNA analyses. Any data from genetic studies must be considered in the context of the suite of other relevant data available for a particular species. We previously considered the mtDNA data referenced in the petition along with other available information in our 2011 petition finding and concluded that the best available scientific and commercial information supports recognition of the coastal California gnatcatcher as a distinguishable subspecies.
As such, in this determination, we focus on the following topics: (1) Defining subspecies criteria for the coastal California gnatcatcher; (2) interpretations of the results of analyses from genetic studies used in the petition; and (3) interpretations of the results of an ecological niche model used in the petition.
In determining whether to recognize the coastal California gnatcatcher as a distinguishable subspecies, we must first define the criteria used to make this decision given the available information. The petition notes that subspecies divisions are often arbitrary or subjective (Thornton and Schiff 2014, pp. 21-22). Indeed, within the ornithological and taxonomic literature, there are no universally agreed-upon criteria for delineating, defining, or diagnosing subspecies boundaries. Historically, multiple researchers (for example, Mayr (1943); Rand (1948); Amadon (1949)) proposed that at least 75 percent of the individuals of a subspecies should be separable from other populations by a particular characteristic. The American Ornithologists' Union (AOU) Committee on Classification and Nomenclature of North and Middle American Birds (formerly known as the Check-list Committee), the widely recognized scientific body responsible for standardizing avian taxonomy in North America (Haig
Subspecies should represent geographically discrete breeding populations that are diagnosable from other populations on the basis of plumage and/or measurements, but are not yet reproductively isolated. Varying levels of diagnosability have been proposed for subspecies, typically ranging from at least 75 to 95 percent. Because subspecies represent relatively young points along an evolutionary time scale, genetic differentiation between subspecies may not necessarily parallel phenotypic divergence. Thus, subspecies that are phenotypically but not genetically distinct still warrant recognition if individuals can be assigned to a subspecies with a high degree of certainty.
In the scientific literature, multiple authors have provided definitions with a wide-ranging variety of criteria for defining or refining the taxonomic rank of subspecies for avian taxa (for example, McKitrick and Zink (1988); Amadon and Short (1992); Strickberger (2000); Helbig
The science panelists who were convened to evaluate the taxonomy and systematics of the coastal California gnatcatcher provided their individual recommendations for criteria used to define subspecies as described in the scientific literature. Most of the panelists highlighted the AOU subspecies criteria as the standard for avian taxa (Amec 2015, Panelist 1, p. 101; Panelist 3, p. 111; Panelist 4, pp. 116-117; Panelist 5, p. 124; Panelist 6, p. 135). Panelist 2 provided the definition of subspecies from Haig
The petition bases its argument for delisting on the genetic analyses presented in Zink
However, the science panelists explicitly rejected the use of reciprocal monophyly for defining subspecies status for the coastal California gnatcatcher (Amec 2015, p. 105). Reciprocal monophyly is rarely used by avian taxonomists, even in defining taxa at the species level, and this approach is not shared by the majority of scientists (Amec 2015, pp. 126, 104; Sangster 2014, p. 208). Many scientists consider subspecies to be incipient species that are not yet fully reproductively isolated (Amec 2015, p. 126), and the subspecies of the California gnatcatcher have likely not been separated for sufficient time to display characteristics of reciprocal monophyly (Amec 2015, p. 106). Additionally, because there are a number of gene lineages contained within any population, if a population becomes geographically (or genetically) divided into two distinguishable entities, a significant amount of time is required before each of the branches will become “fixed for different, reciprocally monophyletic gene lineages at any single gene” (Mallet 2007, p. 7).
In evaluating the best available information regarding the taxonomic and systematic status of the coastal California gnatcatcher, we disagree with the petition's argument, and conclude that a multi-evidence criteria approach is most appropriate for distinguishing subspecies. In accordance with the science panelists and conclusions in the scientific literature (Sangster 2014; McCormack and Maley 2015), we do not accept that reciprocal monophyly is an appropriate criterion for distinguishing subspecies of avian taxa in the case of the coastal California gnatcatcher.
We next examine the available data regarding factors appropriate for evaluating the subspecific status for the coastal California gnatcatcher. As described above, we reviewed and summarized the available morphological data in detail in previous Federal actions, including the 2011 90-day finding (76 FR 66255; October 26, 2011). No new information regarding the morphological characteristics of California gnatcatchers was submitted in the petition or in response to our request for information in our 2014 90-day finding (79 FR 78775; December 31, 2014). Because there was no new morphological information or analyses to review, the panelists considered the previous peer reviews and summaries of morphological data to represent the best available information and relied on this information in their evaluations (Amec 2015, p. 4). In the following sections, we, therefore, focus our discussion on the genetic and ecological information presented in the petition to delist the coastal California gnatcatcher.
We note that our evaluation applies specifically to the coastal California gnatcatcher and not to avian subspecies in general. Each possible subspecies has been subject to unique evolutionary forces, different methods of selection will act on each subspecies (genetic drift versus allopatric speciation), and the potential divergence time (recent versus more distant) will, therefore, lead to different signals, particularly genetically; as such, the methods for detecting each will be different (Amec 2015, pp. 101-102).
The petition relies on the results of a nuclear DNA analysis presented by Zink
With regard to the genetic evidence relied on in the current petition, multiple commenters from the scientific community and members of the science panel expressed concern regarding the nuclear DNA analysis and conclusions of Zink
We received information from the panelists and others from the scientific community (in response to our 90-day finding (79 FR 78775; December 31, 2014)) regarding the statistical methods presented in Zink
We also received information regarding the approach and analysis of the nuclear markers used by Zink
As previously noted, Zink
Zink
We reaffirm that the best available information indicates that the 30° N. is still the appropriate line to delineate the approximate southern limit of the subspecies' range, and, therefore, the genetic analyses based on that boundary are appropriate for considering the subspecific status. In support of this assessment, one science panel member also questioned the division of subspecies boundaries by Zink
An additional difference in the views regarding the genetic analysis presented in Zink
We also received information from the science community and from the panelists regarding the use of only a small number of neutral genetic markers by Zink
The petition contends that use of DNA data can result in more clear and decisive answers regarding subspecies limits than morphological characteristics (Thornton and Schiff 2014, p. 21). We concur with the petition's assertions and the panelists' summaries that genetic data can in some cases provide clear diagnostic information regarding the geographic limits of related populations, which can then be interpreted and applied in assessing taxonomic treatments. However, we also concur with the panelists that evaluation of genetic data must be thorough, analyzed using genetic markers appropriate for the time scale of likely divergence, and analyzed using appropriate statistical methods. We agree with the panelists that the number and type of genes tested by Zink
One recommendation made by five of the six science panelists was that existing or any newly collected samples be reanalyzed using large numbers of genomic data (AMEC 2015, pp. 102, 109, 121-122, 131, 141), particularly, thousands to tens of thousands of single nucleotide polymorphisms (SNPs) that represent a large portion of the genome. On July 6, 2016, Zink sent to the Service an accepted abstract to be presented at the 2016 North American Ornithology Conference in August (Zink 2016b, pers. comm.). The abstract references a study in which Váquez-Miranda and Zink examine thousands of SNPs for the coastal California gnatcatcher and other Baja California bird species. The authors state that the study results show a lack of population structure in the coastal California gnatcatcher (Zink 2016b, pers. comm.).
The science panelists who recommended the use of SNPs included several provisos. They cautioned that the SNP dataset be analyzed using samples from individuals across the range of the California gnatcatcher species, appropriate hypothesis testing be used, appropriate statistical methods be used (for example, testing for outlier loci (Funk
The underlying study identified by Zink (2016b, pers. comm.) has not been provided to us and has not been peer-reviewed or published. The abstract submitted by Zink (2016b, pers. comm.) did not include information regarding the sampling methods used in the study or the statistical methods used to analyze the samples. The division between subspecies of California gnatcatchers used by Váquez-Miranda and Zink appears to be located farther south than the recognized boundary for the subspecies at 30° N., which may confound the results (Zink 2016b, pers. comm.). In sum, the submitted abstract does not provide sufficient detail and information to enable us to adequately evaluate its conclusions. Therefore, we do not consider the abstract to provide the best available information regarding the subspecific status of the gnatcatcher. We will consider the underlying study and data, along with all new information provided on the coastal California gnatcatcher, as we receive it.
The petition also relied on the results of an ecological niche model constructed by Zink
In response to our request for information in our 90-day finding (79 FR 78775; December 31, 2014), we received differing interpretations of the ecological niche model from Zink
The science panelists also disagreed with the interpretation of the results of the ecological niche model presented in Zink
The ecological niche model presented by Zink
Further support for the interpretation of McCormack and Maley (2015) is provided in a new paper by Theimer
In the Zink
After careful review of the best available information including information presented in the petition, information submitted by the public, information provided by the science panelists, and all other available information, we find that the results of the genetic analyses and niche modeling presented in Zink
Having reviewed the best available information regarding the taxonomy of the coastal California gnatcatcher and determined it is a distinguishable subspecies, we next evaluate information regarding its appropriate status under the Act.
Section 4 of the Act (16 U.S.C. 1533) and implementing regulations (50 CFR part 424) set forth procedures for adding species to, removing species from, or reclassifying species on the Federal Lists of Endangered and Threatened Wildlife and Plants. Under section 4(a)(1) of the Act, a species may be determined to be an endangered species or threatened species because of any of the following five factors:
(A) The present or threatened destruction, modification, or curtailment of its habitat or range;
(B) Overutilization for commercial, recreational, scientific, or educational purposes;
(C) Disease or predation;
(D) The inadequacy of existing regulatory mechanisms; or
(E) Other natural or manmade factors affecting its continued existence.
In making this finding, information pertaining to the coastal California gnatcatcher in relation to these five factors is discussed below. In considering what factors might constitute threats, we must look beyond the mere exposure of the species to the factor to determine whether the species responds to the factor in a way that causes actual impacts to the species. If there is exposure to a factor, but no response, or only a positive response, that factor is not a threat. If there is exposure and the species responds negatively, the factor may be a threat. We then attempt to determine if that factor rises to the level of a threat, meaning that it may drive or contribute to the risk of extinction of the species such that the species warrants listing as an endangered species or threatened species as those terms are defined by the Act. This does not necessarily require empirical proof of a threat. The combination of exposure and some corroborating evidence of how the species is likely impacted could suffice. The mere identification of factors that could impact a species negatively is not sufficient to compel a finding that listing is appropriate; we require evidence that these factors are operative threats that act on the species to the point that the species meets the definition of an endangered species or threatened species under the Act.
In 2010, we conducted a threats analysis in our 5-year review for the coastal California gnatcatcher (Service 2010, entire). The following analysis of
The following sections include summary evaluations of nine potential threats to the coastal California gnatcatcher that we identified in the 2010 5-year review as having impacts on the subspecies or its habitat throughout its range in the United States and Mexico. Potential threats that may impact the subspecies are those actions that may affect individuals or habitat either currently or in the future, including habitat loss from urban and agricultural development (
To provide a temporal component to our evaluation of threats, we first determined whether we had data available that would allow us to reasonably predict the likely future impact of each specific threat over time. Overall, we found that, for many threats, the likelihood and severity of future impacts became too uncertain to address beyond a 50-year timeframe. For example:
• The Natural Community Conservation Planning (NCCP) Act, in conjunction with the Service's Habitat Conservation Planning (HCP) process established under section 10(a)(1)(B) of the Act has established long-term NCCP/HCPs within the U.S. range of the coastal California gnatcatcher. These plans address development impacts on the subspecies and its habitat for 50 to 75 years into the future, depending on the plan terms and conditions. We, therefore, consider 50 years a reasonable timeframe for considering future impacts.
• Laws governing urban development under State environmental laws, such as the California Environmental Quality Act and the NCCP Act, have remained largely unchanged since 1970 and 1991, respectively; thus, we consider existing regulatory mechanisms sufficiently stable to support a 25- to 50-year timeframe.
• In analyzing potential impacts from disease, predation, grazing, and brood parasitism, we considered all available information regarding any future changes that could alter the likelihood or extent of impacts. We had no such information extending beyond a 50-year timeframe.
• Although information exists regarding potential impacts from climate change beyond a 50-year timeframe, downscaled climate model projections for this region extend only to the 2060s.
Therefore, a timeframe of 50 years is used to provide the best balance of scope of impacts considered versus certainty of those impacts.
The largest impacts to coastal sage scrub in California, including within the range of the coastal California gnatcatcher, both past and present, have been due to the effects of urbanization and agriculture (Cleland
Urban development has continued to occur throughout the range of the coastal California gnatcatcher, and in our 2010 5-year review we concluded that urban development was an ongoing threat to the subspecies (Service 2010, pp. 12-15; 21). For the purposes of this status review, we evaluated the current protection status of coastal sage scrub (the primary habitat type that supports the coastal California gnatcatcher) within the U.S. range of the subspecies using geospatial data from the U.S. Geological Survey. We note, however, that the distribution of the coastal California gnatcatcher within the United States is not necessarily the same as the distribution of coastal sage scrub vegetation, because not all coastal sage scrub is occupied by coastal California gnatcatchers at any given time (Winchell and Doherty 2014, entire). Our analysis for the U.S. portion of the range found that 16 percent of coastal sage scrub receives permanent protection and minimal human use; 35 percent is permanently protected from urban development but allows multiple uses including off-highway vehicle use or mining; and 49 percent has no assured protections preventing urban development (Service 2016a).
Currently, much of the subspecies' range in the United States, which includes coastal sage scrub as well as other habitat types and some partly developed areas, is included in completed NCCP/HCP plans where the coastal California gnatcatcher is a “covered species.” Other NCCP/HCPs within the subspecies' range in the United States are in various stages of development, such as the North County Multiple Species Conservation Plan in north-central San Diego County, the Orange County Transportation Authority M2 NCCP/HCP, and the Rancho Palos Verdes NCCP/HCP in Los Angeles County. Within the northernmost portion of the subspecies' range in Los Angeles and Ventura Counties, the draft Rancho Palos Verdes NCCP/HCP is the only plan in development. Though the above list represents plans that are not yet
As reported in our 2010 5-year review, we estimated that 59 percent of suitable (modeled) coastal sage scrub habitat would be conserved with full implementation of four currently permitted NCCP/HCPs and one HCP (Service 2010, p. 15). For that analysis, modeled habitat consisted of coastal scrub vegetation within the U.S. portion of the range of the coastal California gnatcatcher as defined by reported observations, elevation, and coastal scrub vegetation (using CDF (2002) vegetation data). Using updated vegetation data (CDF 2015), we prepared a new geospatial analysis of the previously modeled coastal scrub habitat within the subspecies' range and within the planning-area boundaries of these NCCP/HCPs (as compared to the 2010 analysis that estimated acres of habitat expected to be conserved with full implementation). Based on our 2016 analysis, our revised estimate found that these plans encompass approximately 55 percent of the coastal sage scrub habitat within the U.S. range of the coastal California gnatcatcher (Service 2016a). We also evaluated the amount of land currently within conservation reserves established under these plans and estimated that approximately 47 percent of the plans' conservation targets have been reached (Service 2016a). This means that 28 percent of habitat in the U.S. portion of the coastal California gnatcatcher's range is currently conserved by NCCP/HCP plans.
Outside of the United States, urban development continues and is expected to continue into the future (Harper
In order to estimate the distribution of coastal sage scrub in northern Baja California, we created a digital map of the coastal sage scrub vegetation defined by and illustrated in Rebman and Roberts (2012, p. 22). Based on the digitized version of this published map, we created a boundary of the area in northern Baja California that contains coastal sage scrub vegetation; this acreage totaled approximately 1,862,413 ac (753,691 ha). We then prepared a coarse estimation of extant coastal sage scrub vegetation from our delineation of Rebman and Roberts (2012, p. 22) by removing those areas that have been converted to urban and agricultural development, as estimated from composite aerial images from ESRI World Imagery (2013). We estimated approximately 1,704,406 ac (689,749 ha) of coastal sage scrub habitat in northern Baja California, from 30° N. to the United States-Mexico border (Service 2016a). This represents a difference of 158,007 ac (63,942 ha), or about 8.5 percent, from the map prepared by Rebman and Roberts (2012, p. 22) of their estimate of coastal sage scrub vegetation. Though this figure represents a rough estimate of coastal sage scrub vegetation in northern Baja California as of 2013, it is the only available analysis of change in amount of coastal sage scrub habitat available to us at this time.
In our 2010 5-year review, we indicated that the threats to the coastal California gnatcatcher as a result of agricultural development have been tempered in recent years by implementation of regulatory mechanisms, especially the State of California's NCCP process and the Federal HCP process (Service 2010, p. 14). We also indicated that the rate of loss of coastal California gnatcatcher habitat due to agricultural development has declined in its southern California range. More specifically, 1890-1930 was an intensive agricultural period in California with the expansion of dry land farming as well as rapid growth of intensively irrigated fruit and vegetable crops (Preston
The post-World War II population boom resulted in the conversion of many large agricultural areas to urban and suburban developments in southern California (Preston
Because of the limited regulatory mechanisms in Mexico (see
In summary, urban development was identified as a threat at the time of listing and as an ongoing threat in our 2010 5-year review. Our 2016 evaluation of conserved lands established within
The impacts to the subspecies related to agricultural development is low in the United States, but our recent evaluation of remaining coastal sage scrub habitat in Baja California indicates that agricultural development remains as a medium- to high-level stressor for the subspecies' range in Mexico; we anticipate these impacts will continue into the future.
Effects of grazing and browsing from cattle, sheep, and goats include eating and trampling of coastal scrub plants. In the 2010 5-year review, we found that the effects of grazing can result in the loss and modification of coastal California gnatcatcher habitat and promote vegetation type conversion (the modification of one habitat type to another through the effects of one or more stressors working individually or in combination—ultimately resulting in the destruction of the original habitat type) (see the
The effects of grazing practices to coastal California gnatcatcher habitat in Mexico are less concentrated as compared to the United States because livestock are seasonally moved. However, grazing in coastal scrub habitat in Mexico can still result in vegetation type conversion, and as noted above, land clearing for grazing purposes has been documented within northern Baja California (Meyer
Wildland fire can result in the direct loss of the coastal scrub plants that the coastal California gnatcatcher uses for foraging, breeding, and sheltering. In our 2010 5-year review, we found that wildland fire poses a threat to coastal California gnatcatcher habitat (Service 2010, pp. 15-18, 21). In that review, we noted that, absent other disturbances, coastal scrub vegetation can re-grow in some areas post-wildland fire in as little as approximately 3 to 5 years (Service 2010, p. 21). However, new information suggests that the process needed for coastal scrub vegetation to recover sufficiently to provide suitable habitat for the coastal California gnatcatcher is more complex. Winchell and Doherty (2014, p. 543) examined coastal California gnatcatcher recolonization rates after the wildland fires of 2003 in San Diego County; they found that coastal California gnatcatchers recolonize burned areas from the outside in, “[moving] in from the fire perimeter, rather than colonizing the center of the burned area immediately” (see also van Mantgem
Similarly, a 2012 study of coastal California gnatcatchers within the Central and Coastal Reserves in Orange County found that, following two large fires in 2007 (Windy Ridge and Santiago Fires) that burned approximately 75 percent of the Central Reserve, occupancy of surveyed plots in 2011 (4 years post-fire) was 10.1 percent (7 of 65 plots) in burned areas (Leatherman Bioconsulting Inc. 2012, pp. i, 5). The severity of these fires within the Central Reserve also affected occupancy, with no occupancy of coastal California gnatcatchers observed within severely burned plots, as compared to 23 percent occupancy for lightly burned plots (Leatherman Bioconsulting Inc. 2012, p. 5). The 2007 fires resulted in a large loss of coastal sage scrub habitat in the Central Reserve, and the study found that only 12.7 percent of plots were occupied by the subspecies as compared to 34.3 percent of occupied plots for the Coastal Reserve (Leatherman Bioconsulting Inc. 2012, p. 5). These findings are supported by an observation made by one land manager who submitted information to us in response to our request for information in our recent 90-day finding (79 FR 78775; December 31, 2014). This land manager indicated that it took 10 years of restoration activities after the 2003 San Diego wildland fires for coastal California gnatcatcher to return to previously occupied habitat in certain burned areas within San Diego County (Johanson 2015, pers. comm.). The U.S. Geological Survey, in partnership with the San Diego Management and Monitoring Program, is conducting additional research to better understand the effects of wildland fire on coastal California gnatcatcher occupancy within coastal scrub vegetation in southern California (Kus and Preston 2015, entire).
As discussed in our 2010 5-year review (Service 2010, pp. 15-18), the frequency of wildland fire has risen due to an increase in rates of ignition along
Wildland fire, and how often it reoccurs in an area, is a major contributor to vegetation type conversion from coastal sage scrub to annual grassland, a vegetation type that does not support the breeding, feeding, or sheltering needs of the coastal California gnatcatcher. This is particularly problematic when frequency of wildland fires increases above the historic fire regime for coastal sage scrub, which increases the incidence of vegetation type conversion. In conjunction with several other stressors, wildland fires promote the growth of nonnative plant species, which can outcompete and displace native plant species. This occurrence results in the modification and, ultimately, the loss of coastal scrub habitat. Furthermore, the senescence of these annual nonnative annual plants creates higher fuel loads than are found in native coastal scrub habitat, accelerating the effects of the wildland fire-type conversion feedback loop (see
At the time of listing, wildland fire was identified as a substantial threat to the coastal California gnatcatcher and its habitat; it was further identified as an ongoing threat in the 2010 5-year review. Although currently established NCCP/HCPs provide for the establishment of coastal sage scrub reserves and include fire management as one of their primary objectives, there is no mechanism or conservation measure currently in place that can fully prevent the recurrence of natural or human-caused destructive wildland fires in coastal California gnatcatcher habitat. Therefore, wildland fire represents a medium-level stressor leading to the destruction, modification, or curtailment of habitat or range of the coastal California gnatcatcher that causes large-scale, temporary alterations to coastal sage scrub habitat and may result in the loss of some gnatcatcher pairs throughout the subspecies' range. According to the best available data, it will continue to impact the subspecies and its habitat into the future.
The presence of invasive, nonnative plant species, in combination with one or more stressors, such as severe physical disturbance (for example, clearing by heavy machinery), livestock activity, wildland fire, and anthropogenic atmospheric pollutants (particularly nitrogen compounds) can cause a shift from native plants towards a nonnative plant community and result in vegetation type conversion. In the 2010 5-year review, we found that vegetation type conversion of coastal sage scrub to nonnative grasses was an ongoing threat to the coastal California gnatcatcher, given that nonnative grasses do not support breeding for the subspecies (Service 2010, pp. 18-21). Depending on the influencing factors, this conversion can occur over various temporal and spatial scales. In particular, the nonnative annual plant-wildland fire feedback loop can result in the type conversion of large areas of habitat over a relatively short period of time (Service 2010, pp. 15-18). Information provided to us by two land managers within reserves in San Diego County indicates that active management to control nonnative vegetation is needed to maintain habitat quality due to re-occurring wildand fires (Center for Natural Lands Management 2015, pers. comm.; Johanson 2015, pers. comm.).
The NCCP/HCP planning process includes measures for managing coastal scrub vegetation, and current management is reducing the magnitude of the effects of type-conversion within the range of the coastal California gnatcatcher in the United States. Habitat is being added as managed reserves under the NCCP/HCPs at a pace that is roughly in keeping with habitat losses from urban development and other covered activities. However, the process is not yet complete for the decades-long permits issued for the NCCP/HCPs within the subspecies' range. In addition, management plans for each preserve area are not yet complete for these long-term plans, and ensuring sufficient resources for perpetual management of the reserves that addresses existing and future stressors, poses a challenge common to all regional NCCP/HCPs. These circumstances can lead to uncertainty regarding whether long-term management can adequately address vegetation type conversion in the future.
Therefore, vegetation type conversion represents a medium-level stressor leading to the destruction, modification, or curtailment of habitat or range of the coastal California gnatcatcher and causing long-term habitat alterations and impacts to gnatcatchers across the range of the subspecies. The best available scientific and commercial information indicates that vegetation type conversion will continue to have long-term impacts into the future.
In this section, we consider observed or expected environmental changes resulting from ongoing and projected changes in climate. The effects of climate change were not addressed in detail in previous status reviews.
As defined by the Intergovernmental Panel on Climate Change (IPCC), the term “climate” refers to the mean and variability of different types of weather conditions over time, with 30 years being a typical period for such measurements, although shorter or longer periods also may be used (IPCC 2013a, p. 1,450). The term “climate change” thus refers to a change in the mean or the variability of relevant properties, which persists for an extended period, typically decades or longer, due to natural conditions (for example, solar cycles) or human-caused changes in the composition of
Scientific measurements spanning several decades demonstrate that changes in climate are occurring. In particular, warming of the climate system is unequivocal and many of the observed changes in the last 60 years are unprecedented over decades to millennia (IPCC 2013b, p. 4). The current rate of climate change may be as fast as any extended warming period over the past 65 million years and is projected to accelerate in the next 30 to 80 years (National Research Council 2013, p. 5). Thus, rapid climate change is adding to other sources of extinction pressures, such as land use and invasive species, which will likely place extinction rates in this era among just a handful of the severe biodiversity crises observed in Earth's geological record (American Association for the Advancement of Sciences (AAAS) 2014, p. 17).
Examples of various other observed and projected changes in climate and associated effects and risks, and the bases for them, are provided for global and regional scales in recent reports issued by the IPCC (2013c, entire; 2014, entire), and similar types of information for the United States and regions within it can be found in the National Climate Assessment (Melillo
Results of scientific analyses presented by the IPCC show that most of the observed increase in global average temperature since the mid-20th century cannot be explained by natural variability in climate and is “extremely likely” (defined by the IPCC as 95 to 100 percent likelihood) due to the observed increase in greenhouse gas (GHG) concentrations in the atmosphere as a result of human activities, particularly carbon dioxide emissions from fossil fuel use (IPCC 2013b, p. 17 and related citations).
Scientists use a variety of climate models, which include consideration of natural processes and variability as well as various scenarios of potential levels and timing of GHG emissions, to evaluate the causes of changes already observed and to project future changes in temperature and other climate conditions. Model results yield very similar projections of average global warming until about 2030; thereafter, the magnitude and rate of warming vary through the end of the century depending on the assumptions about population levels, emissions of GHGs, and other factors that influence climate change. Thus, absent extremely rapid stabilization of GHGs at a global level, there is strong scientific support for projections that warming will continue through the 21st century, and that the magnitude and rate of change will be influenced substantially by human actions regarding GHG emissions (IPCC 2013b, 2014; entire).
Global climate projections are informative, and in some cases, the only scientific information available for us to use. However, projected changes in climate and related impacts can vary substantially across and within different regions of the world (for example, IPCC 2013c, entire; IPCC 2014, entire) and within the United States (Melillo
Various changes in climate may have direct or indirect effects on a species. These may be positive, neutral, or negative, and they may change over time, depending on the species and other relevant considerations, such as interactions of climate with other variables such as habitat fragmentation (for examples, see Franco
Regional temperature observations for assessing climate change are often used as an indicator of how climate is changing. The Western Regional Climate Center (WRCC) has defined 11 climate regions for evaluating various climate trends in California (Abatzoglou
Three indicators of temperature, the increase in mean temperature, the increase in maximum temperature, and the increase in minimum temperature illustrate trends in climate change in California. For the South Coast Region, linear trends (evaluated over a 100-year time period) indicate an increase in mean temperatures (Jan-Dec) of approximately 2.65 °F (±0.49 °F) (1.47 ± 0.27 °C) since 1895 and 4.17 °F (±1.21 °F) (2.32 ± 0.67 °C) since 1949 (WRCC 2016, p. 6). Similarly, the maximum temperature 100-year trend for the South Coast Region shows an increase of about 1.94 °F (±0.52 °F) (1.08 ± 0.29 °C) since 1895 and 3.16 °F (±1.32 °F) (1.75 ± 0.73 °C) since 1949 (WRCC 2016, p. 9). Likewise, the minimum temperature 100-year trend for the South Coast Region shows an increase of about 3.37 °F (±0.52 °F) (1.87 ± 0.29 °C) since 1895 and 5.19 °F (±1.22 °F) (2.88 ± 0.68 °C) since 1949 (WRCC 2016, p. 12). It is reasonable to assume the rate of temperature increase for this region is higher for the second time period (since 1949) than for the first time period (since 1895) due to the increased use of fossil fuels in the 20th century. Even if that is not the mechanism, it is clear temperatures have increased in the South Coast Region since the start of data collection.
These observed trends provide information as to how climate has changed in the past. However, we must also consider whether and how climate may change in the future. Climate models can be used to simulate and develop future climate projections. Pierce
Precipitation patterns can also be used as an indicator of how climate is changing. Killam
Statewide and regional probabilistic estimates of precipitation changes for California were evaluated by Pierce
Dynamic downscaled simulations indicate larger increases in summer (June-August) precipitation by the 2060s (as compared to statistical downscaling methods) within the region of California affected by the North America monsoonal flow (Pierce
The potential changes in climate described above are expected to have some effect on the coastal California gnatcatcher and its habitat. While the physical and biological mechanisms that result in the establishment of coastal scrub or chaparral vegetation are unclear, minimum temperatures, maximum temperatures, and precipitation (both amount and seasonality) within the southern California coastal region represent important influences on the subspecies and its habitat (Franklin 1998, p. 745). As noted above, there is little consensus on future trends in precipitation in southern California; however, it is highly likely that minimum and maximum temperatures will continue to rise. Malanson and O'Leary (1995, p. 219) suggested that higher average temperatures in the future may create an upslope shift in coastal scrub vegetation into areas that are currently occupied by chaparral. This may expand or shift areas that currently provide suitable habitat for coastal California gnatcatchers. Similarly, because the subspecies' distribution is thought to be limited by low temperatures (Mock 1998, p. 415), warmer minimum temperatures may also allow for coastal California gnatcatchers to survive at higher elevations, thereby allowing the subspecies to extend its range into areas previously not occupied (Preston
Climate change due to global warming is influencing regional climate patterns that may result in changes to the habitat for the coastal California gnatcatcher into the mid-21st century (approximately 2060s). While climate change may expand or shift the coastal California gnatcatcher's preferred habitat of coastal scrub vegetation in some areas, it may also create conditions more favorable for vegetation type conversion to unsuitable habitat such as nonnative annual grasslands. The best available regional data on current and potential future trends related to climate change, within the range of the coastal California gnatcatcher, indicate that the effects of climate change is a low- to medium-level stressor at the present time that is anticipated to result in shifts to the distribution of the subspecies' habitat and that may potentially affect gnatcatchers at the individual or population level. Based on model projections, we can reliably predict these changes will continue into the mid-21st century (2060s).
Two diseases have been identified as potential threats to the coastal California gnatcatcher, West Nile virus and Newcastle disease. These are discussed in greater detail in our 2010 5-year review where we concluded that disease was not a significant threat to the subspecies (Service 2010, pp. 21-22). Because known West Nile virus cases and the range of the coastal California gnatcatcher overlap geographically, the subspecies has likely been exposed to West Nile virus. While new information suggests that the impact to birds in North America has been widespread (George
The effects of predation on the coastal California gnatcatcher are discussed in greater detail in our 2010 5-year review, where we concluded that predation is not a significant threat to the subspecies (Service 2010, pp. 22-24). Predation undoubtedly occurs among all life stages of the coastal California gnatcatcher, but only nest predation has been previously identified as affecting recruitment and survival at levels that could have potential effects on the population (such as reduction in fledging success). Nest predation rates for the coastal California gnatcatcher are higher than most open-nesting passerines because they occupy a
Fragmentation represents a suite of stressors that affect a species at various levels and scales. At its simplest, it involves a large, continuous block of habitat being broken up into smaller pieces, which become isolated from each other within a mosaic of other habitats. It is, therefore, not unrelated to habitat destruction and type conversion (see the
As discussed in our 2010 5-year review, the coastal California gnatcatcher is not particularly sensitive to edge or distance effects (Service 2010, p. 32). This characteristic is further supported by new information indicating that populations of coastal California gnatcatchers within the United States are fairly well connected over large areas. However, some populations (for example, the Palos Verdes Peninsula, greater Ventura County, and Coyote Hills populations) are currently separated by large distances by areas of non-habitat and, therefore, are not as well connected with the populations in the rest of southern California (Vandergast
Ongoing and anticipated implementation of regional NCCP/HCPs is expected to create a network of core-and-linkage habitat areas, thereby preventing or reducing the effects of future habitat fragmentation for much of the U.S. range of the coastal California gnatcatcher. The core areas are large, mostly unfragmented areas, while linkage areas are intended to provide continuous or “stepping stone” corridors for coastal California gnatcatcher movement and dispersal. Thus, as indicated by new information from Vandergast
The new information we have received since the 2010 5-year review suggests that fragmentation is a threat of lower magnitude than was described at the time of listing. However, the effects of fragmentation are more significant than previously recognized for those coastal California gnatcatcher populations that have become widely separated due to urban development and other habitat losses or modifications (for example, wildland fire), particularly the geographically isolated populations in Ventura County, Palos Verdes (western Los Angeles County), and Coyote Hills (northern Orange County) (Vandergast
Rates of brood parasitism by invasive, nonnative brown-headed cowbirds (
Existing regulatory mechanisms that affect the coastal California gnatcatcher include laws and regulations promulgated by Federal and State governments in the United States and in Mexico. In relation to
All Federal agencies are required to adhere to the NEPA of 1970 (42 U.S.C. 4321
Upon its listing as threatened, the coastal California gnatcatcher benefited from the protections of the Act, which include the prohibition against take and the requirement for interagency consultation for Federal actions that may affect the species. Section 9 of the Act and Federal regulations prohibit the take of endangered and threatened species without special exemption. The Act defines “take” as to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct (16 U.S.C. 1532(19)). Our regulations define “harm” to include significant habitat modification or degradation that results in death or injury to listed species by significantly impairing essential behavioral patterns, including breeding, feeding, or sheltering (50 CFR 17.3). Our regulations also define “harass” as intentional or negligent actions that create the likelihood of injury to a listed species by annoying it to such an extent as to significantly disrupt normal behavior patterns, which include, but are not limited to, breeding, feeding, or sheltering (50 CFR 17.3).
Section 7(a)(1) of the Act requires all Federal agencies to utilize their authorities in furtherance of the purposes of the Act by carrying out programs for the conservation of endangered species and threatened species. Section 7(a)(2) of the Act requires Federal agencies to ensure that any action they authorize, fund, or carry out is not likely to jeopardize the continued existence of listed species or destroy or adversely modify their critical habitat. Because the Service has regulations that prohibit take of all threatened wildlife species (50 CFR 17.31(a)), unless modified by a rule issued under section 4(d) of the Act (50 CFR 17.31(c)), the regulatory protections of the Act are largely the same for wildlife species listed as endangered and as threatened.
A section 4(d) rule for the coastal California gnatcatcher was published on December 10, 1993 (58 FR 65088). Under that rule, incidental take of the coastal California gnatcatcher is not considered to be a violation of section 9 of the Act if the take results from activities conducted pursuant to the NCCP Act of 1991 and in accordance with an approved NCCP plan, provided that the Service determines that such a plan meets the issuance criteria of an “incidental take” permit pursuant to section 10(a)(2)(B) of the Act and 50 CFR 17.32(b)(2). Under the section 4(d) rule, a limited amount of incidental take of the coastal California gnatcatcher within subregions actively engaged in preparing a NCCP plan will also not be considered a violation of section 9 of the Act, provided the activities resulting in such take are conducted in accordance with the NCCP Conservation Guidelines and Process Guidelines. Under section 10(a)(1)(B) of the Act, the Service may issue permits authorizing the incidental take of federally listed animal species. Incidental take permittees must develop and implement a habitat conservation plan (HCP) that minimizes and mitigates the impacts of take to the maximum extent practicable and that avoid jeopardy to listed species. Incidental take permits are available to private landowners, corporations, Tribal governments, State and local governments, and other non-Federal entities. These permits can reduce conflicts between endangered species and economic activities and develop important partnerships between the public and private sectors. As discussed in the
Since 1993, the Service has addressed impacts to the coastal California gnatcatcher from urban development and other projects outside of the NCCP/HCP regional planning effort through the section 7 process. The projects have included residential and commercial developments, highway-widening projects, and pipeline projects, among others. Section 7 consultations have also been conducted with the U.S. Army Corps of Engineers for Clean Water Act permit applications, and other Federal agencies on specific actions. In addition to “projects,” we have consulted with the U.S. Marine Corps to address potential impacts to the gnatcatcher and its habitat from military training activities on Marine Corps Base Camp Pendleton (Camp Pendleton) and Miramar Corps Air Station (Miramar), and we have consulted with the U.S. Navy on actions related to the management of Naval Weapons Station Seal Beach Detachment Fallbrook (Detachment Fallbrook).
We reviewed the number of formal section 7 consultations for the coastal California gnatcatcher in our Tracking and Integrated Logging System (TAILS) database (initiated in 2007) that were completed from 1996 through March 2016. In total, the Carlsbad and Ventura Fish and Wildlife Offices completed 320 formal consultations during that time period (Service 2016b). In all of these consultations, we concluded that, due to the implementation of conservation measures to avoid, minimize, and offset impacts to the subspecies and its habitat, effects of the proposed actions were not likely to jeopardize the continued existence of the coastal California gnatcatcher and were not likely to result in the destruction or adverse modification of designated critical habitat for the subspecies. We will continue to evaluate impacts of proposed projects to the subspecies and its habitat for those areas outside of the NCCP/HCPs through other provisions of the Act, such as section 7 consultation,
Our evaluation confirms that urban development and associated threats continue for the coastal California gnatcatcher, but listing of the coastal California gnatcatcher under the Act as threatened has provided protection to the subspecies and its habitat, including the prohibition against take and the conservation mandates of section 7 for all Federal agencies.
The Sikes Act (16 U.S.C. 670a-670f, as amended) directs the Secretary of Defense, in cooperation with the Service and State fish and wildlife agencies, to carry out a program for the conservation and rehabilitation of natural resources on military installations. The Sikes Act Improvement Act of 1997 (Pub. L. 105-85) broadened the scope of military natural resources programs, integrated natural resources programs with operations and training, embraced the tenets of conservation biology, invited public review, strengthened funding for conservation activities on military lands, and required the development and implementation of an Integrated Natural Resources Management Plan (INRMP) for relevant installations, which are reviewed every 5 years.
INRMPs incorporate, to the maximum extent practicable, ecosystem management principles, provide for the management of natural resources (including fish, wildlife, and plants), allow multipurpose uses of resources, and provide public access necessary and appropriate for those uses without a net loss in the capability of an installation to support its military mission. An INRMP is an important guidance document that helps to integrate natural resource protection with military readiness and training. In addition to technical assistance that the Service provides to the military, the Service can enter into interagency agreements with installations to help implement an INRMP. The INRMP implementation projects can include wildlife and habitat assessments and surveys, fish stocking, exotic species control, and hunting and fishing program management.
On Department of Defense lands, including Camp Pendleton, Detachment Fallbrook, and Miramar, coastal California gnatcatcher habitat is generally not subjected to threats associated with large-scale development. However, the primary purpose for military lands, including most gnatcatcher habitat areas, is to provide for military support and training. At these installations, INRMPs provide direction for project development and for the management, conservation, and rehabilitation of natural resources, including for the subspecies and its habitat. For example, on Camp Pendleton and MCAS Miramar, management measures that benefit the coastal California gnatcatcher and its habitat include nonnative vegetation control, nonnative animal control, and habitat enhancement and restoration (MCB Camp Pendleton 2007, p. F-25; MCAS Miramar INRMP 2010, pp. 7-18-7-19). Some restrictions on training and construction activities also apply during gnatcatcher breeding season to reduce impacts on nesting gnatcatchers (MCB Camp Pendleton 2007, p. F-25; MCAS Miramar INRMP 2010, pp. 7-18-7-19).
Without the protections provided to the subspecies and its habitat under the Act (that is, if the coastal California gnatcatcher was delisted), there would be less incentive for the Marine Corps or Navy to continue to include specific provisions (for example, monitoring) in their INRMPs to provide conservation benefits to the subspecies, beyond that provided under a more general integrated natural resource management strategy at these and other DOD installations.
The coastal California gnatcatcher is designated as a Species of Special Concern by the California Department of Fish and Wildlife (CDFW) (CDFG 2008). Although this designation is administrative and provides no formal legal status for protection, it is intended to highlight those species at conservation risk to State and Federal and local governments, land managers, and others, as well as to encourage research for those species whose life history and population status are poorly known (Comrack
CEQA (California Public Resources Code 21000-21177) is the principal statute mandating environmental assessment of projects in California. The purpose of CEQA is to evaluate whether a proposed project may have an adverse effect on the environment and, if so, to determine whether that effect can be reduced or eliminated by pursuing an alternative course of action, or through mitigation. CEQA applies to certain activities of State and local public agencies; a public agency must comply with CEQA when it undertakes an activity defined under CEQA as a “project.”
As with NEPA, CEQA does not provide a direct regulatory role for the CDFW or other State and local agencies relative to activities that may affect the coastal California gnatcatcher. However, CEQA requires a complete assessment of the potential for a proposed project to have a significant adverse effect on the environment. Among the conditions outlined in the CEQA Guidelines that may lead to a mandatory finding of significance are where the project “has the potential to . . . substantially reduce the habitat of a fish or wildlife species; cause a fish or wildlife population to drop below self-sustaining levels; threaten to eliminate a plant or animal community; [or] substantially reduce the number or restrict the range of an endangered, rare or threatened species” (title 14 of the California Code of Regulations (CCR), § 15065(a)(1)). The CEQA Guidelines further state that a species “not included in any listing [as threatened or endangered] shall nevertheless be considered to be endangered, rare, or threatened, if the species can be shown to meet the criteria” for such listing (14 CCR 15380(d)). In other words, CEQA would require any project that may impact populations of these species to assess and disclose such potential impacts during the environmental review process (Osborn 2015, pers. comm.).
The NCCP program is a cooperative effort between the State of California and numerous private and public partners with the goal of protecting habitats and species. The NCCP program identifies and provides for the regional or area-wide protection of plants, animals, and their habitats while allowing compatible and appropriate economic activity. The program uses an ecosystem approach to planning for the protection and continuation of biological diversity (
The 2010 5-year review discusses the NCCP program in greater detail. Currently, the following NCCP plans that cover the coastal California gnatcatcher are approved and being implemented: Multiple Species Conservation Program (one of four Subregional Plans in San Diego County with 5 of 11 Subarea Plans approved),
These plans provide a comprehensive, habitat-based approach to the protection of covered species, including the coastal California gnatcatcher, by focusing on lands identified as important for the long-term conservation of the covered species and through the implementation of management actions for conserving those lands. These protections are outlined in the management actions and conservation objectives described within each plan. However, because the total habitat protection associated with these plans is not expected until plans are fully implemented, and because not all areas are covered, habitat loss is still impacting the gnatcatcher and is expected to continue into the future.
In our 2010 5-year review, we estimated that 59 percent of modeled coastal California gnatcatcher habitat in the United States would be conserved with full implementation of currently permitted, long-term Regional NCCP/HCPs (Service 2010, p. 15). We reviewed the most currently available reports for four regional NCCP/HCPs and one HCP to determine the amount of coastal sage scrub habitat that has been conserved as of the date of the respective final reports:
• For the San Diego County MSCP (City of San Diego, County of San Diego, City of Chula Vista, City of Poway, and City of La Mesa), the total number of acres of coastal sage scrub habitat conserved both inside and outside the preserve planning area is 49,871 ac (20,182 ha); conserved habitat inside the preserve planning area is approximately 42,129 ac (17,049 ha) or about 68 percent of the plan's target (City of Chula Vista 2015, p. 35; City of San Diego 2015, p. 15; County of San Diego 2015, p. 51).
• For the San Diego County MSCP, the City of Carlsbad reported 1,683 ac (681 ha) of coastal sage scrub conserved within their Habitat Management Preserve system as of December 2015 (84 percent of target) (Grim 2016, pers. comm.).
• For the Orange County Central—Coastal NCCP/HCP (as of the end of 2013), the amount of coastal sage scrub conserved is 17,809 ac (7,207 ha) (Nature Reserve of Orange County 2013).
• For the Western Riverside County MSHCP, the Western Riverside County Regional Conservation Authority (WRCRCA 2015, pp. 3-9—3-10) reported that 11,802 ac (4,776 ha) of coastal sage scrub was conserved from February 2000 to December 31, 2013.
With the addition of the Orange County Southern Subregion HCP, which reported coastal California gnatcatcher scrub habitat of 13,135 ac (5,315 ha) within reserves as of December 2013 (Rancho Mission Viejo 2013), the total number is approximately 86,558 ac (35,028 ha) of coastal sage scrub conserved (within reserves established by these plans). This amount represents about 47 percent of the total target (182,976 ac (74,048 ha)) of coastal California gnatcatcher habitat to be preserved by the five plans described in our 2010 5-year review (Service 2010, p. 15).
In summary, while conservation is anticipated to continue within existing plan boundaries within the U.S. range of the coastal California gnatcatcher, habitat protection occurs in a step-wise fashion as areas are conserved, and the total habitat protection associated with a plan is not expected until plans are fully implemented. Once the plans are fully implemented upon completion of the permits (which last for 50-75 years), the plans would provide conservation for much of the 56 percent of the coastal California gnatcatcher's range in the United States. However, the 44 percent of the subspecies range in Baja California is not subject to protections provided by NCCP/HCP plans. Therefore, the subspecies and its habitat remain susceptible to urban development and associated threats.
Without the protections provided to the subspecies and its habitat under the Act (that is, if the coastal California gnatcatcher was delisted), the current NCCP/HCPs may provide some ancillary benefits to the subspecies given that other federally listed species of plants and animals covered under these plans are also found within coastal sage scrub habitat (for example, Quino checkerspot butterfly (
As described above (see
The Mexican Government recognizes the
This entity is listed as threatened under Mexico's
In Mexico, the development of state and municipal plans is designed to regulate and control land use and various production activities as well as provide environmental protections and preservation and sustainability of natural resources (Conservation Biology Institute 2004, p. 31). As an example, an
Outside of the Act, few Federal conservation management and conservation measures exist throughout the U.S. range of the coastal California gnatcatcher that provide protections to the subspecies and its habitat. State management and conservation measures are limited primarily to the planning and implementation of the NCCP Act, and there is uncertainty as to whether the regional plans would continue to provide the full conservation benefits anticipated should the subspecies be delisted under the Act. Limited protection is provided to the coastal California gnatcatcher through the inclusion of its designation as a Species of Special Concern within State (CEQA) planning processes.
Based on the best available data, the listing of the
Therefore, although regulatory mechanisms are in place and provide some protection to the coastal California gnatcatcher and its habitat throughout its range, absent the protections of the Act (for example, section 7, section 9, and section 10(a)(1)(B)), these mechanisms would provide substantially less protection from the stressors currently acting on the subspecies such as urban and agricultural development. Moreover, some of the threats faced by the species and its habitat, including wildland fire, vegetation type conversion, and fragmentation, are not readily susceptible to amelioration through regulatory mechanisms.
Threats can work in concert with one another to cumulatively create conditions that may impact the coastal California gnatcatcher or its habitat beyond the scope of each individual threat. The best available data indicate that cumulative impacts are currently occurring from the combined effects of a number of stressors, including vegetation type conversion, wildland fire, and the effects of climate change.
These stressors interact in multiple ways. As discussed in the
Furthermore, based on our analysis of the best available data, it is likely that the native plant communities that support the coastal California gnatcatcher in southern California are presently impacted by the cumulative effects of wildland fire and the warming effects of climate change. Yue
Stavros
The climate change-wildland fire connection will likely result in a reduction in the amount of suitable habitat for the coastal California gnatcatcher and will likely lead to a greater chance of vegetation type conversion that degrades and eventually eliminates coastal California gnatcatcher
In making this finding, we have followed the procedures set forth in section 4(a)(1) of the Act and regulations implementing the listing provisions of the Act in 50 CFR part 424. We reviewed the petition, information available in our files, and other available published and unpublished information. We sought input from subject matter experts and other Federal, State, and Tribal agencies. On the basis of the best scientific and commercial information available, we find that the petitioned action to delist the coastal California gnatcatcher is not warranted. Review of the best available scientific and commercial data did not show that the original determination, made at the time the species was classified as threatened in 1993, is now in error. Rather, using a multi-evidence criteria approach, the best available scientific and commercial data supports the coastal California gnatcatcher as a valid (distinguishable) subspecies.
For the purposes of our status review, as required by the Act, we considered the five factors in assessing whether the coastal California gnatcatcher is endangered or threatened throughout all of its range. In our threats analysis, we examined the best scientific and commercial information available regarding the past, present, and foreseeable future threats faced by the subspecies. We reviewed the information available in our files, information submitted by the public in response to our 90-day finding (79 FR 78775; December 31, 2014), and other available published and unpublished information. As described above in Background, the petitioners did not provide any new information on any of the factors. Based on our review of the best available scientific and commercial information, we find that the current and future threats are of sufficient imminence, intensity, or magnitude to indicate that the coastal California gnatcatcher remains likely to become an endangered species within the foreseeable future throughout all of its range. Therefore, the coastal California gnatcatcher currently meets the definition of a threatened species.
We evaluated each of the potential stressors discussed in the 2010 5-year review (Service 2010, entire), and we determined the following factors have impacted the coastal California gnatcatcher and its habitat or may affect gnatcatcher individuals or populations in the future: Urban and agricultural development (
Additionally, though brood parasitism (
At this time, impacts from urban and agricultural development (
Though grazing (
Wildland fire (
Vegetation type conversion (
Climate change (
New information we have received since the 2010 5-year review suggests that fragmentation (
Furthermore, cumulative impacts from climate change and other factors such as vegetation type conversion and wildland fire have the potential to significantly alter habitat that currently supports the coastal California gnatcatcher. The wildland fire-type conversion feedback loop promotes the degradation and eventual loss of coastal California gnatcatcher habitat, particularly given the increase in fire frequency from the historical fire regime. Recent studies (such as Stavros
Available regulatory mechanisms, such as the combined NCCP/HCP program and INRMPs on local military bases are providing important protections that help reduce the threats affecting the coastal California gnatcatcher and its habitat, such as urban development, vegetation type conversion, and fragmentation. Absent the provisions of the Act, some of these protections would no longer be in place. In Mexico, the listing of the
Moreover, some of the threats faced by the coastal California gnatcatcher, such as wildland fire, vegetation type conversion, and habitat fragmentation, cannot be readily ameliorated through the application of regulatory mechanisms. Therefore, we conclude that the best available scientific and commercial information indicates that these threats are continuing to impact the subspecies and its habitat throughout its range, and that these impacts will continue into the foreseeable future. At this time, many threats are being reduced through existing regulatory mechanisms, and we expect that full implementation of regional NCCPs/HCPs will provide protection to much of the coastal sage scrub habitat that supports the coastal California gnatcatcher. However, many areas are not yet protected by existing plans and other plans are still in development.
Furthermore, many threats remain on the landscape that are not fully managed, and the best available scientific and commercial information indicates that these threats are likely to continue, such that the coastal California gnatcatcher is likely to become an endangered species within the foreseeable future throughout all its range. Because we have determined that the coastal California gnatcatcher is likely to become an endangered species throughout all its range within the foreseeable future, no portion of its range can be “significant” for purposes of the Act's definitions of “endangered species” and “threatened species.” See the Service's final policy interpreting the phrase “significant portion of its range” (SPR) (79 FR 37578; July 1, 2014). Therefore, we find that the coastal California gnatcatcher continues to meet the definition of a threatened species under the Act, but that the threats are not severe enough at this time such that the species is in danger of extinction throughout its range. Therefore, we find that reclassification to an endangered species is not warranted at this time.
We request that you submit any new information concerning the status of, or threats to, the coastal California gnatcatcher to our Carlsbad Fish and Wildlife Office (see
A complete list of references cited is available on the Internet at
The primary author(s) of this notice are the staff members of the Carlsbad Fish and Wildlife Office and Pacific Southwest Regional Office.
The authority for this action is section 4 of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Agricultural Marketing Service, USDA.
Notice of availability of draft guidance with request for comments.
The Agricultural Marketing Service (AMS) is announcing the availability of a draft guidance document intended for use by accredited certifying agents and organic producers. The draft guidance document is entitled: Treated Lumber (NOP 5036). This draft guidance document is intended to inform the public of the National Organic Program's (NOP) current thinking on this topic. The AMS invites interested parties to submit comments about these guidance provisions.
To ensure that NOP considers your comment on this draft guidance before it begins work on the final version of the guidance, submit written comments on the draft guidance by October 31, 2016.
Submit written requests for hard copies of this draft guidance to Devon Pattillo, Agricultural Marketing Specialist, National Organic Program (NOP), USDA-AMS-NOP, 1400 Independence Ave. SW., Room 2646—So., Ag Stop 0268, Washington, DC 20250-0268. See the
You may submit comments on this draft guidance document by any of the following methods:
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•
USDA intends to make available all comments, including names and addresses when provided, regardless of submission procedure used, on
Devon Pattillo, Agricultural Marketing Specialist, National Organic Program (NOP), USDA-AMS-NOP, 1400 Independence Ave. SW., Room 2646—So., Ag Stop 0268, Washington, DC 20250-0268; Telephone: (202) 720-3252; Fax: (202) 260-9151; Email:
The draft guidance document announced through this document was developed to clarify the requirements and limitations of the prohibition on treated lumber in organic production. USDA organic regulations (7 CFR part 205) prohibit use of lumber treated with arsenate or other non-allowed synthetic substances in contact with soil and livestock (7 CFR 205.206). Non-allowed synthetic substances include all synthetic substances that are not specifically included on the “National List” at 7 CFR 205.601 through 205-606.
The document provides guidance for certifying agents, organic producers, and other interested parties on compliance with 7 CFR 205.206(f), including:
• How lumber treated with prohibited substances affects a producer's timeline for obtaining certification;
• Where lumber treated with prohibited substances can and cannot be placed on organic farms, for new installations or replacement of existing lumber;
• How organic producers can prevent crops and livestock from contacting lumber treated with prohibited substances.
A notice of availability of final guidance on this topic will be issued upon its final approval. Once finalized, this guidance will be available in “The Program Handbook: Guidance and Instructions for Accredited Certifying Agents (ACAs) and Certified Operations”. This Handbook provides those who own, manage, or certify organic operations with guidance and instructions that can assist them in complying with the USDA organic regulations. The current edition of the Program Handbook is available online at
This draft guidance document is being issued in accordance with the Office of Management and Budget (OMB) Bulletin on Agency Good Guidance Practices (GGPs) (January 25, 2007, 72 FR 3432-3440).
The purpose of GGPs is to ensure that program guidance documents are developed with adequate public participation, are readily available to the public, and are not applied as binding requirements. This draft guidance represents NOP's current thinking on the topic. It does not create or confer any rights for, or on, any person and does not operate to bind the NOP or the public. Guidance documents are intended to provide a uniform method for operations to comply that can reduce the burden of developing their own methods and simplify audits and inspections. Alternative approaches that can demonstrate compliance with the Organic Foods Production Act (OFPA), as amended (7 U.S.C. 6501-6522), and its implementing regulations are also acceptable. As with any alternative compliance approach, NOP strongly encourages industry to discuss alternative approaches with NOP before implementing them to avoid unnecessary or wasteful expenditures of
Persons with access to Internet may obtain the draft guidance at either NOP's Web site at
7 U.S.C. 6501-6522.
Forest Service, USDA.
Notice; intent to prepare a supplemental environmental impact statement.
The USDA Forest Service will prepare a Supplement to the Greater Red Lodge Vegetation and Habitat Management Project Final Environmental Impact Statement (EIS) to address the Forest Service's recent analysis and to determine whether a change in the Records of Decision are required.
The Forest Service will complete a final Supplemental EIS through preparing a draft Supplemental EIS by the fall of 2016. Once the Notice of Availability of the draft Supplemental EIS is published a required 45-day public comment period begins, 36 CFR 218.24(b)(5). At the conclusion of the 45-day period the Forest Service will (1) review and respond to comments and make necessary adjustments (based on comments) and prepare a final Supplemental EIS and (2) prepare a draft Record of Decision (“ROD”) which will include a determination of whether changes are needed in the May 19, 2015 Records of Decision. Publication of the notice of opportunity to object to the final Supplemental EIS and draft ROD initiates the required 45-day objection period, 36 CFR 218.7(b), 218.26(a). Forest Service regulations then provide the Reviewing Officer 45 days to review the objections (with the discretion to extend the time up to 30 days), 36 CFR 218.26(b), after which the Agency must respond to any instructions by the Reviewing Officer prior to signing the ROD, 36 CFR 218.12. The Forest Service anticipates signing the final ROD in April 2017.
The line officer responsible for the decision is the Forest Supervisor for the Custer Gallatin National Forest, 10 East Babcock, Bozeman, MT 59715.
Until October 1, 2016, Mark Slacks, Team Leader, at (406) 255-1450. After October 1, 2016, Amy Waring, (406) 255-1451. 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.
On May 19, 2015, Forest Supervisor, Mary Erickson, approved two Records of Decision—one for the Greater Red Lodge Vegetation and Habitat Management Project (Project) and one for the Reconstruction of Nichols Creek Road. Both of these decisions were based on the Greater Red Lodge Vegetation and Habitat Management Project Final EIS. The Project encompasses approximately 21,871 acres in wildland urban interface (WUI) in Carbon County, Montana. The purposes of the project are to reduce high-intensity wildfire within the WUI, improve and maintain forest health, and improve water quality. Vegetation management proposed in the project area consists of both commercial and non-commercial vegetation fuels treatment on about 1,800 acres of land. In addition to vegetation management, the Project would decommission 3.9 miles of existing roadway. The RODs, final EIS, and supporting documents for the Project can be found at
On Tuesday, June 28, 2016, the Forest Service suspended the Greater Red Lodge Area (GLRA) Stewardship Integrated Resource Timber Contract, Contract #02-200866 implementing the two RODs. No activity under the contract can occur until the suspension is lifted. The Project was suspended because the Forest Service recently discovered that the analysis of lynx critical habitat underestimated the number of acres of matrix habitat affected by the Project. At a minimum, the Forest Service will reanalyze the impacts of the Project on lynx critical habitat, in light of the corrected acres of matrix habitat. The Forest Service will not take any on-the-ground action to implement the Project until re-initiation of Endangered Species Act consultation is complete, a Supplemental EIS is issued, and the agency makes new decisions either affirming the current project or modifying the project based on the new analysis.
Forest Service, USDA.
Notice of meeting.
The Black Hills National Forest Advisory Board (Board) will meet in Rapid City, South Dakota. The Board is established consistent with the Federal Advisory Committee Act of 1972 (5 U.S.C. App. II), the Forest and Rangeland Renewable Resources Planning Act of 1974 (16 U.S.C. 1600
The meeting will be held on Wednesday, September 21, 2016, at 1:00 p.m.
All meetings are subject to cancellation. For updated status of meeting prior to attendance, please
The meeting will be held at the Mystic Ranger District, 8221 South Highway 16, Rapid City, South Dakota.
Written comments may be submitted as described under
Scott Jacobson, Board Coordinator, by phone at 605-440-1409 or by 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 provide:
(1) Rushmore Connector Trail update;
(2) Proposed Land Exchange—Spearfish Canyon/Bismarck Lake;
(3) Teckla—Osage 230 kV Transmission Project update;
(4) Black Hills Resilient Landscapes Project update;
(5) BHNF Timber Program update (FY 16/FY 17);
(6) Forest Health Working Group update;
(7) Recreation Facilities Working Group update; and
(8) Non-motorized Trails/Over Snow Working Group update.
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 submit a request in writing by September 12, 2016, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the Board may file written statements with the Board's staff before or after the meeting. Written comments and time requests for oral comments must be sent to Scott Jacobson, Black Hills National Forest Supervisor's Office, 1019 North Fifth Street, Custer, South Dakota 57730; by email to
Forest Service, USDA.
Notice of meeting.
The Manti-La Sal Resource Advisory Committee (RAC) will meet in Price, Utah. 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 September 21, 2016, at 9:00 a.m.
All RAC meetings are subject to cancellation. For status of meeting prior to attendance, please contact the person listed under
The meeting will be held at the Manti-La Sal National Forest Supervisor's Office, Conference Room, 599 West Price River Drive, Price, Utah. If you wish to attend via teleconference, please contact the person listed under
Written comments may be submitted as described under
Duane Resare, Acting RAC Coordinator, by phone at 435-636-3535 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 review and recommend projects authorized under Title II of the Act.
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 September 1, 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 to make oral comments must be sent to Duane Resare, Acting RAC Coordinator, Manti-La Sal National Forest Supervisor's Office, 599 West Price River Drive, Price, Utah 84501; by email to
National Agricultural Statistics Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the intent of the National Agricultural Statistics Service (NASS) to request revision and extension of a currently approved information collection to comply with a
Comments on this notice must be received by October 31, 2016 to be assured of consideration.
You may submit comments, identified by docket number 0535-0256, by any of the following methods:
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R. Renee Picanso, Associate Administrator, National Agricultural Statistics Service, U.S. Department of Agriculture, (202) 720-4333. Copies of this information collection and related instructions can be obtained without charge from David Hancock, NASS—OMB Clearance Officer, at (202) 690-2388 or at
In 2017, this survey will be conducted in the following 13 States: Alabama, Arkansas, California, Florida, Georgia, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas, to measure the damage to livestock that is associated with the presence of feral swine. These States have high feral swine densities and a significant presence of cattle, hogs, sheep and/or goats. The eradication of feral swine is a high priority of the Secretary and is authorized by the Animal Health Protection Act (Title 7 U.S.C. 8301
The $20 million program aims to help states deal with a rapidly expanding population of invasive wild swine. “Feral swine are one of the most destructive invaders a state can have,” said Undersecretary Avalos. “They have expanded their range from 17 to 39 states in the last 30 years and cause damage to crops, kill young livestock, destroy property, harm natural resources, and carry diseases that threaten other animals as well as people and water supplies. It's critical that we act now to begin appropriate management of this costly problem.”
On Feb 3, 1999, Executive Order 13112 was signed by President Clinton establishing the National Invasive Species Council. The Executive Order requires that a Council of Departments dealing with invasive species be created. Currently there are 13 Departments and Agencies on the Council. (
The Animal and Plant Health Inspection Service (APHIS), Wildlife Services' (WS) National Wildlife Research Center (NWRC) is the only Federal research organization devoted exclusively to resolving conflicts between people and wildlife through the development of effective, selective, and socially responsible methods, tools, and techniques. As increased urbanization leads to a loss of traditional wildlife habitat, the potential for conflicts between people and wildlife increases. Such conflicts can take many forms, including property and natural resource damage, human health and safety concerns, and disease transmission among wildlife, livestock, and humans.
The high reproductive rate and adaptability of feral swine has resulted in populations that have dramatically increased in size and distribution. This invasive animal now occurs across much of the United States where it causes a range of agricultural and environmental damage through depredation, rooting, and wallowing activities. Furthermore, feral swine compete with native wildlife and livestock for habitats, are carriers of exotic and endemic diseases, and transmit parasites to livestock and humans. Feral swine are considered a major emerging threat to American agriculture (Seward et al. 2004). Recent data show that the proportions of U.S. counties with agricultural production that also have feral swine present are increasing.
This initial livestock survey will be used to create a benchmark for the following objectives:
Based on the results of this survey, Wildlife Service plans to publish state level data if possible. Also, there may be a follow-up survey to measure the effectiveness of control measures implemented by Wildlife Services. This follow-up survey will also be contingent upon availability of funding.
These data will be collected under the authority of 7 U.S.C. 2204(a). Individually identifiable data collected under this authority are governed by Section 1770 of the Food Security Act of 1985, as amended, 7 U.S.C. 2276, which requires USDA to afford strict confidentiality to non-aggregated data provided by respondents. This Notice is submitted in accordance with the Paperwork Reduction Act of 1995 Public Law 104-13 (44 U.S.C. 3501,
NASS also complies with OMB Implementation Guidance, “Implementation Guidance for Title V of the E-Government Act, Confidential Information Protection and Statistical Efficiency Act of 2002 (CIPSEA),”
NASS will be utilizing several pieces of publicity and informational materials to encourage respondents to participate in this important survey. NASS will conduct the survey initially by mail with phone follow-up for non-response.
All responses to this notice will become a matter of public record and be summarized in the request for OMB approval.
National Agricultural Statistics Service, USDA.
Notice of the Charter renewal for the Advisory Committee on Agriculture Statistics.
The U.S. Department of Agriculture (USDA) is seeking renewal of the 2-year charter for its discretionary committee, the Advisory Committee on Agriculture Statistics. Effective October 1, 1996, responsibility for the census of agriculture program was transferred to the National Agricultural Statistics Service (NASS) at USDA from the Bureau of the Census, U.S. Department of Commerce. Effective February 2, 1997, NASS also received the transferred program positions and staff from the Bureau of the Census, U.S. Department of Commerce. Responsibility for the Advisory Committee on Agriculture Statistics, which is a discretionary committee and was established by agency authority, was transferred, along with its allocated slot, to USDA with the census of agriculture program.
The Advisory Committee on Agriculture Statistics was originally established by the Secretary of Commerce on July 16, 1962. The Committee is also established in accordance with the provisions of the Federal Advisory Committee Act (FACA), as amended, 5 U.S.C. App.2.
Hubert Hamer, Administrator, National Agricultural Statistics Service, U.S. Department of Agriculture, (202) 720-2707, or email
This Committee will be fairly balanced in its membership in terms of the points of view represented and the functions to be performed. Steps will be taken to encourage fresh points of view, such as establishing staggered membership terms and limiting the number of renewed memberships.
Equal opportunity practices in accordance with USDA policies will be followed in all appointments to the Committee. To ensure that the recommendations of the Committee have taken into account the needs of the diverse groups served by USDA, membership will include to the extent possible, individuals with demonstrated ability to represent the needs of all racial and ethnic groups, women and men, and persons with disabilities.
The USDA prohibits discrimination in all of its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental
All members will receive ethics training to identify and avoid any actions that would cause the public to question the integrity of the Committee's advice and recommendations. Members who are appointed as “Representatives” are not subject to Federal ethics laws because such appointment allows them to represent the point(s) of view of a particular group, business sector or segment of the public.
Members appointed as “Special Government Employees” (SGEs) are considered intermittent Federal employees and are subject to Federal ethics laws. SGE's are appointed due to their personal knowledge, academic scholarship, background or expertise. No SGE may participate in any activity in which the member has a prohibited financial interest. Appointees who are SGEs are required to complete and submit a Confidential Financial Disclosure Report (OGE-450 form) and, upon request, USDA will assist SGEs in preparing these financial reports. To ensure the highest level of compliance with applicable ethical standards USDA will provide ethics training to SGEs on an annual basis. The provisions of these paragraphs are not meant to exhaustively cover all Federal ethics laws and do not affect any other statutory or regulatory obligations to which advisory committee members are subject.
Commission on Civil Rights.
Announcement of meeting; postponement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that an emergency telephonic meeting of the South Dakota Advisory Committee to the Commission was convened at 2 p.m. on Thursday, August 18, 2016. The purpose of the emergency meeting was to discuss and vote to postpone briefing meeting on the “Subtle Effects of Racism in South Dakota,” scheduled for Thursday, August 25, 2016 in Aberdeen, SD. The reason for postponing the August 25 meeting is due to a police shooting in Aberdeen that is under state investigation.
The meeting scheduled for August 25, 2016 is postponed. A new date has not been set.
Malee Craft at
Records and documents discussed during the meeting will be available for public viewing as they become available at
Additional notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that the briefing meeting of the South Dakota Advisory Committee to the Commission scheduled for 1:00 p.m. on Thursday, August 25, 2016, in the Community Room on the 1st Floor of the Aberdeen Public Safety Building, 114 2nd Avenue SE., Aberdeen, SD 57401, HAS BEEN POSTPONED by a vote of the SD State Advisory Committee. The vote to postpone was due to a recent critical incident in the Aberdeen community. A subsequent meeting date has not been scheduled.
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).
The 2014 SIPP interview includes a portion conducted using an Event History Calendar (EHC) that facilitates the collection of dates of events and spells of coverage. The EHC assists the respondent's ability to recall events accurately over the one year reference period and provides increased data quality and inter-topic consistency for dates reported by respondents. The EHC is intended to help respondents recall information in a more natural “autobiographical” manner by using life events as triggers to recall other economic events. The EHC was previously used in the 2010-2013 SIPP-EHC field tests in addition to 2014 Panel Waves 1 and 2. The 2014 Panel SIPP design does not contain freestanding topical modules; however, a portion of traditional SIPP topical module content is integrated into the 2014 SIPP Panel interview. Examples of this content include questions on medical expenses, child care, retirement and pension plan coverage, marital history, adult and child well-being, and others.
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; issuance of permits and amendments.
Notice is hereby given that permits or permit amendments have been issued to the following entities:
Permit No. 15543-06: Randy Wells, Ph.D., Sarasota Dolphin Research Program, c/o Mote Marine Laboratory, 1600 Ken Thompson Parkway, Sarasota, FL 34236;
Permit No. 15488-01: Georgia Department of Natural Resources (GADNR), Wildlife Resources Division, 2070 U.S. Hwy 278 SE., Social Circle, GA 30025 (Dan Forster, Responsible Party);
Permit No. 15537-02: Institute for Marine Mammal Studies (IMMS), P.O. Box 207, Gulfport, MS 39502 (Moby Solangi, Ph.D., Responsible Party);
Permit No. 18890: Alaska Department of Fish and Game (ADFG), 1255 West 8th Street, Juneau, Alaska, 99811-5526 (Robert Small, Ph.D., Responsible Party);
Permit No. 19091: NMFS Southwest Fisheries Science Center (SWFSC), 8901 La Jolla Shore Dr., La Jolla, CA 92037, [Lisa Ballance, Ph.D., Responsible Party];
Permit No. 19116: Brandon Southall, Ph.D., Southall Environmental Services Inc., 9099 Soquel Drive, Suite 8, Aptos, CA 95003;
Permit No. 19638: Paul Ponganis, Ph.D., University of California at San Diego, La Jolla, CA, 92093; and
Permit No. 20283: Demian Chapman, Ph.D., School of Marine and Atmospheric Science, Stony Brook University, Stony Brook, NY 11794.
The permits and related documents are available for review 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.
Jennifer Skidmore (Permit Nos. 15537-02, 20283), Amy Sloan (Permit Nos. 15537-02, 15543-06, 18890, 19638), Carrie Hubard (Permit No. 15488-01), Amy Hapeman (Permit No. 19091), and Sara Young (Permit Nos. 19116 and 19638), (301) 427-8401.
Notices were published in the
Permit No. 15543 (Dr. Wells) was issued on May 26, 2011 (76 FR 32144, June 3, 2011), authorizing research on bottlenose dolphins (
Permit No. 15488 (GADNR) issued on June 24, 2011 (75 FR 75458, December
Permit No. 15537 (IMMS) was issued on October 5, 2011 (76 FR 63286, October 12, 2011), authorizing the acquisition of up to eight stranded, releasable California sea lions (
Permit No. 18890 (ADF&G; 80 FR 15992, March 26, 2015) authorizes research on beluga (
Permit No. 19091 (SWFSC; 80 FR 45196, July 29, 2015) authorizes research on over 55 species of marine mammals and five species of sea turtles in all oceans of the world, with special focus on the eastern Pacific Ocean. The purpose of this research is to determine the abundance, distribution, movement patterns, dive behavior, demography and stock structure, and to monitor trends in recruitment of pinnipeds, cetaceans, and sea turtles in U.S. territorial and international waters. Researchers may conduct ground, vessel, and aerial surveys for observation, photogrammetry, photo-identification, biological sampling, and tagging animals. A request to use fully implantable satellite tags for cetaceans was denied. Researchers also may salvage and receive/import/export specimens and biological samples of these species. The permit is valid for five years from the date of issuance.
Permit No. 19116 (Dr. Southall; 81 FR 29847, May 13, 2016) authorizes research involving studies of sound production, diving and other behavior, and responses to sound of sixteen species of marine mammals, including endangered species. This study involves close approaches, attachment of tags, and sound exposure. Small fragments of sloughed skin, which often remain attached to retrieved tags, would be used for genetic analyses. Target species include beaked whales and other odontocetes, key baleen whales, and pinniped species for whom such data have not been previously obtained; other marine species may be incidentally harassed. The permit is valid for five years from the date of issuance.
Permit No. 19638 (Dr. Ponganis; 81 FR 29846, May 13, 2016) authorizes research to determine the role of blood oxygen store depletion in the dive behavior and foraging ecology of California sea lions on San Nicolas Island, California. Lactating females would be captured, flipper tagged, anesthetized, and equipped with a venous or arterial blood oxygen recorder, a velocity-acceleration-depth recorder, kinematic recorders, intravascular lactate sensor, or intravascular thermistor probe during foraging trips to sea. Animals would be recaptured after the foraging trip to remove the recorders. The pups of the females would also be captured and marked for ID purposes. Other pinnipeds may be incidentally harassed. The permit is valid for five years from the date of issuance.
Permit No. 20283 (Dr. Chapman; 81 FR 33212, May 25, 2016) authorizes the import of scalloped hammerhead shark (
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
For File No. 19116, an environmental assessment (EA) was prepared analyzing the effects of the permitted activities on the human environment in compliance with NEPA. Based on the analyses in the EA, NMFS determined that issuance of the permit would not significantly impact the quality of the human environment and that preparation of an environmental impact statement was not required. That determination is documented in a Finding of No Significant Impact, signed on July 8, 2016.
As required by the ESA, as applicable, issuance of these permits were based on a finding that such permits: (1) Were applied for in good faith; (2) will not operate to the disadvantage of such endangered species; and (3) are consistent with the purposes and policies set forth in section 2 of the ESA.
National Oceanic and Atmospheric Administration (NOAA) United States Global Change Research Program (USGCRP).
Request for public nominations.
Context: The U.S. Global Change Research Program (USGCRP) is mandated under the Global Change Research Act (GCRA) of 1990 to conduct a quadrennial National Climate Assessment (NCA). Under its current decadal strategic plan (
The last NCA from 2014 (NCA3:
Comments have been received through a request for information on the draft, annotated outline for the Fourth National Climate Assessment (NCA4)
For each regional chapter, a non-federal regional chapter lead must be nominated through this call for nominations and then selected by the Federal NCA4 Steering Committee. This non-federal regional chapter lead will then, with input and guidance from the Federal NCA4 Steering Committee, select federal and non-federal chapter authors and technical contributors to establish regional author teams. A federal coordinating lead author will also work with each regional chapter lead as a liaison between the regional chapter lead and federal agencies. Federal coordinating lead authors will provide technical editorial oversight of report content.
The regions that NCA4 will cover are the Northeast, Southeast and the Caribbean, Midwest, Northern Plains, Southern Plains, Southwest, Northwest, Alaska, and Hawai'i and Pacific Islands. See below in the appendix for the sectors, responses, and cross-cutting topics that will be covered.
In addition, this request presents an opportunity to submit scientific/technical information to inform the assessment. These technical inputs on sectoral, regional, and response information and cross-cutting topics will serve as part of the foundation for NCA4.
NOAA, on behalf of USGCRP, is soliciting nominations for regional chapter leads, chapter authors, technical contributors and technical/scientific information for the Fourth National Climate Assessment (NCA4). Refer to the NCA4 Annotated Outline (accessible below in the Appendix and via
The report will adhere to the Information Quality Act requirements (
Nominations should be submitted via the web address specified below (See
Nominations for regional chapter leads, chapter authors, and technical contributors must be submitted electronically via a web form accessible via
Emily Therese Cloyd, (202) 223-6262,
Background information, additional details, and instructions for submitting nominations and technical inputs can be found at
Call for Nominations for Regional Chapter Leads, Chapter Authors and Technical Contributors, this notice seeks nominations for regional chapter leads, chapter authors, and technical contributors to NCA4 with pertinent subject matter expertise and scientific background. Potential nominees should be accomplished scholarly writers and have demonstrated scientific and technical expertise and academic proficiency in at least one of the regions, sectors, response, or climate science topics outlined in the NCA4 Annotated Outline, (described below in the Appendix and accessible via
Responses to this request for nominations for regional chapter leads, chapter authors, and technical contributors must be submitted within 30 days of the publication of this notice. Users can access the nominations form via
Nominations will be reviewed and selected by the Federal NCA4 Steering Committee. Non-federal nominees may be selected and requested to serve as regional chapter leads, and other federal and non-federal nominees may be invited to participate as chapter authors or technical contributors to NCA4. Those selected as regional chapter leads will be informed no later than six weeks after the close of the nominations window. Those not selected as non-federal chapter leads may have their information passed on to Federal agencies or non-federal chapter leads for further consideration as chapter authors or technical contributors.
Interested parties are invited to assist in contributing, collecting, and refining the scientific information base for NCA4. To do so, parties are asked to submit recent, relevant scientific and/or technical research studies including observed, modeled and/or projected climate science information that have been peer reviewed and published or accepted for publication in scientific journals and/or government reports. For some elements of NCA4 (such as adaptation issues), relevant literature
Please refer to the outline (See Appendix below for topics covered in NCA4) to target your submissions. We especially encourage submissions of regional information and information for such topics as case studies, economic valuation, and cross-cutting sectoral research. All scientific literature submitted in response to this call for information must be received by January 15, 2017. For best consideration, please submit by November 1, 2016.
Submissions must be uploaded electronically via the link provided on
Dated: Thursday, August 18, 2016.
Published on TBD.
Wednesday, August 31, 2016, 10 a.m.-11.a.m.*
Hearing Room 420, Bethesda Towers, 4330 East West Highway, Bethesda, Maryland.
Commission Meeting—Open to the Public.
A live webcast of the Meeting can be viewed at
Todd A. Stevenson, Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814, (301) 504-7923.
* The Commission unanimously determined by recorded vote that Agency business requires calling the meeting without seven calendar days advance public notice.
Department of the Army, DoD.
Notice of intent.
In compliance with 35 U.S.C. 209(e) and 37 CFR 404.7(a)(1)(i), the Department of the Army hereby gives notice of its intent to grant to Fox Materials Consulting, LLC; a corporation having its principle place of business at 7145 Baker Rd., Colorado Springs, CO 80908, an exclusive license in the field of semiconductor applications that use nonvolatile switches and relays relative to the following:
• “Ferroelectric Mechanical Memory and Method”, US Patent No.: 9,385,306, Filing Date March 12, 2015, Issue Date July 5, 2016.
• “Ferroelectric Mechanical Memory Based on Remanant Displacement and Method”, US Patent Application No.: 15/131,881, Filing Date April 18, 2016.
Written objections must be filed not later than 15 days following publication of this announcement.
Send written objections to U.S. Army Research Laboratory Technology Transfer and Outreach Office, RDRL-DPT/Thomas Mulkern, Building 321, Room 110, Aberdeen Proving Ground, MD 21005-5425.
Thomas Mulkern, (410) 278-0889, email:
The prospective exclusive license may be granted unless within fifteen (15) days from the date of this published notice, the U.S. Army Research Laboratory receives written objections including evidence and argument that establish that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR 404.7. Competing applications completed and received by the U.S. Army Research Laboratory within fifteen (15) days from the date of this published notice will also be treated as objections to the grant of the contemplated exclusive license.
Objections submitted in response to this notice will not be made available to the public for inspection and, to the extent permitted by law, will not be released under the Freedom of Information Act, 5 U.S.C. 552.
Office of Postsecondary Education, Department of Education.
Notice of intent to fund down the State and partnership grant slates from FY 2014.
The Secretary intends to use grant slates developed in FY 2014 for the GEAR UP Program authorized by Section 404A of the Higher Education Act of 1965, as amended (HEA), to make new grant awards in FY 2016. The Secretary takes this action because a number of high-quality applications remain on the FY 2014 State and partnership grant slates and limited funding is available for new grant awards in FY 2016. We expect to use an estimated $20,000,000 for new awards in FY 2016.
Karmon Simms-Coates, U.S. Department of Education, 400 Maryland Avenue SW., Room 5W250, Washington, DC 20202. Telephone: (202) 453-7917 or by email:
If you use a telecommunications device for the deaf or a text telephone, call the Federal Relay Service, toll free, at 1-800-877-8339.
Individuals with disabilities can obtain this document in an accessible format (
On June 4, 2014, the Department of Education published two notices in the
In response to the notices, we received a number of high-quality applications. Many applications that received high scores by peer reviewers were not selected for funding.
To conserve funding that would have been required for a peer review of new grant applications submitted under this program and instead use those limited funds to support grant activities, the FY 2015 GEAR UP grantees were selected from the State and partnership slates developed during the FY 2014 competition using the priority, selection criteria, and application requirements referenced in the June 2014 notice. A number of high-quality applications from the 2014 competition were not funded in 2014 or 2015. We will select new grantees in FY 2016 from the existing State and partnership slates developed in FY 2014 for the same reasons and in the same manner as we did in FY 2015.
You may also access documents of the Department published in the
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501
Interested persons are invited to submit comments on or before October 31, 2016.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Beth Grebeldinger, 202-377-4018.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501
Interested persons are invited to submit comments on or before October 31, 2016.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Veronica Pickett, 202-377-4232.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Innovation and Improvement, Department of Education.
Notice.
The Assistant Deputy Secretary for Innovation and Improvement extends, for certain prospective eligible applicants described elsewhere in this notice, the deadline date for transmittal of applications for new awards for fiscal year (FY) 2016 under the Promise Neighborhoods program. The Assistant Deputy Secretary takes this action to allow more time for the preparation and submission of applications by prospective eligible applicants in Louisiana affected by the severe storms and flooding that began in that State on August 11, 2016. The extension of the application deadline date for this competition is intended to help affected eligible applicants compete fairly with other eligible applicants under this competition.
On July 8, 2016, we published in the
In accordance with the application notice, an eligible organization for the Promise Neighborhoods program—
(1) Is representative of the geographic area proposed to be served;
(2) Is one of the following:
(a) A nonprofit organization that meets the definition of a nonprofit
(b) An institution of higher education as defined by section 101(a) of the Higher Education Act of 1965, as amended.
(c) An Indian tribe as defined in the application notice for this competition published by us in the
(3) Currently provides at least one of the solutions from the applicant's proposed continuum of solutions in the geographic area proposed to be served; and
(4) Operates or proposes to work with and involve in carrying out its proposed project, in coordination with the school's LEA, at least one public elementary or secondary school located within the identified geographic area that the grant will serve.
In the case of an eligible applicant that is a partnership, the extension of the application deadline date applies if any entity required to be part of the partnership (
An eligible applicant submitting an application under the extended deadline in this notice must provide in its application a certification that it meets the criteria for an extension and be prepared to provide appropriate supporting documentation, if requested. If such an eligible applicant is submitting its application electronically, the submission of the application serves as the eligible applicant's attestation that it meets the criteria for submitting an application under the extended deadline.
Except for the deadline date, all information in the application notice for this competition remains the same.
Fund for the Improvement of Education, title V, part D, subpart 1, sections 5411 through 5413 of the Elementary and Secondary Education Act of 1965, as amended by the No Child Left Behind Act of 2001 (20 U.S.C. 7243-7243b).
Adrienne Hawkins, U.S. Department of Education, 400 Maryland Avenue SW., Room 4W256, Washington, DC 20202. Telephone: (202) 453-5638. Email address:
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.
You may also access documents of the Department published in the
U.S. Election Assistance Commission
Public Meeting of the Technical Guidelines Development Committee
In accordance with the Federal Advisory Committee Act (FACA), Public Law 92-463, as amended (5 U.S.C. Appendix 2), notice is hereby given that the U.S. Election Assistance Commission's (EAC) Technical Guidelines Development Committee (TGDC) will meet in open session on Thursday, September 15, 2016 and Friday, September 16, 2016 at the National Institute of Standards and Technology (NIST) in Gaithersburg, Maryland.
The meeting will be held on Thursday, September 15, 2016, from 8:30 a.m. until 5:00 p.m., Eastern time (estimated based on speed of business), and Friday, September 16, 2016 from 8:30 a.m. to 12:00 p.m., Eastern time (estimated based on speed of business).
The meeting will take place at the National Institute of Standards and Technology, 100 Bureau Drive, Building 101, West Square Room, Gaithersburg, Maryland 20899-8900. Members of the public wishing to attend the meeting must notify Gladys Arrisueno by c.o.b. Thursday, September 8, 2016, per instructions under the
Patricia Wilburg, NIST Voting Program, Information Technology Laboratory, National Institute of Standards and Technology, 100 Bureau Drive, Stop 8970, Gaithersburg, MD 20899-8930, telephone: (301) 975-6994 or
The Technical Guidelines Development Committee will meet Thursday, September 15, 2016, from 8:30 a.m. until 5:00 p.m., Eastern time, and Friday, September 16, 2016 from 8:30 a.m. to 12:00 p.m., Eastern time. Discussions at the meeting will include the following topics: The Working Group and Constituency Groups activities since the February TGDC Meeting that include Cyber Security, Human Factors, Interoperability and Testing; the scope of the VVSG, Post-HAVA Voting System Requirements, Usability & Accessibility, and Security; and the VVSG 2.0 Project Charter. The full meeting agenda will be posted in advance at
The TGDC was established pursuant to 42 U.S.C 15361, to act in the public interest to assist the Executive Director of the Election Assistance Commission (EAC) in the development of voluntary voting system guidelines. Details regarding the TGDC's activities are available at
All visitors to the National Institute of Standards and Technology site will have to pre-register to be admitted. Anyone wishing to attend this meeting must register by c.o.b. Thursday, September 8, 2016, in order to attend. Please submit your name, time of arrival, email address and phone number to Gladys Arrisueno and she will provide you with instructions for admittance. Non-U.S. citizens must also submit their country of citizenship, title, employer/sponsor, and address. Gladys Arrisueno's email address is
Members of the public may submit relevant written statements to the TGDC with respect to the meeting no later than 5:00 p.m. EDT on Thursday, September 8, 2016. Statements may be sent via email at
This meeting will be open to the public.
Office of Science, Department of Energy.
Notice of partially-closed meeting.
This notice sets forth the schedule and summary agenda for a partially-closed meeting of the President's Council of Advisors on Science and Technology (PCAST), and describes the functions of the Council. The Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat. 770) requires that public notice of these meetings be announced in the
September 30, 2016; 8:30 a.m. to 12:30 p.m.
The meeting will be held at the National Academy of Sciences, 2101 Constitution Avenue NW., Washington, DC, in the Lecture Room.
Information regarding the meeting agenda, time, location, and how to register for the meeting is available on the PCAST Web site at:
The President's Council of Advisors on Science and Technology (PCAST) is an advisory group of the nation's leading scientists and engineers, appointed by the President to augment the science and technology advice available to him from inside the White House, cabinet departments, and other Federal agencies. See the Executive Order at
The public comment period for this meeting will take place on September 30, 2016, at a time specified in the meeting agenda posted on the PCAST Web site at
Please note that because PCAST operates under the provisions of FACA, all public comments and/or presentations will be treated as public documents and will be made available for public inspection, including being posted on the PCAST Web site.
U.S. Department of Energy.
Notice and request for OMB review and comment.
The Department of Energy (DOE) has submitted to the Office of Management and Budget (OMB) for clearance, a proposal for collection of information under the provisions of the Paperwork Reduction Act of 1995. The proposed collection will collect information on the status of grantee activities, expenditures, and results, to ensure that program funds are being used appropriately, effectively and expeditiously.
Comments regarding this collection must be received on or before September 30, 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, please advise the DOE Desk Officer at OMB of your intention to make a submission as soon as possible. The Desk Officer may be telephoned at 202-395-4650.
Written comments should be sent to: Attention: Desk Officer for DOE; Office of Information and Regulatory Affairs (OIRA); Office of Management and Budget, New Executive Office Building, 725 17th St. NW., Room 10202; Washington, DC 20503-0009 or by; email at:
And to: Christine Askew, EE-5W; U.S. Department of Energy; 1000 Independence Ave., SW.; Washington, DC 20585-1290, Phone: (202)586-8224; Fax: (202) 287-1992; Email:
Christine Askew, EE-5W, U.S. Department of Energy, 1000 Independence Ave. SW., Washington, DC 20585-1290, Phone: (202)586-8224, Fax: (202) 287-1992; Email:
This information collection request contains: (1) OMB No. 1910-5127 ; (2) Information Collection Request Title: “Weatherization Assistance Program (WAP)”; (3) Type of Request: Extension of a Currently Approved Information Collection; (4) Purpose: To collect information on the status of grantee activities, expenditures, and results, to ensure that program funds are being used appropriately, effectively and expeditiously (5) Annual Estimated Number of Respondents: 59; (6) Annual Estimated Number of Total Responses: 696; (7) Annual Estimated Number of Burden Hours: 2,088; (8) Annual Estimated Reporting and Recordkeeping Cost Burden: $0; (5) Annual Estimated Number of Respondents: 59; (6) Annual Estimated Number of Total Responses: 696; (7) Annual Estimated Number of Burden Hours: 2,088; (8) Annual Estimated Reporting and Recordkeeping Cost Burden: $0.
Statutory Authority: Title V, Subtitle E of the Energy Independence and Security Act (EISA), Pub. L. 110-140 as amended (42 U.S.C. 17151
Federal Energy Management Program (FEMP), Office of Energy Efficiency and Renewable Energy, Department of Energy (DOE).
Notice of availability and request for information.
The Federal Energy Management Program Office (FEMP), within the U.S. Department of Energy (DOE), released on its Web site a Request for Information (RFI) on the availability of new construction geothermal electricity in the Salton Sea area to serve regional federal load. The purpose of the RFI is to gather industry input on options available to the Federal Government for a potential aggregated power purchase of 100-250 MW of new construction geothermal electricity generated in the Salton Sea area, within the Riverside and Imperial Counties of California, for delivery over a ten-year or twenty-year contract period to serve regional Federal load. The RFI can be found at
Written comments and information are requested on or before September 29, 2016.
Interested parties are to submit comments electronically to:
Tracy Niro, U.S. Department of Energy, Federal Energy Management Program (EE-2L), 1000 Independence Avenue SW., Washington, DC 20585; email:
FEMP released an RFI to gather information on the potential for an aggregated power purchase of 100-250 MW of new construction geothermal electricity generated in the Salton Sea area, which is located within the Riverside and Imperial Counties of California, for delivery over a ten-year or twenty-year contract period to serve regional Federal load located in one or more of the Arizona counties of: Pima, Pinal, Maricopa, Yuma, La Paz and/or the California counties of: Imperial, San Diego, Riverside, San Bernardino, Orange and Los Angeles. The RFI requests responders to provide information on potential new construction geothermal projects in the Salton Sea area and to describe details about those options such as whether the power would include any associated renewable energy certificates, the optimal term for any agreement, and whether transmission, congestion, or infrastructure issues might impact projects, among other things. The RFI is available on the FEMP Web site at:
FEMP invites all interested parties to submit in writing by September 29, 2016, comments and information on matters addressed in the notice.
1. By letter filed July 29, 2016, Eagle Creek Renewable Energy, LLC submitted
2. Champlain Spinners Power, LLC is now the exemptee of the Champlain Spinners Project No. 5296. All correspondence should be forwarded to: Mr. Bernard Cherry, Champlain Spinners Power, LLC, c/o Eagle Creek Renewable Energy, LLC, 65 Madison Avenue, Suite 500, Morristown, NJ 07960.
Take notice that on August 12, 2016, Columbia Gas Transmission, LLC (Columbia), having its principal place of business at 5151 San Felipe, Suite 2500, Houston, TX 77056 filed in the above referenced docket an application pursuant to section 7(c) of the Natural Gas Act (NGA), and Part 157 of the Commission's regulations requesting authorization to install and operate compressions, pipeline and appurtenant facilities located in Louisa and Goochland Counties, Virginia, referred to as the Central Virginia Connector Project (Project), all as more fully set forth in the application which is on file with the Commission and open to public inspection. The filing is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site web at
Any questions concerning this application may be directed to Tyler Brown, Senior Counsel, 5151 San Felipe, Suite 2500, Houston, TX 77056; by calling (713) 386-3797; by faxing (304) 357-2509; or by emailing
Specifically, the applicant proposes the following modifications: (i) Replace unit at Louisa CS, (ii) convert replaced units to standby, (iii) increase horsepower (HP) by 2,080 HP, (iv) install 0.12 mile of 8-inch-diameter pipeline, (v) install station pipe and valve to make section at Boswell's Tavern bi-directional, and (vi) install meter station near Goochland CS. The increase in HP will provide an additional capacity of 45 million cubic feet per day (MMcf/d). The total cost of the Project is $52,387,031.
Pursuant to section 157.9 of the Commission's rules (18 CFR 157.9), within 90 days of this Notice, the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit seven copies of filings made in the proceeding with the Commission and must mail a copy to the applicant and to every other party. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commentors will not be required to serve copies of filed documents on all other parties. However, the non-party commentors will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
On August 15, 2016, the Amador Water Agency filed a notice of intent to construct a qualifying conduit hydropower facility, pursuant to section 30 of the Federal Power Act (FPA), as amended by section 4 of the Hydropower Regulatory Efficiency Act of 2013 (HREA). The proposed Ione Hydroelectric Station Project would have an installed capacity of 447.6 kilowatts (kW) and would be located on an existing 16-inch-diameter gravity fed raw water transmission pipe. The project would be located near the City of Ione in Amador County, California.
A qualifying conduit hydropower facility is one that is determined or deemed to meet all of the criteria shown in the table below.
The deadline for filing motions to intervene is 30 days from the issuance date of this notice.
Anyone may submit comments or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210 and 385.214. Any motions to intervene must be received on or before the specified deadline date for the particular proceeding.
The Commission strongly encourages electronic filing. Please file motions to intervene and comments using the Commission's eFiling system at
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
a.
b.
c.
d.
e.
f.
g.
h.
i. Deadline for filing comments, motions to intervene and protests, is 30 days from the issuance date of this notice by the Commission. The Commission strongly encourages electronic filing. Please file motions to intervene, protests, comments, and recommendations, using the Commission's eFiling system at
j.
k. This notice is available for review and reproduction at the Commission in the Public Reference Room, Room 2A, 888 First Street NE., Washington, DC 20426. The filing may also be viewed on the Commission's Web site at
l. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
m.
n.
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. Deadline for filing comments, motions to intervene and protests, is 30 days from the issuance date of this notice. The Commission strongly encourages electronic filing. Please file motions to intervene, protests, comments, and recommendations, using the Commission's eFiling system at
k.
l.
m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
n.
o.
This is a supplemental notice in the above-referenced proceeding of Brady Interconnection, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is September 14, 2016.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC
Take notice that on August 16, 2016, Transcontinental Gas Pipe Line Company, LLC (Transco), Post Office Box 1396, Houston, Texas 77251, filed in Docket No. CP16-494-000, an application pursuant to section 7(c) of the Natural Gas Act and Part 157 of the Commission's regulations requesting authorization of its Gulf Connector Expansion Project (Project) consisting of three new compressor stations totaling 30,650 horsepower in Wharton, San Patricio and Victoria Counties, Texas; a new interconnect with Cheniere Corpus Christi Pipeline, LLC's pipeline facilities in San Patricio County, Texas; and piping and valve modifications in Hardin and Wharton Counties, Texas to allow for bi-directional flow and related appurtenant facilities. The Project would cost approximately $167.4 million and would enable 475,000 dekatherms per day of incremental firm natural gas transportation, all as more fully set forth in the application which is on file with the Commission and open to public inspection. This filing may be viewed on the web at
Any questions regarding this Application should be directed to Ingrid Germany, Rates & Regulatory, P.O. Box 1396, Houston, Texas 77251-1396, or call (713) 215-4015, or via eMail:
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below, file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 7 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenter's will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with he Commission's environmental review process. Environmental commenter's will not be required to serve copies of filed documents on all other parties. However, the non-party commentary, will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and ill not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
Federal Energy Regulatory Commission.
Comment request.
In compliance with the requirements of the Paperwork Reduction Act of 1995, 44 U.S.C. 3507(a)(1)(D), the Federal Energy Regulatory Commission (Commission or FERC) is submitting these information collections (FERC Form 80 [Licensed Hydropower Development Recreation Report], FERC-550 [Oil Pipeline Rates-Tariff Filings], and FERC-549 [NGPA
Comments on the collections of information are due by September 30, 2016.
Comments filed with OMB, identified by the OMB Control Nos. 1902-0106 (FERC Form 80), 1902-0089 (FERC-550), or 1902-0086 (FERC-549) should be sent via email to the Office of Information and Regulatory Affairs:
A copy of the comments should also be sent to the Commission, in Docket No. IC16-10-000, by either of the following methods:
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Ellen Brown may be reached by email at
FERC Form 80 is a report on the use and development of recreational facilities at hydropower projects licensed by the Commission. Applications for amendments to licenses and/or changes in land rights frequently involve changes in resources available for recreation. FERC utilizes the FERC Form 80 data when analyzing the adequacy of existing public recreational facilities and when processing and reviewing proposed amendments to help determine the impact of such changes. In addition, FERC staff uses the FERC Form 80 data when conducting inspections of licensed projects and in evaluating compliance with various license conditions and in identifying recreational facilities at hydropower projects.
The data which FERC Form 80 requires are specified by Title 18 of the Code of Federal Regulations (CFR) under 18 CFR 8.11 and 141.14 (and are discussed at
FERC collects the FERC Form 80 once every six years. The last collection was due on April 1, 2015, for data compiled during the 2014 calendar year. The next collection of the FERC Form 80 is due on April 1, 2021, with subsequent collections due every sixth year, for data compiled during the previous calendar year.
The Commission updated the format for the general instructions section of the form for improved readability. Specifically, FERC split a long paragraph into several smaller paragraphs.
FERC made no changes to the instructions, form, or glossary.
• Regulation of rates and practices of oil pipeline companies engaged in interstate transportation;
• establishment of equal service conditions to provide shippers with equal access to pipeline transportation;
• establishment of reasonable rates for transporting petroleum and petroleum products by pipeline.
The filing requirements for oil pipeline tariffs and rates
In 18 CFR 284.102(e) the Commission requires interstate pipelines to obtain proper certification in order to ship natural gas on behalf of intrastate pipelines and local distribution companies (LDC). This certification consists of a letter from the intrastate pipeline or LDC authorizing the interstate pipeline to ship gas on its behalf. In addition, interstate pipelines must obtain from its shippers certifications including sufficient information to verify that their services qualify under this section.
18 CFR 284.123(b) provides that intrastate gas pipeline companies file for Commission approval of rates for services performed in the interstate transportation of gas. An intrastate gas pipeline company may elect to use rates contained in one of its then effective transportation rate schedules on file with an appropriate state regulatory agency for intrastate service comparable to the interstate service or file proposed rates and supporting information showing the rates are cost based and are fair and equitable. It is the Commission policy that each pipeline must file at least every five years to ensure its rates are fair and equitable. Depending on the business process used, either 60 or 150 days after the application is filed, the rate is deemed to be fair and equitable unless the Commission either extends the time for action, institutes a proceeding or issues an order providing for rates it deems to be fair and equitable.
18 CFR 284.123(e) requires that within 30 days of commencement of new service any intrastate pipeline engaging in the transportation of gas in interstate commerce must file a statement that includes the interstate rates and a description of how the pipeline will engage in the transportation services, including operating conditions. If an intrastate gas pipeline company changes its operations or rates, it must amend the statement on file with the Commission. Such amendment is to be filed not later than 30 days after commencement of the change in operations or change in rate election.
The Commission's regulations at 18 CFR 284.288 and 284.403 provide that applicable sellers of natural gas adhere to a code of conduct when making gas sales in order to protect the integrity of the market. As part of this code, the Commission imposes a record retention requirement on applicable sellers to “retain, for a period of five years, all data and information upon which it billed the prices it charged for natural gas it sold pursuant to its market based sales certificate or the prices it reported for use in price indices.” FERC uses these records to monitor the jurisdictional transportation activities and unbundled sales activities of interstate natural gas pipelines and blanket marketing certificate holders.
The record retention period of five years is necessary due to the importance of records related to any investigation of possible wrongdoing and related to assuring compliance with the codes of conduct and the integrity of the market. The requirement is necessary to ensure consistency with the rule prohibiting market manipulation (regulations adopted in Order No. 670, implementing the EPAct 2005 anti-manipulation provisions) and the generally applicable five-year statute of limitations where the Commission seeks civil penalties for violations of the anti-manipulation rules or other rules, regulations, or orders to which the price data may be relevant. Failure to have this information available would mean the Commission is unable to perform its regulatory functions and to monitor and evaluate transactions and operations of
In 2006 the Commission amended its regulations to establish criteria for obtaining market-based rates for storage services offered under 18 CFR 284.501-505. First, the Commission modified its market-power analysis to better reflect the competitive alternatives to storage. Second, pursuant to the Energy Policy Act of 2005, the Commission promulgated rules to implement section 4(f) of the Natural Gas Act, to permit underground natural gas storage service providers that are unable to show that they lack market power to negotiate market-based rates in circumstances where market-based rates are in the public interest and necessary to encourage the construction of the storage capacity in the area needing storage services, and where customers are adequately protected. These revisions are intended to facilitate the development of new natural gas storage capacity while protecting customers.
a.
b.
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d.
e. All local, state, and federal agencies, Indian tribes, and other interested entities are invited to participate by phone. Please call Andy Bernick at (202) 502-8660 by Tuesday, September 13, 2016, to RSVP and to receive specific instructions on how to participate.
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing
Take notice that on July 11, 2016, EcoEléctrica, L.P. (EcoEléctrica), Road 337, Km. 3.7, Bo. Tallaboa Poniente, Peñuelas, PR 00624, filed an application in Docket No. CP16-492-000 under section 3 of the Natural Gas Act (NGA), and Part 153 and 380 of the Commission's regulations for an amendment to the authorization granted by the Commission on May 15, 1996 in Docket No. CP95-35-000, as subsequently amended on April 16, 2009 in Docket No. CP95-35-001, and on June 19, 2014 in Docket No. CP13-516-000. EcoEléctrica requests authorization to amend its current NGA Section 3 authorization to use inherent spare capacity within the existing LNG vaporizers, to supply the Puerto Rico Electric Power Authority (PREPA) an additional 93 million standard cubic feet (MMscf/d) of natural gas, all as more fully set forth in the application which is on file with the Commission and open to public inspection. This filing is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site at
Any questions regarding this application should be directed to Jaime L. Sanabria, EcoEléctrica, L.P., Road 337, Km. 3.7, Bo. Tallaboa Poniente, Peñuelas, PR 00624, (787) 759-0202, or by email at
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below, file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 5 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commentors will not be required to serve copies of filed documents on all other parties. However, the non-party commentors will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as
Written comments should be submitted on or before September 30, 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
Federal Trade Commission (FTC or Commission).
Notice.
The information collection requirements described below will be submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act (PRA). The FTC seeks public comments on its proposal to extend, for three years, the current PRA clearance for its portion of the information collection requirements contained in the Consumer Financial Protection Bureau's Regulation N (the Mortgage Acts and Practices—Advertising Rule). The FTC shares enforcement of Regulation N with the Consumer Financial Protection Bureau (“CFPB”). This clearance expires on December 31, 2016.
Comments must be received on or before October 31, 2016.
Interested parties may file a comment online or on paper by following the instructions in the Request for Comments part of the Supplementary Information section below. Write “Regulation N: FTC File No. P134811; K05” on your comment, and file your comment online at
Requests for copies of the collection of information and supporting documentation should be addressed to Carole L. Reynolds, Attorney, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW., CC-10232, Washington, DC 20580, (202) 326-3230.
Under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3520, federal agencies must get OMB approval for
The FTC invites comments on: (1) 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) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond. All comments must be received on or before October 31, 2016.
The FTC's Mortgage Acts and Practices—Advertising Rule, 16 CFR 321, was issued by the FTC on July 19, 2011, at
Regulation N requires covered persons to retain: (1) Copies of materially different commercial communications and related materials, regarding any term of any mortgage credit product, that the person made or disseminated during the relevant time period; (2) documents describing or evidencing all mortgage credit products available to consumers during the relevant time period; and (3) documents describing or evidencing all additional products or services (such as credit insurance or credit disability insurance) that are or may be offered or provided with the mortgage credit products available to consumers during the relevant time period. A failure to keep such records would be an independent violation of the Rule.
Commission staff believes these recordkeeping requirements pertain to records that are usual and customary and kept in the ordinary course of business for many covered persons, such as mortgage brokers, lenders, and servicers; real estate brokers and agents; home builders, and advertising agencies.
The information retained under the Rule's recordkeeping requirements is used by the Commission to substantiate compliance with the Rule and may also provide a basis for the Commission to bring an enforcement action. Without the required records, it would be difficult either to ensure that entities are complying with the Rule's requirements or to bring enforcement actions based on violations of the Rule.
Commission staff estimates that the Rule's recordkeeping requirements will affect approximately 1,000 persons
Commission staff derived labor costs by applying appropriate hourly cost figures to the burden hours described above. Staff further assumes that office support file clerks will handle the Rule's record retention requirements at an hourly rate of $14.38.
Absent information to the contrary, staff anticipates that existing storage media and equipment that covered persons use in the ordinary course of business will satisfactorily accommodate incremental recordkeeping under the Rule. Accordingly, staff does not anticipate that the Rule will require any new capital or other non-labor expenditures.
You can file a comment online or on paper. Write “Regulation N: FTC File No. P134811; K05” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at
Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, such as a 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, such as 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 discussed 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 must follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c). Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest. Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, the Commission encourages 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 “Regulation N: FTC File No. P134811; K05” on your comment and on the envelope, and mail it 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 October 31, 2016. You can find more information, including routine uses permitted by the Privacy Act, in the Commission's privacy policy, at
Agency for Healthcare Research and Quality (AHRQ), Department of Health and Human Services (HHS).
Notice of delisting.
The Patient Safety and Quality Improvement Act of 2005, 42 U.S.C. 299b-21 to b-26, (Patient Safety Act) and the related Patient Safety and Quality Improvement Final Rule, 42 CFR part 3 (Patient Safety Rule), published in the
The directories for both listed and delisted PSOs are ongoing and reviewed weekly by AHRQ. The delisting was effective at 12:00 Midnight ET (2400) on August 10, 2016.
Both directories can be accessed electronically at the following HHS Web site:
Eileen Hogan, Center for Quality Improvement and Patient Safety, AHRQ,
The Patient Safety Act authorizes the listing of PSOs, which are entities or component organizations whose mission and primary activity are to conduct activities to improve patient safety and the quality of health care delivery.
HHS issued the Patient Safety Rule to implement the Patient Safety Act. AHRQ administers the provisions of the Patient Safety Act and Patient Safety Rule relating to the listing and operation of PSOs. The Patient Safety Rule authorizes AHRQ to list as a PSO an entity that attests that it meets the statutory and regulatory requirements for listing. A PSO can be “delisted” if it is found to no longer meet the requirements of the Patient Safety Act and Patient Safety Rule, when a PSO chooses to voluntarily relinquish its status as a PSO for any reason, or when a PSO's listing expires. Section 3.108(d) of the Patient Safety Rule requires AHRQ to provide public notice when it removes an organization from the list of federally approved PSOs.
AHRQ has accepted a notification from the QAISys, Inc., PSO number P0161, to voluntarily relinquish its status as a PSO. Accordingly, QAISys, Inc. was delisted effective at 12:00 Midnight ET (2400) on August 10, 2016. AHRQ notes that that QAISys, Inc. submitted this request for voluntary relinquishment following receipt of the Notice of Preliminary Finding of Deficiency sent on July 28, 2016. In addition, QAISys, Inc., P0046, was previously listed as a PSO in 2009; AHRQ accepted its request for voluntary relinquishment in 2013.
More information on PSOs can be obtained through AHRQ's PSO Web site at
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA) is announcing the availability of a draft guidance for industry entitled “Submission of Warning Plans for Cigars.” The draft guidance, when finalized, will help those involved in the manufacture, distribution, and sale of cigars in the United States understand the new cigar warning plan requirements under FDA's final rule deeming these products to be subject to the tobacco product authorities in the Federal Food, Drug, and Cosmetic Act (the FD&C Act). The draft guidance reiterates the required health warning statements and the requirements for random display and distribution that should be provided in cigar warning plans, and, when finalized, will help persons determine who should submit a warning plan, when a plan must be submitted, and what information should be included when submitting a plan.
Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by September 29, 2016.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Submit written requests for single copies of this guidance to the Center for Tobacco Products, Food and Drug Administration, Document Control Center, Bldg. 71, Rm. G335, 10903 New Hampshire Ave., Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your request or include a fax number to which the guidance document may be sent. See the
Deirdre Jurand, Center for Tobacco Products, Food and Drug Administration, 10903 New Hampshire Ave., Document Control Center, Bldg. 71, Rm. G335, 10903 New Hampshire Ave., Silver Spring, MD 20993-0002, 1-877-287-1373,
FDA is announcing the availability of a draft guidance for industry entitled “Submission of Warning Plans for Cigars.”
On June 22, 2009, the President signed the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) (Pub. L. 111-31) into law. The Tobacco Control Act granted FDA important new authority to regulate the manufacture, marketing, and distribution of cigarettes, cigarette tobacco, roll-your-own tobacco (RYO), and smokeless tobacco products to protect the public health and to reduce tobacco use by minors.
The Tobacco Control Act also gave FDA the authority to issue a regulation deeming all other products that meet the statutory definition of a tobacco product as subject to FDA regulatory authority (“deeming”) (section 901(b) of the FD&C Act (21 U.S.C. 387a)). On May 10, 2016, FDA issued that rule, extending FDA's tobacco product authority to cigars, among other products (81 FR 28973). Among the requirements that now apply to cigars are health warning statements prescribed under section 906(d) of the FD&C Act (21 U.S.C. 387f(d)), which permits restrictions on the sale and distribution of tobacco products that are “appropriate for the protection of public health.” The regulation specifies the health warning statements to be displayed and also requires the submission of warning plans that provide for the random, equal display and random distribution of the statements on cigar packaging and advertising.
The draft guidance discusses the regulatory requirements to submit warning plans, who submits a warning plan, the scope of a warning plan, when to submit a warning plan, what information should be submitted in a warning plan, where to submit a warning plan, and what approval of a warning plan means.
FDA is issuing this draft guidance consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on cigar warning plans. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
This draft guidance also refers to previously approved collections of information found in FDA regulations. The collections of information in 21 CFR part 1143 have been approved under OMB control number 0910-0768.
Persons with access to the Internet may obtain an electronic version of the guidance at either
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a document entitled “Revised Recommendations for Reducing the Risk of Zika Virus Transmission by Blood and Blood Components; Guidance for Industry.” The guidance document is notifying blood establishments that collect Whole Blood and blood components, that FDA has determined Zika virus (ZIKV) to be a relevant transfusion-transmitted infection (RTTI) and provides FDA's assessment. The guidance also provides recommendations to reduce the risk of transmission of ZIKV by Whole Blood and blood components. The guidance applies to the collection of Whole Blood and blood components. The guidance does not apply to the collection of Source Plasma. The guidance supersedes the February 2016 document entitled, “Recommendations for Donor Screening, Deferral, and Product Management to Reduce the Risk of Transfusion-Transmission of Zika Virus: Guidance for Industry” (February 2016 guidance), and the March 2016 document entitled, “Questions and Answers Regarding ‘Recommendations for Donor Screening, Deferral, and Product Management to Reduce the Risk of Transfusion-Transmission of Zika Virus: Guidance for Industry’ ” no later than 12 weeks after the date of the issuance of this guidance. Implementation of the guidance will be immediate for blood establishments that collect Whole Blood and blood components in States and territories with local transmission of ZIKV by mosquitos, and will be phased in over 4 to 12 weeks in other States and territories using a tiered, risk-based approach. Blood establishments should follow the recommendations in the February 2016 guidance until the recommendations in the guidance document have been fully implemented.
The Agency is soliciting public comment, but is implementing this guidance immediately because the
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Submit written requests for single copies of the guidance to the Office of Communication, Outreach and Development, Center for Biologics Evaluation and Research (CBER), Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist the office in processing your requests. The guidance may also be obtained by mail by calling CBER at 1-800-835-4709 or 240-402-8010. See the
Jonathan McKnight, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 240-402-7911.
FDA is announcing the availability of a guidance entitled “Revised Recommendations for Reducing the Risk of Zika Virus Transmission by Blood and Blood Components; Guidance for Industry.” The guidance is notifying blood establishments that collect Whole Blood and blood components that FDA has determined ZIKV to be an RTTI under 21 CFR 630.3(h)(2) and provides FDA's assessment. The guidance provides recommendations to reduce the risk of transmission of ZIKV by Whole Blood and blood components. The guidance does not apply to the collection of Source Plasma, which is used for further manufacture of plasma-derived products. If, based upon the available scientific evidence, the risk of ZIKV transmission by blood and blood components significantly changes, FDA may update the recommendations as warranted. In making this determination, FDA will consider available epidemiologic and other scientific evidence.
The guidance supersedes the February 2016 guidance entitled, “Recommendations for Donor Screening, Deferral, and Product Management to Reduce the Risk of Transfusion-Transmission of Zika Virus; Guidance for Industry” and the March 2016 guidance entitled, “Questions and Answers Regarding ‘Recommendations for Donor Screening, Deferral, and Product Management to Reduce the Risk of Transfusion-Transmission of Zika Virus: Guidance for Industry’ ” no later than 12 weeks after the date of the issuance of this guidance. Implementation of the guidance will be immediate for blood establishments that collect Whole Blood and blood components in States and territories with local transmission of ZIKV by mosquitos, and will be phased in over 4 to 12 weeks in other States and territories using a tiered, risk-based approach. Blood establishments should follow the recommendations in the February 2016 guidance until they fully implement the recommendations in the guidance document currently being issued.
ZIKV is an arbovirus from the Flaviviridae family, genus
The global ZIKV epidemic expanded in the region of the Americas by early
The first local transmission of ZIKV in the United States was reported from Puerto Rico in December 2015, and soon thereafter local transmission was also reported in American Samoa and the U.S. Virgin Islands. In July 2016, the first cases of local transmission of ZIKV occurring in the continental United States were reported from Miami-Dade County in Florida. The possibility of further geographic spread of ZIKV exists in regions where the
The most common ZIKV disease symptoms include fever, arthralgia, maculopapular rash, and conjunctivitis. In addition, neurological manifestations and congenital anomalies have been associated with ZIKV disease outbreaks. ZIKV infection has been associated with Guillain-Barré syndrome. ZIKV infection during pregnancy is a cause of microcephaly and other serious fetal brain anomalies. Other problems have been detected in pregnancies and among fetuses and infants infected with ZIKV before birth, such as miscarriage, stillbirth, absent or poorly developed brain structures, defects of the eye, hearing deficits, and impaired growth; however, the full clinical spectrum of the effects of ZIKV infection during pregnancy is not yet known.
FDA has identified ZIKV as a transfusion-transmitted infection under § 630.3(
The guidance recommends that blood establishments test all donations collected in the United States and its territories with an investigational individual donor nucleic acid test (ID-NAT) for ZIKV under an investigational new drug application (IND), or when available, a licensed test. Alternatively, blood establishments may implement pathogen reduction technology for platelets and plasma using an FDA-approved pathogen reduction device as specified in the Instructions for Use of the device. If an FDA-approved pathogen reduction device becomes available for Whole Blood or red blood cells, blood establishments may implement pathogen reduction technology for such products rather than testing the donations. Blood establishments implementing these measures may discontinue providing donor educational material with respect to ZIKV and screening donors for ZIKV risk factors such as travel history and deferring them as previously recommended in the February 2016 guidance. Under 21 CFR 630.10(a), if a donor volunteers a recent history of ZIKV infection, a blood establishment must not collect blood or blood components from that donor. For such donors, the guidance recommends a deferral period of 120 days after a positive viral test or the resolution of symptoms, whichever timeframe is longer.
FDA recommends that blood establishments implement the recommendations in the guidance as follows: (1) Blood establishments that collect Whole Blood and blood components in U.S. States and territories with one or more reported locally acquired mosquito-borne cases of ZIKV should implement the recommendations immediately. Blood establishments should cease blood collection until testing or the use of pathogen reduction technology is implemented, consistent with the recommendations in the guidance. As of the date of issuance of the guidance, the recommendations applies to blood establishments that collect Whole Blood and blood components in Florida and Puerto Rico; (2) because of their proximity to areas with locally acquired mosquito-borne cases of ZIKV or because of other epidemiological linkage to ZIKV, such as the number of travel-associated cases reported in a State, blood establishments that collect Whole Blood and blood components in Alabama, Arizona, California, Georgia, Hawaii, Louisiana, Mississippi, New Mexico, New York, South Carolina, and Texas should implement the recommendations as soon as feasible, but not later than 4 weeks after the guidance issue date; and (3) blood establishments that collect Whole Blood and blood components in all other States and territories should implement the recommendations as soon as feasible, but not later than 12 weeks after the date of the issuance of this guidance.
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). FDA is issuing this guidance for immediate implementation in accordance with 21 CFR 10.115(g)(2) without initially seeking prior comment because the Agency has determined that prior public participation is not feasible or appropriate. The guidance represents the current thinking of FDA on “Revised Recommendations for Reducing the Risk of Zika Virus Transmission by Blood and Blood Components.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
This guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR 601.12 have been approved under OMB control number 0910-0338; the collections of information in 21 CFR 606.100(b) and 606.160(b)(1) have been approved under OMB control number 0910-0795; and the collections of information in 21 CFR 606.122 and 630.30 have been approved under OMB control number 0910-0116.
Persons with access to the Internet may obtain the guidance at either
In accordance with Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), notice is hereby given of the following meeting:
National Advisory Committee on Rural Health and Human Services.
The meeting will be open to the public.
The National Advisory Committee on Rural Health and Human Services provides counsel and recommendations to the Secretary with respect to the delivery, research, development, and administration of health and human services in rural areas.
The meeting on Wednesday, September 14, will be called to order at 8:30 a.m. by the Chairperson of the Committee, the Honorable Ronnie Musgrove. The Committee will examine the issue of social determinants of health in rural areas. The day will conclude with a period of public comment at approximately 5:00 p.m.
The Committee will break into subcommittees and depart for site visits Thursday morning, September 15, at approximately 8:30 a.m. Subcommittees will visit the Presbyterian Medical Services Cuba Health Center in Cuba, New Mexico; the Laguna Pueblo, a federally recognized Native American tribe of the Pueblo people in Laguna, New Mexico; and the Guadalupe County Hospital in Santa Rosa, New Mexico. The day will conclude at the Albuquerque Marriott with the period of public comment at approximately 5:15 p.m.
On Friday, September 16, at 8:30 a.m., the Committee will meet at the Albuquerque Marriott to summarize key findings from the site visits and develop a work plan for the next quarter.
Steve Hirsch, MSLS, Administrative Coordinator, National Advisory Committee on Rural Health and Human Services, Health Resources and Services Administration, 5600 Fishers Lane, 17W41D, Rockville, MD 20857, Telephone (301) 443-0835, Fax (301) 443-2803.
Persons interested in attending any portion of the meeting should contact Pierre Joseph at the Federal Office of Rural Health Policy (FORHP) via telephone at (301) 945-0897 or by email at
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Advisory Mental Health Council.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and/or contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications and/or contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any member of the public interested in presenting oral comments to the committee may notify the Contact Person listed on this notice at least 10 days in advance of the meeting. Interested individuals and representatives of organizations may submit a letter of intent, a brief description of the organization represented, and a short description of the oral presentation. Only one representative of an organization may be allowed to present oral comments and if accepted by the committee, presentations may be limited to five minutes. Both printed and electronic copies are requested for the record. In addition, any interested person may file written comments with the committee by forwarding their statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Advisory Council for Complementary and Integrative Health.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial
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.
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxicabs, hotel, and airport shuttles will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
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 (
U.S. Customs and Border Protection, Department of Homeland Security.
30-Day notice and request for comments; revision of an existing collection of information.
U.S. Customs and Border Protection (CBP) of the Department of Homeland Security will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act: CBP Form I-94 (Arrival/Departure Record), CBP Form I-94W (Nonimmigrant Visa Waiver Arrival/Departure), and the Electronic System for Travel Authorization (ESTA). This is a proposed extension and revision of an information collection that was previously approved. CBP is proposing that this information collection be extended with a revision to the information collected. This document is published to obtain comments from the public and affected agencies.
Written comments should be received on or before September 30, 2016 to be assured of consideration.
Interested persons are invited to submit written comments on this proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Customs and Border Protection, Department of Homeland Security, and sent via electronic mail to
Requests for additional information should be directed to Paperwork Reduction Act Officer, U.S. Customs and Border Protection, Regulations and Rulings, Office of Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, or via email (
This proposed information collection was previously published in the
CBP Forms I-94 (Arrival/Departure Record) and I-94W (Nonimmigrant Visa Waiver Arrival/Departure Record) are used to document a traveler's admission into the United States. These forms are filled out by aliens and are used to collect information on citizenship, residency, passport, and contact information. The data elements collected on these forms enable DHS to perform its mission related to the screening of alien visitors for potential risks to national security and the determination of admissibility to the United States. ESTA applies to aliens seeking to travel to the United States under the Visa Waiver Program (VWP) and requires that VWP travelers provide information electronically to CBP before embarking on travel to the United States without a visa. Travelers who are entering the United States under the VWP in the air or sea environment and who have a travel authorization obtained through ESTA are not required to complete the paper Form I-94W.
Pursuant to an interim final rule published on March 27, 2013 in the
ESTA can be accessed at:
On December 18, 2015, the President signed into law the Visa Waiver Program Improvement and Terrorist Travel Prevention Act of 2015 as part of the Consolidated Appropriations Act of 2016. To meet the requirements of this new Act, DHS strengthened the security of the VWP by enhancing the ESTA application and Form I-94W. In two recent emergency submissions under the Paperwork Reduction Act, additional questions were added to ESTA and to Form I-94W that request information from applicants about countries to which they have traveled on or after March 1, 2011; countries of which they are citizens/nationals; countries for which they hold passports; and Global Entry Numbers.
DHS proposes to add the following question to ESTA and to Form I-94W: “Please enter information associated with your online presence—Provider/Platform—Social media identifier.” It will be an optional data field to request social media identifiers to be used by highly trained CBP personnel for vetting purposes, and applicant contact information. Collecting social media identifiers will enhance the existing vetting process and provide DHS greater clarity and visibility to possible nefarious activity and connections by providing an additional selector which analysts and investigators may use to better assess ESTA applications. Social media information may be used to validate information provided in the ESTA application, such as countries visited, purpose of travel, etc. If an applicant chooses not to fill out or answer questions regarding social media, the ESTA application can still be successfully submitted. If an applicant chooses to answer this question, DHS will have visibility of the publicly available information on those platforms, consistent with the privacy settings the applicant has set on the platforms.
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Comments Due Date: October 31, 2016.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Room 4176, Washington, DC 20410-5000; telephone 202-402-3400 (this is not a toll-free number) or email at
Daniel J. Sullivan, Acting Director, Office of Multifamily Housing Development, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Daniel J. Sullivan, at Daniel.J.Sullivan
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Room 4176, Washington, DC 20410-5000; telephone 202-402-3400 (this is not a toll-free number) or email at
Kevin Stevens, 451 7th Street SW., Washington, DC 20410; email Kevin L.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of the Chief Information Officer, HUD.
Notice.
The Department of Housing and Urban Development (HUD) is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806. Email:
Anna Guido, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Anna Guido at
HUD will submit the proposed information collection package to OMB for review, as required by the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended).
Like the previous surveys, the 2017 AHS will collect “core” data on subjects, such as the amount and types of changes in the housing inventory, the physical condition of the housing inventory, the characteristics of the occupants, housing costs for owners and renters, the persons eligible for and beneficiaries of assisted housing, remodeling and repair frequency, reasons for moving, the number and characteristics of vacancies, and characteristics of resident's neighborhood.
In addition to the “core” data, HUD plans to collect “topical” data on disaster and emergency preparedness, how people commute to work and commuting costs, the causes and effects of evictions, and recent delinquent payments and notices for mortgage, rent, or utility bills.
The AHS national longitudinal sample consists of approximately 92,000 housing units, and includes oversample from the 15 largest metropolitan areas, approximately 5,250 HUD-assisted housing units, and approximately 6,000 “bridge sample” housing units. The bridge sample will allow for estimation of longitudinal changes between 2013, 2015, when the AHS introduced a new sample, and 2017. The bridge sample will also facilitate analyses of the impact of survey design changes on 2017 AHS estimates. In addition to the national longitudinal sample, HUD plans to conduct 15 metropolitan area samples, each with approximately 3,000 housing units (for a total 45,000 metropolitan area housing units).
To help reduce respondent burden on households in the longitudinal sample, the 2017 AHS will make use of dependent interviewing techniques, which will decrease the number of questions asked.
Policy analysts, program managers, budget analysts, and Congressional staff use AHS data to advise executive and legislative branches about housing conditions and the suitability of public policy initiatives. Academic researchers and private organizations also use AHS data in efforts of specific interest and concern to their respective communities.
HUD needs the AHS data for two important uses.
1. With the data, policy analysts can monitor the interaction among housing needs, demand and supply, as well as changes in housing conditions and costs, to aid in the development of housing policies and the design of housing programs appropriate for different target groups, such as first-time home buyers and the elderly.
2. With the data, HUD can evaluate, monitor, and design HUD programs to improve efficiency and effectiveness.
This notice solicits comments from members of the public and affected parties concerning the collection of
(1) 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) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Bureau of Land Management, Interior.
30-day notice and request for comments.
The Bureau of Land Management (BLM) has submitted an information collection request to the Office of Management and Budget (OMB) to continue the collection of information that enables the BLM to manage Federal coal resources in accordance with applicable statutes. The OMB previously approved this information collection activity, and assigned it control number 1004-0073.
The OMB is required to respond to this information collection request within 60 days but may respond after 30 days. For maximum consideration, written comments should be received on or before September 30, 2016.
Please submit comments directly to the Desk Officer for the Department of the Interior (OMB #1004- 0073), Office of Management and Budget, Office of Information and Regulatory Affairs, fax 202-395-5806, or by electronic mail at
Bill Radden-Lesage, at 202-912-7116. Persons who use a telecommunication device for the deaf may call the Federal Information Relay Service at 1-800-877-8339, to leave a message for Mr. Radden-Lesage. You may also review the information collection request online at
The Paperwork Reduction Act (44 U.S.C. 3501-3521) and OMB regulations at 5 CFR part 1320 provide that an agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. Until OMB approves a collection of information, you are not obligated to respond. In order to obtain and renew an OMB control number, Federal agencies are required to seek public comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d) and 1320.12(a)).
As required at 5 CFR 1320.8(d), the BLM published a 60-day notice in the
1. Whether the collection of information is necessary for the proper functioning of the BLM, including whether the information will have practical utility;
2. The accuracy of the BLM's estimate of the burden of collecting the information, including the validity of the methodology and assumptions used;
3. The quality, utility and clarity of the information to be collected; and
4. How to minimize the information collection burden on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other forms of information technology.
Please send comments as directed under
The following information pertains to this request:
• Form 3440-1, Application and License to Mine Coal (Free Use); and
• Form 3400-12, Coal Lease.
• Applicants for, and holders of, coal exploration licenses;
• Applicants/bidders for, and holders of, coal leases;
• Applicants for, and holders of, licenses to mine coal; and
• Surface owners and State and tribal governments whose lands overlie coal deposits.
Bureau of Land Management, Interior.
30-Day notice and request for comments.
The Bureau of Land Management (BLM) has submitted an information collection request to the Office of Management and Budget (OMB) to continue the collection of information that enables the BLM to collect information from applicants for free use permits for vegetative or mineral material. The Office of Management and Budget (OMB) has assigned control number 1004-0001 to this information collection.
The OMB is required to respond to this information collection request within 60 days but may respond after 30 days. For maximum consideration, written comments should be received on or before September 30, 2016.
Please submit comments directly to the Desk Officer for the Department of the Interior (OMB #1004-0001), Office of Management and Budget, Office of Information and Regulatory Affairs, fax 202-395-5806, or by electronic mail at
Please indicate “Attn: 1004-0001” regardless of the form of your comments.
Mike Bechdolt, at 202-912-7234 (vegetative material); or George Brown, at 202-912-7118 (mineral material). Persons who use a telecommunication device for the deaf may call the Federal Information Relay Service at 1-800-877-8339, to leave a message for Mr. Brown or Mr. Bechdolt. You may also review the information collection request online at
The Paperwork Reduction Act (44 U.S.C. 3501-3521) and OMB regulations at 5 CFR part 1320 provide that an agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. Until OMB approves a collection of information, you are not obligated to respond. In order to obtain and renew an OMB control number, Federal agencies are required to seek public comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d) and 1320.12(a)).
As required at 5 CFR 1320.8(d), the BLM published a 60-day notice in the
The BLM now requests comments on the following subjects:
1. Whether the collection of information is necessary for the proper functioning of the BLM, including whether the information will have practical utility;
2. The accuracy of the BLM's estimate of the burden of collecting the information, including the validity of the methodology and assumptions used;
3. The quality, utility and clarity of the information to be collected; and
4. How to minimize the information collection burden on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other forms of information technology.
Please send comments as directed under
The following information pertains to this request:
• 3604-1a, Free Use Permit Application for Mineral Materials;
• 3604-1b, Free Use Permit for Mineral Materials; and
• 5510-1, Free Use Application and Permit for Vegetative Materials.
The estimated annual burdens of this collection are itemized below:
Bureau of Land Management, Interior.
Notice.
The purpose of this notice is to reopen the request for public nominations for certain New Mexico Bureau of Land Management (BLM) Resource Advisory Councils (RAC) that have member terms expiring this year. These RACs provide advice and recommendations to the BLM on land use planning and management of the National System of Public Lands within their geographic areas. The RACs covered by this request for nominations are identified below. The BLM will accept public nominations for 30 days after the publication of this notice.
All nominations must be received no later than September 30, 2016.
See
Allison Sandoval, U.S. Department of the Interior, Bureau of Land Management, New Mexico State Office, 301 Dinosaur Trail, Santa Fe, NM 87502-0115; 505-954- 2019.
The Federal Land Policy and Management Act (FLPMA) directs the Secretary of the Interior to involve the public in planning and issues related to management of lands administered by the BLM. Section 309 of FLPMA (43 U.S.C. 1739) directs the Secretary to establish 10- to 15-member citizen-based advisory councils that are consistent with the Federal Advisory Committee Act (FACA). As required by FACA, RAC membership must be balanced and representative of the various interests concerned with the management of the public lands. The rules governing RACs are found at 43 CFR subpart 1784 and include the following three membership categories:
Those who have already submitted a nomination in response to the first call for nominations (published in the
Simultaneous with this notice, the BLM New Mexico State Office will issue press releases providing additional information for submitting nominations, with specifics about the number and categories of member positions available for each RAC.
Nominations and completed applications for RACs should be sent to the appropriate BLM offices listed below:
43 CFR 1784.4-1
Office of Surface Mining Reclamation and Enforcement.
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995, the Office of Surface Mining Reclamation and Enforcement (OSMRE) is announcing its intention to request approval for the collection of information for General Reclamation Requirements.
Comments on the proposed information collection must be received by October 31, 2016, to be assured of consideration.
Mail comments to John Trelease, Office of Surface Mining Reclamation and Enforcement, 1951 Constitution Ave. NW., Room 203—SIB, Washington, DC 20240. Comments may also be submitted electronically to
To receive a copy of the information collection request contact John Trelease at (202) 208-2783, or via email at
The Office of Management and Budget (OMB) regulations at 5 CFR 1320, which implement provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104-13), require that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities [see 5 CFR 1320.8 (d)]. This notice identifies the information collection that OSMRE will be submitting to OMB for extension. This collection is contained in 30 CFR part 874.
OSM has revised burden estimates, where appropriate, to reflect current reporting levels or adjustments based on reestimates of burden or number of respondents. OSMRE will request a 3-year term of approval for this information collection activity.
Comments are invited on: (1) the need for the collection of information for the performance of the functions of the agency; (2) the accuracy of the agency's burden estimates; (3) ways to enhance the quality, utility and clarity of the information collections; and (4) ways to minimize the information collection burden on respondents, such as use of automated means of collection of the information. A summary of the public comments will accompany OSMRE's submission of the information collection request to OMB.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment-including your personal identifying information-may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
This notice provides the public with 60 days in which to comment on the following information collection activity:
U.S. International Trade Commission.
Sanction for breaches of Commission administrative protective order.
Notice is hereby given that the U.S. International Trade Commission has imposed a sanction for the breach of the administrative protective order (“APO”) issued in this investigation. The Commission determined that the law firm of Quinn Emanuel Urquhart & Sullivan, LLP (“Quinn Emanuel”) breached the APO by failing to adequately control access to confidential business information (“CBI”) in the investigation and litigation in the U.S. District for the Northern District of California. As a result, Quinn Emanuel attorneys and employees of complainants Samsung Telecommunications America LLC and Samsung Electronics Co., Ltd. (collectively, “Samsung”) improperly disclosed CBI to more than 140 unauthorized persons over a fourteen-month period. Quinn Emanuel is being publicly reprimanded for pervasive problems at the firm in safeguarding CBI.
Carol McCue Verratti, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-3088. Hearing impaired individuals are advised that information on this matter can be obtained by contacting the Commission's TDD terminal at (202) 205-1810. General information concerning the Commission can also be obtained by accessing its Internet server (
Several Quinn Emanuel attorneys inadvertently disclosed CBI designated by respondent Apple Inc. as CBI in the investigation and for cross-use in litigation in the U.S. District for the Northern District of California to persons who were not authorized to access CBI under the APO.
A junior associate at Quinn Emanuel failed to fully redact CBI from an expert report prepared for the district court action, and a partner at Quinn Emanuel failed to supervise the junior associate.
In connection with the investigation before the Commission, a mid-level associate at Quinn Emanuel failed to redact the same CBI from an outline for a brief on remedy and the public interest. Quinn Emanuel attorneys subsequently sent versions of the outline and the public interest brief containing CBI to unauthorized persons at Samsung and other law firms on several occasions. A partner at Quinn Emanuel discovered one such disclosure, but did not notify Apple or the Commission at the time because he had acted promptly after the discovery to prevent unauthorized persons from viewing CBI.
A third party filed a motion for a protective order in the district court action, alleging that Samsung had obtained CBI. Quinn Emanuel notified the Commission of certain of the disclosures a month later, and two weeks after it had notified the third party of the same disclosures.
The Commission considered several aggravating factors, including the viewing of CBI by unauthorized persons; the discovery of the breaches by a third party; Quinn Emanuel's failure and delay in reporting to the Commission the disclosures when they were discovered; the lengthy period of time in which CBI was unprotected; multiple breaches by Quinn Emanuel attorneys in the same investigation; and multiple breaches by Quinn Emanuel attorneys in a two-year period. The Commission also considered several mitigating factors, including the inadvertent nature of the breaches; Quinn Emanuel's recent implementation of a firm-wide policy to help prevent unauthorized disclosures; Quinn Emanuel's prompt and strenuous efforts to investigate, cure, and prevent further breaches; and the fact that a federal district court has already sanctioned the disclosures and conduct underlying the breaches relating to the expert report.
Although Quinn Emanuel had procedures to prevent unauthorized disclosures, the firm did not ensure that attorneys complied with those procedures and made unilateral decisions regarding the APO's scope and requirements. The large number and the vast extent of the unauthorized disclosures show that the failure to safeguard CBI was a pervasive problem at Quinn Emanuel.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
Notice.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announces cessation of the pilot program that tested the transfer of data between the Participating Government Agency (PGA) Message Set in the Automated Commercial Environment (ACE) and ATF's Web-based data analytics system. ACE is the Web-based portal for the collection and use of international trade data maintained by U.S. Customs and Border Protection (CBP). The PGA Message Set is the data related to merchandise regulated by an agency, such as ATF, that CBP will receive electronically from importers for its use as well as for the PGA's use. The data enables ATF to determine the actual items imported. Although this notice announces the cessation of the pilot program, the mandatory filing date for filing entries in ACE has yet to be determined.
This notice is effective on August 31, 2016.
William E. Majors, Chief, Firearms and Explosives Imports Branch, Firearms and Explosives Services Division, Enforcement Programs and Services; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Department of Justice; 244 Needy Road, Martinsburg, WV 25401; telephone (304) 616-4589, fax: (304) 616-4551, or email:
ATF participated in a voluntary CBP pilot program of the International Trade Data System (ITDS) involving the use of the PGA Message Set in ACE. See 80 FR 45548 (July 30, 2015). The pilot allowed importers to submit required data to CBP through ACE for the purposes of obtaining CBP release and receipt. CBP validated that information electronically, and electronically transmitted entry and release information to ATF for purposes of satisfying certification requirements. The pilot program confirmed the efficiency and effectiveness of digitizing traditional, manual paperwork. While the pilot has been suspended, the mandatory filing date for filing entries in ACE has yet to be determined.
Importers should be aware that no changes have been made to the requirement that importers submit their copy of the Form 6A (with Sections I and III completed) to ATF within 15 days of release from CBP custody.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
60-day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 60 days until October 31, 2016.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Kenneth Mason, Firearms and Explosives Services Specialist, National Firearms Act Branch, 244 Needy Road, Martinsburg, WV 25405, at email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
• 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;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Evaluate whether and if so how the quality, utility, and clarity of the information to be collected can be enhanced; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
30-day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for an additional 30 days until September 30, 2016.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Shawn Stevens, ATF Industry Liaison, Federal Explosives Licensing Center, 244 Needy Road, Martinsburg, WV 25405, at telephone: 1-877-283-3352. Written comments and/or suggestions can also be directed to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention Department of Justice Desk Officer, Washington, DC 20503 or sent to
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Evaluate whether and if so how the quality, utility, and clarity of the information to be collected can be enhanced; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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Abstract: The information will help ATF identify any waste product(s) generated as a result of the operations by the applicant and the disposal of the products. The information will help determine if there is any adverse impact on the environment.
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If additional information is required contact: Jerri Murray, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., Room 3E-405B, Washington, DC 20530.
On August 19, 2016, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the District of Massachusetts in the lawsuit entitled
In the Complaint, the United States, on behalf of the U.S. Environmental Protection Agency (EPA), alleges that the defendant City of Haverhill violated the Clean Water Act (CWA), 33 U.S.C. 1251,
The publication of this notice opens a period for public comment on the 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 Consent Decree may be examined and downloaded at this Justice Department Web site:
Please enclose a check or money order for $20.25 (25 cents per page reproduction cost), not including Appendices, payable to the United States Treasury.
Notice.
The Department of Labor (DOL) is submitting the Mine Safety and Health Administration (MSHA) sponsored information collection request (ICR) titled, “Certificate of Electrical Training and Applications for Mine Safety and Health Administration Approved Tests and State Tests Administered as Part of a Mine Safety and Health Administration Approved Program,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
The OMB will consider all written comments that agency receives on or before September 30, 2016.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-MSHA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Contact Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or by email at
44 U.S.C. 3507(a)(1)(D).
This ICR seeks to extend PRA authority for the Certificate of Electrical Training and Applications for Mine Safety and Health Administration Approved Tests and State Tests Administered as Part of a Mine Safety and Health Administration Approved Program information collection. Instructors use MSHA Form 5000-1, “Certificate of Electrical Training,” to report the qualification of persons satisfactorily completing a coal mine electrical training program course to the MSHA. The Agency is also requesting approval for applications for MSHA approved tests and for State tests that are administered as part of an MSHA-approved State program. Federal Mine Safety and Health Act of 1977 sections 101(a) and 103(h) authorize this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on October 31, 2016. The DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. For additional substantive information about this ICR, see the related notice published in the
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• 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;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Merit Systems Protection Board.
Notice.
Notice is hereby given of the members of the Merit Systems Protection Board's Performance Review Board.
August 31, 2016.
Marion Hines at 202-254-4413 or
The Merit Systems Protection Board is publishing the names of the current and new members of the Performance Review Board (PRB) as required by 5 U.S.C. 4314(c)(4). William D. Spencer continues to serve as Chairman of the PRB. Laura M. Albornoz is a new member of the PRB. Susan M. Swafford and William L. Boulden continue to serve as members of the PRB.
National Aeronautics and Space Administration.
Notice.
NASA announces its annual invitation for public nominations for service on NASA Federal advisory committees. U.S. citizens may submit self-nominations for consideration as potential members of NASA's Federal advisory committees. NASA's Federal
The deadline for NASA receipt of all public nominations is September 30, 2016.
For any questions, please contact Ms. Marla King, Advisory Committee Specialist, Advisory Committee Management Division, Office of International and Interagency Relations, NASA Headquarters, Washington, DC 20546, (202) 358-1148. To view advisory committee charters and obtain further information on NASA's Federal advisory committees, please visit the NASA Advisory Committee Management Division Web site noted in the
Self-nominations from interested U.S. citizens must be sent electronically to NASA in letter form, be signed, and must include the name of specific NASA Federal advisory committee of interest for NASA consideration. Self-nomination letters are limited to specifying interest in only one (1) NASA Federal advisory committee per year. The following additional information is required to be attached to each self-nomination letter (
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Nuclear Regulatory Commission.
Proposed revision to policy statement; request for comments.
To further clarify and enhance participation in public meetings conducted by the U.S. Nuclear Regulatory Commission (NRC), the NRC is proposing to revise its public meeting policy. The revised policy statement redefines the three categories of public meetings and identifies the level of public participation offered at each type of meeting. The revised policy statement also clarifies notification expectations for meetings that include physical presence in the meeting room and meetings that rely solely on remote access technology such as a teleconferencing. The proposed revisions will improve the consistency of the NRC's public meetings and help participants better prepare for NRC meetings.
Submit comments by November 14, 2016. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods:
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Lance Rakovan, Office of the Executive Director for Operations, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2589; email:
Please refer to Docket ID NRC-2016-0178 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
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Please include Docket ID NRC-2016-0178 in your comment submission.
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
The entire text of the proposed revision of the policy statement, “Enhancing Public Participation in NRC Meetings,” is available as an attachment to this document.
For the Nuclear Regulatory Commission.
The Nuclear Regulatory Commission's (NRC) longstanding practice is to provide the public with substantial information on its activities, to conduct business in an open manner, and to balance openness and transparency with the need to exercise regulatory and safety responsibilities without undue administrative burden. The NRC's policy is to open meetings between the agency staff and one or more outside persons to observation and participation to the extent possible. The NRC has had a formal policy regarding open (public) meetings since 1978. The current Commission Policy Statement Enhancing Public Participation in NRC Meetings was issued in 2002 and can be accessed at
This policy establishes three public meeting categories based on the level of participation offered to attendees. The policy provides information such as descriptions of each category, information on how public meetings are announced, post-meeting activities, and applicability and exceptions.
In order to fulfill the NRC's commitment to openness, the level of participation, purpose, and description for each category of public meeting are described below. When assigning a category to a meeting, NRC staff will consider the objective of the meeting and the extent of known public interest in the topic.
The three meeting categories are based on the level of public participation to be provided at each type of meeting. Thus, some categories may support multiple meeting formats. The label for each category provides an indication of the level of participation meeting attendees can expect.
The NRC is committed to providing an atmosphere of civility and inclusion at its public meetings. All participants are expected to follow established ground rules, including those provided in the applicable meeting notice posted on the NRC's public Web site, to support this atmosphere of civility and inclusion regardless of personal viewpoints. If the actions of one or more participants significantly impact this atmosphere, and therefore other participants' ability to observe or participate in a meeting, the NRC staff shall take appropriate actions to restore a more respectful environment, including ending a meeting early if necessary.
Meeting Purpose—The purpose of this type of meeting is for the NRC to meet with representatives from one or more groups in an open and transparent manner to discuss regulatory and technical matters. The meeting will inform the public by providing information to help them understand the applicable regulatory issues and NRC actions.
Level of Participation—Other attendees besides the representatives noted above are invited to observe the meeting and discuss regulatory issues with NRC representatives at a designated point or points identified on the agenda. This does not preclude the licensee from responding to questions if they choose to do so.
Description—Meetings in this category include the NRC meeting with one or more industry groups, licensees, vendors, applicants, potential applicants, or non-government organizations, to discuss regulatory issues regarding a specific facility (or facilities), certificates of compliance, licenses, or license applications. This category of meeting could also include the NRC meeting with representatives of task force groups, industry groups, or public interest and citizen groups. The primary discussions are expected to occur between the NRC and representatives of those entities or groups.
The following description will be included in an Observation Meeting notice:
This is a meeting in which attendees will have an opportunity to observe the NRC performing its regulatory function or discussing regulatory issues. Attendees will have an opportunity to ask questions of the NRC staff or make comments about the issues discussed following the business portion of the meeting, but the NRC is not actively soliciting comments on regulatory decisions.
Examples—Meetings of this category may include meetings with licensees (or applicants) to discuss license renewal, amendment or exemption requests; meetings with applicants related to topical report reviews, combined licenses, early site permits, or design certifications; annual public meetings to discuss plant performance as part of the Reactor Oversight Process; renewals, or amendments. Certain inspection exit meetings, such as those for Incident Investigation Teams or Augmented Inspection Teams, are included under this category.
Meeting Purpose—The purpose of this type of meeting is for the NRC to share information and discuss applicable regulatory issues and NRC actions with meeting attendees. The meeting will inform the public by providing information to help them understand the applicable regulatory issues and NRC actions through NRC presentations and discussions with NRC staff. These are organized, yet informal opportunities to interact with and ask questions of the NRC staff not associated with a more traditional public meeting format.
Level of Participation—This type of meeting is tailored to inform attendees and allow them to ask questions.
Description—Meetings in this category are held with interested parties, including representatives of non-government organizations, private citizens, or various businesses or industries, to engage them in a discussion of regulatory issues.
The following description will be included in the notice for an Information Meeting with a Question and Answer Session:
The purpose of this meeting is for the NRC staff to meet directly with individuals to provide an opportunity to discuss regulatory and technical issues. Attendees will have an opportunity to ask questions of the NRC staff or make comments about the issues discussed throughout the meeting, however the NRC is not actively soliciting comments towards regulatory decisions at this meeting.
Examples—Meetings of this category may include town hall and roundtable discussions, and open house meetings.
Meeting Purpose—The purpose of this type of meeting is for the NRC to obtain feedback on regulatory issues and NRC actions. In most cases, the meeting will include a presentation by the NRC to explain the regulatory issue. The feedback received at these meetings is used to support actions such as licensing and rulemaking activities.
Level of Participation—This type of meeting is tailored for attendees to provide opinions, perspectives, and feedback.
Description—This type of meeting would be held with a broad number of interested parties, including representatives of non-government organizations, private citizens, or various businesses or industries, to fully engage them in a discussion of a specific regulatory issue.
The following description will be included in the notification of a Comment-Gathering Meeting:
The purpose of this meeting is for NRC staff to meet directly with individuals to receive comments from participants on specific NRC decisions and actions to ensure that NRC staff understands their views and concerns.
The notice for such meetings should include details as to how comments will be taken at the meeting (
Examples—Meetings of this category may include town hall and roundtable discussions, environmental impact statement scoping meetings, and workshops.
Although the extent of meeting outreach and preparation by NRC staff can be different for each meeting, certain steps are usually taken. Meeting information will be announced as soon as the NRC staff is reasonably confident that a meeting will be held and firm date, time, and facility arrangements have been made. This will generally occur no fewer than 10 days before a meeting. When a meeting must be scheduled but cannot be announced within the 10-day timeframe, the NRC staff will provide as much advance notice as possible.
Public notice of meetings will be made through the NRC's Public Meetings & Involvement Web page at
Meeting details and materials such as an agenda, names of participants, and background documents will be entered into the NRC's Public Meeting Schedule Web site. A link to the materials as well as the Agencywide Documents Access and Management System (ADAMS) accession number for additional meeting materials such as presentations will, when possible, be provided in the meeting notice on the NRC's public Web site under the “Public Meetings & Involvement” page at
Audio teleconferencing and other technologies that allow participation from locations other than a meeting room will be used whenever possible to help ensure widespread involvement in meetings. If information on how to participate remotely in a meeting is not provided in the meeting notice, individuals may request the use of such technology through the meeting contact listed on the meeting notice. Such requests may be granted to the extent budgeted resources are available and technical factors can be accommodated.
The NRC staff will provide answers to questions as appropriate during the public meeting and will inform attendees at the meeting how it plans to address questions that cannot be answered at the meeting. Informal follow-up (telephone or email) may be appropriate. Individuals also have the option of calling, writing, or emailing the NRC staff about particular concerns. NRC staff will provide feedback forms at all public meetings so that comments can be reviewed and offices can track any planned improvements or resulting actions, as appropriate. NRC staff will make meeting summaries publicly available in ADAMS following the meeting.
The NRC staff will make efforts, as appropriate, to find new and innovative ways to interact with individuals, including exploring varied meeting formats and other ways to incorporate technologies that allow participation from locations other than a meeting room. Experiences with new methods will be shared across the agency for information and consideration by other NRC staff.
This policy applies to planned, formal encounters between NRC staff members and outside individuals or entities, with an expressed intent of discussing substantive issues directly associated with the NRC's regulatory responsibilities. Such meetings will be designated in advance as public meetings, open for public attendance and categorized in accordance with this policy, subject to the following conditions and exceptions:
1. This policy applies solely to NRC staff-sponsored and conducted meetings with an outside individual or entity. It does not apply to a meeting conducted by an outside individual or entity where an NRC staff member might participate, nor when an NRC employee attends a meeting outside of his or her official capacity.
2. This policy does not apply to meetings between the NRC staff and outside individuals or entities who are:
a. Under contract to the NRC;
b. Acting as an official consultant to the NRC;
c. Acting as an official representative of an agency of the executive, legislative, or judicial branch of the U.S. Government (except on matters where the agency is subject to NRC regulatory oversight);
d. Acting as an official representative of a foreign government or representing an international organization such as the International Atomic Energy Agency; or
e. Acting as an official representative of a State or local government or Tribal official.
3. Meetings between the NRC staff and outside individuals or entities will not be designated as public meetings if the NRC staff determines that the subject matter or information to be discussed in the meeting:
a. Is specifically authorized by an Executive Order to be withheld in the interests of national defense or foreign policy (classified information);
b. Is specifically exempt from public disclosure by statute (
c. Is of a personal nature where such disclosure would constitute a clearly unwarranted invasion of personal privacy;
d. Is related to a planned, ongoing, or completed investigation, or contains information compiled for law enforcement purposes;
e. Could compromise the ongoing reviews and inspections associated with an open allegation;
f. Could result in the inappropriate disclosure and dissemination of preliminary, pre-decisional, or unverified information;
g. Is for general information exchange having no direct, substantive connection to a specific NRC regulatory decision or action; however, should discussions in a closed meeting approach issues that might lead to a specific regulatory decision or action, the NRC staff may advise the meeting attendees that such matters cannot be discussed and propose discussing the issues in a future public meeting; or
h. Indicates that the administrative burden associated with public attendance at the meeting could interfere with the NRC staff's execution of its safety and regulatory responsibilities, such as when the meeting is an integral part of the execution of the NRC inspection program.
4. This policy does not apply to Commission meetings, advisory committee meetings, meetings related to financial assistance or acquisition requirements, or to meetings sponsored by offices that report directly to the Commission (for example, the Office of the General Counsel or the Office
5. This policy does not cover the hearings associated with adjudicatory proceedings under the Commission's Rules of Practice and Procedure set forth in 10 CFR part 2. The term “hearings” relates primarily to Commission adjudicatory proceedings on various types of license applications and licensing actions (
6. Certain meetings that would normally be closed under section F.3.a. or F.3.b. above may be opened to cleared members of the public who also have a need-to-know. A cleared member of the public is a person who holds a U.S. Government security clearance or has been granted access to Safeguards Information in accordance with 10 CFR 73.22(b).
7. This policy may be applicable to only part of a meeting. For example, an NRC meeting may have a portion that is open to the public and a portion that is closed to the public due to any of the exceptions listed above. In these cases, this policy statement is applicable to the public portion of the meeting only.
8. This policy is a matter of NRC discretion; the NRC reserves the right to depart from any stated conditions as circumstances may warrant.
The primary point of contact in the agency for general issues related to this policy will be the Deputy Assistant for Operations, Office of the Executive Director for Operations. The Office of Public Affairs is also available to receive questions and suggestions. There are also opportunities for comment on our public participation policies, or on many of our programs through the NRC's Web site under the “Public Meetings & Involvement” page at
Nuclear Regulatory Commission.
Standard review plan-final section revision; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing a final revision to Chapter 7, “Instrumentation and Controls,” of NUREG-0800, “Standard Review Plan (SRP) for the Review of Safety Analysis Reports for Nuclear Power Plants: LWR Edition.”
The effective date of this SRP update is September 30, 2016.
Please refer to Docket ID NRC-2015-0211 when contacting the NRC about the availability of information regarding this document. You may access publicly-available information related to this document using any of the following methods:
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Carolyn Lauron, telephone: 301-415-2736; email:
On September 16, 2015 (80 FR 55654), the NRC published for public comment the proposed revisions to Chapter 7 of the SRP. The NRC made no changes to the proposed revisions after the consideration of comments received. A summary of the comments and the NRC staff's disposition of the comments are available in a separate document, “Response to Public Comments on Draft SRP Sections in Chapter 7.”
The Office of New Reactors and the Office of Nuclear Reactor Regulation are revising these sections from their current versions. Details of specific changes in the proposed revisions are included at the end of each of the proposed sections.
The changes to this SRP chapter reflect current NRC staff's review methods and practices based on lessons learned from the NRC's reviews of design certification and combined license applications completed since the last revision of this chapter.
Issuance of these revised SRP sections does not constitute backfitting as defined in § 50.109 of title 10 of the
The SRP provides guidance to the staff on how to review an application for the NRC's regulatory approval in the form of licensing. Changes in internal staff guidance are not matters for which either nuclear power plant applicants or licensees are protected under either the Backfit Rule or the issue finality provisions of 10 CFR part 52.
The staff does not intend to impose or apply the positions described in the SRP to existing (already issued) licenses and regulatory approvals. Therefore, the issuance of a final SRP—even if considered guidance that is within the
3. Backfitting and issue finality do not—with limited exceptions not applicable here—protect current or future applicants.
Applicants and potential applicants are not, with certain exceptions, protected by either the Backfit Rule or any issue finality provisions under 10 CFR part 52. This is because neither the Backfit Rule nor the issue finality provisions under 10 CFR part 52—with certain exclusions discussed in the next paragraph—were intended to apply to every NRC action which substantially changes the expectations of current and future applicants.
The exceptions to the general principle are applicable whenever an applicant references a 10 CFR part 52 license (
This action is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act.
The documents identified in the following table are available to interested persons.
For the Nuclear Regulatory Commission.
Peace Corps.
60-Day notice and request for comments.
The Peace Corps will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval. The purpose of this notice is to allow 60 days for public comment in the
Submit comments on or before October 31, 2016.
Written comments should be addressed to Denora Miller, FOIA/Privacy Act Officer, Office of Management, Peace Corps, 1111 20th Street NW., Washington, DC 20526. Denora Miller may also be contacted by telephone at 202-692-1236 or email at
Denora Miller at Peace Corps address above.
The Peace Corps, under Section 10(a)(4) of the Peace Corps Act, authorizes the Director to accept gifts of voluntary service, money, or property, for use in furtherance of the purposes of the Peace Corps Act. The information collected on the donation form is essential to fulfilling this authority and acceptance of gifts.
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(d)
On July 3, 2012, the Securities and Exchange Commission (“Commission”) issued an order pursuant to its authority under Rule 612(c) of Regulation NMS (“Sub-Penny Rule”)
The Exchanges now seek to extend the exemptions until December 31, 2016.
THEREFORE, IT IS HEREBY ORDERED that, pursuant to Rule 612(c) of Regulation NMS, each Exchange is granted a limited exemption from Rule 612 of Regulation NMS that allows it to accept and rank orders priced equal to or greater than $1.00 per share in increments of $0.001, in connection with the operation of its Retail Liquidity Program, until December 31, 2016.
The limited and temporary exemptions extended by this Order are subject to modification or revocation if at any time the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Securities Exchange Act of 1934. Responsibility for compliance with any applicable provisions of the Federal securities laws must rest with the persons relying on the exemptions that are the subject of this Order.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend the Fees Schedule. The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend the Fees Schedule. Specifically, the Exchange proposes to delete the reference to “Test Center” fees from the Continuing Education Fees sub-section of the Regulatory Fees section of the Fees Schedule to reflect the fact that the Exchange no longer offers test center delivery of the Regulatory Element of the Exchange's continuing education requirement; as of July 5, 2016, delivery of the Regulatory Element of the Exchange's continuing education requirement is entirely Web-based.
On August 8, 2015, the Securities and Exchange Commission (“SEC” or “Commission”) approved SR-FINRA-2015-015 and the proposed changes to FINRA Rule 1250 therein, which, among other things, provided for Web-based delivery of the Regulatory Element of certain of FINRA's continuing education programs.
The Exchange utilizes FINRA's continuing education programs for its own continuing education requirements. Consistent with SR-FINRA-2015-015, the Exchange recently filed SR-CBOE-2015-084
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
The Exchange believes that the proposed rule change is consistent with the Act. Primarily, the Exchange believes that the elimination of obsolete rules helps to eliminate confusion and makes the Exchange's rules more clear and transparent, which is in the interests of both market participants and the general public. The Exchange is continuously updating the Rules to provide additional accuracy, detail, clarity, and transparency regarding its operations, trading systems, and fees. The Exchange believes that the adoption of detailed, clear, and transparent rules reduces burdens on competition and promotes just and equitable principles of trade. Furthermore, in general, the Exchange believes that promoting the Web-based delivery method for continuing education serves the best interests of market participant's and the general public by lower the costs of participation in the markets. The reduced cost of Web-based delivery of the Regulatory Element of the S106, S201, and S901 Continuing Education Programs lowers barriers to entry and removes impediments to a free and open market and national market system by making it easier and less costly for Trading Permit Holders to participate in the market. The Exchange believes that reducing the costs of continuing education promotes regulatory compliance, which is in the best interests of investors, consistent with the Act.
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. Rather, the proposed rule change merely seeks to delete references to a fee that is no longer applicable to any Trading Permit Holder under the Rules. In fact, the Exchange believes that the proposed rule change will relieve any burden on, or otherwise promote, competition by lower costs of entry to the markets and making it easier for market participants to satisfy the Regulatory Element of the Exchange's continuing education requirement.
The Exchange neither solicited nor received written comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
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”),
CHX proposes to amend the Rules of the Exchange (”CHX Rules”) to modify the handling of Intermarket Sweep Orders (”ISOs”).
CHX has designated this proposed rule change as non-controversial pursuant to Section 19(b)(3)(A)
The text of this proposed rule change is available on the Exchange's Web site at (
In its filing with the Commission, the CHX included statements concerning the purpose of and basis for the proposed rule changes 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 CHX has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.
The Exchange proposes various amendments to the CHX Rules to amend the operation of the Exchange's ISO modifiers as follows:
• Amend the operation of the ISO modifier to be similar to the ISO modifiers offered by other national securities exchanges.
• Require a limit order marked by any one of the Exchange's three ISO modifiers (
The Exchange believes that the proposed rule change will harmonize the operation of the Exchange's ISO modifier with ISO modifiers offered by other national securities exchanges, as well as clarify and simplify the order types and modifiers offered by the Exchange, all of which further the objectives of the Act, as described below.
The Exchange currently offers three different ISO modifiers: BBO ISO, Price-Penetrating ISO, and ISO.
An incoming BBO ISO will execute against orders resting on the CHX book at prices not to exceed the more restrictive of its limit price or the contra-side displayed best bid or offer. Any unexecuted balance of the BBO ISO will be immediately cancelled if -1- marked Immediate Or Cancel (”IOC”)
A Price-Penetrating ISO will execute at or better than its limit price as soon as the order is received by the Matching System, with any unexecuted balance of the order to be immediately cancelled, as it is always handled IOC. A Price-Penetrating ISO cannot be displayed or otherwise post to the CHX book. Price-Penetrating ISOs will execute against any eligible orders in the Matching System (including any Reserve Size or undisplayed orders) through multiple price points. The Matching System, in executing these orders, will not take any of the actions described in Article 20, Rule 5 to prevent an improper trade-through. A limit order marked Price-Penetrating ISO shall be deemed to have been received IOC, which cannot be overridden by the order sender.
ISO is a limit and cross order modifier. A limit order marked ISO that is not marked BBO ISO is deemed to have been received Price-Penetrating ISO, which cannot be overridden by the order sender. Thus, a limit order marked ISO will always be handled as a BBO ISO or Price-Penetrating ISO. A cross order marked ISO is handled like a simple cross order, except that the Exchange would not take any actions described in Article 20, Rule 5 to prevent an improper trade-through.
The Exchange now proposes to amend the definition of “ISO” under Article 1, Rule 2(b)(3)(B) so that the amended ISOs behave like ISOs offered by other national securities exchanges.
”Intermarket Sweep” or “ISO”: a limit or cross order modifier that marks an order as required by SEC Rule 600(b)(30).
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The Exchange also proposes to amend Article 1, Rule 2(b)(1)(A) and Article 1, Rule 2(b)(1)(E) to delete the current definition of BBO ISO and Price-Penetrating ISO, respectively, and replace each definition with language that provides that the modifier is a limit order modifier that shall be handled as an ISO, as defined under amended paragraph (b)(3)(B).
The Exchange notes that the amended ISO would be compatible with all display modifiers (
Moreover, if the Exchange were to receive an ISO limit marked CHX
The following Examples are illustrative of the amended ISO modifier, but do not exhaustively depict every possible scenario regarding ISOs. Moreover, the Examples do not necessarily depict the actual technical processes of prioritizing messages and executing orders.
• The NBBO for security XYZ is 10.00 x 10.01.
• The displayed CHX BBO for XYZ is 9.99 x 10.01.
• There is only one buy order for XYZ priced at 9.99 resting on the CHX book (”CHX Buy Order”) and there are no undisplayed orders for XYZ resting on the CHX book.
• There is only one away market with a Protected Bid for XYZ at 10.00 (“Away Protected Bid”).
• All Protected Quotations in XYZ are for 100 shares.
Assume then that the Exchange receives an ISO limit marked Day to sell 200 shares of XYZ at 9.99 (”Incoming Sell ISO Limit”).
Under this Example 1, the Exchange would execute 100 shares of Incoming Sell ISO Limit against the CHX Buy Order at 9.99, without taking any actions to prevent a trade-through of Away Protected Bid. The Exchange would then rank and display the unexecuted 100 shares of Incoming Sell ISO Limit at 9.99, without taking any actions to prevent a crossed market.
The proposed rule change shall be operative pursuant to notice to Participants on a date after the expiration of the 30-day preoperative waiting period.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act in general,
Moreover, the Exchange believes that requiring the Exchange's various ISO modifiers to operate in the same manner and clarifying the handling of ISO crosses simplifies the CHX Rules, which furthers the objectives of Section 6(b)(1)
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. To the contrary, the Exchange believes that the proposed rule change will reduce the regulatory burden placed on market participants engaged in trading activities across different markets by harmonizing the operation of the Exchange's ISO modifier with those of other national securities exchanges. The Exchange believes that such harmonization across the various markets will reduce burdens on competition by removing impediments to participation in the national market system.
No written comments were either solicited or received.
The Exchange believes that the proposal qualifies for immediate effectiveness upon filing as non-controversial under Section 19(b)(3)(A) of the Act
The Exchange asserts that the proposed rule change: (1) Will not significantly affect the protection of investors or the public interest, (2) will not impose any significant burden on competition, and (3) and will not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate. In addition, the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing, or such shorter time as designated by the Commission.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal 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 Robert W. Errett, Deputy Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File No. SR-CHX-2016-15 and should be submitted on or before September 21, 2016.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On December 23, 2013, the Securities and Exchange Commission (“Commission”) issued an order pursuant to its authority under Rule 612(c) of Regulation NMS (“Sub-Penny Rule”)
The Exchange now seeks to extend the exemption until December 31, 2016.
THEREFORE, IT IS HEREBY ORDERED that, pursuant to Rule 612(c) of Regulation NMS, the Exchange is granted a limited exemption from Rule 612 of Regulation NMS that allows it to accept and rank orders priced equal to or greater than $1.00 per share in increments of $0.001, in connection with the operation of its Retail Liquidity Program, until August 31, 2016.
The limited and temporary exemption extended by this Order is subject to modification or revocation if at any time the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Securities Exchange Act of 1934. Responsibility for compliance with any applicable provisions of the Federal securities laws must rest with the persons relying on the exemption that is the subject of this Order.
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 its rules relating to pre-opening indications and opening procedures to promote greater efficiency and transparency at the open of trading on the Exchange. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend its rules relating to pre-opening indications and opening procedures to promote greater efficiency and transparency at the open of trading on the Exchange. In particular, the Exchange proposes to:
• Make changes to the rules related to the pre-opening indication process by:
○ Amending Rules 15—Equities (“Rule 15”) and 123D—Equities (“Rule 123D”) to consolidate the requirements for publication of pre-open indications in a single rule (Rule 15);
○ changing the conditions in which a Designated Market Maker (“DMM”) is required to publish a pre-opening indication in a security to an anticipated 5% move from a security's reference price and, during extreme market-wide volatility, an anticipated 10% from a security's reference price; and
○ providing for the CEO of the Exchange to temporarily suspend the requirement to publish pre-opening indications.
• Make changes to Rule 123D related to the opening process by:
○ Incorporating all procedures relating to openings, other than pre-opening indications, in Rule 123D; and
○ Specifying that DMMs may effect an opening of a security electronically within specified percentage and volume parameters, which would be doubled during extreme market-wide volatility; and
○ providing for the CEO of the Exchange to temporarily suspend price and volume limitations for a DMM automated open or the requirement for prior Floor Approval before opening or reopening a security.
• Delete Rule 48—Equities (“Rule 48”).
• Make conforming changes to Rules 80C—Equities (“Rule 80C”) and 9217.
The Exchange believes that the proposed changes will enhance transparency regarding the Exchange's opening process by specifying new parameters for how the opening at the Exchange would be effectuated on trading days experiencing extreme market-wide volatility, which would include both additional information before the open through the use of new parameters for pre-opening indications and expanded ability for DMMs to effectuate an opening electronically. The proposed rule changes are designed to preserve the Exchange's existing model, which values human touch when opening securities with significant price or volume disparity, while at the same time promoting automated measures to have as many securities open as close to 9:30 a.m. as feasible, even during extreme market-wide volatility.
These proposed changes are based on recent amendments to the rules of the New York Stock Exchange LLC (“NYSE”).
The Exchange's current pre-opening procedures are outlined in Rules 15 (Pre-Opening Indications), 48 (Exemptive Relief—Extreme Market Volatility Condition), and 123D (Openings and Halts in Trading).
Rule 15(a) provides that if the opening transaction in a security will be at a price that represents a change of more than the “applicable price change” specified in the Rule,
A Rule 15 Indication is published on the Exchange's proprietary data feeds only and includes the security and the price range within which the DMM anticipates the opening transaction will occur, and would include any orally-represented Floor broker interest for the open. The applicable price ranges for determining whether to publish a Rule 15 Indication are based on five different price buckets and are expressed in dollar and percentage parameters:
Rule 123D also mandates that pre-opening indications be published if the opening price would result in a significant price change from the previous close or if the opening is delayed past 10:00 a.m. Eastern Time (“Rule 123D Mandatory Indication”). The DMM is responsible for publishing the Rule 123D Mandatory Indication and, when determining the price range for the indication, takes into consideration Floor broker interest that has been orally entered and what, at a given time, the DMM anticipates the dealer participation in the opening transaction would be. Rule 123D Mandatory Indications are published to the Consolidated Tape and proprietary data feeds. The applicable price ranges for determining whether an opening price would be a “significant” price change requiring a Rule 123D Mandatory Indication are based on three price buckets and are expressed in a mixture of dollar (1 point = one dollar) and percentage parameters:
Rule 48 provides that a “qualified Exchange officer”
Finally, Rule 123D, which in addition to setting forth requirements for certain pre-opening indications, also specifies procedures relating to openings, including that it is the responsibility of each DMM to ensure that securities open as close to the opening bell as possible and that securities can be opened on a trade or a quote. The rule further provides that openings may be effectuated manually or electronically.
The Exchange proposes to amend Rules 15, 48, and 123D to introduce greater efficiency and transparency into its opening process by, among other things, consolidating its rules regarding pre-opening indications into a single rule (Rule 15), introducing a new, single percentage parameter for the publication of pre-opening indications that would double on volatile trading days, and consolidating opening procedures into Rule 123D, including specifying parameters of when a DMM may effect an opening electronically, and consolidating the procedures of Rule 48 into Rules 15 and 123D, as applicable. The Exchange also proposes conforming changes to Rules 80C and 9217.
The Exchange proposes to make changes to the pre-opening indication process. The Exchange would consolidate the requirements relating to pre-opening indications into Rule 15(a)-(f). Because the Exchange proposes all new rule text in Rule 15(a)-(f), the Exchange proposes to delete paragraphs (a) and (b) of current Rule 15, re-number Rule 15(c) as Rule 15(g), delete rule text in Rule 123D(b) relating to mandatory indications, and amend the title of Rule 15 to add the phrase “and Opening Order Imbalance Information” so that the rule would be titled “Pre-Opening Indications and Opening Order Imbalance Information.” In amending Rule 15, the Exchange would establish new conditions for when DMMs are required to publish pre-opening indications.
Proposed Rule 15(a), entitled “Pre-Opening Indications,” would provide that a pre-opening indication would include the security and the price range within which the opening price is anticipated to occur. This proposed rule text is based on the last clause of the first sentence of current Rule 15(a), which provides that a pre-opening indication includes the security and the price range within which the opening transaction is anticipated to occur. Proposed Rule 15(a) would further provide that a pre-opening indication would be published via the securities information processor (“SIP”) and proprietary data feeds. This proposed rule text is based on the way in which Rule 123D Mandatory Indications are currently published to both the SIP and proprietary data feeds. The Exchange proposes to use the term “securities information processor” instead of “Consolidated Tape” to use the term more commonly used in the industry.
Proposed Rule 15(b), entitled “Conditions for Publishing a Pre-Open Indication,” would set forth the conditions in which a DMM is required to publish a pre-opening indication.
• Proposed Rule 15(b)(1) would provide that a DMM will publish a pre-opening indication before a security opens if the opening transaction on the Exchange is anticipated to be at a price that represents a change of more than the “Applicable Price Range,” as defined in proposed Rule 15(d), from a specified “Reference Price,” as defined in proposed Rule 15(c), before the security opens. The procedures for publishing a pre-opening indication would be described in Rule 15(e). This proposed rule text is based on current Rule 15(a), which uses the term “applicable price range” and describes the reference prices used for purposes of current Rule 15(a). The Exchange proposes to define the “Reference Price” and “Applicable Price Range” in proposed Rules 15(c) and (d), described below. The requirement for DMMs to publish pre-opening indications is based on current Rule 15(a), which provides that the DMM shall issue a pre-opening indication if the conditions set forth in the rule are met.
• Proposed Rule 15(b)(2) would specify that when making a determination of what the opening transaction price would be, the DMM will take into consideration all interest eligible to participate in the opening transaction, including electronically-entered orders, the DMM's own interest, and any interest represented orally in the crowd. This proposed rule text would be new and is designed to promote transparency in Exchange rules that all interest eligible to participate in the opening transaction is considered when publishing a pre-opening indication.
• Proposed Rule 15(b)(3) would provide that if a DMM is unable to publish a pre-opening indication for one or more securities due to a systems or technical issue, the Exchange may publish the pre-opening indication. This proposed rule text is based in part on current Rule 15(a), which provides that
Proposed Rule 15(c), entitled “Reference Price,” would provide in paragraph (1) that the Reference Price for a security (other than an American Depository Receipt (“ADR”)) for purposes of the proposed rule would be:
• The security's last reported sale price on the Exchange (proposed Rule 15(c)(1)(A));
• in the case of an IPO, the security's offering price (proposed Rule 15(c)(1)(B)); or
• the security's last reported sale price on the securities market from which the security is being transferred to the Exchange, on the security's first day of trading on the Exchange (proposed Rule 15(c)(1)(C)).
This proposed rule text is based on current Rule 15(a).
Proposed Rule 15(c)(2) would provide that the Reference Price for ADRs for purposes of the proposed rule would be:
• The closing price of the security underlying the ADR in the primary foreign market in such security when the trading day of the primary foreign market concludes (proposed Rule 15(c)(2)(A)); or
• based on parity with the last sale price of the security underlying the ADR in the primary foreign market for such security when the trading day of the primary foreign market is open for trading at the time of the opening on the Exchange (proposed Rule 15(c)(2)(B)).
This proposed rule text is based on current Rule 15(b), with non-substantive differences for clarity and to use the defined term “Reference Price” in the proposed rule text.
Proposed Rule 15(d) would set forth the Applicable Price Ranges for determining whether a DMM is required to disseminate a pre-opening indication. The Exchange proposes to eliminate the current price buckets in Rules 15 and 123D and instead use a single percentage parameter as the Applicable Price Range for all securities, regardless of price of the security. As proposed, except during extreme market-wide volatility as set forth in proposed Rule 15(d)(2), a DMM would be required to publish a pre-opening indication if a security is expected to open at a price more than 5% away from the Reference Price. The Exchange believes that the proposed 5% parameter applicable to all securities would simplify and streamline the Exchange's rules regarding required pre-opening indications by having a single percentage parameter that would be applied across all securities, rather than having different price buckets and percentage parameter ranges to track. The Exchange further believes that the proposed single percentage parameter would result in a similar number of pre-opening indications as are currently published pursuant to Rule 123D, while at the same time simplifying the process for DMMs.
For example, using trade data on NYSE for the month of October 2015, which was a month of relative trading stability and volumes, current Rule 123D Mandatory Indication parameters required indications for 15 securities on an average daily basis, which represents approximately 0.46% of the securities traded on the Exchange.
Under current rules, the Exchange may suspend the requirement to publish pre-opening indications if a market-wide extreme market volatility condition is declared under Rule 48. This rule was adopted, in part, because of the manual nature of publishing pre-opening indications, and if DMMs were required to publish Rule 123D Mandatory Indications for multiple securities, it could delay the opening process and result in a large number of securities opening past 9:30 a.m. Eastern Time.
Accordingly, the Exchange proposes to amend its rules to provide that on trading days with extreme market-wide volatility, the Applicable Price Range would be 10%, or double the Applicable Price Range on regular trading days. Specifically, proposed Rule 15(d)(2) would provide that, if as of 9:00 a.m. Eastern Time (“ET”), the E-mini S&P 500 Futures are plus or minus 2% from the prior day's closing price of the E-mini S&P 500 Futures, when reopening trading following a market-wide trading halt under Rule 80B, or if the Exchange determines that it is necessary or appropriate for the maintenance of a fair and order market, a DMM would be
By proposing to specify in its rules that the Applicable Price Range would be 10%, rather than 5%, when the market is more volatile, the Exchange would require DMMs to disseminate pre-opening indications in those securities experiencing the greatest price movement. Under current rules, the Exchange's only option when the overall market is volatile is to lift the requirement for pre-opening indications under Rule 48. The Exchange also proposes to use the 10% percentage parameter when reopening securities following a market-wide trading halt under Rule 80B. The Exchange believes that widening the parameters for pre-opening indications following a market-wide trading halt would be appropriate because the reason for the trading halt was market-wide volatility, and thus the reopening of securities would face similar pricing pressure as circumstances when there is pre-opening extreme market-wide volatility. The Exchange also proposes that it would have the authority to use the 10% Applicable Price Range when it is necessary or appropriate for the maintenance of a fair and orderly market. For example, if the E-mini S&P 500 Futures were not plus or minus 2% as of 9:00 a.m., but moved to that level between 9:00 and 9:30, it may be appropriate, for the maintenance of a fair and orderly market, to use widened percentage parameters.
To determine the percentage parameter that would be appropriate for trading days with extreme market-wide volatility, the Exchange reviewed NYSE trading data from August 24, 25, and 26, 2015 and assessed how many Rule 123D Mandatory Indications would have been required under the NYSE rules in place at that time, and how many pre-opening indications would have been required if a 5% and 10% percentage parameter were used on those days. Taking for example August 24, 2015, as set forth on Table 1 below, the NYSE data show that, had the NYSE not invoked Rule 48 lifting the requirement to publish Rule 123D Mandatory Indications, there would have been 638 securities (19% of securities) for which NYSE DMMs would have been required to publish Rule 123D Mandatory Indications. As set forth in Table 2 below, a 5% percentage parameter would have required 1,460 pre-opening indications (44% of securities) on NYSE on August 24, 2015, more than twice as many as under the current parameters. As noted above, the Exchange believes that this would be too many pre-opening indications for DMMs to process on a trading day without impacting their ability to timely open their assigned securities.
By contrast, as set forth in Table 2 below, a 10% percentage parameter would have required pre-opening indications in 278 securities (8.4% of securities) on NYSE on August 24, 2015. While this number is still higher than the number of pre-opening indications that would have been published on NYSE on an average trading day in October using the 5% percentage parameter (see above), the Exchange believes that it strikes the appropriate balance between providing additional pre-opening information to investors and enabling the DMM's to timely open their assigned securities. As set forth in more detail in Tables 1 and 2 below, August 24 represents an outlier, even for days when there has been extreme market-wide volatility. For other days in 2015 when the NYSE declared an extreme market-wide volatility under Rule 48, as set forth in Tables 1 and 2 below, applying a 10% parameter would not materially change the number of pre-opening indications being published.
Proposed Rule 15(e), entitled “Procedures for publishing a pre-opening indication,” would set forth proposed procedures a DMM would use when publishing a pre-opening indication. As discussed below, these procedures are based on existing procedures currently set forth in Rule 123D, with specified differences.
Proposed Rule 15(e)(1) would provide that publication of pre-opening
Proposed Rule 15(e)(2) would provide that a pre-opening indication must be updated if the opening transaction would be at a price outside of a published pre-opening indication. Proposed Rule 15(e)(3) would further require that if a pre-opening indication is a spread wider than $1.00, the DMM should undertake best efforts to publish an updated pre-opening indication of $1.00 or less before opening the security, as may be appropriate for the specific security. Proposed Rules 15(e)(2) and (e)(3) are based, in part, on the second and third bullet points following the ninth paragraph of Rule 123D(b),
Proposed Rule 15(e)(4) would provide that, after publication of a pre-opening indication, the DMM must wait for the following minimum specified periods before opening a security:
• Proposed Rule 15(e)(4)(A) would provide that, when using the 5% Applicable Price Range specified in proposed Rule 15(d)(1), a minimum of three minutes must elapse between publication of the first indication and a security's opening. The rule would further provide that, if more than one indication has been published, a security may be opened one minute after the last published indication provided that at least three minutes have elapsed from the dissemination of the first indication. These first two sentences of proposed Rule 15(e)(4)(A) are based on rule text set forth in the twelfth and thirteenth paragraphs of current Rule 123D(b). Proposed Rule 15(e)(4)(A) would further provide that the DMM may open a security less than the required wait times after the publication of a pre-opening indication if the imbalance is paired off at a price within the Applicable Price Range. This proposed exception to the three-minute waiting requirement is new and is because the Exchange believes that, if equilibrium in price has been reached at a price within the Applicable Price Range,
• Proposed Rule 15(e)(4)(B) would provide that, when using the 10% Applicable Price Range specified in Proposed Rule 15(d)(2), a minimum of one minute must elapse between publication of the first indication and a security's opening and that if more than one indication has been published, a security may be opened without waiting any additional time. As discussed above, proposed Rule 15(d)(2) would provide for new percentage parameters for trading days with extreme market-wide volatility. Based on the analysis of NYSE trade data for August 24, 2015, even with the new percentage parameters, there is the potential for 278 pre-opening indications to be required on NYSE on an extremely volatile trading day. Because these pre-opening indications would be manually published by the DMM, the Exchange believes that eliminating additional wait times would enable the DMMs to facilitate a speedy opening for a security that has been subject to a pre-opening indication on days with extreme market-wide volatility.
Proposed Rule 15(e)(5) would provide that, if trading is halted for a non-regulatory order imbalance, a pre-opening indication must be published as soon as practicable after the security is halted. This proposed rule text is based on the first sentence of the third bulleted paragraph following the ninth paragraph in Rule 123D(b), with a proposed substantive difference that a pre-opening indication should be published “as soon as practicable,” rather than “immediately,” after a security is halted. The Exchange believes that the proposed approach provides for more flexibility for the DMM to assess the order imbalance and publish a pre-opening indication that takes into consideration all applicable factors.
Proposed Rule 15(e)(6) would set forth the requirements for pre-opening indications when reopening a security following a trading pause under Rule 80C.
Proposed Rule 15(f), entitled “Temporary Suspension of Pre-Opening Indications,” would provide in proposed Rule 15(f)(1) that if the CEO of the Exchange determines that a Floor-wide event is likely to impact the ability of DMMs to arrange for a fair and orderly opening or reopening and that absent such relief, operation of the Exchange is likely to be impaired, the CEO of the Exchange may temporarily suspend the requirement to publish pre-opening indications under Rule 15 prior
Proposed Rule 15(f) is based in part on Rule 48, which provides that a qualified Exchange officer may declare an extreme market volatility condition and temporarily suspend the requirements for pre-opening indications.
Proposed Rule 15(f)(2), which is based on Rule 48(c)(1)(A), would specify the range of factors that the CEO of the Exchange would be required to consider in making any determination to temporarily suspend the requirement for pre-opening indications.
Because the Exchange has added new subsections to Rule 15, the Exchange proposes to renumber Rule 15(c) as Rule 15(g) and to add a header to this subsection of rule entitled “Opening Order Imbalance Information.” In addition to re-designating the rule from Rule 15(c) to Rule 15(g), the Exchange proposes non-substantive differences to re-number the subsections of proposed Rule 15(g) to use the same numbering convention as proposed for proposed Rule 15(a)-(f), delete the phrase “the provisions of” in proposed Rule 15(g)(2)(B), and remove the reference to subparagraph (b) by deleting the phrase “or (b).”
The Exchange also proposes a substantive difference to change Rule 15(c)(3)(iii) (re-numbered as proposed Rule 15(g)(3)(C)) to increase the frequency with which the Exchange disseminates Order Imbalance Information
Finally, the Exchange proposes to add new Supplementary Material .10 to Rule 15 providing that, unless otherwise specified in the proposed Rule,
As noted above, the process for publishing either Rule 15 Indications or Rule 123D Mandatory Indications is manual, and is generally followed by the DMM effecting the opening of a security manually rather than electronically. Consistent with this approach, the Exchange currently systemically blocks DMMs from opening a security electronically if the opening price would be outside of price
Because the DMM is not obligated to open a security electronically, the Exchange has not historically specified in its rules the parameters for when the DMM may effect an opening electronically.
In specifying parameters for when a DMM may effectuate an opening electronically, the Exchange proposes to adopt parameters and requirements that would be structured similarly to the proposed parameters for new Rule 15 pre-opening indications, as discussed above. Because Rule 123D(a)(1) is applicable to reopenings, the Exchange proposes to add to Rule 123D(a) that unless otherwise specified, references to an open or opening in Rule 123D(a) also mean a reopening following a trading halt or pause in a security. This proposed rule text is based on the last sentence of Rule 123D(a)(2).
The Exchange proposes new subsection numbering to Rule 123D(a)(1) to break out the third and fourth sentences of current Rule 123D(a)(1) to be proposed Rules 123D(a)(1)(A) and (B).
The Exchange proposes to set forth the parameters for when a DMM may effect an opening electronically in new proposed Rules 123D(a)(1)(B)(i), (ii), and (iii):
• Proposed Rule 123D(a)(1)(B)(i) would provide that except under the conditions set forth in Rules 123D(a)(1)(B)(ii) and (iii), a DMM may not effect an opening electronically if; (a) the opening (but not reopening) transaction would be at a price more than 4% away from the Official Closing Price, as defined in Rule 123C(1)(e)—Equities, (b) the reopening transaction would be at a price more than 4% away from the last sale price on the Exchange; or (c) the matched volume for the opening transaction would be more than (1) 150,000 shares for securities with an average opening volume of 100,000 shares or fewer in the previous calendar quarter; or (2) 500,000 shares for securities with an average opening volume of over 100,000 shares in the previous calendar quarter. For purposes of this Rule, the calendar quarters will be based on a January 1 to December 31 calendar year.
• The Exchange believes that when reopening a security, the Official Closing Price from the prior day would no longer be a relevant reference price because the security has already opened for trading. Rather, because the security has been subject to a halt or pause before reopening, the Exchange believes that using the last sale price on the Exchange would be more representative of the most recent price of a security. A reopening price that would be more than 4% away from the last Exchange sale price demonstrates a level of price movement in a security during the halt or pause that warrants the manual price discovery process for the reopening. If the reopening price were to be within 4% away from the last Exchange sale price, that security likely has not experienced as much price movement, and therefore an electronic reopening may be more appropriate.
• Proposed Rule 123D(a)(1)(B)(ii) would provide that if as of 9:00 a.m. ET, the E-mini S&P 500 Futures are plus or minus 2% from the prior day's closing price of the E-mini S&P 500 Futures, or if the Exchange determines that it is necessary or appropriate for the maintenance of a fair and order market, a DMM could effect an opening electronically if the opening transaction would be at a price of up to 8% away from the Official Closing Price, as defined in Proposed Rule 123C(1)(e)—Equities, (for openings, but not reopenings) or the last sale price on the Exchange (for reopenings), without any volume limitations.
• Proposed Rule 123D(a)(1)(B)(iii) would provide that when reopening a security following a trading pause under Rule 80C or a market-wide halt under Rule 80B—Equities, if a pre-opening indication has been published in a security under Rule 15—Equities, a DMM may not reopen such security electronically if the reopening transaction would be at a price outside of the last-published pre-opening indication.
• The Exchange believes that because price volatility was likely the cause of such trading pause or halt, if the DMM publishes a pre-opening indication in a security for a reopening following such trading pause or halt, the reopening price should be within such pre-opening indication price range, regardless of whether the security is reopened manually or electronically. If the price moves away from the last pre-opening indication, the DMM should publish a new pre-opening indication to provide notice of the new price range.
Similar to the new Applicable Price Ranges for pre-opening indications proposed in Rule 15(d) above, the
The Exchange believes that the proposed conditions for when a DMM may effect an opening electronically would reduce the number of manual openings and enable more securities to open closer to 9:30 a.m. ET, both on regular trading days and on extremely volatile trading days such as August 24, 2015.
Tables 3 through 5 below illustrate how many securities would not be eligible for a DMM to effect an opening electronically when applying the current and proposed percentage and volume parameters to NYSE trade data from October 2015 and NYSE trade data from August 24, 2015.
For example, as set forth in Table 3, using current price parameters and a 100,000 share volume parameter, in October 2015, 94 securities (13.4% of securities) on NYSE on average each day were not eligible to be opened by the DMM electronically. As demonstrated in Table 4, using the proposed 4% price and tiered volume parameters, a comparable 47 securities (1.7% of securities) on NYSE on average in October would not have been eligible to be opened by the DMM electronically.
With respect to the proposed volume parameters, the Exchange believes that having a parameter tied to higher-than-average opening volume in a security would better reflect whether opening electronically would be appropriate. For example, as the data show in Table 4, on NYSE, there were 74 securities averaging daily opening volume over 100,000 shares in the previous quarter (3Q15) and three of those securities had opening volume of over 500,000 shares on an average daily basis in October. The Exchange believes that if a security has a higher-than-average opening volume on a quarterly basis without any corresponding price dislocation, then the volume of shares trading on the opening for such securities is not representative of any volatility for that security, but rather, is a regular state of affairs that does not require a high-touch opening managed by a DMM on the trading Floor. Rather, such securities would benefit from being available for the DMM to open electronically in order to promote a fair and orderly opening at or near the open of trading. The Exchange further believes that securities with an average daily volume of over 500,000 shares at the open are the types of securities that most warrant the
As with pre-opening indications, the Exchange proposes to double the percentage parameter on trading days with extreme market-wide volatility and eliminate the volume parameter. As illustrated in Table 5, doubling the percentage parameter and eliminating the volume parameters would allow DMMs to open most NYSE securities electronically even during extreme market-wide volatility. As NYSE trade data from August 24, 2015 set forth in Table 3 illustrates, the current percentage parameters restricted DMMs from opening 1,753 securities electronically, which represents 58.4% of securities on NYSE.
The Exchange also proposes to add a new paragraph (c) to Rule 123D entitled “Temporary Suspension of DMM Automated Opening Limitations or Floor Official Approval.” Similar to proposed Rule 15(f), if the CEO of the Exchange determines that a Floor-wide event is likely to have an impact on the ability of DMMs to arrange for a fair and orderly opening or reopening following a market-wide trading halt at the Exchange and that, absent relief, the operation of the Exchange is likely to be impaired, the CEO of the Exchange may temporarily suspend the prohibition on a DMM opening a security electronically if the opening transaction would be more than the price or volume parameters specified in proposed Rule 123D(a)(1)(B). This would be a new suspension authority that relates to the proposed new price and volume parameters for when a DMM may open a security electronically. The Exchange believes that having this temporary suspension authority would be appropriate for situations if the DMM is unable to open a security manually, either due to unavailability of 11 Wall Street facilities or because of systems or technical issues with Floor-based tools for manually opening a security.
Proposed Rule 123D(c) would also provide that if the CEO of the Exchange determines that a Floor-wide event is likely to have an impact on the ability of DMMs to arrange for a fair and orderly opening or reopening following a market-wide trading halt at the Exchange, and that absent relief, the operation of the Exchange is likely to be impaired, the CEO of the Exchange may temporarily suspend (i) the prohibition on a DMM opening a security electronically if the opening transaction will be more than the price or volume parameters specified in proposed Rule 123D(a)(1)(B); or (ii) the need under Rule 123D(b) for prior Floor Official approval to open or reopen a security following a market-wide trading halt. This proposed rule change is similar to authority in current Rule 48, which permits a qualified Exchange officer to temporarily suspend the need for prior Floor Official or prior NYSE Floor operations approval to open or reopen a security following a market-wide trading halt. While the Exchange expects that its other proposed changes to Rule 123D would make it unlikely that a complete suspension of prior Floor Official approval would be required, the Exchange believes it would be prudent for the CEO of the Exchange to retain the authority temporarily suspend such requirements for events that it cannot currently predict. The Exchange also proposes a new temporary suspension that correlates to the proposed new price and volume parameters for when a DMM may open a security electronically. The Exchange expects that this relief would be required if 11 Wall Street facilities were unavailable and DMMs would be required to open all securities remotely, and thus electronically.
Proposed Rule 123D(c)(2)-(3) are nearly identical to proposed Rule 15(f)(1)-(3), as described in greater detail above, with changes only to address that this proposed rule relates to the temporary suspension of the requirements for specified paragraphs of Rule 123D. Proposed Rule 123D(c)(2)-(3) is based on the same provisions of Rule 48 that proposed Rule 15(f)(2)-(4) is based on, which is discussed in greater detail above.
The miscellaneous and technical amendments proposed to Rule 123D are as follows:
• The Exchange proposes to amend Rule 123D(a)(5) (Pre-Opening Information) to change the citation to Rule 15(c) to 15(g) based on the proposed changes to Rule 15, described above, and delete the word “either” and the references to Rule 123D.
• The Exchange proposes to delete the phrase “Halts in Trading” from the heading of Rule 123D(b).
• Also in Rule 123D(b), the Exchange proposes to delete the text relating to the dissemination of mandatory indications beginning with the sentence “If an unusual situation exists, such as a large order imbalance, tape indications should be disseminated, including multiple indications if appropriate with the supervision of a Floor Official” through and including the sentence “An Executive Floor Governor or Floor Governor should be consulted in any case where there is not complete agreement among the Floor Officials participating in the discussion.” This rule text all pertains to Rule 123D Mandatory indications, which, as discussed above, would be governed by proposed Rule 15.
• The Exchange proposes to add a new heading (d) entitled “Halts in Trading” before the sentence “Once trading has commenced, trading may only be halted with the approval of a Floor Governor or two Floor Officials” in current Rule 123D(b) and change current heading (c) (Equipment Changeover) to (e).
• Finally, in current Rule 123D(c) (proposed Rule 123D(e)), to reflect that all information relating to pre-opening indications, including the Applicable Price Ranges and Reference Prices, are now described in Rule 15, the Exchange proposes to delete the phrase “a significant order imbalance (one which would result in a price change from the last sale of one point or more for stocks under $10, the lesser of 10% or three points for $10—$99.99 and five points if $100 or more—unless a Floor Governor deems circumstances warrant a lower parameter) develops” and add the phrase “a pre-opening indication would be required to be published” in its place.
The Exchange proposes to delete Rule 48 in its entirety. As discussed above, the Exchange is proposing changes to Rules 15 and 123D that it believes will allow DMMs to publish pre-opening indications in a manageable number of securities, even on days of high volatility, which would promote transparency regarding opening prices at the Exchange. In addition, and as described above, the Exchange is incorporating into Rules 15 and 123D authority for the CEO of the Exchange to temporarily suspend the requirement to publish pre-opening indications, the pricing and volume limitations for a
The Exchange proposes conforming amendments Rule 80C(b)(2), which governs a Trading Pause under the LULD Plan.
First, Rule 80C(b)(2) requires that the Exchange re-open the security in a manner similar to the procedures set forth in Rule 123D following a Trading Pause (as defined therein). The Exchange proposes to add a reference to Rule 15 to Rule 80C(b)(2), so that the requirement to re-open would be in a manner similar to Rules 15 and 123D.
Second, the Exchange proposes to delete subdivision (A) of Rule 80C(b)(2) in its entirety and mark the deleted text as “Reserved.” As noted above, the requirements for reopening a security following a trading pause set forth in Rule 80C would be codified in proposed Rule 15(d)(6).
The Exchange also proposes to amend Rule 9217, which sets forth the list of rules under which a member organization or covered person may be subject to a fine under a minor rule violation plan as set forth in Rule 9216(b). Rule 9217 permits a summary fine for violations of Rule 123D requirements for DMMs relating to openings, reopenings, delayed openings, trading halts, and tape indications. The Exchange proposes to delete the clause “tape indications” to reflect elimination of mandatory indications from Rule 123D. The Exchange believes this proposed change would add transparency and clarity to the Exchange's rules.
Because of the technology changes associated with the proposed rule change, the Exchange will announce by Trader Update the implementation date of the changes.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that streamlining and consolidating pre-opening indications into a single rule (Rule 15) from two (Rules 15 and 123D) would remove impediments to and perfect the mechanism of a free and open market because it would set forth in a single rule the requirements for pre-opening indications, thereby promoting transparency by using consistent terminology for rules governing equities trading and ensuring that members, regulators, and the public can more easily navigate the Exchange's rulebook.
The Exchange believes that adopting new single-wide (5% change) and double-wide (10% change if S&P 500 futures move 2%) percentage parameters for the publication of pre-opening indications would remove impediments to and perfect the mechanism of a free and open market by requiring issuance of more pre-opening indications than currently during times of market stress, thereby increasing the amount of information available in the pre-market and improving the quality of price discovery at the opening. The proposed rule therefore promotes just and equitable principles of trade because it would expand the amount of pre-opening information available to the marketplace, thereby promoting transparency. For the same reasons, the proposal is also designed to protect investors as well as the public interest.
The Exchange believes that amending Rule 123D to specify when a DMM may effect an opening electronically would remove impediments to and perfect the mechanism of a free and open market by promoting transparency in Exchange rules regarding under what circumstances a DMM may effect an opening electronically. The Exchange believes that the proposed parameters for when a DMM may open a security electronically, which would be 4% on regular trading days and doubled to 8% in times of market stress, would remove impediments to and perfect the mechanism of a free and open market by reducing the number of manual openings and enabling more securities to open closer to 9:30 a.m. ET on extremely volatile trading days, thereby providing customers and the investing public with greater certainty of a timely open in circumstances of extreme market stress. The Exchange further believes that the proposal would advance the efficiency and transparency of the opening process, thereby fostering accurate price discovery at the open of trading. For the same reasons, the proposal is also designed to protect investors as well as the public interest.
The Exchange believes that using the last Exchange sale price as a reference price for reopenings would promote just and equitable principles of trade and remove impediments to and perfect the mechanism of a free and open market and a national market system because using the last sale price on the Exchange would be more representative of the most recent price of a security from before the halt or pause. In addition, the Exchange believes that if a security were to reopen more than 4% (or 8% on a more volatile trading day) from that reference price, such reopening would likely benefit from the manual price discovery process. The Exchange also believes that it would remove impediments to and perfect the mechanism of a free and open market to provide that a DMM may reopen a security electronically if the reopening transaction would be at a price outside of the last-published pre-opening indication when reopening a security following a trading pause under Rule 80C or a market-wide halt under Rule 80B and a pre-opening indication has been published under Rule 15.
The Exchange believes that deleting Rule 48 and moving the applicable provisions to Rules 15 and 123D would remove impediments to and perfect the mechanism of a free and open market by reducing reliance on Rule 48 during extremely volatile trading days. Rather, as proposed, the need for the CEO of the Exchange to temporarily suspend either pre-opening indications or the need for prior Floor Official approval before opening or reopening a security would be under more narrow circumstances of when a Floor-wide event would impair the Exchange's ability to conduct a fair and orderly open or reopening. As discussed above, the proposed amendments to Rule 15 and 123D to provide for parameters on days with extreme market-wide volatility would obviate the need for the current Rule 48 ability to lift the requirements for pre-opening indications or prior Floor Official approval during extreme market-wide volatility. The Exchange further believes that the proposal would advance the efficiency and transparency of the opening process, thereby fostering accurate price discovery at the open of trading. For the same reasons, the
The Exchange believes that making corresponding conforming changes to Rules 80C and 9217 would remove impediments to and perfects the mechanism of a free and open market by reducing potential confusion and adding transparency and clarity to the Exchange's rules, thereby ensuring that members, regulators and the public can more easily navigate and understand the Exchange's rulebook.
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 intended to address competitive issues but rather promote greater efficiency and transparency at the open of trading on the Exchange. The Exchange believes the proposed rule change will ease a burden on competition by providing for similar standards for the opening process on the Exchange as have been approved for the NYSE, which currently operates on the same trading platform as the Exchange.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
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 the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to expand the Short Term Option Series Program to allow Wednesday expirations for SPY options.
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 amend BX Rules at Chapter I, Section 1(a)(60) and Chapter IV, Section 6 at Commentary .07 to expand the Short Term Option Series Program to permit the listing and trading of options with Wednesday expirations.
Currently, under the Short Term Option Series Program, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on that class that expire on each of the next five consecutive Fridays, provided that such Friday is not a Friday in which monthly options series or Quarterly Options Series expire (“Short Term Option Series”). The Exchange is now proposing to amend its rule to permit the listing of options expiring on Wednesdays. Specifically, the Exchange is proposing that it may open for trading on any Tuesday or Wednesday that is a business day, series of options on the SPDR S&P 500 ETF Trust (SPY) to expire on any Wednesday of the month that is a business day and is not a Wednesday in which Quarterly Options Series expire (“Wednesday SPY Expirations”).
In regards to Wednesday SPY Expirations, the Exchange is proposing to remove the current restriction preventing the Exchange from listing Short Term Option Series that expire in the same week in which monthly option series in the same class expire. Specifically, the Exchange will be allowed to list Wednesday SPY Expirations in the same week in which monthly option series in SPY expire. The current restriction to prohibit the expiration of monthly and Short Term Option Series from expiring on the same trading day is reasonable to avoid investor confusion. This confusion will not apply with Wednesday SPY Expirations and standard monthly options because they will not expire on the same trading day, as standard monthly options do not expire on Wednesdays. Additionally, it would lead to investor confusion if Wednesday SPY Expirations were not listed for one week every month because there was a monthly SPY expiration on the Friday of that week.
Under the proposed Wednesday SPY Expirations, the Exchange may list up to five consecutive Wednesday SPY Expirations at one time. The Exchange may have no more than a total of five Wednesday SPY Expirations listed. This is the same listing procedure as Short Term Option Series that expire on Fridays. This means, under the proposal, the Exchange would be allowed to list five Short Term Option Series expirations for SPY expiring on Friday under the current rule and five Wednesday SPY Expirations. The interval between strike prices for the proposed Wednesday SPY Expirations will be the same as those for the current Short Term Option Series. Specifically, the Wednesday SPY Expirations will have $0.50 strike intervals.
Currently, for each Short Term Option Expiration Date,
As is the case with current Short Term Option Series, the Wednesday SPY Expiration series will be P.M.-settled. The Exchange does not believe that any market disruptions will be encountered with the introduction of
The Exchange is also amending the definition of Short Term Option Series to make clear that it includes Wednesday expirations.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
In particular, the Exchange believes the Short Term Option Series Program has been successful to date and that Wednesday SPY Expirations simply expand the ability of investors to hedge risk against market movements stemming from economic releases or market events that occur throughout the month in the same way that the Short Term Option Series Program has expanded the landscape of hedging. Similarly, the Exchange believes Wednesday SPY Expirations should create greater trading and hedging opportunities and flexibility, and provide customers with the ability to more closely tailor their investment objectives. The Exchange believes that allowing Wednesday SPY Expirations and monthly SPY expirations in the same week will benefit investors and minimize investor confusion by providing Wednesday SPY Expirations in a continuous and uniform manner. Finally, the Exchange represents that it has an adequate surveillance program in place to detect manipulative trading in Wednesday SPY Expirations in the same way it monitors trading in the current Short Term Option Series. The Exchange also represents that it has the necessary systems capacity to support the new options series. Also, the Exchange notes that BOX Options Exchange LLC (“BOX”) recently received approval to list Wednesday expirations for SPY options.
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 notes that having Wednesday expirations is not a novel proposal, BOX has received approval to list Wednesday expirations for SPY options.
No written comments were either solicited or received.
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, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days from the date of filing. However, Rule 19b-4(f)(6)(iii)
Interested persons are invited to submit written data, views, and
• 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.
On December 16, 2015, Financial Industry Regulatory Authority, Inc. (“FINRA”) filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
The proposed rule change was published for comment in the
On March 29, 2016, pursuant to delegated authority, the Commission issued an order instituting proceedings pursuant to Section 19(b)(2)(B) of the Act
This order approves the rule change as proposed. Section II provides an overview of the rule and summarizes the rule as described by FINRA in its filing and as published in the Notice, Section III is a summary of the comments received and FINRA's responses, and Section IV contains the Commission's findings in approving the proposal.
As described more fully in the Notice, FINRA modeled proposed Rule 2030
In light of this regulatory framework, FINRA proposed its own pay-to-play rule to enable its member firms to continue to engage in distribution and solicitation activities for compensation with government entities on behalf of investment advisers, while subjecting its member firms to appropriate safeguards that will discourage them from engaging in pay-to-play practices.
Furthermore, FINRA's proposed Rule 4580 would impose recordkeeping requirements on FINRA member firms in connection with its pay-to-play rule that would allow examination of member firms' books and records for compliance with Rule 2030.
The following is an overview of the key provisions in FINRA's proposed rules, as described by FINRA in the Notice.
Proposed Rule 2030(a) would prohibit a covered member from engaging in distribution or solicitation activities for compensation with a government entity on behalf of an investment adviser that provides or is seeking to provide investment advisory services to such government entity within two years after a contribution to an official of the
The following is an overview of some of the key terms used in FINRA's proposed Rule 2030, as discussed by FINRA in its filing and published in the Notice or as defined in proposed Rule 2030(g).
The SEC Pay-to-Play Rule includes within its definition of “regulated person” SEC-registered municipal advisors, subject to specified conditions.
FINRA addresses the interplay between its proposed rule and the application of the MSRB's municipal advisor pay-to-play rule by exempting from the definition of “covered member” a member when it is “engaging in activities that would cause the member to be a municipal advisor as defined in Exchange Act Section 15B(e)(4), SEA Rule 15Ba1-1(d)(1) through (4) and other rules and regulations thereunder.”
With respect to the triggering activities for FINRA's proposed Rule 2030(a), FINRA states that, based on the definition of “regulated person” in the SEC Pay-to-Play Rule,
FINRA explains that the proposed rule would not apply to distribution activities related to registered investment companies that are not investment options of a government entity's plan or program because in these circumstances a member firm is not providing or seeking to provide investment advisory services to a government entity.
FINRA states that, consistent with the SEC Pay-to-Play Rule, proposed Rule 2030(g)(11) defines the term “solicit” to mean:
(A) With respect to investment advisory services, to communicate, directly or indirectly, for the purpose of obtaining or retaining a client for, or referring a client to, an investment adviser; and (B) With respect to a contribution or payment, to communicate, directly or indirectly, for the purpose of obtaining or arranging a contribution or payment.
FINRA notes that, although the determination of whether a particular communication would be a solicitation would depend on the facts and circumstances relating to such communication, as a general proposition FINRA believes that any communication made under circumstances reasonably calculated to obtain or retain an advisory client would be considered a solicitation unless the circumstances otherwise indicate that the communication does not have the purpose of obtaining or retaining an advisory client.
Proposed Rule 2030 would apply to covered members acting on behalf of (as defined in proposed Rule 2030(g)(7)) any investment adviser registered (or required to be registered) with the Commission, or unregistered in reliance on the exemption available under Section 203(b)(3) of the Advisers Act for foreign private advisers, or that is an exempt reporting adviser under Advisers Act Rule 204-4(a).
FINRA explains that an “official” (as defined in proposed Rule 2030(g)(8)) of a “government entity” (as defined in proposed Rule 2030(g)(7))—both of which FINRA states are consistent with the SEC Pay-to-Play Rule definitions—would include an incumbent, candidate or successful candidate for elective office of a government entity if the office is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser or has authority to appoint any person who is directly or indirectly responsible for, or can influence the outcome of, the hiring of an investment adviser.
Proposed Rule 2030(g)(1) defines “contribution” to mean any gift, subscription, loan, advance, deposit of money, or anything of value made for the purpose of influencing the election for a federal, state or local office, and includes any payments for debts incurred in such an election or transition or inaugural expenses incurred by a successful candidate for state or local office.
Proposed Rule 2030(g)(2) defines the term “covered associates” to mean:
(A) Any general partner, managing member or executive officer of a covered member, or other individual with a similar status or function; (B) Any associated person of a covered member who engages in distribution or solicitation activities with a government entity for such covered member; (C) Any associated person of a covered member who supervises, directly or indirectly, the government entity distribution or solicitation activities of a person in subparagraph (B) above; and (D) Any political action committee controlled by a covered member or a covered associate.
FINRA states that, as also noted in the SEC Pay-to-Play Rule Adopting Release, contributions made to influence the selection process are typically made not by the firm itself, but by officers and employees of the firm who have a direct economic stake in the business relationship with the government client.
Proposed Rule 2030(b) also would prohibit a covered member or covered associate from soliciting or coordinating any person or political action committee (“PAC”) to make any: (1) Contribution to an official of a government entity in respect of which the covered member is engaging in, or seeking to engage in, distribution or solicitation activities on behalf of an investment adviser; or (2) payment to a political party of a state or locality of a government entity with which the covered member is engaging in, or seeking to engage in, distribution or solicitation activities on behalf of an investment adviser.
FINRA's proposed pay-to-play rule contains three exceptions from the proposed rule's prohibitions: (1)
Proposed Rule 2030(c)(1) would except from the rule's restrictions contributions made by a covered associate who is a natural person to government entity officials for whom the covered associate was entitled to vote at the time of the contributions, provided the contributions do not exceed $350 in the aggregate to any one official per election.
The proposed rule would attribute to a covered member contributions made by a person within two years (or, in some cases, six months) of becoming a covered associate. However, proposed Rule 2030(c)(2) would provide an exception from the proposed rule's restrictions for covered members if a natural person made a contribution more than six months prior to becoming a covered associate of the covered member unless the covered associate engages in, or seeks to engage in, distribution or solicitation activities with a government entity on behalf of the covered member.
Proposed Rule 2030(c)(3) would provide an exception from the proposed rule's restrictions for covered members if the restriction is due to a contribution made by a covered associate and: (1) The covered member discovered the contribution within four months of it being made; (2) the contribution was less than $350; and (3) the contribution is returned within 60 days of the discovery of the contribution by the covered member.
Proposed Rule 2030(d)(1) provides that a covered member that engages in distribution or solicitation activities with a government entity on behalf of a covered investment pool,
As noted above, the proposed rule would not apply to distribution activities related to registered investment companies that are not investment options of a government entity's plan or program because in these circumstances a member firm is not providing or seeking to provide investment advisory services to a government entity.
Proposed Rule 2030(e) provides that it shall be a violation of Rule 2030 for any covered member or any of its covered associates to do anything indirectly that, if done directly, would result in a violation of the rule.
Proposed Rule 2030(f) includes an exemptive provision for covered members, modeled on the exemptive provision in the SEC Pay-to-Play Rule, that would allow covered members to apply to FINRA for an exemption from the proposed rule's two-year “time-out.”
Proposed Rule 4580 would require covered members that engage in distribution or solicitation activities with a government entity on behalf of any investment adviser that provides or is seeking to provide investment advisory services to such government entity to maintain books and records that would allow FINRA to examine for compliance with its pay-to-play rule.
In response to the Notice, the Commission received ten comment letters, from nine different commenters.
The Commission received an additional four comments in response to the Order Instituting Proceedings.
As noted above, five commenters either oppose the proposed rule
In response to these comments, FINRA states that the points raised by the commenters do not warrant changes to, or disapproval of, its proposed rule change.
Furthermore, FINRA states that the proposed rule change is justified by a sufficiently important governmental interest to withstand constitutional scrutiny. For example, FINRA explains that, as in
FINRA further believes that the proposed rule change also is “closely drawn” to avoid unnecessary abridgment of associational freedoms.
Several commenters contend that FINRA does not have the authority to adopt a pay-to-play rule because only Congress or the Federal Election Commission may regulate contributions for federal elections.
In response, FINRA states that the proposed rule change is consistent with the authority Congress granted a registered national securities association like FINRA under Section 15A(b)(6) of the Act to adopt rules that are designed, among other things, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest.
Although FINRA acknowledges that the proposed rule's two-year “time-out” provision might result in fewer covered members and their covered associates making certain political contributions to certain officials, FINRA notes that if it did not adopt a pay-to-play rule, the SEC Pay-to-Play Rule would prohibit member firms from soliciting government entities for investment advisory services for compensation on behalf of investment advisers.
Two commenters raise concerns regarding the application of the proposed rules to variable annuities.
This commenter also requests that proposed Rule 2030 be modified to, among other things, clarify that the distribution of a two-tiered product such as a variable annuity is not solicitation activity for an investment adviser and sub-advisers managing the funds available as investment options.
In response, FINRA states that its proposed rules must impose substantially equivalent or more stringent restrictions on member firms as the SEC Pay-to-Play Rule imposes on
Two commenters also express concern that proposed Rule 2030(d) would, in their view, re-characterize “ordinary” or “customary” distribution activities for covered investment pools as the solicitation of clients on behalf of the investment adviser to the covered investment pools.
Similarly, another commenter expresses concern with the apparent application of proposed Rule 2030(d) to “traditional” brokerage sales of mutual funds and variable annuities to participant-directed government-sponsored retirement plans.
In response, FINRA explains that, in proposing FINRA Rule 2030(d), it did not intend to re-characterize broker-dealers' selling interests in variable annuities, mutual funds and private funds as soliciting an investment advisory relationship with investors who invest in those products.
One commenter generally expresses concern that proposed Rule 2030 is unnecessarily ambiguous regarding the term “distribution” activities in Rule 2030(a).
This commenter also claims that, while the SEC Pay-to-Play Rule requires regulated persons to be subject to rules that prohibit them from engaging in certain distribution activities if certain political contributions have been made, SEC Pay-to-Play Rule 206(4)-5 does not mandate the use of the term “distribution” in describing the conduct prohibited by the proposed rule, and suggested revised rule text reflecting that assertion.
In response, FINRA states that it continues to maintain the position, outlined in the Notice, that it will not remove references to the term “distribution.”
Two commenters request clarification of certain defined terms used in the proposed rules.
Another commenter requests that FINRA clarify the definition of a “covered associate” and clarify and delineate the positions that would qualify someone as a covered “official.”
In response, FINRA states that it recognizes, as did the commenters, that these terms are defined in the SEC Pay-to-Play Rule and that FINRA modeled the definitions in its proposal on those in the SEC Pay-to-Play Rule.
One commenter claims that statements made by FINRA in the Notice regarding the proposed rule's anti-circumvention provision, proposed Rule 2030(e), combined with statements made in Commission staff guidance concerning whether contributions through PACs would violate the SEC Pay-to-Play Rule and Section 208(d) of the Advisers Act, have the ability to chill contributions to PACs.
In response, FINRA again acknowledges the concerns raised by the commenter and the requests for clarification and additional guidance from the Commission and FINRA.
Another commenter claims that it continues to believe that not all payments to political parties or PACs should have to be maintained under the books and records requirements of proposed Rule 4580.
In response, FINRA states that it disagrees with these comments and has determined to retain the recordkeeping requirements as proposed in FINRA Rule 4580.
As discussed above, certain commenters raise concerns regarding the exception for
In response, FINRA explains that its proposed rules must impose substantially equivalent or more stringent restrictions on member firms as the SEC Pay-to-Play Rule imposes on investment advisers.
One commenter requests that FINRA clarify the application of the proposed rule to existing government entity accounts or contracts.
In response, FINRA explains that, as discussed above, its proposed rules must impose substantially equivalent or more stringent restrictions on member firms as the SEC Pay-to-Play Rule imposes on investment advisers.
One commenter claims that its members “will face difficulties” in attempting to comply with the proposed rules, and that these difficulties stem, primarily, from a requirement for independent firms to implement a rule that is premised on the notion that solicitation of clients is performed pursuant to a centralized process controlled by the management of a registered investment adviser.
In response, FINRA states that, consistent with the SEC Pay-to-Play Rule, it has determined not to except from its proposed pay-to-play rule member firms engaged in the independent business model.
Two commenters suggested that proposed Rule 2030 include more stringent requirements in certain respects.
In response, FINRA states that, as discussed in the Notice,
Second, these two commenters request that FINRA include a mandatory disgorgement provision for violations of its proposed rule.
In response, FINRA states that, after considering similar comments made in response to its
Finally, one commenter believes that the cooling-off period in the proposal should be at least four years.
FINRA declines to make PIABA's suggested change.
After carefully considering the proposed rule change, the comments submitted, and FINRA's responses thereto, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a registered national securities association.
In particular, the Commission finds that the proposed rule change is consistent with Section 15A(b)(6) of the Act.
As support for the need for the proposed rule, FINRA outlined certain regulatory concerns in the Notice that also were identified by the Commission in connection with its adoption of the SEC Pay-to-Play Rule.
As we explained in adopting the SEC Pay-to-Play Rule, public pension plans are particularly vulnerable to pay-to-play practices, and we have been particularly concerned that the engagement of placement agents who have made political contributions to key officials is viewed by investment advisers as a necessary step to securing a contract with a public pension plan.
Pay-to-play practices are harmful. They create an impediment to a free and open market by, for example, distorting the investment adviser selection process from one that is based on merit, performance and cost, to one that is influenced by a placement agent's contributions to the campaigns of government officials who are responsible for, or can influence the outcome of, selecting an investment adviser.
The Commission also believes that the stealth in which pay-to-play practices occur and the inability of markets to properly address these practices argue strongly for rules like the SEC Pay-to-Play Rule and FINRA's proposal.
We believe that application of FINRA's proposed pay-to-play rules will effectively discourage covered members and their covered associates who act as placement agents for investment advisers from participating in pay-to-play practices because their political contributions or payments will be subject to restrictions similar to those imposed on investment advisers under the SEC Pay-to-Play Rule.
The Commission notes that most commenters to the Notice
The Commission acknowledges the concerns and questions raised by some commenters, which are outlined in further detail above in Section III. As discussed below, the Commission believes, however, that FINRA has responded to the commenters' concerns and questions in light of, among other things, the regulatory framework established by the SEC Pay-to-Play Rule, which provides that FINRA's proposed rules must impose substantially equivalent or more stringent restrictions on its members than the SEC Pay-to-Play Rule imposes on investment advisers for FINRA members to be “regulated persons” under the SEC Pay-to-Play Rule.
Several commenters express the view that FINRA's proposed rule violates the First Amendment.
FINRA's rule, which focuses on covered members who serve as placement agents, tracks the SEC Pay-to-Play Rule for investment advisers, which, in turn, tracks the MSRB's pay-to-play rule, Rule G-37, which the D.C. Circuit upheld against First Amendment challenge in 1995.
Decisions like
We do not understand FINRA to be engaging in broad electoral reform or trying to clean up the electoral process. Rather, to avoid the outright ban on placement agent activity resulting from FINRA member firms not being “regulated person[s]” under the SEC Pay-to-Play Rule, the two-year time-out in FINRA's proposal, like the SEC Pay-to-Play Rule, discourages
FINRA's proposed rule advances this important governmental interest because the two-year time-out discourages pay-to-play. As explained above, pay-to-play has been and is a serious problem when placement agents assist investment advisers in obtaining advisory business from government entities.
In response to these incidents, the Commission proposed a ban on the use of placement agents by investment advisers and ultimately adopted a final rule that permitted use of placement agents so long as they were “regulated persons” governed by the type of pay-to-play rule that FINRA has proposed here.
The contours of FINRA's proposed rule reflect how pay-to-play practices involving placement agents affect the hiring and retention of investment advisers by State and local pension funds. One scenario implicated by FINRA's rule (and reflected in the
The proposed FINRA rule, like the SEC Pay-to-Play Rule that it is modeled on, is a tailored solution to a particularly pernicious form of
As discussed in detail above, the commenters raise several concerns regarding the scope and coverage of the proposed rules, including with respect to: The inclusion of variable annuities and mutual funds;
As noted above, the SEC Pay-to-Play Rule, in part, prohibits any investment adviser covered under the rule or any of its covered associates from providing or agreeing to provide, directly or indirectly, payment to any person to solicit a government entity for investment advisory services on behalf of the investment adviser unless such person is a “regulated person,” as defined under the rule.
The Commission believes that it is appropriate and consistent with Section 15A(b)(6) of the Act for FINRA to design its proposed rules to have the same scope and provisions as the SEC Pay-to-Play Rule. If the Commission were unable to make the required stringency finding, this would result in FINRA member firms not being a “regulated person” under the SEC Pay-to-Play Rule and therefore prohibited from receiving compensation for engaging in distribution and solicitation activities with government entities on behalf of investment advisers.
One commenter states that the proposal is ambiguous regarding the term “distribution” activities in Rule 2030(a).
One commenter claims that, among other things, the “lack of clarity as to the application of the SEC Pay-to-Play Rule to [its] members' business model, and the scope of government officials that trigger the requirements, has led some firms to adopt aggressive compliance programs that prohibit political contributions.”
We also note that FINRA has committed to working with the industry and the Commission to address interpretive questions that may arise regarding the application and scope of the provisions and terms used in the proposed rule change and to provide additional guidance as needed.
Commenters asked for clarification of certain defined terms and provisions in the proposed rule, including clarification with respect to: The term “instrumentality” as it is used in the definition of “government entity;”
The Commission believes that FINRA's definition of “covered associate” in proposed Rule 2030(g) is functionally identical to the definition of the same term in the SEC Pay-to-Play Rule.
FINRA's definition of “official” also tracks the Commission's definition of that same term in the SEC Pay-to-Play Rule and, therefore, limits the rule so that a time-out is triggered only by contributions to certain officials.
Additionally, FINRA's definitions of “contribution” and “payment” are functionally identical to those same definitions in the SEC Pay-to-Play Rule.
The Commission believes that FINRA's definitions, which mirror or are functionally equivalent to similar definitions in the SEC's Pay-to-Play Rule, will help to achieve the objectives of the SEC Pay-to-Play Rule and, as described above, the requirements governing the rules of a registered national securities association.
One commenter claims that not all payments to political parties or PACs should have to be maintained under the books and records requirements of proposed Rule 4580.
The Commission acknowledges the comment, but agrees, as noted by FINRA, that payments to political parties or PACs can be a means for a covered member or covered associate to contribute indirectly to a government official in contravention of the proposed rule. The Commission also agrees that requiring FINRA members to maintain a record of all payments to political parties or PACs would assist FINRA in identifying situations that might suggest an intent to violate proposed Rules 2030(b) and 2030(e).
Certain commenters also suggested that FINRA should include more stringent requirements in its proposed rule.
The Commission acknowledges this comment but believes that it is appropriate for FINRA to determine to provide for the same scope of its pay-to-play rule as that of the SEC Pay-to-Play Rule. As FINRA notes, the Commission previously declined to make a similar change to the SEC Pay-to-Play Rule stating, among other things, that it was the Commission's understanding that few of these smaller state-registered firms manage public pension plans or other similar funds.
These same commenters suggest that FINRA include a mandatory disgorgement provision for violations of its proposed rule.
Finally, one of these commenters suggests that the current two-year cooling-off period in the proposal should be at least four years.
The Commission recognizes these commenters suggest that the rule could have a broader scope. The Commission, however, must evaluate the proposed rule before it and approve a proposed rule if it finds that the proposed rule is consistent with the requirements of the Act and the applicable rules and regulations thereunder. As discussed above, because the rule is consistent with the Act, the Commission is required to approve the FINRA rule.
Accordingly, for the reasons discussed above, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to such organization.
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange filed a proposal to amend Rule 19.6, entitled “Series of Options Contracts Open for Trading,” related to the Short Term Option Series (“STOS”) Program to allow Wednesday expirations for SPY options. The Exchange also proposes to make corresponding changes to Rule 16.1, entitled “Definitions.”
The text of the proposed rule change is available at 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 parts of such statements.
The purpose of the proposed rule change is to harmonize the Exchange's rules with the rules governing Short Term Options Series programs of other options exchanges. Specifically, the Exchange proposes to amend Rule 19.6, entitled “Series of Options Contracts Open for Trading,” related to the STOS Program to allow Wednesday expirations for SPY options. The Exchange also proposes to make certain corresponding changes to 16.1, entitled “Definitions.” The proposed rule change is based on the recent approval of a filing submitted by the BOX Options Exchange LLC (“BOX”).
Currently, under the STOS Program, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on that class that expire on each of the next five Fridays, provided that such Friday is not a Friday in which monthly options series or Quarterly Options Series expire (“Short Term Option Series”). The Exchange is now proposing to amend its rule to permit the listing of options expiring on Wednesdays. Specifically, the Exchange is proposing that it may open for trading on any Tuesday or Wednesday that is a business day, series of options on the SPDR S&P 500 ETF Trust (“SPY”) to expire on any Wednesday of the month that is a business day and is not a Wednesday in which Quarterly Options Series expire (“Wednesday SPY Expirations”).
In regards to Wednesday SPY Expirations, the Exchange is proposing to remove the current restriction preventing it from listing Short Term Option Series that expire in the same week in which monthly option series in the same class expire. Specifically, the Exchange will be allowed to list Wednesday SPY Expirations in the same week in which monthly option series in SPY expire. The current restriction to prohibit the expiration of monthly and Short Term Option Series from expiring on the same trading day is reasonable to avoid investor confusion. This confusion will not apply with Wednesday SPY Expirations and standard monthly options because they will not expire on the same trading day, as standard monthly options do not expire on Wednesdays. Additionally, it would lead to investor confusion if Wednesday SPY Expirations were not listed for one week every month because there was a monthly SPY expiration on the Friday of that week.
Under the proposed Wednesday SPY Expirations, the Exchange may list up to five consecutive Wednesday SPY Expirations at one time. The Exchange may have no more than a total of five Wednesday SPY Expirations listed. This is the same listing procedure as Short Term Option Series that expire on Fridays. The Exchange is also proposing to clarify that the five series limit in the current Short Term Option Series Program Rule will not include any Wednesday SPY Expirations.
Currently, for each Short Term Option Expiration Date,
The Exchange is also proposing to amend the definition of Short Term Option Series contained in Exchange Rule 16.1(a)(57) to make clear that STOS includes Wednesday expirations and to conform to BOX Rule 100(a)(64). Specifically, the Exchange is amending the definition to expand Short Term Option Series to those listed on any Tuesday or Wednesday and that expire on the Wednesday of the next business week. If a Tuesday or Wednesday is not a business day, the series may be opened (or shall expire) on the first business day immediately prior to that Tuesday or Wednesday.
The Exchange believes that the introduction of Wednesday SPY Expirations will provide investors with a flexible and valuable tool to manage risk exposure, minimize capital outlays, and be more responsive to the timing of events affecting the industry. The proposed rule change is a competitive proposal designed to enable the Exchange to compete equally and fairly with other options exchanges in satisfying high market demand for weekly options and continuing strong customer demand to use STOS to execute hedging and trading strategies.
The rule changes proposed herein are consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.
In particular, the Exchange believes the Short Term Option Series Program has been successful to date and that Wednesday SPY Expirations simply expand the ability of investors to hedge risk against market movements stemming from economic releases or market events that occur throughout the month in the same way that the Short Term Option Series Program has expanded the landscape of hedging. Similarly, the Exchange believes Wednesday SPY Expirations should create greater trading and hedging opportunities and flexibility, and provide customers with the ability to more closely tailor their investment objectives. The Exchange believes that allowing Wednesday SPY Expirations and monthly SPY expirations in the same week will benefit investors and minimize investor confusion by providing Wednesday SPY Expirations in a continuous and uniform manner. Finally, the Exchange represents that it has an adequate surveillance program in place to detect manipulative trading in Wednesday SPY Expirations in the same way it monitors trading in the current Short Term Option Series. The Exchange also represents that it has the necessary systems capacity to support the new options series.
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. To the contrary, with respect to intermarket competition, the Exchange believes the proposal is pro-competitive and will allow the Exchange to compete more effectively with BOX, which has already adopted changes to its STOS programs that are substantially identical to the changes proposed by this filing.
The Exchange does not believe the proposal will impose any burden on intramarket competition, as all market participants will be treated in the same manner as existing Short Term Option Series. The Exchange believes that the proposal will result in additional investment options and opportunities to achieve the investment objectives of market participants seeking efficient trading and hedging vehicles, to the benefit of investors, market participants, and the marketplace in general.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
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, the proposed rule change has become
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days from the date of filing. However, Rule 19b-4(f)(6)(iii)
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”),
The Exchange proposes to amend the rules of the NASDAQ Options Market LLC (“NOM”) to expand the Short Term Option Series Program to allow Wednesday expirations for SPY options.
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 amend NOM Rules at Chapter I, Section 1(a)(59) and Chapter IV, Section 6 at Commentary .07 to expand the Short Term Option Series Program to permit the listing and trading of options with Wednesday expirations.
Currently, under the Short Term Option Series Program, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on that class that expire on each of the next five consecutive Fridays, provided that such Friday is not a Friday in which monthly options series or Quarterly Options Series expire (“Short Term Option Series”). The Exchange is now proposing to amend its rule to permit the listing of options expiring on Wednesdays. Specifically, the Exchange is proposing that it may open for trading on any Tuesday or Wednesday that is a business day, series of options on the SPDR S&P 500 ETF Trust (SPY) to expire on any Wednesday of the month that is a business day and is not a Wednesday in which Quarterly Options Series expire (“Wednesday SPY Expirations”).
In regards to Wednesday SPY Expirations, the Exchange is proposing to remove the current restriction preventing the Exchange from listing Short Term Option Series that expire in the same week in which monthly option series in the same class expire. Specifically, the Exchange will be allowed to list Wednesday SPY Expirations in the same week in which monthly option series in SPY expire. The current restriction to prohibit the expiration of monthly and Short Term Option Series from expiring on the same trading day is reasonable to avoid investor confusion. This confusion will not apply with Wednesday SPY Expirations and standard monthly options because they will not expire on the same trading day, as standard monthly options do not expire on Wednesdays. Additionally, it would lead to investor confusion if Wednesday SPY Expirations were not listed for one week every month because there was a monthly SPY expiration on the Friday of that week.
Under the proposed Wednesday SPY Expirations, the Exchange may list up to five consecutive Wednesday SPY Expirations at one time. The Exchange may have no more than a total of five Wednesday SPY Expirations listed. This is the same listing procedure as Short Term Option Series that expire on Fridays. This means, under the proposal, the Exchange would be allowed to list five Short Term Option Series expirations for SPY expiring on Friday under the current rule and five Wednesday SPY Expirations. The interval between strike prices for the proposed Wednesday SPY Expirations will be the same as those for the current Short Term Option Series. Specifically, the Wednesday SPY Expirations will have $0.50 strike intervals.
Currently, for each Short Term Option Expiration Date,
As is the case with current Short Term Option Series, the Wednesday SPY Expiration series will be P.M.-settled. The Exchange does not believe that any market disruptions will be encountered with the introduction of P.M.-settled Wednesday SPY Expirations. The Exchange currently trades P.M.-settled Short Term Option Series that expire almost every Friday, which provide market participants a tool to hedge special events and to reduce the premium cost of buying protection. The Exchange seeks to introduce Wednesday SPY Expirations to, among other things, expand hedging tools available to market participants and to continue the reduction of the premium cost of buying protection. The Exchange believes that Wednesday expirations, similar to Friday expirations, would allow market participants to purchase an option based on their timing as needed and allow them to tailor their investment and hedging needs more effectively.
The Exchange is also amending the definition of Short Term Option Series to make clear that it includes Wednesday expirations.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
In particular, the Exchange believes the Short Term Option Series Program has been successful to date and that Wednesday SPY Expirations simply expand the ability of investors to hedge risk against market movements stemming from economic releases or market events that occur throughout the month in the same way that the Short Term Option Series Program has expanded the landscape of hedging. Similarly, the Exchange believes Wednesday SPY Expirations should create greater trading and hedging opportunities and flexibility, and provide customers with the ability to more closely tailor their investment objectives. The Exchange believes that allowing Wednesday SPY Expirations and monthly SPY expirations in the same week will benefit investors and minimize investor confusion by providing Wednesday SPY Expirations in a continuous and uniform manner. Finally, the Exchange represents that it has an adequate surveillance program in place to detect manipulative trading in
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 notes that having Wednesday expirations is not a novel proposal, BOX has received approval to list Wednesday expirations for SPY options.
No written comments were either solicited or received.
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, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days from the date of filing. However, Rule 19b-4(f)(6)(iii)
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
The Exchange proposes to expand the Short Term Option Series Program to allow Wednesday expirations for SPY options.
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 amend Phlx Rules 1000(44) and Rule 1012 at Commentary .11 to expand the Short Term Option Series Program to permit the listing and trading of options with Wednesday expirations.
Currently, under the Short Term Option Series Program, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on that class that expire on each of the next five consecutive Fridays, provided that such Friday is not a Friday in which monthly options series or Quarterly Options Series expire (“Short Term Option Series”). The Exchange is now proposing to amend its rule to permit the listing of options expiring on Wednesdays. Specifically, the Exchange is proposing that it may open for trading on any Tuesday or Wednesday that is a business day, series of options on the SPDR S&P 500 ETF Trust (SPY) to expire on any Wednesday of the month that is a business day and is not a Wednesday in which Quarterly Options Series expire (“Wednesday SPY Expirations”).
In regards to Wednesday SPY Expirations, the Exchange is proposing to remove the current restriction preventing the Exchange from listing Short Term Option Series that expire in the same week in which monthly option series in the same class expire. Specifically, the Exchange will be allowed to list Wednesday SPY Expirations in the same week in which monthly option series in SPY expire. The current restriction to prohibit the expiration of monthly and Short Term Option Series from expiring on the same trading day is reasonable to avoid investor confusion. This confusion will not apply with Wednesday SPY Expirations and standard monthly options because they will not expire on the same trading day, as standard monthly options do not expire on Wednesdays. Additionally, it would lead to investor confusion if Wednesday SPY Expirations were not listed for one week every month because there was a monthly SPY expiration on the Friday of that week.
Under the proposed Wednesday SPY Expirations, the Exchange may list up to five consecutive Wednesday SPY Expirations at one time. The Exchange may have no more than a total of five Wednesday SPY Expirations listed. This is the same listing procedure as Short Term Option Series that expire on Fridays. This means, under the proposal, the Exchange would be allowed to list five Short Term Option Series expirations for SPY expiring on Friday under the current rule and five Wednesday SPY Expirations. The interval between strike prices for the proposed Wednesday SPY Expirations will be the same as those for the current Short Term Option Series. Specifically, the Wednesday SPY Expirations will have $0.50 strike intervals.
Currently, for each Short Term Option Expiration Date,
As is the case with current Short Term Option Series, the Wednesday SPY Expiration series will be P.M.-settled. The Exchange does not believe that any market disruptions will be encountered with the introduction of P.M.-settled Wednesday SPY Expirations. The Exchange currently trades P.M.-settled Short Term Option Series that expire almost every Friday, which provide market participants a tool to hedge special events and to reduce the premium cost of buying protection. The Exchange seeks to introduce Wednesday SPY Expirations to, among other things, expand hedging tools available to market participants and to continue the reduction of the premium cost of buying protection. The Exchange believes that Wednesday expirations, similar to Friday expirations, would allow market participants to purchase an option based on their timing as needed and allow them to tailor their investment and hedging needs more effectively.
The Exchange is also amending the definition of Short Term Option Series to make clear that it includes Wednesday expirations.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
In particular, the Exchange believes the Short Term Option Series Program has been successful to date and that Wednesday SPY Expirations simply expand the ability of investors to hedge risk against market movements stemming from economic releases or market events that occur throughout the month in the same way that the Short Term Option Series Program has expanded the landscape of hedging. Similarly, the Exchange believes Wednesday SPY Expirations should create greater trading and hedging opportunities and flexibility, and provide customers with the ability to more closely tailor their investment objectives. The Exchange believes that allowing Wednesday SPY Expirations and monthly SPY expirations in the same week will benefit investors and minimize investor confusion by providing Wednesday SPY Expirations in a continuous and uniform manner. Finally, the Exchange represents that it has an adequate surveillance program in place to detect manipulative trading in Wednesday SPY Expirations in the same way it monitors trading in the current Short Term Option Series. The Exchange also represents that it has the necessary systems capacity to support the new options series. Also, the Exchange notes that BOX Options Exchange LLC (“BOX”) recently received approval to list Wednesday expirations for SPY options.
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 notes that having Wednesday expirations is not a novel proposal, BOX has received approval to list Wednesday expirations for SPY options.
No written comments were either solicited or received.
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, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days from the date of filing. However, Rule 19b-4(f)(6)(iii)
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 the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing a proposal to amend the MIAX Options Fee Schedule (the “Fee Schedule”).
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 amend Section 1)b) of the Fee Schedule, Marketing Fee, to add to the list of symbols for which the Exchange assesses a $0.12 per contract Posted Liquidity Marketing Fee. In addition to the current symbols listed in Section 1)b), the Exchange is proposing to assess the Posted Liquidity Marketing Fee for contracts executed in DIA, FB, GDX, SLV, USO, UVXY, and VXX. The Exchange also proposes to assess the applicable per contract non-Market Maker transaction fees for executions in these new symbols, as described more fully below.
A Marketing Fee is assessed on certain transactions of all Market Makers.
(i) A Marketing Fee to all Market Makers for contracts, including mini options, they execute in their assigned classes when the contra-party to the execution is a Priority Customer. MIAX will not assess a Marketing Fee to Market Makers for contracts executed as a PRIME Agency Order, Contra-side Order, Qualified Contingent Cross Order, PRIME Participating Quote or Order, or a PRIME AOC Response in the PRIME Auction, unless it executes against an unrelated order.
(ii) an additional $0.12 per contract Posted Liquidity Marketing Fee to all Market Makers for any standard options overlying EEM, GLD, IWM, QQQ, and SPY that Market Makers execute in their assigned class when the contra-party to the execution is a Priority Customer and the Priority Customer order was posted on the MIAX Book at the time of the execution. MIAX will not assess the additional Posted Liquidity Marketing Fee to Market Makers for contracts executed as a PRIME Agency Order, Contra-side Order, Qualified Contingent Cross Order, or a PRIME AOC Response or PRIME Participating Quote or Order in the PRIME Auction. MIAX will also not assess the additional Posted Liquidity Marketing Fee to Market Makers for contracts executed pursuant to a Liquidity Refresh Pause, route timer, or during the Opening Process. This Posted Liquidity Marketing Fee is in addition to the current Marketing Fee of $0.25 per contract for standard options overlying these enumerated symbols that Market Makers execute in their assigned class when the contra-party to the execution is a Priority Customer.
Funds collected via the Marketing Fee, including the additional $0.12 per contract Posted Liquidity Marketing Fee, are put into “pools” controlled by Primary Lead Market Makers (“PLMMs”)
The purpose of the Posted Liquidity Marketing Fee is to further encourage Members to post additional Priority Customer orders on the Exchange's Book in the enumerated high volume symbols. Increased Priority Customer orders on the Exchange's Book in these symbols provides for greater liquidity, which benefits all market participants on the Exchange. The Exchange now proposes to add to the following high volume symbols to its Posted Liquidity Marketing Fee program: DIA, FB, GDX, SLV, USO, UVXY, and VXX,
The Exchange also proposes to adopt the same additional $0.50 per contract transaction fee for options overlying DIA, FB, GDX, SLV, USO, UVXY, and VXX executed by non-MIAX Market Makers as currently applies to options overlying EEM, GLD, IWM, QQQ, and SPY executed by non-MIAX Market Makers as set forth in footnote 8, Section (1)(a)(ii) of the Fee Schedule.
MIAX believes that its proposed rule change is consistent with Section 6(b) of the Act
The proposed changes are designed to incentivize order flow providers to post additional Priority Customer orders in DIA, FB, GDX, SLV, USO, UVXY, and VXX options on the Exchange's Book. The proposed marketing fee rate is reasonable in that although it may result in a marketing fee that is slightly higher than similar marketing fee programs, it is still in the range of marketing fee programs on other competing exchanges which charge lower marketing fees for Penny Pilot options classes versus non-Penny Pilot options classes.
The Exchange believes that its proposal to assess the additional Posted Liquidity Marketing Fee for transactions in DIA, FB, GDX, SLV, USO, UVXY, and VXX options, and not other options classes, is consistent with other options markets that provide additional incentives to increase order flow in high volume symbols including assessing different marketing fees for Penny options classes as compared to non-Penny options classes.
Further, the Exchange's proposed transaction fees for non-MIAX Market Makers in DIA, FB, GDX, SLV, USO, UVXY, and VXX are reasonable in order to ensure that the net transaction fees for non-MIAX Market Makers remain higher than Market Makers in a manner that is designed to encourage market participants to become members and register as Market Makers versus otherwise sending orders to the Exchange as a non-MIAX Market Maker in order to avoid a higher transaction fee.
The Exchange 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. The proposal is designed to encourage an increase in Priority Customer orders in DIA, FB, GDX, SLV, USO, UVXY, and VXX options posted to the Exchange's Book in order to bring greater volume and liquidity, which benefit all market participants by providing more trading opportunities and tighter spreads. An increase in the submission of Priority Customer orders in DIA, FB, GDX, SLV, USO, UVXY, and VXX options on the Exchange's Book should result in an increase in competition for the opportunity to trade on the Exchange by, among other things, sending more orders and providing narrower and larger sized quotations in the effort to trade with such Priority Customer order flow. The resulting increased volume and liquidity will benefit non-Market Makers that do not pay the proposed fee and do not qualify for the marketing fee program at all, by providing more trading opportunities and tighter spreads.
To the extent that there is additional competitive burden on market participants that are not Priority Customers or Market Makers or trading in other symbols, the Exchange believes that this is appropriate because the proposal should encourage Members to direct additional order flow to the Exchange and thus provide additional liquidity that enhances the quality of its markets and increases the volume of contracts traded on the Exchange. The Exchange believes that all of the Exchange's market participants will benefit from the improved market liquidity. Enhanced market quality and increased transaction volume that results from the anticipated increase in order flow directed to the Exchange will benefit all market participants and improve competition on the Exchange.
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. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and to attract order flow to the Exchange. The Exchange believes that the proposed rule change reflects this competitive environment because it establishes a fee structure in a manner that encourages market participants to direct their order flow, to provide liquidity, and to attract additional transaction volume to the Exchange.
Written comments were neither solicited nor received.
The foregoing rule 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 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)
The Exchange proposes to (1) amend Rule 13 to eliminate orders with a sell “plus” and buy “minus” instruction and retain orders with a “Buy Minus Zero Plus” instruction, and (2) make conforming changes to Rules 104, 107B, 123C and 1004. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Rule 13 to eliminate orders with a sell “plus” and buy “minus” instruction and retain orders with a “Buy Minus Zero Plus” instruction, and make conforming changes to Rules 104, 107B, 123C and 1004. The Exchange proposes to eliminate orders with a sell “plus” and buy “minus” instruction for all securities both to streamline its rules and reduce complexity among its order type offerings.
Because of the technology changes associated with the proposed rule change, the Exchange proposes to announce the implementation date of the elimination of the order types via Trader Update.
The Exchange proposes to eliminate, and thus delete from its rules, sell “plus” and buy “minus” order instructions, as defined in Rule 13(f)(4)(A) and (B), respectively. Rule 13(f)(4)(B) would also be amended to retain a “Buy Minus Zero Plus” instruction.
First, the Exchange proposes to eliminate the sell “plus” order instruction. An order with a sell “plus” instruction is an order that will not trade at a price that is lower than the last sale if the last sale was a “plus” or “zero plus” tick or that is lower than the last sale plus the minimum fractional change in the stock if the last sale was a “minus” or “zero minus” tick, subject to the limit price of an order, if applicable.
To reflect elimination of the sell “plus” order instruction, the Exchange proposes to delete subsection (f)(4)(A) of Rule 13, which defines the sell “plus” instruction, in its entirety. Subsection (4)(B) of Rule 13(f), amended as described below, would become new subsection (4)(A).
Second, the Exchange proposes to eliminate the buy “minus” order instruction defined in Rule 13(f)(4)(B) and retain the “Buy Minus Zero Plus” order. An order with a buy “minus” instruction will not trade at a price that is higher than the last sale if the last sale was a “minus” or “zero minus” tick or that is higher than the last sale minus the minimum fractional change in the stock if the last sale was a “plus” or “zero plus” tick, subject to the limit price of an order, if applicable.
Exchange rules would continue to permit an order with a “Buy Minus Zero Plus” instruction, which is currently a sub-set of the instructions available under Rule 13(f)(4)(B). A Buy Minus Zero Plus order instruction assists member organizations with compliance with the “safe harbor” provisions of Rule 10b-18 under the Act (“Rule 10b-18”) for issuer repurchases.
To reflect elimination of the buy “minus” order instruction and retention of the “Buy Minus Zero Plus” instruction, the Exchange proposes to add “Zero Plus” after “buy minus” in the first sentence of proposed new Rule 13(f)(4)(A), capitalize “buy minus,” and delete the phrase “if the last sale was a `minus' or `zero minus' tick or that is higher than the last sale minus the minimum fractional change in the stock
The remaining subsections of Rule 13(f)(4) would be amended to reflect these proposed changes, as follows.
Current subsection (C) provides that sell “plus” and buy “minus” instructions are available for Limit Orders, Limit-on-Open (“LOO”) Orders, Limit-on-Close (“LOC”) Orders, and Market-on-Close (“MOC”) Orders. Further, the current rule provides that orders with a buy “minus” instruction that are systemically delivered to Exchange systems will be eligible to be automatically executed in accordance with, and to the extent provided by, Rules 1000-1004, consistent with the order's instructions.
Current subsection (C) would become subsection (B) and would be amended to reflect that the “Buy Minus Zero Plus” order instruction would only be available for limit orders. The Exchange would accordingly amend the first sentence of current subsection (C) to:
• Delete “sell `plus' and”;
• add “Zero Plus” after “buy minus” and capitalize “buy minus”;
• delete “LOO Orders, LOC Orders, and MOC Orders”; and
• add the word “only” after “Limit Orders”.
The second sentence of proposed new subsection (B) would be amended to:
• Add “Zero Plus” after “buy minus” and capitalize “buy minus”; and
• delete the clause “or sell `plus' ”.
Finally, current subsection (D), which provides that odd-lot sized transactions shall not be considered the last sale for purposes of executing sell “plus” or “buy” minus orders would become new subsection (C) of Rule 13(f)(4). Proposed new subsection (C) would be amended to:
Delete the clause “sell `plus' or” before “buy minus”; and capitalize “buy minus”; and
• add “Zero Plus” after “buy minus”.
The Exchange proposes certain conforming amendments to Rules 104, 107B, 123C and 1004 to reflect the elimination of sell “plus” and buy “minus” instruction as described above as follows.
The Exchange proposes to amend Rule 104 (Dealings and Responsibilities of Designated Market Makers (“DMMs”)). Specifically, Rule 104(b)(vi) provides that DMM units may not enter certain orders and modifiers including, among others, orders with Sell “Plus”—Buy “Minus” Instructions.
To conform Rule 104, the Exchange proposes to delete “Sell `Plus'—” and the quotes around the word “Minus” from Rule 104(b)(vi) and add the phrase “Zero Plus” after “Minus” and before “Instructions.” As proposed, Rule 104(b)(vi) would provide that DMM units may not enter orders with Buy Minus Zero Plus Instructions.
The Exchange proposes to amend Rule 107B (Supplemental Liquidity Providers), which sets forth the rules governing Supplemental Liquidity Providers (“SLPs”). An SLP is an Exchange member organization that electronically enters proprietary orders or quotes from off the Floor into the systems and facilities of the Exchange and is obligated, among other things, to maintain a bid or an offer at the NBB or NBO in each assigned security in round lots for at least 10% of the trading day, on average, and for all assigned SLP securities.
To conform Rule 107B, the Exchange proposes to delete the phrase “Tick sensitive orders (
The Exchange proposes to amend Rule 123C (The Closing Procedures), which specifies the procedures to be followed at the close of trading on the Exchange.
Rule 123C(4)(a) describes how the Exchange calculates MOC and LOC imbalances, which is intended to provide market participants with a snapshot of the prices at which interest eligible to participate in the closing transaction would be executed in full against each other at the time the data feed is disseminated. Subsection (vi) of Rule 123C(4)(a) provides that tick sensitive MOC and LOC interest and LOC orders priced equal to the last sale can reduce the Buy or Sell Imbalance to bring the imbalance quantity as close to zero as possible. The Rule also provides that the volume of tick sensitive MOC and LOC orders eligible to reduce the imbalance shall not cause the imbalance to change to the other side.
Rule 123C(4)(a)(vi)(A) specifies that, in the event of a Buy Imbalance, only Sell Plus MOC orders, Sell Plus LOC orders priced equal to or below the last sale price, and Sell and Sell Short LOC orders priced equal to the last sale will be included to offset the imbalance, and that Sell Plus MOC and Sell Plus LOC orders will be included to offset the imbalance only if such orders could be executed consistent with the terms of their tick restrictions.
Rule 123C(4)(a)(vi)(B) specifies that, in the event of a Sell Imbalance, only Buy Minus MOC orders, Buy Minus LOC orders priced equal to or above the last sale price, and Buy LOC orders priced equal to the last sale will be included to offset the imbalance. The Rule also provides that Buy Minus MOC and Buy Minus LOC orders will be included to offset the imbalance only if such orders could be executed consistent with the terms of their tick restrictions.
To reflect the elimination of orders with a sell “plus” instruction and buy “minus” instructions,
• Amend Rule 123C(4)(a)(vi) to delete the phrase “tick sensitive MOC orders and LOC orders and” before “LOC orders priced equal to the last sale to bring the imbalance quantity as close to zero as possible.” The Exchange also proposes to delete the last sentence in Rule 123C(4)(a)(vi), which provides that “[t]he volume of tick sensitive MOC and LOC orders eligible to reduce the imbalance shall not cause the imbalance to change to the other side.”
• Amend Rule 123C(4)(a)(vi) (A) to remove references to Sell Plus MOC orders and Sell Plus LOC orders priced equal to or below the last sale price. The Exchange also proposes to delete the last sentence of the subsection (A), which provides that “Sell Plus MOC and Sell Plus LOC orders will be included to offset the imbalance only if such orders could be executed consistent with the terms of their tick restrictions.”
• Amend Rule 123C(4)(a)(vi)(B) to remove references to Buy Minus MOC
Finally, the Exchange proposes to amend Rule 1004 (Election of Buy Minus, Sell Plus and Stop Orders), which provides that automatic executions of transactions reported to the Consolidated Tape shall elect, among others, buy minus and sell plus orders electable at the price of such executions. The Rule further provides that any buy minus and sell plus orders so elected shall be automatically executed as market orders pursuant to Exchange rules.
To reflect the elimination of orders with a Sell “Plus” and Buy “Minus” instruction and retention of “Buy Minus Zero Plus” orders, the Exchange proposes to add “Zero Plus” after “buy minus” in Rule 1004, capitalize “buy minus,” and delete the phrase “and sell plus” in two places. The Exchange also proposes to capitalize “market orders.” As amended, Rule 1004 would allow for the automatic execution of Buy Minus Zero Plus orders electable at the price of such executions.
The proposed rule change is consistent with Section 6(b)
Specifically, the Exchange believes that eliminating orders with a sell “plus” and buy “minus” instruction removes impediments to and perfects a national market system by simplifying functionality and complexity of its order types. The Exchange believes that eliminating these order types across all securities would not be inconsistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from the removal of complex functionality.
The Exchange further believes that deleting corresponding references in Exchange rules to deleted order types also removes impediments to and perfects the mechanism of a free and open market by ensuring that members, regulators and the public can more easily navigate the Exchange's rulebook and better understand the orders types available for trading on the Exchange. Removing obsolete cross references also furthers the goal of transparency and adds clarity to the Exchange's rules.
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 change is not designed to address any competitive issue but would rather remove complex functionality and obsolete cross-references, thereby reducing confusion and making the Exchange's rules easier to understand and navigate.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) 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 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change 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 Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Exchange Act” or “Act”)
The Exchange is proposing amendments to its rules regarding qualification, registration and continuing education requirements applicable to Equity Trading Permit (“ETP”) Holders
The Exchange has designated this rule proposal as a “non-controversial” rule change pursuant to Section 19(b)(3)(A) of the Act
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 parts of such statements.
The Exchange proposes to amend its qualification, registration, and continuing education requirements applicable to ETP Holders and Persons Associated with ETP Holders. The proposed amendments are intended to: (i) Provide transparency and clarity with respect to the Exchange's registration, qualification, and examination requirements; (ii) ensure that all persons engaging in trading on the Exchange or performing supervisory or operational functions are properly registered and subject to the examination and continuing education requirements necessary for their business function; (iii) align the Exchange's qualification, registration and examination rules with those of the Financial Industry Regulatory Authority (“FINRA”) and other SROs so as to promote uniform standards across the securities industry; (iv) provide for the Securities Trader registration (Series 57) and Securities Trader Principal registration; and (v) reorganize certain rules, add new definitions of terms, and make other conforming or ministerial, non-substantive amendments designed to enhance the comprehensiveness and clarity of the Exchange's rules. The proposed changes are discussed below.
The Exchange is proposing to amend NSX Rule 1.5 to add new definitions, revise certain definitions in the current rule, and make non-substantive changes to the rule text. The Exchange first proposes to amend the definition of an ETP in NSX Rule 1.5E.(1). As currently defined in the rule, the term ETP “. . . shall refer to an Equity Trading Permit issued by the Exchange for effecting approved securities transactions on the Exchange's trading facilities. An ETP may be issued to a sole proprietor, partnership, corporation, limited liability company or other organization which is a registered broker or dealer pursuant to Section 15 of the Act, and which has been approved by the Exchange.”
Under the Exchange's proposed amendment, the definition of an “ETP” would retain the text that an ETP shall refer to an Equity Trading Permit issued by the Exchange for effecting approved securities transactions on the Exchange's trading facilities. However, the subsequent text in the current rule, which provides that an ETP may be issued to a sole proprietor, partnership, corporation, limited liability company or other organization which is a registered broker or dealer pursuant to Section 15 of the Act, will be moved to NSX Rule 2.3, entitled “ETP Holder Eligibility,” where it is more logically placed given the content of that rule. Additionally, the relocated text will be amended to add a requirement that the prospective ETP Holder must be a member of another national securities exchange or national securities association in order to be eligible to become an ETP Holder of NSX. The Exchange is proposing this amendment because it will not act as the Designated Examining Authority for any ETP
The Exchange is also proposing to add new definitions for the terms “Person,” “Principal,” “Principal—Financial and Operations,” “Securities Trader,” and “Securities Trader Principal.” Proposed Rule 1.5P.(1) will define the term “Person” as a natural person, corporation, partnership, limited liability company, association, joint stock company, trustee of a trust fund, or any organized group of persons whether incorporated or not.
The term “Principal” will be defined in proposed Rule 1.5P.(3) as any person actively engaged in the management of the ETP Holder's securities business, including supervision, solicitation, the conduct of the ETP Holder's business, or the training of Authorized Traders
A Principal—Financial and Operations (“FINOP”) will be defined in proposed Rule 1.5P.(4) as a Person Associated with an ETP Holder whose responsibilities include final approval and responsibility for the accuracy of financial reports submitted to securities industry regulatory bodies and the final preparation of such reports; supervision of individuals who assist in the preparation of such reports; supervision of and responsibility for individuals who are involved in the maintenance of the ETP Holder's books and records from which such reports are derived; supervision and/or performance of the ETP Holder's responsibilities under all financial responsibility rules under the provisions of the Act; overall supervision of and responsibility for the individuals who are involved in the administration and maintenance of the ETP Holder's back office operations; or any other matter involving the financial and operational management of the ETP Holder.
The Exchange proposes to add the terms Securities Trader and Securities Trader Principal to Exchange Rule 1.5S. Proposed Rule 1.5S.(1) states that the term “Securities Trader” means any person engaged in the purchase or sale of securities or other similar instruments for the account of an ETP Holder with which such person is associated, as an employee or otherwise, and who does not transact any business with the public. Proposed Rule 1.5S.(2) states that the term “Securities Trader Principal” means a person who has become qualified and registered as a Securities Trader and passes the General Securities Principal qualification examination. Each Principal with responsibility over securities trading activity on the Exchange shall become qualified and registered as a Securities Trader Principal. The Exchange's proposed definitions of the Securities Trader and Securities Trader Principal registration categories align with those contained in NASD Rules 1032 and 1022(a)(6)(A), respectively.
The Exchange also proposes to make changes to the numbering and capitalization and other ministerial changes to Rule 1.5 in light of the additions that have been made to the Rule.
The Exchange is proposing to make changes to Chapter II of its rules with respect to the eligibility, obligations and restrictions applicable to ETP Holders; and the qualification, registration and continuing education requirements applicable to Principals of ETP Holders, Authorized Traders, and Persons Associated with an ETP Holder. The proposed changes will align the Exchange's rules with those of other SROs and provide ETP Holders, their registered and non-registered personnel, and other market participants with reasonable notice of the requirements established by the Exchange in these subject areas.
The Exchange proposes to amend NSX Rule 2.2, entitled Obligations of ETP Holders and the Exchange. The current text of the rule will be denoted as paragraph (a) and additional rule text will be added in new paragraphs (b) through (e). Proposed paragraph (b) provides that each ETP Holder shall require each Person Associated with such ETP Holder as defined in NSX Rule 1.5P.(2) to agree: (i) To supply the Exchange with such information as may be specified by the Exchange with respect to such person's relationships and dealings with the ETP Holder; (ii) to permit the examination by the Exchange of such person's books and records to verify the accuracy of the information so supplied; and (iii) to be regulated by the Exchange and recognize the Exchange's obligation under the Act to enforce compliance with the Exchange's Rules, By-Laws, Interpretations and Policies and the provisions of the Act and the rules and regulations thereunder. The Exchange is proposing these requirements in order to make more explicit in the Exchange's rules the obligation of ETP Holders, and all Persons Associated with the ETP Holder, to comply with Exchange information requests, to permit the examination of any books and records relevant to the subject matter of an Exchange inquiry, and to consent to the regulatory jurisdiction of the Exchange.
Proposed new subparagraph (c)(i) of Rule 2.2 provides that an ETP Holder shall register through the Central Registration Depository System (“CRD System”)
Further, pursuant to proposed subparagraph (c)(i), a Principal that is responsible for supervising Authorized Traders or any Principal designated as a Chief Compliance Officer on Schedule A of the ETP Holder's Form BD must pass the General Securities Principal qualification examination (“Series 24”) and be registered in CRD. Alternatively, proposed Interpretations and Policies provision .02 provides that the Exchange will accept the New York Stock Exchange (“NYSE”) Chief Compliance Officer Examination
Proposed subparagraphs (c)(ii) and (iii) of Rule 2.2 require each ETP Holder, except a sole proprietorship or a proprietary trading firm with 25 or fewer Authorized Traders (such entity defined as a “Limited Size Proprietary Firm”), to have a minimum of two registered Principals. A Person registered solely as a FINOP, as defined in Rule 1.5P.(4), does not count toward the two-Principal requirement and shall not be qualified to function in a Principal capacity with responsibility over any area of business activity not described in Rule 1.5P.(4).
Proposed subparagraph (c)(iii) states that for purposes of the Rule, the Exchange proposes to define a proprietary firm as an ETP Holder that trades its own capital and conducts all of its trading activity using exclusively firm accounts and firm funds; does not have customer accounts; whose traders are owners of, employees of, or contractors of the firm; and is not a FINRA member.
The Exchange further proposes to include a waiver provision that will permit the Exchange to waive the requirements of this proposed subparagraph in situations that indicate conclusively that only one person associated with an applicant for membership should be required to register as a Principal. The Exchange is proposing this amendment to align Rule 2.2(c)(ii) with NASD Rule 1021(e)(2), which contains the same waiver provision.
The Exchange proposes in paragraph (d) of amended NSX Rule 2.2 to require that ETP Holders designate and register with the Exchange through the CRD System a FINOP, as described in proposed NSX Rule 1.5P.(5). The FINOP will be required by the Exchange to pass the Financial and Operations Principal examination (“Series 27”) examination”).
The Exchange is further proposing to adopt NSX Rule 2.2(e), Continuing Education Requirements, describing such requirements for all Registered Persons of ETP Holders. The requirements proposed in Rule 2.2(e) are identical to those in the rules of other SROs. For the purposes of paragraph (e) the term “Registered Person” means any Person registered with the Exchange as a General Securities Representative, Securities Trader, Principal, FINOP, Person Associated with an ETP Holder, Authorized Trader, or Market Maker Authorized Trader pursuant to Exchange Rules.
The Exchange submits that its proposed adoption of the uniform securities industry rules regarding continuing education requirements will promote uniformity among SRO rules.
The Exchange proposes to amend the Interpretations and Policies of NSX Rule 2.2 to add new provisions and to relocate and amend certain text currently found in the Interpretation and Policies provisions of current NSX Rule 2.4 (Restrictions) as Interpretations and Policies to NSX Rule 2.2. Currently, NSX Rule 2.4 Interpretations and Policies describe the qualification requirements that align with NSX Rule 2.2, as proposed to be amended by this rule filing, and the Exchange believes that relocating these provisions will result in a better organizational structure and greater clarity in its rules. The Exchange also proposes to add to the amended NSX Rule 2.2 Interpretations and Policies new provisions relating to the Securities Trader and Securities Trader Principal categories of registration.
As amended, the NSX Rule 2.2 Interpretations and Policies include the following: In provision .01, the Exchange states that it requires the Series 7 or an equivalent foreign examination module approved by the Exchange in qualifying persons seeking registration as General Securities Representatives. The Exchange is relocating this clause from NSX Rule 2.4 Interpretations and Policies, provision .01(c) and adding the text allowing for an equivalent foreign examination module, which will align the Exchange's requirements with those of other SROs.
In proposed provision .02, the Exchange states that it will accept the NYSE Series 14 as an alternative qualification to the Series 24 to register as a Principal an individual identified as the Chief Compliance Officer on ETP Holder's Form BD. Additionally, in order to conform to the rules of other SROs, the Exchange specifies in provision .05 that it uses the Uniform Application for Securities Industry Registration or Transfer (“Form U4”), and the Uniform Termination Notice for Securities Industry Registration (“Form U5”), through the CRD System as part of its procedure for registration of ETP Holder personnel. Form U4 shall be amended by the ETP Holder no later than 30 days after an event that would require an amendment to Form U4.
In proposed provision .06, the substance of which is being relocated from NSX Rule 2.4 Interpretations and Policies .01(b), the Exchange will have the authority to waive the requirement of a proficiency examination in exceptional cases, upon a written request and a showing of good cause by an applicant. Advanced age or physical infirmity will not individually of themselves constitute sufficient grounds to waive a qualification examination. Experience in fields ancillary to the investment banking or securities business may constitute sufficient
The Exchange is proposing to add Interpretations and Policies provisions .03 and .04 to adopt the Securities Trader and Securities Trader Principal registrations.
In proposed provision .03, the Exchange will require the Securities Trader Qualification Examination (“Series 57”) and registration for persons meeting the definition of a Securities Trader as set forth in Rule 1.5S.(1). A person registered as a Securities Trader will not be able to function in any other registration category unless he or she is also qualified in such other registration category. For example, a person registered solely as a Securities Trader would not be able to perform all of the functions of a General Securities Representative (Series 7), unless such person had obtained that registration as well.
Proposed provision .04 would further require that a Principal who will have supervisory responsibility for securities trading activity on the Exchange to become qualified and registered as a Securities Trader Principal. Qualification as a Securities Trader Principal would require the Series 57 examination as a prerequisite to taking the Series 24 examination. A Person who is qualified and registered as a Securities Trader Principal may only have supervisory responsibilities for the trading activity described in NASD Rule 1032(f)(1), unless such person is separately qualified and registered in another appropriate principal registration category. A person who is registered as a General Securities Principal shall not be qualified to supervise the trading activities described in NASD Rule 1032(f)(1), unless such person has also become qualified and registered as a Securities Trader under NASD Rule 1032(f) by passing the Securities Trader qualification examination and becoming registered as a Securities Trader Principal.
The Exchange is proposing amendments to NSX Rule 2.4, Restrictions, that are intended to streamline and clarify the rule requirements. In light of other changes contained in this rule proposal, the text of current NSX Rule 2.4(e) and Interpretations and Policies .01 and .02 has been relocated to NSX Rule 2.2 and the Interpretations and Policies to such rule. In certain areas, the repositioned rule text has been further amended. These changes are proposed to better organize the Exchange's requirements for the qualification, registration and continuing education requirements applicable to registered persons. With respect to the remaining text of NSX Rule 2.4, the Exchange is proposing certain non-substantive amendments designed to enhance the clarity of the rule.
The Exchange is proposing certain non-substantive, technical or conforming amendments to NSX Rules 2.5, 2.6, 2.7 and 2.11. Current NSX Rule 2.5, Application Procedures for an ETP Holder or to become an Associated Person of an ETP Holder, provides in paragraph (b) that “[a]pplications for association with an ETP Holder shall be made on Form U4 and such other forms as the Exchange may prescribe, and shall be delivered to the Exchange's Vice President of Regulation or such other officer or employee as designated by the Exchange.” In view of the Exchange's proposed amendments to NSX Rule 2.2, the text of paragraph (b) is no longer needed and the Exchange proposes to delete this text and denote paragraph (b) as “Reserved.”
Similarly, paragraph (f) currently provides that “[e]xcept where, pursuant to Section 17(d) of the Act, the Exchange has been relieved of its responsibility to review and act upon applications for associated persons of an ETP Holder, the procedure set forth in this Chapter shall govern the processing of any such applications.” The Exchange is proposing to delete this provision because it retains the authority and responsibility to review and approve applications for associated persons of ETP Holders, and the proposed amendments to the qualification and registration requirements discussed in this filing make this current rule text inapposite. Moreover, were the Exchange to enter into an agreement with another SRO to review and act upon applications for associated persons of ETP Holders, such an agreement would be subject to a filing with the Commission pursuant to Section 17(d) of the Act. Accordingly, the Exchange proposes to delete the current text and make paragraph (f) “Reserved.”
The Exchange is proposing ministerial, non-substantive amendments to NSX Rule 2.6, entitled Revocation of an ETP or an Association with an ETP Holder, NSX Rule 2.7, entitled Voluntary Termination of Rights as an ETP Holder and NSX Rule 2.11, entitled NSX Securities, LLC. NSX Rule 2.6 currently states, in relevant part, that “[i]n connection with any revocation or voluntary termination of an ETP pursuant to Rule 2.7, the ETP shall be cancelled.” The Exchange proposes to delete the text referencing a voluntary termination of an ETP from NSX Rule 2.6 and add it to NSX Rule 2.7, where it is more logically placed.
Finally, the Exchange proposes a ministerial amendment to Rule 2.11(a)(2) to remove an obsolete reference to the National Association of Securities Dealers (“NASD”) as the unaffiliated SRO having oversight responsibilities for NSX Securities, LLC, the Exchange's outbound order routing facility. The correct reference should be to the Financial Industry Regulatory Authority and the Exchange proposes to amend the rule to denote that fact.
The Exchange is proposing to make several amendments to Chapter XI, Trading Rules. First, the Exchange proposes to amend Rule 11.6, Obligations of Market Maker Authorized Traders, to align the text of the rule with the Exchange's proposed rule changes regarding the qualification and registration of Persons Associated with
The Exchange is further proposing amendments to NSX Rule 11.10, Authorized Traders, to add new paragraph (e). As proposed, the new rule text will state that, to be eligible for registration as an Authorized Trader of an ETP Holder, a person must successfully complete the Series 57 examination and any other training and/or certification programs as may be required by the Exchange.
The Exchange believes that the proposed amendments to NSX Rules 11.6 and 11.10 will provide internal consistency within NSX's rules and eliminate a fragmented qualification standard for individuals engaged in trading on the Exchange. Currently under Rule 11.6, an individual is required to pass the Series 7 examination to register as an MMAT. Current Rule 11.10 does not include a similar requirement for an Authorized Trader that will not act as an MMAT. The Exchange proposes to replace the Series 7 qualification with the Series 57 qualification for both Authorized Traders and MMATs, thereby providing a uniform registration requirement.
Additionally, the Exchange proposes to change Rule 11.6(b) to clarify that the Exchange will register an MMAT upon receiving a written application from a Market Maker and subject to the eligibility criteria described in the rule. This change is intended to clarify that the MMAT applicant must meet the eligibility criteria set forth in the Rule before the Exchange will register the MMAT.
The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act
The proposed amendments to NSX Rule 1.5, whereby the Exchange proposes to add new definitions for the terms “ETP Holder,” “Person,” “Principal,” “Principal—Financial and Operational,” “Securities Trader,” and “Securities Trader Principal,” are consistent with the statutory provisions in that they add clarity and context to the Exchange's rules regarding securities industry personnel to whom the proposed amended qualification and registration requirements will apply.
The Exchange's proposed amendments to certain provisions contained in Chapter II of the NSX rules, entitled “ETP Holders of the Exchange,” also satisfy the requirements of Sections (6)(b)(5) and 6(c)(3)(B) of the Act in that, among other things, they prescribe the standards of training, experience, and competence for ETP Holders and their Associated Persons. Specifically, the proposed amendments to NSX Rule 2.2(b)(i) through (iii), providing that each ETP Holder shall require its Associated Persons to agree: (i) To supply the Exchange with information as requested; (ii) to permit the examination by the Exchange of the person's books and records; and (iii) to be regulated by the Exchange and recognize the Exchange's obligations to enforce compliance with its rules, by-laws and policies and the provisions of the Act, are consistent with Section 6(b)(5) in that they are designed to establish standards of conduct for proposed Associated Persons. The provisions will operate to promote cooperation and coordination among persons regulating the securities markets, which is one of the objectives of Section 6(b)(5).
Proposed NSX Rule 2.2(c)(i)-(iii) addresses the requirements for ETP Holders to register Principals, and provides an exemption from the two-Principal registration requirement for sole proprietorships and proprietary trading firms, the latter as defined in NSX Rule 2.2(c)(iii). Proposed NSX Rule 2.2(d) contains the requirement for each ETP Holder to register a FINOP. These proposed rule provisions are consistent with the rules of other SROs; their adoption by the Exchange is designed to further enhance cooperation and coordination among those entities responsible for regulating the securities industry, thereby meeting the statutory requirement set forth in Section 6(b)(5).
In proposed NSX Rules 2.2(e)(i) and (ii) the Exchange will adopt the uniform industry rules establishing continuing education requirements for the registered personnel. The proposed revisions will contribute to the consistency of application of continuing education requirements and meet the statutory mandate of Section 6(c)(3)(B) that the Exchange's rules be designed to prescribe standards of training and competence for registered personnel associated with its ETP Holders. The proposed continuing education requirements will contribute to uniform standards across the securities industry and avoid unnecessary duplication or inconsistencies among SRO rules.
The Exchange's proposed amendments to Interpretations and Policies .01 through .07 of NSX Rule 2.2 also meet the requirements of Sections 6(b)(5) and 6(c)(3)(B) pursuant to the Act. These proposed amendments specify that: (i) The Exchange requires the Series 7 or an equivalent foreign examination module in qualifying persons as General Securities Representatives; (ii) the NYSE Series 14 can be used as a qualification for Principals designated as an ETP Holder's Chief Compliance Officer; (iii) those who meet the qualifications of a Securities Trader must pass the Series 57; (iv) any Principal who supervises Securities Trading activity must qualify as a Securities Trader Principal, and only a Principal qualified as a Securities
The Exchange's proposed amendments to NSX Rules 2.5, 2.6, 2.7, and 2.11 are designed as conforming amendments that resulted from the proposed changes to the Exchange's qualification and registration rules, or are ministerial, non-substantive changes designed to correct deficient or obsolete text and promote clarity and consistency in the Exchange's rules. Such amendments are consistent with Section 6(b)(5) of the Act in that, by enhancing the organization and clarity of the Exchange's rules, they operate to promote just and equitable principles of trade.
The Exchange has further proposed amendments Chapter XI, Trading Rules, and specifically to NSX Rules 11.6 and 11.10. The proposed amendments codify the qualification standards for MMATs and for Authorized Traders. The proposed amendments are designed to establish the standard of competence and knowledge required of those categories of registered personnel, which is consistent with the requirements of Section 6(c)(3)(B) of the Act. The adoption of these rule amendments will conform the Exchange's standards those of FINRA and other SROs.
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 amendments are intended to promote transparency in the Exchange's rules, and consistency with the rules of other SROs with respect to the examination, qualification, and continuing education requirements applicable to ETP Holders and their registered personnel. The Exchange believes in that regard that any burden on competition would be clearly outweighed by the important regulatory goal of ensuring clear and consistent requirements applicable across SROs, avoiding duplication, and mitigating any risk of SROs implementing different standards in these important areas.
Further, the Exchange does not believe that the proposed amendments will affect competition among securities markets since FINRA and exchanges have adopted similar rules with uniform standards for qualification, registration and continuing education requirements.
The Exchange has not solicited or received any comments on the proposed rule change from market participants or others.
Because the foregoing proposed rule change does not:
A. Significantly affect the protection of investors or the public interest;
B. impose any significant burden on competition; and
C. become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)
At any time within sixty (60) days of the filing of such proposed rule change, the Commission may summarily temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
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 the delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
CBOE proposes to expand the Short Term Option Series Program to allow Wednesday expirations for SPDR S&P 500 ETF Trust (“SPY”) options. The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to expand the Short Term Option Series Program outlined in Rule 5.5(d) to allow the listing and trading of SPY options with Wednesday expirations. This is a competitive filing based on a filing submitted by the BOX Options Exchange, LLC (“BOX”), which the Commission recently approved.
Currently, under the Short Term Option Series Program, which was made permanent in 2009,
In regards to Wednesday SPY Expirations, the Exchange is proposing to remove the current restriction preventing CBOE from listing Short Term Option Series that expire in the same week in which monthly option series in the same class expire. Specifically, the Exchange would be allowed to list Wednesday SPY Expirations in the same week in which monthly option series in SPY expire. The current restriction to prohibit the expiration of monthly and Short Term Option Series from expiring on the same trading day is reasonable to avoid investor confusion. This confusion would not apply with Wednesday SPY Expirations and standard monthly options because they would not expire on the same trading day, as standard monthly options do not expire on Wednesdays. Additionally, it would lead to investor confusion if Wednesday SPY Expirations were not listed for one week every month because there was a monthly SPY expiration on the Friday of that week. The existing restriction that a Short Term Option Series may not expire on the same day that a Quarterly Option Series expires would apply to Wednesday SPY Expirations.
Under the proposal, CBOE may open for trading on any Tuesday or Wednesday that is a business day, series of SPY options that expire at the close of business on each of the next five Wednesdays that are business days and are not Wednesdays on which Quarterly Options Series expire. The Exchange may have no more than a total of five Wednesday SPY Expirations listed. This is similar to the listing procedures for Short Term Option Series that expire on Fridays. If the Exchange is not open for business on the respective Tuesday or Wednesday, the Wednesday SPY Expiration Opening Date will be the first business day immediately prior to that respective Tuesday or Wednesday. Similarly, if the Exchange is not open for business on a Wednesday, the expiration date for a Wednesday SPY Expiration will be the first business day immediately prior to that Wednesday. This is also similar to the procedures for Short Term Option Series that expire on Fridays.
The Exchange is also proposing to clarify that the five expirations limit in the current Short Term Option Series Program Rule would not include any Wednesday SPY Expirations and vice versa.
Currently, for each Short Term Option Expiration Date,
As is the case with current Short Term Option Series, the Wednesday SPY Expiration series would be P.M.-settled. The Exchange does not believe that any market disruptions would be encountered with the introduction of P.M.-settled Wednesday SPY Expirations. The Exchange currently trades P.M.-settled Short Term Option Series that expire almost every Friday, which provide market participants a tool to hedge special events and to reduce the premium cost of buying protection. The Exchange seeks to introduce Wednesday SPY Expirations to, among other things, expand hedging tools available to market participants and to continue the reduction of the premium cost of buying protection. The Exchange believes that Wednesday expirations, similar to Friday expirations, would allow market participants to purchase an option based on their timing as needed and allow them to tailor their investment and hedging needs more effectively.
The Exchange is also proposing to amend Rule 1.1(bbb), which sets forth the definition of Short Term Option Series. The definition set forth in Rule 1.1(bbb) is redundant to the terms for Short Term Option Series set forth in Rule 5.5. As a result, the Exchange believes that amending Rule 1.1(bbb) by including an internal cross reference to Rule 5.5(d) and by deleting redundant language would result in a less bulky definition and would make the Rulebook more user friendly.
The Exchange is taking this opportunity to amend Rule 5.5(d) with respect to Exchange closures on Fridays that would otherwise be eligible as Short Term Option Expiration Dates. Specifically, the Exchange is cleaning up outdated language that previously tied listings to Fridays in the following business week,
The Exchange proposes to add the new rule text language regarding Wednesday SPY Expirations at the beginning of Rule 5.5(d), before the provisions governing classes, expiration, initial series, additional series, strike interval and delisting. The Exchange believes that placement of Wednesday SPY Expirations at the start of Rule 5.5(d) would make it apparent that the rest of Rule 5.5(d) applies to Wednesday SPY Expirations. To make this point clear, the Exchange proposes to add the sentence, “References to `Short Term Option Series' below shall be read to include `Wednesday SPY Expirations,' except where indicated otherwise[ ]” before the Arabic numbered paragraphs set forth in Rule 5.5(d).
The Exchange believes that the introduction of Wednesday SPY Expirations would provide investors with a flexible and valuable tool to manage risk exposure, minimize capital outlays, and be more responsive to the timing of events affecting the industry.
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes the Short Term Option Series Program has been successful to date and that Wednesday SPY Expirations simply expand the ability of investors to hedge risk against market movements stemming from economic releases or market events that occur throughout the month in the same way that the Short Term Option Series Program has expanded the landscape of hedging. Similarly, the Exchange believes Wednesday SPY Expirations should create greater trading and hedging opportunities and flexibility, and provide customers with the ability to more closely tailor their investment objectives. The Exchange believes that allowing Wednesday SPY Expirations and monthly SPY expirations in the same week would benefit investors and minimize investor confusion by providing Wednesday SPY Expirations in a continuous and uniform manner.
In addition to the substantive proposal to permit Wednesday SPY Expirations, the Exchange is proposing to make two technical changes to the text of Rule 5.5(d). One proposed change is grammatical and the other is a cleanup change that would benefit investors because CBOE's Rulebook would have parallel structure and would be more user friendly.
The Exchange represents that it has an adequate surveillance program in place to detect manipulative trading in Wednesday SPY Expirations in the same way it monitors trading in the current Short Term Option Series. Finally, the Exchange also represents that it has the necessary systems capacity to support the new options series.
CBOE does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that it currently trades Wednesday expirations for certain
The Exchange neither solicited nor received comments on 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, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days from the date of filing. However, Rule 19b-4(f)(6)(iii)
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 5.3(i)(3) to amend the requirements for the dissemination of news in compliance with the Exchange's immediate release policy. 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.
NYSE Arca Equities Rules 5.3(i)(2) and (3) require a listed company to make immediate public disclosure of all material information concerning its affairs (the “immediate release policy”). NYSE Arca Equities Rule 5.3(i)(3) provides that companies should comply with the immediate release policy by releasing material information “simultaneously to any of the following organizations”:
“(a) the primary business and financial newswire services (Dow Jones and Reuters);
(b) the national services (
(c) The WALL STREET JOURNAL, NEW YORK TIMES, LOS ANGELES TIMES, SAN FRANCISCO CHRONICLE, and SAN FRANCISCO EXAMINER;
(d) Moody's Investors Service and Standard & Poor's Corporation; and
(e) a company that distributes press releases over private teletype networks may find PR Newswire and Business Wire helpful in gaining news coverage.”
The Exchange proposes to amend Rule 5.3(i)(3) to conform it to the immediate release policies of the New York Stock Exchange (“NYSE”), NYSE MKT and Nasdaq.
Foreign private issuers and issuers registered under the Investment Company Act other than closed end funds are subject to the immediate release policy but they are not required to comply with Regulation FD.
While the Exchange continues to believe that there are benefits to the market and investors generally if companies issue press releases when disclosing material information, the Exchange nonetheless believes that it is appropriate to harmonize its requirements in this regard with Regulation FD, as well as with Section 202.06 of the NYSE Listed Company Manual, NYSE MKT Company Guide Section 402 and Nasdaq Marketplace Rule 5250(b)(1), thereby eliminating the confusion inherent in having different regimes applied by different listing exchanges and the Commission. The Exchange believes that many companies will continue to issue press releases in relation to material news events, and the proposed amendment includes language that encourages companies to disclose material news via a press release. However, the Exchange also believes that it is appropriate to enable companies to utilize the [sic] flexibility and discretion with respect to the method of disclosure provided by Regulation FD.
The Exchange also proposes to delete from the rule the existing list of methods for disseminating material news and to instead specify in the revised rule that any company disseminating material news by means of a press release should release it to the major news wire services, including, at a minimum, Dow Jones & Company, Inc., Reuters Economic Services and Bloomberg Business News. This revised provision is the same as the press release requirements of the NYSE and, in the Exchange's opinion, it represents a more effective approach to news dissemination than may be the case under some of the approaches permitted under the current rule.
The Exchange proposes to include language in the revised rule specifying that listed companies choosing to comply with the immediate release policy by disseminating information via their Web site or social media must comply with the Commission's guidelines applicable to the use of companies' Web sites or social media for purposes of compliance with Regulation FD.
The Exchange also proposes to replace references to the “Securities Qualification Department” and the “Surveillance Department” throughout Rule 5.3 and in Rule 5.5(m) with references to NYSE Regulation, as there are no longer groups within the Exchange with those titles and the relevant work is performed in each case by the staff of NYSE Regulation.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed amendment simply harmonizes the Exchange's immediate release policy with the Commission's requirements in Regulation FD. The proposed amendment also harmonizes the method of compliance with the Exchange's immediate release policy with the methods of compliance for the NYSE, NYSE MKT and Nasdaq immediate release policies and makes other non-substantive changes to the Company Guide. Accordingly, there will be no burden on competition because the other markets already have similar rules.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
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 Rule 13—Equities to eliminate orders with a sell “plus” and buy “minus” instruction and retain orders with a “Buy Minus Zero Plus” instruction, and (2) make conforming changes to Rules 104—Equities, 107B—Equities, 123C—Equities and 1004—Equities. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Rule 13—Equities (“Rule 13”) to eliminate orders with a sell “plus” and buy “minus” instruction and retain orders with a “Buy Minus Zero Plus” instruction, and make conforming changes to Rules 104—Equities (“Rule 104”), 107B—Equities (“Rule 107B”), 123C—Equities (“Rule 123C”) and 1004—Equities (“Rule 1004”). The Exchange proposes to eliminate orders with a sell “plus” and buy “minus” instruction for all securities both to streamline its rules and reduce complexity among its order type offerings.
Because of the technology changes associated with the proposed rule change, the Exchange proposes to announce the implementation date of the elimination of the order types via Trader Update.
The Exchange proposes to eliminate, and thus delete from its rules, sell “plus” and buy “minus” order instructions, as defined in Rule 13(f)(4)(A) and (B), respectively. Rule 13(f)(4)(B) would also be amended to retain a “Buy Minus Zero Plus” instruction.
First, the Exchange proposes to eliminate the sell “plus” order instruction. An order with a sell “plus” instruction is an order that will not trade at a price that is lower than the last sale if the last sale was a “plus” or “zero plus” tick or that is lower than the last sale plus the minimum fractional change in the stock if the last sale was a “minus” or “zero minus” tick, subject to the limit price of an order, if applicable.
To reflect elimination of the sell “plus” order instruction, the Exchange proposes to delete subsection (f)(4)(A) of Rule 13, which defines the sell “plus” instruction, in its entirety. Subsection (4)(B) of Rule 13(f), amended as described below, would become new subsection (4)(A).
Second, the Exchange proposes to eliminate the buy “minus” order instruction defined in Rule 13(f)(4)(B) and retain the “Buy Minus Zero Plus” order. An order with a buy “minus” instruction will not trade at a price that is higher than the last sale if the last sale was a “minus” or “zero minus” tick or that is higher than the last sale minus the minimum fractional change in the stock if the last sale was a “plus” or “zero plus” tick, subject to the limit price of an order, if applicable.
Exchange rules would continue to permit an order with a “Buy Minus Zero Plus” instruction, which is currently a sub-set of the instructions available under Rule 13(f)(4)(B). A Buy Minus Zero Plus order instruction assists member organizations with compliance with the “safe harbor” provisions of Rule 10b-18 under the Act (“Rule 10b-18”) for issuer repurchases.
To reflect elimination of the buy “minus” order instruction and retention of the “Buy Minus Zero Plus” instruction, the Exchange proposes to add “Zero Plus” after “buy minus” in the first sentence of proposed new Rule 13(f)(4)(A), capitalize “buy minus,” and delete the phrase “if the last sale was a `minus' or `zero minus' tick or that is higher than the last sale minus the minimum fractional change in the stock if the last sale was a “plus” or “zero plus” tick” following “will not trade at a price that is higher than the last sale.” As proposed, an order with an instruction to “Buy Minus Zero Plus” would not trade at a price that is higher than the last sale, subject to the limit price of the order, if applicable.
The remaining subsections of Rule 13(f)(4) would be amended to reflect these proposed changes, as follows.
Current subsection (C) provides that sell “plus” and buy “minus” instructions are available for Limit Orders, Limit-on-Open (“LOO”) Orders, Limit-on-Close (“LOC”) Orders, and Market-on-Close (“MOC”) Orders. Further, the current rule provides that orders with a buy “minus” instruction that are systemically delivered to Exchange systems will be eligible to be automatically executed in accordance with, and to the extent provided by, Rules 1000-1004—Equities, consistent with the order's instructions.
Current subsection (C) would become subsection (B) and would be amended to reflect that the “Buy Minus Zero Plus” order instruction would only be available for limit orders. The Exchange would accordingly amend the first sentence of current subsection (C) to:
• Delete “sell `plus' and”;
• add “Zero Plus” after “buy minus” and capitalize “buy minus”;
• delete “LOO Orders, LOC Orders, and MOC Orders”; and
• add the word “only” after “Limit Orders”.
The second sentence of proposed new subsection (B) would be amended to:
• Add “Zero Plus” after “buy minus” and capitalize “buy minus”; and
• delete the clause “or sell `plus' ”.
Finally, current subsection (D), which provides that odd-lot sized transactions shall not be considered the last sale for purposes of executing sell “plus” or “buy” minus orders would become new subsection (C) of Rule 13(f)(4). Proposed new subsection (C) would be amended to:
• Delete the clause “sell `plus' or” before “buy minus”; and capitalize “buy minus”; and
• add “Zero Plus” after “buy minus”.
The Exchange proposes certain conforming amendments to Rules 104, 107B, 123C and 1004 to reflect the elimination of sell “plus” and buy “minus” instruction as described above as follows.
The Exchange proposes to amend Rule 104 (Dealings and Responsibilities of Designated Market Makers (“DMMs”)). Specifically, Rule 104(b)(vi) provides that DMM units may not enter certain orders and modifiers including, among others, orders with Sell “Plus”—Buy “Minus” Instructions.
To conform Rule 104, the Exchange proposes to delete “Sell `Plus'—” and the quotes around the word “Minus” from Rule 104(b)(vi) and add the phrase “Zero Plus” after “Minus” and before “Instructions.” As proposed, Rule 104(b)(vi) would provide that DMM units may not enter orders with Buy Minus Zero Plus Instructions.
The Exchange proposes to amend Rule 107B (Supplemental Liquidity Providers), which sets forth the rules governing Supplemental Liquidity Providers (“SLPs”). An SLP is an Exchange member organization that electronically enters proprietary orders or quotes from off the Floor into the systems and facilities of the Exchange and is obligated, among other things, to maintain a bid or an offer at the NBB or NBO in each assigned security in round lots for at least 5% of the trading day, on average, and for all assigned SLP securities.
To conform Rule 107B, the Exchange proposes to delete the phrase “Tick sensitive orders (
The Exchange proposes to amend Rule 123C (The Closing Procedures), which specifies the procedures to be followed at the close of trading on the Exchange.
Rule 123C(4)(a) describes how the Exchange calculates MOC and LOC imbalances, which is intended to provide market participants with a snapshot of the prices at which interest eligible to participate in the closing transaction would be executed in full against each other at the time the data feed is disseminated. Subsection (vi) of Rule 123C(4)(a) provides that tick sensitive MOC and LOC interest and LOC orders priced equal to the last sale can reduce the Buy or Sell Imbalance to bring the imbalance quantity as close to zero as possible. The Rule also provides that the volume of tick sensitive MOC and LOC orders eligible to reduce the imbalance shall not cause the imbalance to change to the other side.
Rule 123C(4)(a)(vi)(A) specifies that, in the event of a Buy Imbalance, only Sell Plus MOC orders, Sell Plus LOC orders priced equal to or below the last sale price, and Sell and Sell Short LOC orders priced equal to the last sale will be included to offset the imbalance, and that Sell Plus MOC and Sell Plus LOC orders will be included to offset the imbalance only if such orders could be executed consistent with the terms of their tick restrictions.
Rule 123C(4)(a)(vi)(B) specifies that, in the event of a Sell Imbalance, only Buy Minus MOC orders, Buy Minus LOC orders priced equal to or above the last sale price, and Buy LOC orders priced equal to the last sale will be included to offset the imbalance. The Rule also provides that Buy Minus MOC and Buy Minus LOC orders will be included to offset the imbalance only if such orders could be executed consistent with the terms of their tick restrictions.
To reflect the elimination of orders with a sell “plus” instruction and buy “minus” instructions,
• Amend Rule 123C(4)(a)(vi) to delete the phrase “tick sensitive MOC orders and LOC orders and” before “LOC orders priced equal to the last sale to bring the imbalance quantity as close to zero as possible.” The Exchange also proposes to delete the last sentence in Rule 123C(4)(a)(vi), which provides that “[t]he volume of tick sensitive MOC and LOC orders eligible to reduce the imbalance shall not cause the imbalance to change to the other side.”
• Amend Rule 123C(4)(a)(vi)(A) to remove references to Sell Plus MOC orders and Sell Plus LOC orders priced equal to or below the last sale price. The Exchange also proposes to delete the last sentence of the subsection (A), which provides that “Sell Plus MOC and Sell Plus LOC orders will be included to offset the imbalance only if such orders could be executed consistent with the terms of their tick restrictions.”
• Amend Rule 123C(4)(a)(vi)(B) to remove references to Buy Minus MOC orders and Buy Minus LOC orders priced equal to or above the last sale price. The Exchange also proposes to delete the last sentence of the subsection (B), which provides that “Buy Minus MOC and Buy Minus LOC orders will be included to offset the imbalance only if such orders could be executed consistent with the terms of their tick restrictions.”
Finally, the Exchange proposes to amend Rule 1004 (Election of Buy Minus, Sell Plus and Stop Orders), which provides that automatic executions of transactions reported to the Consolidated Tape shall elect, among others, buy minus and sell plus orders electable at the price of such executions. The Rule further provides that any buy minus and sell plus orders so elected shall be automatically executed as market orders pursuant to Exchange rules.
To reflect the elimination of orders with a Sell “Plus” and Buy “Minus” instruction and retention of “Buy Minus Zero Plus” orders, the Exchange proposes to add “Zero Plus” after “buy minus” in Rule 1004, capitalize “buy minus,” and delete the phrase “and sell plus” in two places. The Exchange also proposes to capitalize “market orders.” As amended, Rule 1004 would allow for the automatic execution of Buy Minus Zero Plus orders electable at the price of such executions.
The proposed rule change is consistent with Section 6(b)
Specifically, the Exchange believes that eliminating orders with a sell “plus” and buy “minus” instruction removes impediments to and perfects a national market system by simplifying functionality and complexity of its order types. The Exchange believes that eliminating these order types across all securities would not be inconsistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from the removal of complex functionality.
The Exchange further believes that deleting corresponding references in Exchange rules to deleted order types also removes impediments to and perfects the mechanism of a free and open market by ensuring that members, regulators and the public can more easily navigate the Exchange's rulebook and better understand the orders types available for trading on the Exchange. Removing obsolete cross references also furthers the goal of transparency and adds clarity to the Exchange's rules.
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 change is not designed to address any competitive issue but would rather remove complex functionality and obsolete cross-references, thereby reducing confusion and making the Exchange's rules easier to understand and navigate.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) 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 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change 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 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 filed a proposal to amend Rule 19.6, entitled “Series of Options Contracts Open for Trading,” related to the Short Term Option Series (“STOS”) Program to allow Wednesday expirations for SPY options. The Exchange also proposes to make corresponding changes to Rule 16.1, entitled “Definitions.” The text of the proposed rule change is available at 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 parts of such statements.
The purpose of the proposed rule change is to harmonize the Exchange's rules with the rules governing Short Term Options Series programs of other options exchanges. Specifically, the Exchange proposes to amend Rule 19.6, entitled “Series of Options Contracts Open for Trading,” related to the STOS Program to allow Wednesday expirations for SPY options. The Exchange also proposes to make certain corresponding changes to 16.1, entitled “Definitions.” The proposed rule change is based on the recent approval of a filing submitted by the BOX Options Exchange LLC (“BOX”).
Currently, under the STOS Program, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on that class that expire on each of the next five Fridays, provided that such Friday is not a Friday in which monthly options series or Quarterly Options Series expire (“Short Term Option Series”). The Exchange is now proposing to amend its rule to permit the listing of options expiring on Wednesdays. Specifically, the Exchange is proposing that it may open for trading on any Tuesday or Wednesday that is a business day, series of options on the SPDR S&P 500 ETF Trust (“SPY”) to expire on any Wednesday of the month that is a business day and is not a Wednesday in which Quarterly Options Series expire (“Wednesday SPY Expirations”).
In regards to Wednesday SPY Expirations, the Exchange is proposing to remove the current restriction preventing it from listing Short Term Option Series that expire in the same week in which monthly option series in the same class expire. Specifically, the Exchange will be allowed to list Wednesday SPY Expirations in the same week in which monthly option series in SPY expire. The current restriction to prohibit the expiration of monthly and Short Term Option Series from expiring on the same trading day is reasonable to avoid investor confusion. This confusion will not apply with Wednesday SPY Expirations and standard monthly options because they will not expire on the same trading day, as standard monthly options do not expire on Wednesdays. Additionally, it would lead to investor confusion if Wednesday SPY Expirations were not listed for one week every month because there was a monthly SPY expiration on the Friday of that week.
Under the proposed Wednesday SPY Expirations, the Exchange may list up to five consecutive Wednesday SPY Expirations at one time. The Exchange may have no more than a total of five Wednesday SPY Expirations listed. This is the same listing procedure as Short Term Option Series that expire on Fridays. The Exchange is also proposing to clarify that the five series limit in the current Short Term Option Series Program Rule will not include any Wednesday SPY Expirations.
Currently, for each Short Term Option Expiration Date,
The Exchange is also proposing to amend the definition of Short Term Option Series contained in Exchange Rule 16.1(a)(57) to make clear that STOS includes Wednesday expirations and to conform to BOX Rule 100(a)(64). Specifically, the Exchange is amending the definition to expand Short Term Option Series to those listed on any Tuesday or Wednesday and that expire on the Wednesday of the next business week. If a Tuesday or Wednesday is not a business day, the series may be opened (or shall expire) on the first business day immediately prior to that Tuesday or Wednesday.
The Exchange believes that the introduction of Wednesday SPY Expirations will provide investors with a flexible and valuable tool to manage risk exposure, minimize capital outlays, and be more responsive to the timing of events affecting the industry. The proposed rule change is a competitive proposal designed to enable the Exchange to compete equally and fairly with other options exchanges in satisfying high market demand for weekly options and continuing strong customer demand to use STOS to execute hedging and trading strategies.
The rule changes proposed herein are consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.
In particular, the Exchange believes the Short Term Option Series Program has been successful to date and that Wednesday SPY Expirations simply expand the ability of investors to hedge risk against market movements stemming from economic releases or market events that occur throughout the month in the same way that the Short Term Option Series Program has expanded the landscape of hedging. Similarly, the Exchange believes Wednesday SPY Expirations should create greater trading and hedging opportunities and flexibility, and provide customers with the ability to more closely tailor their investment objectives. The Exchange believes that allowing Wednesday SPY Expirations and monthly SPY expirations in the same week will benefit investors and minimize investor confusion by providing Wednesday SPY Expirations in a continuous and uniform manner. Finally, the Exchange represents that it has an adequate surveillance program in place to detect manipulative trading in Wednesday SPY Expirations in the same way it monitors trading in the current Short Term Option Series. The Exchange also represents that it has the necessary systems capacity to support the new options series.
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. To the contrary, with respect to intermarket competition, the Exchange believes the proposal is pro-competitive and will allow the Exchange to compete more effectively with BOX, which has already adopted changes to its STOS programs that are substantially identical to the changes proposed by this filing.
The Exchange does not believe the proposal will impose any burden on intramarket competition, as all market participants will be treated in the same manner as existing Short Term Option Series. The Exchange believes that the proposal will result in additional investment options and opportunities to achieve the investment objectives of market participants seeking efficient trading and hedging vehicles, to the benefit of investors, market participants, and the marketplace in general.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties.
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, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days from the date of filing. However, Rule 19b-4(f)(6)(iii)
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”),
The purpose of this proposed rule change by OCC is to improve the resiliency of OCC's escrow deposit program. OCC is proposing changes that are designed to: (1) Increase OCC's visibility into and control over collateral deposits made under the escrow deposit program; (2) strengthen clearing members' rights to collateral in the escrow deposit program in the event of a customer default to the clearing member; (3) provide more specificity concerning the manner in which OCC or clearing members would take possession of collateral in OCC's escrow deposit program; and (4) improve the readability of the rules governing OCC's escrow deposit program by consolidating all such rules into a single location in OCC's Rulebook.
In its filing with the Commission, OCC 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. OCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.
The purpose of this proposed rule change is to improve the resiliency of OCC's escrow deposit program. The changes would: (1) Increase OCC's visibility into and control over collateral deposits made under the escrow deposit program; (2) provide more specificity concerning the manner in which OCC would take possession of collateral in OCC's escrow deposit program in the event of a clearing member or custodian bank default; (3) clarify clearing members' rights to collateral in the escrow deposit program in the event of a customer default to the clearing member; and (4) improve the readability of the rules governing OCC's escrow deposit program by consolidating all such rules into a single location in OCC's Rulebook. Upon implementation of the proposed rule change, all securities collateral in OCC's escrow deposit program would be held at the Depository Trust Company (“DTC”), and custodian banks would only be allowed to hold cash collateral.
The narrative below is comprised of four sections. The first section provides a background of OCC's current escrow deposit program as well as an overview of the proposed changes to the rules and agreements that govern the escrow deposit program. The second section discusses the changes associated with: (1) Increasing OCC's visibility into and control over collateral deposits made under the escrow deposit program; (2) providing more specificity concerning the manner in which OCC would take possession of collateral in OCC's escrow deposit program in the event of a clearing member or custodian bank default; and, (3) clarifying clearing members' rights to collateral in the escrow deposit program in the event of a customer default to the clearing member as well as providing additional detail concerning the manner in which clearing members may take possession of such collateral. The third section discusses proposed technical and conforming changes to the rules and agreements governing the current escrow deposit program that would allow OCC to consolidate all such terms into a single location in OCC's Rulebook. The second and third sections also discuss changes that improve the readability of the rules governing OCC's escrow deposit program, which is primarily achieved by consolidating all such rules into a single location in OCC's Rulebook. The fourth section discusses the manner in which OCC proposes to transition from the current escrow deposit program to the new escrow deposit program, including the removal of certain rules and contractual provisions that would no longer be applicable to the new escrow deposit program.
Each day OCC collects collateral from its clearing members in order to protect OCC and the markets it serves from potential losses stemming from a clearing member default. Approximately half of the collateral deposited by clearing members at OCC is deposited through OCC's escrow deposit program. Users of OCC's escrow deposit program are customers of clearing members who, through the escrow deposit program, are permitted to collateralize eligible positions directly with OCC (instead of with the relevant clearing member who would, in turn, deposit margin at OCC). Currently, collateral deposits made through OCC's escrow deposit program are characterized as either “specific deposits” or “escrow deposits.” Specific deposits are deposits of the security underlying a given options position and are made through DTC by a clearing member on behalf of its customer (at the direction of the customer).
When a customer of a clearing member makes a deposit in lieu of margin through OCC's escrow deposit program, the relevant positions are excluded from the clearing member's margin requirement at OCC. The escrow deposit program therefore provides users of OCC's services with a means to more efficiently use cash or securities they may have available.
Currently, the rules concerning OCC's escrow deposit program are located in OCC Rules 503, 610, 613 and 1801. Additionally, OCC and custodian banks participating in OCC's escrow deposit program enter into an Escrow Deposit Agreement (“EDA”), which also contains substantive provisions governing the program. OCC is proposing to consolidate all of the rules concerning the escrow deposit program, including the provisions of the EDA relevant to the revised escrow deposit program, into proposed Rules 610, 610A, 610B and 610C.
In connection with the above described rule consolidation, OCC is also proposing to rename the types of escrow deposits available within the escrow deposit program, as well as rename the term “approved depository” to “approved custodian.” Specific deposits would now be called “member specific deposits,” which are equity securities deposited by clearing members at DTC at the direction of their customers; third-party escrow deposits would now be called “third-party specific deposits,” which are equity securities deposited by custodian banks at DTC at the direction of their customers; and, escrow program deposits would now be called, “escrow deposits,” which are either cash deposits held at a custodian bank for the benefit of OCC, or Government securities deposited at DTC by custodian banks at the direction of their
With respect to the rules governing the escrow deposit program, proposed Rule 610 would set forth general terms and conditions common to all types of deposits permitted under the escrow deposit program. Specifically, proposed Rule 610: (1) Sets forth the different types of eligible positions for which a deposit in lieu of margin may be used, (2) sets forth operational aspects of the escrow deposit program such as the days and the times during which a deposit in lieu of margin may be made and where the different types of deposits in lieu of margin must be maintained (either DTC or a custodian bank), (3) provides the conditions under which OCC may take possession of a deposit in lieu of margin (from DTC or a custodian bank), and (4) describes OCC's security interest in deposits in lieu of margin.
The new rule structure differs from the existing rule structure in that existing Rules 503, 610, 613 and 1801 discuss topics concerning deposits in lieu of margin (such as withdrawal, roll-over
In addition to the above-described Rule changes, many provisions of the EDA would be moved into the Rules. Accordingly, OCC is proposing to eliminate the EDA and replace it with a simplified agreement entitled the “Participating Escrow Bank Agreement.”
OCC, under Proposed Rule 610C(b), would also require customers wishing to deposit cash collateral and custodian banks holding escrow deposits comprised of cash to enter into a tri-party agreement involving OCC, the customer and the applicable custodian bank (“Tri-Party Agreement,” attached hereto as Exhibit 5B). The Tri-Party Agreement governs the customer's use of cash in the program, confirms the grant of a security interest in the customer's account to OCC and the relevant clearing member, as set forth in proposed Rule 610C(f), and causes customers of clearing members to be subject to all terms of the Rules governing the revised escrow deposit program.
Currently, securities deposits in the escrow deposit program are held at either DTC or a custodian bank, and cash deposits in the escrow deposit program are held at a custodian bank. In the case of either cash or securities held at a custodian bank, OCC relies on the custodian bank to verify the value and control of collateral since OCC does not have any visibility into relevant accounts. OCC is proposing to require that all securities deposited within the escrow deposit program, regardless of the type of deposit, be held at DTC.
Holding securities escrow deposit program collateral at DTC would provide OCC with increased visibility into the collateral within the escrow deposit program because OCC would be able to use its existing interfaces with DTC to view, validate and value collateral within the escrow deposit program in real time, allowing OCC to perform the controls for which it currently relies on the custodian banks. It would also provide OCC with the ability to obtain possession of deposited securities upon a clearing member default by issuing a demand of collateral instruction through DTC's systems, without the need for custodian bank involvement. Furthermore, a clearing member would have the ability to obtain possession of deposited securities upon a customer default in a similar manner by notifying OCC of such customer default and submitting a request for delivery of such deposited securities (OCC's and clearing members' ability to take possession of a deposit within the escrow deposit program is discussed in greater detail below). OCC does not believe that requiring use of DTC to deposit securities escrow collateral presents a material change for users of OCC's escrow deposit program because such users currently use DTC to effect certain types of deposits in lieu of margin under the current escrow deposit program.
Cash collateral pledged to support an escrow deposit would continue to be facilitated through the existing program interfaces; however, for increased security, any pledges of cash would be required to be made in a customer's account at the Tri-Party Custodian Bank that is used solely for the purpose of making escrow deposits. As described above, under the proposed changes OCC would require Tri-Party Custodian Banks and customers to enter into a Tri-Party Agreement in order to provide legal certainty concerning this arrangement. Further, and as set forth in the Tri-Party Agreement, each Tri-Party Custodian Bank would agree to disburse funds from the pledged account only at OCC's direction. From an operational perspective, each Tri-Party Custodian Bank would provide OCC with online view access to each customer's cash account designated for the escrow deposit program, allowing visibility into transactional activity and account balances. OCC would not process a cash escrow deposit in its systems until it sees the appropriate amount of cash deposited in the designated bank account at the Tri-Party Custodian Bank. This process ensures that OCC does not rely on a third party to value, or warrant the existence of, collateral within the escrow deposit program. The Tri-Party Agreement, in connection with the new cash collateral structure, would provide OCC with additional transparency and control over cash collateral under the revised escrow deposit program.
In order to effect the foregoing, OCC is proposing to adopt proposed Rules 610A(a), 610B(a), 610C(b) and 610C(c). Proposed Rules 610A(a) and 610B(a), Effecting a Member Specific Deposit and Effecting a Third-Party Specific Deposit, respectively, require that member specific deposits and third-party specific deposits must be made through DTC, and are largely based upon existing Rule 610(e), which discusses effecting deposits in lieu or margin generally. Language has been added to each proposed rule to more accurately articulate that member specific deposits and third-party specific deposits must be made through DTC and the party that is required to effect each type of deposit (
In addition to the above, and with respect to escrow deposits only, OCC is proposing enhancements to its process of ensuring that customers meet initial and maintenance minimums.
In order to implement the foregoing within the new rules concerning the escrow deposit program, OCC is proposing to adopt Rules 610C(g) and 610C(h) that concern the initial and maintenance minimum escrow deposit values required by OCC as well as actions OCC is permitted to take in the event an escrow deposit falls below a required amount. These proposed rules are based on existing Rules 1801(c) and 1801(e) as well as Sections 3.2, 4.2, 5.2, 3.7, 4.8 and 5.7 of the EDA.
The proposed Rules would enhance OCC's default management regime as it relates to the escrow deposit program by more specifically delineating the conditions under, and the process through which, OCC would take possession of collateral within the escrow deposit program should a clearing member or custodian bank default. Specifically, proposed Rules 610A(b), 610B(f), 610C(q) and 610C(r) provide that in the event of a clearing member or custodian bank default OCC would have the right to direct DTC to deliver the securities included in a member specific deposit, third-party specific deposit or escrow deposit to OCC's DTC participant account for the purpose of satisfying the obligations of the clearing member or reimbursing itself for losses incurred as a result of the failure, as applicable. Similarly, pursuant to proposed Rules 610C(q) and 610C(r) OCC would have the right in the event of a Tri-Party Custodian Bank default to take possession of cash included within an escrow deposit for the same purposes. In the event of a custodian bank default, pursuant to proposed Rule 610C(r) OCC would have the right to remove the custodian bank from the escrow deposit program, prohibit the custodian bank from making new escrow deposits, disallow withdrawals with respect to existing deposits, close out short positions covered by escrow deposits at the defaulted custodian bank and use such escrow deposits to reimburse itself for the costs of the close-out, or disregard or require the withdrawal of existing escrow deposits.
Proposed Rules 610A(b), 610B(f) and 610C(q) concern OCC's rights to member specific deposits, third-party specific deposits and escrow deposits, respectively, in the event of a clearing member default. They would provide a more specific description of OCC's rights to a third-party specific deposit during a default than existing Rule 610(k) and Section 18 of the EDA. However, the additional specificity that would be provided in proposed Rules 610A(b), 610B(f) and 610C(q) would not change OCC's nor clearing members' rights or obligations regarding member specific, third-party specific or escrow deposits in the event of a clearing member default. Proposed Rule 610C(r) addresses OCC's rights in the event of a custodian bank default and is based on existing Rules 613(h) and 1801(k). Proposed Rule 610C(r) would clarify OCC's existing operational practices when a custodian defaults (
In addition to the above-described proposed rule changes, OCC is proposing to amend Rule 1106 to set forth the treatment of deposits in the escrow deposit program in the event of a suspension of a clearing member. Rule 1106(b)(2) would be amended to provide that OCC may close out a short position of a suspended clearing member covered by a member specific, third-party specific or escrow deposit, subject to the ability of the suspended clearing member or its representative to transfer the short position to another clearing member under certain circumstances. Further, current Rule 1106(b)(3) would be combined with Rule 1106(b)(2) and amended to set forth OCC's right to take possession of the cash and/or securities included within an escrow, member specific or third-party specific deposit for the purpose of reimbursing itself for costs incurred in connection with the close-out of a short position covered by the deposit. These proposed amendments to Rule 1106 are consistent with proposed Rules 610B(f), 610C(q) and 610C(r).
Clearing members' rights to escrow deposits and third-party specific deposits would be clarified under the proposed rules. While clearing members have secondary lien rights to the escrow deposits of their customers under the current escrow deposit program, OCC is proposing to add several rules that
Additionally, OCC is proposing to add several procedural rules that would set forth the process by which clearing members could exercise their secondary lien rights in a given deposit in the escrow deposit program. Proposed Rules 610C(d), 610C(o), 610C(p) and 610C(s), relating to escrow deposits, and proposed Rules 610B(d) and 610B(e), relating to third-party specific deposits, would provide that, in the event of a customer default to a clearing member, the clearing member would have the right to request a “hold” on a deposit. The hold would prevent the withdrawal of deposited securities or cash by a custodian bank or the release of a deposit that would otherwise occur in the ordinary course. Subsequent to placing a hold instruction on a deposit, a clearing member would have the right to request that OCC direct delivery of the deposit to the clearing member through DTC's systems in the case of securities, or an instruction to the Tri-Party Custodian Bank in the case of cash. Providing clearing members with transparent instructions regarding how to place a hold instruction on, and direct delivery of a deposit within the escrow deposit program, would significantly enhance the current escrow deposit program.
OCC is also proposing to adopt Rules 610B(e) and 610C(s), which would protect OCC in the event that it delivers a third-party specific deposit or escrow deposit to a clearing member. Under proposed Rules 610B(e) and 610C(s), a clearing member making a request for delivery would be deemed to have made the appropriate representations to OCC that the clearing member has a right to take possession of the deposited securities or cash and would agree to indemnify OCC against losses resulting from a breach of these representations or the delivery of the deposit. A clearing member would also be required to provide documentation regarding its right to possession of the securities or cash as OCC may reasonably request.
OCC also proposes a number of technical, conforming and structural changes in order to move the majority of the terms governing the escrow deposit program into one section in its Rulebook. OCC believes that changes to proposed Rules 610, 610A, 610B and 610C, described in greater detail below, are either non-substantive or conforming changes that do not alter the current rights or obligations of OCC, clearing members or participants in the escrow deposit program.
Proposed Rule 610 contains general provisions applicable to the escrow deposit program. Specifically, proposed Rule 610(a) replaces existing Rule 610(a) and sets forth general provisions of the escrow deposit program including: (1) Who may participate in the escrow deposit program, (2) the types of positions included in the escrow deposit program, (3) the types of deposits in the escrow deposit program, and (4) the collateral that is eligible for the escrow deposit program. Proposed Rule 610(b) replaces existing Rule 610(b) and provides further specificity with respect to the types of options positions included within OCC's escrow deposit program.
Proposed Rule 610A clarifies many of the current rules concerning the escrow deposit program as they relate to member specific deposits. For example, proposed 610A(c) describes the process by which a clearing member may withdraw a member specific deposit (
Proposed Rule 610B clarifies many of the current rules concerning third-party specific deposits. For example, Proposed Rule 610B(b) addresses rollovers of a third-party specific deposit and replaces existing Rules 613(a) and Section 9 of the EDA, and articulates how to rollover third-party specific deposits by its inclusion within Rule 610B. Withdrawals and releases of third-party specific deposits are addressed in proposed Rule 610B(d), which is based on existing Rules 613(b) and 613(f). Specifically, releases and withdrawals of third-party specific deposits would be effected through DTC's EDP Pledge System, subject to the clearing member's margin requirement being met, the clearing member's approval of the release or withdrawal, and the absence of a “hold” instruction. In addition, proposed Rule 610B(g) seeks to provide a more detailed description of the effect of a release of a third-party specific deposit than the applicable portions of existing Rule 613(i).
Proposed Rule 610C, which is based on existing Rule 1801(a), would clarify the current rules concerning escrow deposits. For example, the introductory paragraph of proposed Rule 610C would provide a more detailed overview of a custodian bank's role in the escrow deposit program, specifying such a bank's role in effecting escrow deposits, and would describe eligible positions as they relate to escrow deposits. Proposed Rules 610C(a) through 610C(e) and proposed Rule 610C(t) concern eligible collateral, the manner in which escrow deposits are to be held, and withdrawing an escrow deposit and rolling over an escrow deposit. These operational rules are based on: (1) Existing Rules 610(g) and 1801(b) and Sections 3.1, 4.1 and 5.1 of the EDA with respect to eligible collateral (proposed Rule 610C(a)); (2) existing Rules 610(j) and 1801(i), and Sections 10 and 20 of the EDA with respect to withdrawing an escrow deposit (proposed Rule 610C(d)); (3) existing Rule 613(i) with respect to the effect of a release or withdrawal of an escrow deposit (proposed Rule 610C(t)); and (4) existing Rule 613(a) and Section 9 of the EDA with respect to rollovers of an escrow deposit (Proposed Rule 610C(e)).
In order to provide additional transparency concerning representations that custodian banks are deemed to make when effecting an escrow deposit, OCC is proposing to move several contractual provisions of the EDA into proposed Rules 610C(i), 610C(j) and 610C(k). Specifically: (1) Proposed Rule 610C(i), which concerns agreements and representations a custodian bank is deemed to have made when effecting an escrow deposit, is based upon Sections 1.6 and 4.6 of the EDA; (2) proposed Rule 610C(j), which concerns representations and warranties a custodian bank is deemed to make when giving an instruction to OCC and is based upon Sections 1.3, 1.4, 1.5, 1.6, 1.7 and 1.8 of the EDA; and (3) proposed Rule 610C(k), which concerns agreements a custodian bank is deemed to make when giving an instruction to OCC and is based upon Sections 4, 5 and 21 of the EDA. Moreover, and in addition to locating deemed representations of custodian banks in the Rules, proposed Rules 610C(i), 610C(j) and 610C(k) contain language that perfects OCC's security interest in escrow deposits under Section 9 of the UCC, and replace Sections 3.3, 3.4, 4.3, 4.4, 5.3 and 5.4 of the EDA.
Proposed Rules 610C(m), 610C(n), 610C(o) and 610C(p) concern the exercise of options positions collateralized by escrow deposits and the release of escrow deposits upon expiration. As with other parts of proposed Rule 610C, OCC believes that the location of proposed Rules 610C(m), 610C(n), 610C(o) and 610C(p) provides all users and potential users of OCC's escrow deposit program with a more transparent understanding of how exercises of options positions affect escrow deposits as well as the manner in which OCC would release an escrow deposit upon the expiration of an options position. Similar to other parts of Rule 610C, proposed Rules 610C(m), 610C(n), 610C(o) and 610C(p) are based on existing Rules of OCC as well as the EDA.
For the administrative convenience of clearing members, custodian banks and customers, the existing Rules governing deposits in lieu of margin would remain in effect, in parallel with the proposed Rules, for a transition ending November 30, 2017. During this transition period, deposits in lieu of margin could be made under either the existing Rules or the proposed Rules. This will eliminate the need of all clearing members to provide new collateral on a single date in the absence of a transition period. After the transition period, proposed Rules 610, 610A, 610B and 610C would provide the sole means of making deposits in lieu of margin and existing Rules 613 and 1801 would be removed from the Rulebook. In connection with the transition, existing Rule 610 would be re-designated as 610T to indicate that it is a temporary rule, and would become ineffective and removed after the transition period. Furthermore, following the transition period, existing Rule 503, which addresses instructions that call for the payment of a premium by or to the clearing member for whose account the deposit is made, would be removed from the Rules because these instructions would no longer be permitted under the revised escrow deposit program since this aspect of the program has not been used for a number of years.
OCC believes that the proposed rule change is consistent with Section 17A(b)(3)(F) of the Act
OCC also believes that the proposed rule change is consistent with Rule 17Ad-22(d)(3), which requires OCC to hold assets in a manner that minimizes risk of loss or delay or in access to them.
The proposed rule change would reflect changes to the Rules governing OCC's escrow deposit program and, more generally, amend the Rules to more clearly identify the three forms of deposits in lieu of margin: (1) Escrow deposits, (2) third-party specific deposits and (3) member specific deposits. The proposed rule change would impose a burden on competition that is necessary and appropriate in furtherance of the Act.
In light of the substantial changes proposed to the escrow deposit program, OCC has sought to keep custodian banks informed regarding the proposed rule changes. These communications began in January and February 2012, when OCC notified each custodian bank of the proposal to restructure the escrow deposit program. As part of this notification, OCC informed each custodian bank of (1) OCC's intention to require that security pledges be made through DTC, (2) the percentage of cash used in the escrow deposit program and (3) the potential elimination of cash deposits.
In June through August 2012, OCC provided a PowerPoint presentation to each custodian bank summarizing proposed rule changes to the escrow deposit program. This presentation included an explanation of the reasons for the proposed rule changes, including the desire to enhance and strengthen the escrow deposit program and increase collateral transparency. The presentation also included a discussion of changes to the validation and valuation of collateral, and the calculation of contract quantities based on the collateral that has been pledged.
In April and May 2013, OCC provided each custodian bank with an operational overview of the restructured escrow deposit program in the form of a PowerPoint presentation. This presentation covered: Eligible option types, types of eligible supporting collateral, required collateral value calculations for option contact coverage, valuation of supporting collateral, asset management locations/processing of supporting collateral, and validation and valuation of supporting collateral
In July and August 2013, OCC distributed a draft Participating Escrow Bank Agreement (as described below) and the related proposed OCC Rules to custodian banks along with a request for feedback. Following the receipt of questions and comments, OCC distributed “FAQ” responses to custodian banks.
During September 2013, OCC provided a walkthrough of the functions of its ENCORE
In February and March 2014, OCC arranged a series of calls with custodian banks to solicit feedback on a term sheet detailing cash account structures. Following the receipt of questions and comments, OCC distributed “FAQ” responses to custodian banks.
As described above, OCC discussed the proposed rule changes to its escrow deposit program with custodian banks several times since 2012. While these discussions were generally informational in nature, custodian banks provided OCC with comments and questions in two instances: The July/August 2013 discussions and the February/March 2014 discussion. The primary focus of the comments in both sets of discussions was the manner in which custodian banks would be required to hold cash under the new escrow rules: In an omnibus structure or in a tri-party structure. The omnibus structure would provide OCC with an account in OCC's name and thereby perfect OCC's right under the UCC to take possession of cash escrow deposits in the event of a clearing member default. This would also eliminate the need for a separate tri-party agreement. However, the omnibus structure was less desirable to custodian banks since all of a custodian bank's OCC escrow deposit program clients' assets would be comingled in a single account. From an operational perspective, a single omnibus account at a custodian bank is easier for OCC to manage since OCC would only need to have “view access” into one account at a custodian bank. On the other hand, custodian banks expressed privacy concerns with respect to several clients having view access into a single account.
Eventually, OCC decided to use a tri-party account structure for cash escrow deposits, with certain controls to alleviate the concerns on both sides. Specifically, custodian banks agreed to facilitate the execution of a form tri-party agreement with each of its clients that participates in OCC's escrow deposit program, which perfects OCC's security interest in cash escrow deposits. Additionally, custodian banks agreed to establish an escrow specific cash account for each client so that OCC does not need to differentiate a client's OCC escrow cash from the client's non-escrow cash. OCC believes that the proposed structure for cash accounts strikes the appropriate balance between OCC's desire for legal certainty as to its right to take possession of cash escrow deposits in the event of a clearing member default, and the operational desire to only have view access to a client's OCC escrow deposit program cash account balance at a custodian bank.
Additional comments OCC received from the July/August 2013 discussions with custodian banks centered on administrative items such as the escrow deposit program documentation structure and the manner in which custodian banks would post escrow deposits in OCC's clearing system, ENCORE. As discussed above, OCC moved the substantial majority of its Amended and Restated On-Line Escrow Deposit Agreement into proposed Rule 610C in order to have the majority of escrow rules in one place. Custodian banks did not express any concerns regarding the operational steps necessary to post an escrow deposit in ENCORE once OCC provided custodian banks with a “walkthrough” of the operational process.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You
All submissions should refer to File Number SR-OCC-2016-009 and should be submitted on or before September 21, 2016.
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 Rule 900.2NY(18A). 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 purpose of the filing is to amend Rule 900.2NY(18A), regarding the definition of a “Professional Customer,” to align the Exchange's definition with that of competing options exchanges, as discussed below.
The Exchange adopted the definition of a Professional Customer in 2010, after several other options exchanges added this definition.
The Exchange also proposes to make a non-substantive change to clarify the list of rules to which the Professional Customer definition applies, which would add clarity and transparency to Exchange rules.
The proposed rule change is consistent with Section 6(b)
The proposed change would foster cooperation and coordination with persons engaged in facilitating transactions in securities as it would align Exchange rules with that of its competitors, which benefits investors and the public interest. By removing reference to the Exchange's fee schedule from the definition of Professional Customer, the Exchange would, like its competitors, have the ability to attract Professional Customer order flow with fees that differentiate Professional Customers from Broker/Dealers. The proposed rule change would therefore remove impediments to and perfect the mechanism of a free and open market and a national market system by enabling the Exchange to structure its fees for Professional Customers competitively with the fees of other options exchanges.
Further, the proposed changes are not unfairly discriminatory as the modified definition would apply to all similarly-situated ATP Holders that submit orders on behalf of Professional Customers.
Finally, the non-substantive change to the Professional Customer definition would remove impediments to and perfect the mechanisms of a free and open market and a national market system, as it would add clarity and transparency to Exchange rules.
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 Exchange believes that the proposed changes are pro-competitive as the changes align Exchange rules with that of competing markets and would allow the Exchange to better compete for Professional Customer order flow. The Exchange does not believe that the proposed rule change would impose any burden on intramarket competition because, to the extent the Exchange chooses to adopt fees specific to Professional Customers, such fees would be equal to or less than those charged to broker/dealers and would not be more favorable than fees charged to public customers.
No written comments were solicited or received with respect to the proposed rule change.
Because the 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
A proposed rule change filed under Rule 19b-4(f)(6)
The Commission believes waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposal does not raise any new or novel issues. The Exchange's proposal removes the current provision that requires the Exchange to treat Professional Customers and Broker-Dealers in the “same manner” with respect to fees, which will allow the Exchange to separately propose, if it so chooses, to set its fees competitively in order to attract Professional Customer order flow, provided that such competitive fees are consistent with the requirements of the Act and the rules and regulations thereunder. The Commission notes that the Exchange has representated that, to the extent it chooses to adopt fees specific to Professional Customers, such fees would be equal to or less than those charged to broker-dealers and would not be more favorable than fees charged to public customers. Because this proposal does not raise any new or novel issues with respect to the treatment of Professional Customers, the Commission hereby waives the operative delay and designates the proposed rule change operative upon filing.
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 the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
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 delete or amend outdated rule language contained in Rules 1022, Securities Accounts and Orders of Specialists and Registered Options Traders, 1036, Affiliated Persons of Specialists, and 1037, Floor Reports of Exchanges Options Transactions.
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 is proposing to delete or amend several rules pertaining to the obligations of specialists, as follows.
Rule 1022 (b) and (c) currently provide that each specialist or Registered Options Trader (“ROT”) shall provide certain reports of options and orders in a manner provided by the Exchange. Section (b) requires each specialist or ROT, no later than 10:00 a.m. on the business day following order entry date, to report to the Exchange opening positions and each purchase and sale in each option in which the Specialist or ROT is registered for each account reported pursuant to Rule 1022.
Likewise, Section (c) requires each specialist or ROT, no later than 10:00 a.m. on the business day following order entry date, to report to the Exchange every order entered by the specialist or ROT for the purchase or sale of a security underlying any stock or Exchange-Traded Fund Share options contract traded on the Exchange or a security convertible into or exchangeable for such underlying security as well as opening and closing positions in all such securities held in each account reported pursuant to the rule.
The Exchange is deleting Sections (b) and (c) as obsolete and reserving those sections. The Exchange has previously stated with respect to Rule 1022 that the required reports of activity in each option, as well as activity in the underlying stock, is reviewed daily to insure compliance with Exchange and SEC rules and regulation.
The information referred to in Section (b) is available from The Options Clearing Corporation. Much of the information called for in Section (c) is now available to the Exchange in the ISG Equity Audit Trail known among the exchanges as ECAT.
Section (a) of Rule 1036, Affiliated Persons of Specialists, currently requires every limited partner, approved person and every party who is affiliated with a specialist member organization to agree, in a stipulation approved by the Exchange, not to violate any Exchange rule or cause a specialist or a specialist member organization to violate these or any other rules relating to specialists. The Exchange currently does not collect such stipulations. The violation of such a stipulation would have provided the Exchange with a separate basis for proceeding against the provider of the stipulation in the event of an Exchange rule violation by that person or by a specialist or specialist member organization. However, the Exchange has determined that the burden of collecting such stipulations would outweigh any benefits and is accordingly proposing to delete and reserve Section (a) of Rule 1036.
Rule 1036(b) provides that no issuer, or parent or subsidiary thereof, or any officer, director or 10% stockholder thereof, may become an approved person in a specialist member organization whose members are registered in a security of that issuer. Rule 1036(b) however applies only to
Rule 1037, Floor Reports of Exchanges Options Transactions, provides for a specialist's liability for missed orders on the book. Under the rule a specialist was liable for any loss sustained for orders
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The amendments to Rule 1022 are consistent with the Act because they delete requirements that specialists and ROTs provide reports which the Exchange no longer needs in order to fulfill its regulatory responsibilities. The elimination of the requirements reduces an unnecessary burden on ROTs and specialists, which therefore removes an impediment to a free and open market and a national market system.
The amendments to Rule 1036 are consistent with the Act because they clarify that Rule 1036(b) applies to option specialist member organizations. They also eliminate requirements that certain affiliates of specialists or related persons provide stipulations the collection of which the Exchange believes to be a burden that is not outweighed by its benefits. The elimination of the requirement reduces an unnecessary burden on the Exchange, which therefore removes an impediment to a free and open market and a national market system.
The deletion of Rule 1037 is consistent with the Act because this rule language is operationally obsolete, as explained above; moreover, having clear and up-to-date rules should promote just and equitable principles of trade on the Exchange. The proposal should result in a more accurate and understandable rule book, particularly for Exchange specialists who no longer operate a book or handle orders for accounts other than their own.
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 proposal raises neither intra-market nor inter-market competition issues. The proposal deletes or amends obsolete or unnecessary provisions or clarifies rules and therefore does not impact how the market operates today.
No written comments were either solicited or received.
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.
All submissions should refer to File Number SR-Phlx-2016-86 and should be submitted on or before September 21, 2016.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the imported objects, contact the Office of Public Diplomacy and Public Affairs in the Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the imported objects, contact the Office of Public Diplomacy and Public Affairs in the Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
On August 11, 2016, Michigan Southern Railroad Company, d/b/a Napoleon, Defiance & Western Railway (NDW) filed with the Surface Transportation Board (Board) a petition under 49 U.S.C. 10502 for exemption from the provisions of 49 U.S.C. 10903 to discontinue rail service over approximately 5.43 miles of rail line between milepost TN 28.0, near Liberty Center, Ohio, and milepost TN 33.43, near Napoleon, Ohio, in Henry County, Ohio. The line traverses U.S. Postal Service Zip Codes 43545 and 43532, and includes the station of Liberty Center, which NDW states will be discontinued.
NDW states that the line does not contain any federally granted rights-of-way. Any documentation in NDW's possession will be made available promptly to those requesting it.
The interest of railroad employees will be protected by the conditions set forth in
By issuance of this notice, the Board is instituting an exemption proceeding pursuant to 49 U.S.C. 10502(b). A final decision will be issued by November 29, 2016.
Because this is a discontinuance proceeding and not an abandonment proceeding, trail use/rail banking and public use conditions are not appropriate. Because there will be environmental review during abandonment, this discontinuance does not require an environmental review.
Any offer of financial assistance (OFA) under 49 CFR 1152.27(b)(2) to subsidize continued rail service will be due no later than December 9, 2016, or 10 days after service of a decision granting the petition for exemption, whichever occurs sooner. Each offer must be accompanied by a $1,600 filing fee.
All filings in response to this notice must refer to Docket No. AB 1245X and must be sent to: (1) Surface Transportation Board, 395 E Street, SW., Washington, DC 20423-0001; and (2) William A. Mullins, Baker & Miller PLLC, 2401 Pennsylvania Ave., NW., Suite 300, Washington, DC 20037. Replies to the petition are due on or before September 20, 2016.
Persons seeking further information concerning discontinuance procedures may contact the Board's Office of Public Assistance, Governmental Affairs, and Compliance at (202) 245-0238 or refer to the full abandonment and discontinuance regulations at 49 CFR pt. 1152. [Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339.]
Board decisions and notices are available on our Web site at “
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
Federal Aviation Administration (FAA), U.S. Department of Transportation (DOT).
Eighty-sixth SC-147 Traffic Collision & Avoidance Committee Plenary.
The FAA is issuing this notice to advise the public of a meeting of Eighty-Sixth SC-147 Traffic Collision & Avoidance Committee Plenary.
The meeting will be held September 26-29, 2016 09:00 a.m.—04:30 p.m.
The meeting will be held at: RTCA Headquarters, 1150 18th Street NW., Suite 910, Washington, DC 20036.
Al Secen at
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.), notice is hereby given for a meeting of the Eighty-Sixth SC-147 Traffic Collision & Avoidance Committee Plenary. The agenda will include the following:
Combined Surveillance Group Leadership Meeting
Working group breakout meetings
Working group breakout meetings
Working group breakout meetings
Plenary Meeting and Agenda
1. Opening Plenary Session
Attendance is open to the interested public but limited to space availability. With the approval of the chairman, members of the public may present oral statements at the meeting. Persons wishing to present statements or obtain information should contact the person listed in the
Federal Aviation Administration (FAA), U.S. Department of Transportation (DOT).
Eighteenth Meeting of the SC-227 Navigation Information on Electronic Maps.
The FAA is issuing this notice to advise the public of a meeting of Eighteenth Meeting of SC-227 Navigation Information on Electronic Maps.
The meeting will be held September 20-22, 2016, 9:00 a.m. to 4:30 p.m.
The meeting will be held at: 1150 18th Street NW., Suite 910, Washington, DC 20036.
Jennifer Iversen at
Pursuant to section 10(a) (2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.), notice is hereby given for a meeting of the Eighteenth Meeting of the SC-227, Navigation Information on Electronic Maps. The agenda will include the following:
Working Group of a Whole will take place at all other meeting times outside of stated Plenary sessions.
Attendance is open to the interested public but limited to space availability. With the approval of the chairman, members of the public may present oral statements at the meeting. Persons wishing to present statements or obtain information should contact the person listed in the
Federal Highway Administration (FHWA), DOT.
Notice and request for comments.
The FHWA invites public comments about our intention to request the Office of Management and Budget's (OMB) approval for a new information collection, which is summarized below under
Please submit comments by October 31, 2016.
You may submit comments identified by DOT Docket ID Number 2016-0022 by any of the following methods:
Derek Constable, 202-366-4606, or Shay Burrows, 202-366-4675, Office of Bridges and Structures, Federal Highway Administration, Department of Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590. Office hours are from 8 a.m. to 5 p.m., Monday through Friday, except Federal holidays.
The study will include an analysis of the performance of bridges that received funding under the IBRC program in meeting the program goals. The study will include an analysis of the utility, compared to conventional materials and technologies, of each of the innovative materials and technologies used in projects for bridges under the program in meeting the present and future needs of the United States in 2015 and in the future for a sustainable and low lifecycle cost transportation system. The study will make recommendations to Congress on how the installed and lifecycle costs of bridges could be reduced through the use of innovative materials and technologies, including, as appropriate, any changes in the design and construction of bridges needed to maximize the cost reductions. The study will include a summary of any additional research that may be needed to further evaluate innovative approaches to reducing the installed and lifecycle costs of highway bridges.
By separate action the FHWA will be providing public notice of the study proposal with opportunity for comment.
The conduct of this study will require that each State, that received funds under the IBRC program, provide to the Transportation Research Board any relevant information and data needed to carry out the study. Recipients of IBRC funding may be asked to provide information and data by interview, survey, and/or release of records. Interviews and surveys may be required to determine which projects to focus investigations and to gather relevant background, cost, and performance information. Records required may include data, documents, and reports associated with design, construction, in-service inspection, maintenance, evaluation, monitoring, and other relevant phases or activities. The study will make use of the IBRC project information previously supplied to the FHWA, but this information is generally insufficient to accomplish the study objectives.
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended; and 49 CFR 1.48.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of applications for exemptions; request for comments.
FMCSA announces receipt of applications from 12 individuals for exemption from the vision requirement in the Federal Motor Carrier Safety Regulations. 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. If granted, the exemptions would enable these individuals to qualify as drivers of commercial motor vehicles (CMVs) in interstate commerce.
Comments must be received on or before September 30, 2016. All comments will be investigated by FMCSA. The exemptions will be issued the day after the comment period closes.
You may submit comments bearing the Federal Docket Management System (FDMS) Docket No. FMCSA-2016-0206 using any of the following methods:
•
•
•
•
Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the Federal Motor Carrier Safety Regulations 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.” FMCSA can renew exemptions at the end of each 2-year period. The 12 individuals listed in this notice have each requested such an exemption from the vision requirement in 49 CFR 391.41(b)(10), which applies to drivers of CMVs in interstate commerce. Accordingly, the Agency will evaluate the qualifications of each applicant to determine whether granting an exemption will achieve the required level of safety mandated by statute.
Mr. Beaulier, 58, has had a macular scar in his right eye due to a traumatic incident in 1971. The visual acuity in his right eye is light perception, and in his left eye, 20/20. Following an examination in 2016, his optometrist stated, “Tim does well as a monocular patient. I feel he will have no issues on the roadway based on visual demands. I do not see any issue with Tim Beaulier's ability to safely operate a commercial vehicle at this time.” Mr. Beaulier reported that he has driven straight trucks for 30 years, accumulating 15,000 miles and tractor-trailer combinations for 14 years, accumulating 218,400 miles. He holds a Class CA CDL from Michigan. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Edland, 71, has complete loss of vision in his right eye since childhood. The visual acuity in his right eye is no light perception, and in his left eye, 20/25. Following an examination in 2015, his ophthalmologist stated, “His visual status has been stable for many years . . . Mr. Edland appears to be functioning well and it is my opinion that he is capable of operating a commercial motor vehicle in traffic.” Mr. Eldand reported that he has driven straight trucks for 50 years, accumulating 1.3 million miles. He holds a Class B CDL from Minnesota. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Field, 50, has had amblyopia in his right eye since childhood. The visual acuity in his right eye is 20/400, and in his left eye, 20/15. Following an examination in 2016, his ophthalmologist stated, “Where he has been functioning successfully with excellent central and peripheral vision under binocular conditions, it is my opinion that he has more than sufficient vision to continue to perform the driving tasks required to operate a commercial vehicle.” Mr. Field reported that he has driven straight trucks for 30 years, accumulating 1.5 million miles and tractor-trailer combinations for 30 years, accumulating 1.5 million miles. He holds a Class AMC CDL from New Hampshire. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Gartman, 60, has had amblyopia in his right eye since childhood. The visual acuity in his right eye is 20/70, and in his left eye, 20/20. Following an examination in 2016, his optometrist stated, “In my medical opinion, Mr. Gartman has sufficient vision to perform the driving tasks required to operate a
Mr. Inskeep, 57, has glaucoma in his right eye due to a traumatic incident in 2009. The visual acuity in his right eye is 20/70, and in his left eye, 20/15. Following an examination in 2016, his optometrist stated, “Mr. Inskeep has been able to drive a commercial vehicle over the years and could continue to do so since his glaucoma is stable and unchanged since 2009.” Mr. Inskeep reported that he has driven straight trucks for 27 years, accumulating 810,000 miles, and tractor-trailer combinations for 3 years, accumulating 45,000 miles. He holds a Class A CDL from Ohio. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Jacobs, 41, has had amblyopia in his left eye since childhood. The visual acuity in his right eye is 20/20, and in his left eye, 20/70. Following an examination in 2016, his optometrist stated, “It is my expert opinion that Spencer Jacobs has sufficient vision to operate a commercial vehicle.” Mr. Jacobs reported that he has driven tractor-trailer combinations for 3 years, accumulating 22,500 miles. He holds a Class A CDL from Texas. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Joe, 62, has had anisometropia and amblyopia in his right eye since childhood. The visual acuity in his right eye is 20/40, and in his left eye, 20/20. Following an examination in 2016, his optometrist stated, “From a vision standpoint only, Mr. Joe has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Joe reported that he has driven straight trucks for 10 years, accumulating 260,000 miles. He holds an operator's license from New Mexico. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. McCord, 49, has a prosthesis in his right eye due to a traumatic incident in childhood. The visual acuity in his right eye is no light perception, and in his left eye, 20/20. Following an examination in 2016, his optometrist stated, “Based on all of the findings, I have determined that Mr. McCord does have sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. McCord reported that he has driven straight trucks for 10 years, accumulating 500,000 miles. He holds an operator's license from Illinois. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Monterroso De Leon, 44, has had a prosthetic in his left eye due to a traumatic incident in birth. The visual acuity in his right eye is 20/20, and in his left eye, no light perception. Following an examination in 2016, his optometrist stated, “I certify that in my medical opinion, Mr. Monterroso has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Monterroso De Leon reported that he has driven straight trucks for 15 years, accumulating 1.88 million miles. He holds an operator's license from Texas. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Moore, 74, has a prosthetic in his left eye due to a traumatic incident in 1976. The visual acuity in his right eye is 20/20, and in his left eye, no light perception. Following an examination in 2016, his optometrist stated, “I certify from the above qualifications that Mr. Moore has sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Moore reported that he has driven tractor-trailer combinations for 30 years, accumulating 3.12 million miles. He holds a Class A CDL from Mississippi. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. White, 58, has a retinal detachment in his right eye since childhood. The visual acuity in his right eye is counting fingers, and in his left eye, 20/20. Following an examination in 2015, his ophthalmologist stated, “I would consider that Mr. White has adequate vision to perform driving tests [sic] and to operate a commercial vehicle.” Mr. White reported that he has driven tractor-trailer combinations for 38 years, accumulating 4.94 million miles. He holds a Class A CDL from North Carolina. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Wittenburg, 43, had a cerebrovascular accident in his right eye in 2006. The visual acuity in his right eye is counting fingers, and in his left eye, 20/20. Following an examination in 2016, his ophthalmologist stated, “Mr. Wittenburg has sufficient vision to continue to operate a commercial vehicle.” Mr. Wittenburg reported that he has driven straight trucks for 20 years, accumulating 500,000 miles. He holds an operator's license from North Carolina. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comment online, go to
FMCSA will consider all comments and material received during the comment period. FMCSA may issue a final determination at any time after the close of the comment period.
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to exempt 30 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 January 8, 2016. The exemptions expire on January 8, 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 December 8, 2015, FMCSA published a notice of receipt of exemption applications from certain individuals, and requested comments from the public (80 FR 76345). That notice listed 30 applicants' case histories. The 30 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 30 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 30 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 amblyopia, anisometropic amblyopia, chorioretinal scar, chronic rhegmatagenous, complete loss of vision, corneal scar, enucleation, glaucoma, hyperopic astigmatism, macular degeneration, macular hole, macular pucker, ocular damage, optic atrophy, optic nerve atrophy, optic neuritis, prosthetic eye, retinal detachment, retinal hole, retinal scar, and toxoplasmosis. In most cases, their eye conditions were not recently developed. Fourteen of the applicants were either born with their vision impairments or have had them since childhood.
The 16 individuals that sustained their vision conditions as adults have had it for a range of 3 to 21 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 30 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 56 years. In the
The qualifications, experience, and medical condition of each applicant were stated and discussed in detail in the December 8, 2015 notice (80 FR 76345).
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 30 applicants, no drivers were involved in crashes, and 4 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 30 applicants listed in the notice of December 8, 2015 (80 FR 76345).
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 30 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 physically examined every year (a) by an ophthalmologist or optometrist who attests that the vision in the better eye continues to meet the requirement in 49 CFR 391.41(b)(10) and (b) by a medical examiner who attests that the individual is otherwise physically qualified under 49 CFR 391.41; (2) that each individual provide a copy of the ophthalmologist's or optometrist's report to the medical examiner at the time of the annual medical examination; and (3) that each individual provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy in his/her driver's qualification file if he/she is self-employed. The driver must have a copy of the certification when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
FMCSA received one comment in this proceeding. Johnny Campbell, having known Franklin Tso professionally for 25 years, is in favor of granting Mr. Tso and exemption from the vision standard.
Based upon its evaluation of the 30 exemption applications, FMCSA exempts the following drivers from the
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.
Maritime Administration (MARAD).
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Comments must be submitted on or before September 30, 2016.
Barbara Jackson, 202-366-0615, Maritime Administration, Department of Transportation, 1200 New Jersey Avenue SE., W26-494, Washington, DC 20590.
Send comments regarding the burden estimate, including suggestions for reducing the burden, to the Office of Management and Budget, Attention: Desk Officer for the Office of the Secretary of Transportation, 725 17th Street NW., Washington, DC 20503.Comments are invited on: Whether the proposed collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; the accuracy of the Department's estimate of the burden of the proposed information collection; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms of information technology.
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended; and 49 CFR 1.93.
By Order of the Maritime Administrator.
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
List of Applications for Modification of Special Permit.
In accordance with the procedures governing the application for, and the processing of, special permits from the Department of Transportation's Hazardous Material Regulations (49 CFR part 107, subpart B), notice is hereby given that the Office of Hazardous Materials Safety has received the application described herein. Each mode of transportation for which a particular special permit is requested is indicated by a number in the “Nature of Application” portion of the table below as follows: 1—Motor vehicle, 2—Rail freight, 3—Cargo vessel, 4—Cargo aircraft only, 5—Passenger-carrying aircraft.
Comments must be received on or before September 30, 2016.
Record Center, Pipeline and Hazardous Materials Safety
Comments should refer to the application number and be submitted in triplicate. If confirmation of receipt of comments is desired, include a self-addressed stamped postcard showing the special permit number.
Ryan Paquet, Director, Office of Hazardous Materials Approvals and Permits Division, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC 20590-0001, (202) 366-4535.
Copies of the applications are available for inspection in the Records Center, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC, or at
This notice of receipt of applications for special permit is published in accordance with Part 107 of the Federal hazardous materials transportation law (49 U.S.C. 5117(b); 49 CFR 1.53(b)).
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
List of Applications for Special Permits.
In accordance with the procedures governing the application for, and the processing of, special permits from the Department of Transportation's Hazardous Material Regulations (49 CFR part 107, subpart B), notice is hereby given that the Office of Hazardous Materials Safety has received the application described herein. Each mode of transportation for which a particular special permit is requested is indicated by a number in the “Nature of Application” portion of the table below as follows: 1—Motor vehicle, 2—Rail freight, 3—Cargo vessel, 4—Cargo aircraft only, 5—Passenger-carrying aircraft.
Comments must be received on or before September 30, 2016.
Record Center, Pipeline and Hazardous Materials Safety Administration U.S. Department of Transportation Washington, DC 20590.
Comments should refer to the application number and be submitted in triplicate. If confirmation of receipt of comments is desired, include a self-addressed stamped postcard showing the special permit number.
Ryan Paquet, Director, Office of Hazardous Materials Approvals and Permits Division, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC 20590-0001, (202) 366-4535.
Copies of the applications are available for inspection in the Records Center, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC or at
This notice of receipt of applications for special permit is published in accordance with Part 107 of the Federal hazardous materials transportation law (49 U.S.C. 5117(b); 49 CFR 1.53(b)).
Office of Hazardous Materials Safety, Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
List of applications delayed more than 180 days.
In accordance with the requirements of 49 U.S.C. 5117(c), PHMSA is publishing the following list of special permit applications that have been in process for 180 days or more. The reason(s) for delay and the expected completion date for action on each application is provided in association with each identified application.
Ryan Paquet, Director, Office of Hazardous Materials Special Permits and Approvals, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, East Building, PHH-30, 1200 New Jersey Avenue Southeast, Washington, DC 20590-0001, (202) 366-4535.
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 the limitation on reduction in income tax liability incurred to the Virgin Islands (§ 1.934-1).
Written comments should be received on or before October 31, 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 regulations 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.
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 Special rules for certain medical uses of chemicals that deplete the ozone layer.
Written comments should be received on or before October 31, 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 regulations should be directed to Allan Hopkins, Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW., Washington, DC 20224, or through the internet at
In addition, the regulation affects persons, other than manufacturers and importers of ozone-depleting chemicals, holding such chemicals for sale or for use in further manufacture on January 1, 1990, and on subsequent tax-increase dates.
This regulation provides reporting and recordkeeping rules relating to taxes imposed on exports of ozone-depleting chemicals (ODCs), taxes imposed on ODCs used as medical sterilants or propellants in metered-dose inhalers, and floor stocks taxes on ODCs. The rules affect persons who
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 8038-B, Information Return for Build America Bonds and Recovery Zone Economic Development Bonds.
Written comments should be received on or before October 31, 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 notice 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.
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the date of publication of this notice.
Comments should be received on or before September 30, 2016 to be assured of consideration.
Send comments regarding the burden estimates, or any other aspect of the information collections, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submissions may be obtained by emailing
TD 9315 contains final regulations under section 1503(d) of the Internal Revenue Code (Code) regarding dual consolidated losses. Section 1503(d) generally provides that a dual consolidated loss of a dual resident corporation cannot reduce the taxable income of any other member of the affiliated group unless, to the extent provided in regulations, the loss does not offset the income of any foreign corporation. Similar rules apply to losses of separate units of domestic corporations. These final regulations address various dual consolidated loss issues, including exceptions to the general prohibition against using a dual consolidated loss to reduce the taxable income of any other member of the affiliated group.
The Department of the Treasury will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the date of publication of this notice.
Comments should be received on or before September 30, 2016 to be assured of consideration.
Send comments regarding the burden estimates, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission may be obtained by emailing
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the date of publication of this notice.
Comments should be received on or before September 30, 2016 to be assured of consideration.
Send comments regarding the burden estimates, or any other aspect of the information collections, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submissions may be obtained by emailing
The Department of the Treasury will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the date of publication of this notice.
Comments should be received on or before September 30, 2016 to be assured of consideration.
Send comments regarding the burden estimates, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission may be obtained by emailing
U.S. Citizenship and Immigration Services, DHS.
Proposed rule.
The Department of Homeland Security (DHS) proposes to amend its regulations implementing the Secretary of Homeland Security's discretionary parole authority to increase and enhance entrepreneurship, innovation, and job creation in the United States. The proposed rule would add new regulatory provisions guiding the use of parole on a case-by-case basis with respect to entrepreneurs of start-up entities whose entry into the United States would provide a significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation. Such potential would be indicated by, among other things, the receipt of significant capital investment from U.S. investors with established records of successful investments, or obtaining significant awards or grants from certain Federal, State or local government entities. If granted, parole would provide a temporary initial stay of up to 2 years (which may be extended by up to an additional 3 years) to facilitate the applicant's ability to oversee and grow his or her start-up entity in the United States. A subsequent request for re-parole would be considered only when the entrepreneur and his or her start-up entity continues to provide a significant public benefit as evidenced by substantial increases in capital investment, revenue, or job creation. DHS believes that a regulatory process for seeking and granting parole in this business-creation context—including by establishing criteria for evaluating individual parole applications on a case-by-case basis—is important given the complexities involved in such adjudications and the need for guidance regarding the general criteria for eligibility by the start-up entrepreneurs, entities, and investors involved.
Written comments must be received on or before October 17, 2016.
You may submit comments, identified by DHS Docket No. USCIS-2015-0006, by any one of the following methods:
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Steven Viger, Adjudications Officer, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, 20 Massachusetts Avenue NW., Suite 1100, Washington, DC 20529-2140; Telephone (202) 272-8377.
DHS invites comments, data, and information from all interested parties, including advocacy groups, nongovernmental organizations, community-based organizations, entrepreneurs, investors, other entities in the entrepreneurial ecosystem of the United States, and legal representatives who specialize in immigration law on any and all aspects of this proposed rule. Comments that will provide the most assistance to DHS in developing these procedures will reference a specific portion of the proposed rule, explain the reason for any recommended change, and include data, information, or authorities that support such recommended change. DHS is generally seeking comments on:
A. Proposed filing requirements and procedures;
B. Proposed definitions and criteria for evaluating parole applications,
C. Proposed conditions, including limits on the number of entrepreneur parolees per start-up entity and time limits on parole periods;
D. Proposed provisions establishing employment authorization for entrepreneurs incident to parole;
E. Proposed provisions regarding termination of parole; and
F. Proposed opportunity to request re-parole, length of period for re-parole, and limitation on number of re-parole opportunities.
DHS also invites comments on the economic analysis supporting this rule and the proposed new parole request form for entrepreneurs.
Section 212(d)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. 1182(d)(5), grants the Secretary of Homeland Security the discretionary authority to parole individuals into the United States, on a case-by-case basis, for urgent humanitarian reasons or significant public benefit. DHS proposes to amend its regulations implementing this authority to increase and enhance entrepreneurship, innovation, and job creation in the United States. As described in more detail below, the proposed rule would establish general criteria for the use of parole with respect to entrepreneurs of start-up entities whose entry into the United States would provide a significant public benefit through the substantial and demonstrated potential for rapid growth and job creation. In all cases, whether to parole a particular individual under this rule would be a discretionary determination that would be made on a case-by-case basis.
Given the complexities involved in adjudicating applications in this context and the need for guidance regarding the criteria for exercising parole in this area, DHS has decided to establish by regulation the criteria for the case-by-case evaluation of parole applications filed by entrepreneurs of start-up entities. By including such criteria in regulation, as well as establishing application requirements that are specifically tailored to capture the necessary information for processing parole requests on this basis, DHS expects to facilitate the use of parole in this area.
As discussed, the proposed rule would establish criteria for seeking and obtaining parole based on the creation of a start-up entity in the United States. DHS proposes that to be considered for parole under this rule, an applicant would need to demonstrate that his or her parole would provide a significant public benefit because he or she is the entrepreneur of a new start-up entity in the United States that has significant potential for rapid growth and job creation. DHS proposes that such potential would be indicated by, among other things, the receipt of (1) significant capital financing from U.S. investors with established records of successful investments or (2) significant awards or grants from certain Federal, State or local government entities. DHS also proposes alternative criteria for applicants who partially meet the proposed thresholds for capital financing or government awards or grants and who can provide additional reliable and compelling evidence of their entities' significant potential for rapid growth and job creation. An applicant would qualify for further consideration by showing that he or she has a substantial ownership interest in such an entity, has an active and central role in the entity's operations, and would substantially further the entity's ability to engage in research and development or otherwise conduct and grow its business in the United States. The grant of parole is intended to facilitate the applicant's ability to oversee and grow the start-up entity.
DHS believes that this proposal would encourage foreign entrepreneurs to create and develop start-up entities with high growth potential in the United States, which are expected to facilitate research and development in the country, create jobs for U.S. workers, and otherwise benefit the U.S. economy through increased business activity, innovation and dynamism. Particularly in light of the complex considerations involved in entrepreneur-based parole requests, DHS also believes that this proposal will provide a transparent framework by which DHS will exercise its discretion to adjudicate such requests on a case-by-case basis under section 212(d)(5) of the INA, 8 U.S.C. 1182(d)(5).
The Secretary of Homeland Security's authority for the proposed regulatory amendments can be found in various provisions of the immigration laws. Section 402(4) of the Homeland Security Act of 2002 (HSA), Public Law 107-296, 116 Stat. 2135, 6 U.S.C. 202(4), provides the Secretary the authority to administer and enforce the immigration and nationality laws. Sections 103(a)(1) and (3) of the INA, 8 U.S.C. 1103(a)(1), (3), expressly authorize the Secretary to establish rules and regulations governing parole. Section 212(d)(5) of the INA, 8 U.S.C. 1182(d)(5), vests in the Secretary the discretionary authority to grant parole for urgent humanitarian reasons or significant public benefit to applicants for admission on a case-by-case basis.
DHS is proposing to add a new section 8 CFR 212.19 to provide guidance with respect to the use of parole for entrepreneurs of start-up entities based upon significant public
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DHS proposes that an applicant who meets the above criteria (and his or her spouse and minor, unmarried children, if any) generally may be considered under this rule for a discretionary grant of parole lasting up to 2 years based on the significant public benefit that would be provided by the applicant's (or family's) parole into the United States. An applicant would be required to file a new application specifically tailored for entrepreneurs to demonstrate eligibility for parole based upon significant public benefit under this rule, along with proposed fees. Applicants would also be required to appear for collection of biometric information. DHS further proposes that no more than three entrepreneurs may receive parole with respect to any one qualifying entity.
USCIS adjudicators would be required to consider the totality of the evidence, including evidence obtained by USCIS through background checks and other means, to determine whether the applicant has satisfied the above criteria, whether the specific applicant's parole would provide a significant public benefit, and whether negative factors exist that warrant denial of parole as a matter of discretion. To grant parole, adjudicators would be required to conclude, based on the totality of the circumstances, that both: (1) The applicant's parole would provide a significant public benefit, and (2) the applicant merits a grant of parole as a matter of discretion.
DHS further proposes that if parole is granted, the entrepreneur would be authorized for employment incident to the grant of parole, but only with respect to the entrepreneur's start-up entity. The entrepreneur's spouse and children, if any, would not be authorized for employment incident to the grant of parole, but the entrepreneur's spouse, if paroled into the United States pursuant to 8 CFR 212.19, would be permitted to apply for employment authorization consistent with proposed 8 CFR 274a.12(c)(34). DHS retains the right to revoke any such grant of parole at any time as a matter of discretion or if the Department determines that parole no longer provides a significant public benefit, such as when the entity has ceased operations in the United States or DHS believes that the application involves fraud or misrepresentation.
As noted, the purpose of the proposed parole process is to provide qualified entrepreneurs of high-potential start-up entities in the United States with the improved ability to conduct research and development and expand the entities' operations in the United States so that our nation's economy may benefit from such development and expansion, including through increased capital expenditures, innovation and job creation. DHS proposes to allow individuals granted parole under this rule to be considered for re-parole for an additional period of up to 3 years if, and only if, they can demonstrate that their entities have shown signs of significant growth since the initial grant of parole and such entities continue to have substantial potential for rapid growth and job creation. As proposed, an applicant under this rule would generally need to demonstrate the following to be considered for a discretionary grant of an additional period of parole:
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d.
DHS proposes that an applicant who generally meets the above criteria may be considered for one additional grant of parole to work with the same start-up entity based on the significant public benefit that would be served by his or her continued parole in the United States, if the applicant also merits a favorable exercise of discretion. If granted, re-parole may be for up to 3 years, for a total maximum period of 5 years for parole under 8 CFR 212.19. No more than three entrepreneurs (and their spouses and children) may receive such additional periods of parole with respect to any one qualifying entity.
As with initial parole applications, USCIS adjudicators would be required to consider the totality of the evidence, including evidence obtained by USCIS through verification methods, to determine whether the applicant has satisfied the above criteria and whether his or her continued parole would provide a significant public benefit. To re-parole, adjudicators would be required to conclude, based on the totality of the circumstances, both: (1) That the applicant's continued parole would provide a significant public benefit, and (2) that the applicant continues to merit parole as a matter of discretion. If re-paroled, DHS retains the right to revoke parole at any time as a matter of discretion or if the Department determines that parole no longer provides a significant public benefit, such as when the entity has ceased operations in the United States or DHS believes that the applicant committed fraud or made material misrepresentations.
Finally, DHS is proposing conforming changes to the employment authorization regulations at 8 CFR 274a.12(b) and (c), the employment eligibility verification regulations at 8 CFR 274a.2(b), and fee regulations at 8 CFR 103.7(b)(i). The proposed rule would amend 8 CFR 274a.12(b) by: (1) Adding entrepreneur parolees to the classes of aliens authorized for employment incident to their immigration status or parole, and (2) providing for temporary employment authorization for those applying for re-parole. The proposed rule would amend 8 CFR 274a.12(c) by extending eligibility for employment authorization to the spouse of an entrepreneur paroled into the United States under 8 CFR 212.19. The proposed rule would amend 8 CFR 274a.2(b) by designating the entrepreneur's foreign passport and Arrival/Departure Record (Form I-94) indicating entrepreneur parole as acceptable evidence for employment eligibility verification (Form I-9) purposes.
DHS does not anticipate that this rule, if finalized, would generate significant costs and burdens to private or public entities. Costs of the rule would stem from filing fees and opportunity costs associated with applying for parole, and the requirement that the entrepreneur alert DHS to any material changes.
DHS estimates that 2,940 entrepreneurs could be eligible for parole annually. Each applicant for parole would face a total filing cost—including the application form fee, biometric filing fee, travel costs, and associated opportunity costs—of $1,480, resulting in a total cost of $4,349,827 (undiscounted) for the first full year the rule could take effect and any subsequent year. Additionally, dependent family members (spouses and children) seeking parole with the principal applicant would be required to file an Application for Travel Document (Form I-131) and submit biographical information and biometrics. DHS estimates approximately 3,234 dependent spouses and children could seek parole based on the base estimate of 2,940 principal applicants. Each spouse and child 14 years of age and older seeking parole would face a total cost of $550 per applicant, for a total aggregate cost of $1,779,604.
DHS anticipates that establishing a parole process for those entrepreneurs who stand to provide a significant public benefit would advance the U.S. economy by enhancing innovation, generating capital investments, and creating jobs. DHS does not expect significant negative consequences or labor market impacts from this rule; indeed, DHS believes this proposal would encourage entrepreneurs to pursue business opportunities in the United States rather than abroad, which can be expected to generate significant scientific, research and development, and technological impacts that could create new products and produce positive spillover effects to other businesses and sectors. The impacts stand to benefit the economy by supporting and strengthening high-growth, job-creating businesses in the United States.
The Secretary of Homeland Security has discretionary authority to grant temporary parole “under conditions as he may prescribe only on a case-by-case
Parole decisions are discretionary determinations and must be made on a case-by-case basis consistent with the INA. DHS may exercise its authority to determine that an individual's parole into the United States is justified by urgent humanitarian reasons or significant public benefit. Even when one of those standards would be met, DHS may nevertheless deny parole as a matter of discretion based on other factors.
Parole is not an admission to the United States.
DHS regulations at 8 CFR 212.5 describe DHS's discretionary parole authority for arriving aliens to the United States (other than detained aliens), including the authority to set the terms and conditions of parole. Some conditions are described in the regulations, including requiring reasonable assurances that the parolee will appear at all hearings and will depart from the United States when required to do so.
Each of the DHS immigration components—USCIS, U.S. Customs and Border Protection (CBP), and U.S. Immigration and Customs Enforcement (ICE)—has been delegated the authority to parole applicants for admission in accordance with section 212(d)(5) of the INA, 8 U.S.C. 1182(d)(5).
Currently, upon an alien's arrival to the United States with a parole travel document (
Because parole does not constitute an admission, individuals may be paroled into the United States even if they are inadmissible.
Under current regulations, once paroled into the United States, a parolee is eligible to request employment authorization from USCIS by filing an Application for Employment Authorization (Form I-765) with USCIS.
Parole may terminate automatically upon the expiration of the authorized parole period or upon the departure of the individual from the United States.
DHS and the former Immigration and Naturalization Service (INS) have long extended parole to individuals for urgent humanitarian reasons or significant public benefit. The authority has been exercised on behalf of individuals on an ad hoc basis, as well as through policy guidance or regulations identifying classes of individuals to be considered for parole through individualized case-by-case adjudications. For example, parole has long been used on an ad hoc basis for individuals with serious medical conditions who need to come into the United States for medical treatment, individuals subject to prosecution or who are required to testify in court, individuals cooperating with law enforcement agencies, volunteers offering assistance in response to
Parole has also long been exercised on a case-by-case basis with respect to individuals falling within certain designated parameters, as defined through regulation or policy guidance. Longstanding regulations, for example, provide discretionary criteria and other guidance for the use of parole with respect to arriving aliens detained in the United States.
More recently, DHS has provided guidance on the case-by-case exercise of the parole authority through policy memoranda or notices in the
• In 2007, DHS implemented the Cuban Family Reunification Parole Program to promote safe, legal, and orderly migration as an alternative to maritime crossings from Cuba. This program offers Cuban beneficiaries of approved family-based immigrant visa petitions an opportunity to apply for parole rather than remain in Cuba while awaiting the availability of an immigrant visa number.
• In 2009, DHS announced a policy on the use of parole into the CNMI for certain foreign workers, as well as visitors from the Russian Federation and the People's Republic of China.
• In 2013, DHS issued guidance encouraging the use of parole for spouses, children, and parents of active duty members of the U.S. Armed Forces, individuals in the Selected Reserve of the Ready Reserve, and individuals who previously served in the U.S. Armed Forces or the Selected Reserve of the Ready Reserve.
DHS believes that enabling foreign entrepreneurs to establish and grow their start-up entities in the United States, rather than abroad, would yield a significant public benefit in certain cases. This would be expected to promote entrepreneurship and investment; facilitate research and development and other forms of innovation; support the continued growth of the U.S. economy; and lead to job creation for U.S. workers. To this end, DHS has considered the economic benefits of foreign entrepreneurs.
Evidence indicates that young business ventures, especially new start-up businesses, are important economic drivers and that the U.S. economy significantly benefits from the economic activity generated by entrepreneurs who start and grow new businesses here rather than abroad.
Allowing certain qualified entrepreneurs to come to the United States as parolees on a case-by-case basis would produce a significant public benefit through substantial and positive contributions to innovation, economic growth, and job creation. New business ventures, especially start-up businesses, are important economic drivers.
Innovative foreign-born entrepreneurs are critical forces in the U.S. economy, having founded roughly one-quarter of technology and engineering companies created between 2006 and 2012.
DHS proposes to exercise its parole authority, on a case-by-case basis, for entrepreneurs of start-up entities whose parole into the United States would provide a significant public benefit through the substantial potential of his or her start-up entity for rapid growth and job creation. Under the proposed rule, such potential would be evidenced by, among other things, the receipt of (1) substantial significant capital financing by U.S. investors with established records of successful investments or (2) significant awards or grants from certain government entities. DHS also proposes alternative criteria for applicants who partially meet the proposed thresholds for capital financing or government awards or grants and who can provide additional reliable and compelling evidence of their entities' significant potential for rapid growth and job creation.
If granted, parole would be authorized for up to 2 years to facilitate the entrepreneur's ability to oversee and grow his or her start-up entity in the United States. A subsequent request for re-parole would be considered only if the start-up entity continues to show significant promise of rapid growth and job creation through substantial and demonstrated increases in qualifying funding (whether capital investment or government grants or awards), revenue, or job creation. In all cases, whether to parole a particular individual under this rule would be a discretionary determination that would be made on a case-by-case basis. DHS believes that a regulatory process for seeking and granting parole in this business-creation context—including by establishing criteria for evaluating individual parole applications on a case-by-case basis—is important given the complexities involved in such adjudications and the need for general guidance regarding the relevant factors for eligibility by the start-up entrepreneurs, entities, and investors involved.
In this rule, DHS is proposing to add a new section 8 CFR 212.19 to its regulations to set forth application procedures and criteria specifically for considering parole requests filed by entrepreneurs of start-up entities.
At the proposed section 8 CFR 212.19, DHS sets forth the application
• The entrepreneur's entity was recently formed (
• The applicant is an entrepreneur in that he or she possesses a substantial ownership interest (
• The entity has: (1) Received substantial investment from U.S. investors with established records of successful investments; or (2) received substantial awards or grants from certain Federal, State, or local government entities.
Under the proposed rule, an applicant would file a new application specifically tailored for entrepreneurs to demonstrate eligibility for parole based upon significant public benefit, along with proposed fees.
If a determination is made that parole of the applicant would provide a significant public benefit, DHS may parole the entrepreneur for a period of up to 2 years, with an opportunity to apply for one additional period of parole of up to 3 years upon showing that parole would continue to provide a significant public benefit.
Following is a detailed discussion of the specific provisions proposed by DHS in this rulemaking.
To be considered for an initial grant of parole based on significant public benefit under this rule, DHS is proposing that the individual generally meet the following criteria:
The key criterion under this proposed rule is the formation of a new entity in the United States that has substantial potential to rapidly increase revenue and create jobs for U.S. workers. DHS thus proposes that an applicant for parole under this rule be able to show that his or her start-up entity was recently formed in the United States, has lawfully done business during any period of operation since its date of formation, and has the substantial potential to experience rapid growth and job creation, including through the significant attraction of capital investment or government awards or grants.
As a preliminary matter, DHS proposes that a proffered start-up entity must meet the definition of “U.S. business entity” at proposed 8 CFR 212.19(a)(9). The term is defined as any corporation, limited liability company, partnership, or other entity that is organized under Federal law or the laws of any State,
As noted above, an entity must be recently formed in the United States to be considered a start-up entity for purposes of this rule.
DHS further proposes to consider parole under this rule only where it is demonstrated that the start-up entity has been operating lawfully in the United States since its formation.
Finally, DHS proposes that the start-up entity must be of a type that has the substantial potential to experience rapid growth and job creation, including through the significant attraction of capital investment or government awards or grants. This factor is intended to capture the types of start-up entities that are most likely to provide a significant public benefit, while excluding entities without such potential—such as small businesses with limited growth potential created by entrepreneurs for the sole or primary purpose of providing income to the entrepreneurs and their families.
DHS anticipates that an applicant seeking parole under this rule would be able to meet the above criteria by providing various types of evidence. As part of the application process, an applicant would generally be expected to submit supporting documentation concerning the entity's business and its substantial potential for rapid growth and job creation (as well as the entrepreneur's day-to-day role in the business).
• Evidence of capital investments from qualified investors, or government awards or grants, other than those relied on to satisfy the requirements of 8 CFR 212.19(b)(2)(ii)(B);
• letters from relevant government entities, qualified investors, or established business associations with knowledge of the entity's research, products or services and/or the applicant's knowledge, skills or experience that would advance the entity's business;
• newspaper articles or other similar evidence that the applicant or entity has received significant attention or recognition;
• evidence that the applicant or entity has been recently invited to participate in, is currently participating in, or has graduated from one or more established and reputable start-up accelerators;
• evidence of significant revenue generation and growth in revenue;
• patent awards or other documents indicating that the entity or applicant is focused on developing new technologies or cutting-edge research;
• evidence that the applicant has played an active and central role in the success of prior start-up entities;
• degrees or other documentation indicating that the applicant has knowledge, skills, or experience that would significantly advance the entity's business;
• payroll, bookkeeping, salary, or bank records or other documents related to jobs created prior to filing the request for parole; and
• any other relevant, probative, and credible evidence indicating the entity's potential for growth and/or the applicant's ability to advance the entity's business in the United States.
DHS welcomes public comment on the proposed definitions of the terms “start-up entity” and “U.S. business entity,” as well as the requirement that the entity be formed within the 3 years preceding a request for parole. DHS also welcomes comments on the types of evidence that may be considered when determining whether such provisions have been met, including alternative suggestions on how applicants may be able to demonstrate eligibility.
DHS is proposing that to be considered for parole under this rule, an applicant must be an entrepreneur who is well-positioned to advance his or her start-up entity's business. Specifically, DHS proposes that an applicant be able to demonstrate that he or she is an “entrepreneur” as defined at 8 CFR 212.19(a)(1). This definition would require the applicant to show that he or she both: (1) Possesses a substantial ownership interest in the start-up entity, and (2) has a central and active role in the operations of that entity, such that his or her knowledge, skills, or experience will substantially assist the entity with the growth and success of its business.
DHS believes these criteria are appropriate, as active ownership and participation provide stronger justifications for parole based on significant public benefit than investment alone. To establish that parole would serve a significant public benefit, DHS believes that the applicant should be central to the entity's business and well-positioned to actively assist in the growth of that business, such that his or her presence would help the entity provide related benefits in the United States, including by conducting research and development, increasing revenue, or creating jobs. DHS thus adopts the common meaning of the term “entrepreneur,” which embodies the concept of active, material participation by an individual in the operations and growth of a new business entity.
The ownership criterion proposed by DHS in this rule is also essential for connecting the individual to the start-up entity providing the significant public benefit. DHS has determined that a minimum 15 percent ownership interest is a reasonable threshold for seeking parole under this rule. DHS recognizes that entrepreneurs may possess larger equity stakes in the start-up entity at the time of formation or during initial seed rounds of financing (often ranging from 50-100 percent).
DHS anticipates that an applicant would be able to demonstrate sufficient satisfaction of the above criteria by providing various forms of evidence. With respect to ownership, DHS anticipates that an applicant would be able to provide copies of legal or financial documents—such as formation and organizational documents, equity certificates, equity ledgers, ownership schedules, or capitalization tables—indicating the applicant's ownership interest in the start-up entity. With respect to the applicant's role within the entity, DHS expects that an applicant would provide supporting documentation of his or her role within the entity, as well as the knowledge and experience that is central to the entity's business. Such supporting documentation may include:
• Letters from relevant government agencies, qualified investors, or established business associations with an understanding of the applicant's knowledge, skills or experience that would advance the entity's business;
• newspaper articles or other similar evidence that the applicant has received significant attention and recognition;
• evidence that the applicant or entity has been recently invited to participate in, is currently participating in, or has graduated from one or more established and reputable start-up accelerators;
• evidence that the applicant has played an active and central role in the success of prior start-up entities;
• degrees or other documentation indicating that the applicant has knowledge, skills, or experience that would significantly advance the entity's business; and
• any other relevant, probative, and credible evidence indicating the applicant's ability to advance the entity's business in the United States.
DHS is also proposing that an individual who seeks parole under this rule must validate the entity's substantial potential for rapid growth and job creation by providing additional reliable evidence of such potential. DHS is proposing that this requirement may generally be satisfied by demonstrating that the entity has: (1) Received substantial investment of capital from U.S. investors with established records of successful investments; or (2) received substantial awards or grants for purposes of economic development, research and development, or job creation from Federal, State, or local government entities that regularly provide such awards or grants to U.S. businesses.
These investment and funding criteria are proposed to serve as reliable indicators of an entity's substantial potential for rapid growth and job creation and, ultimately, of the significant public benefit that a grant of parole would provide in an individual case. Meeting these criteria, however, is intended to supplement—and not supplant—the need to provide other supporting evidence (such as that described in section IV.B.1) establishing that the applicant meets the general criteria for a grant of parole under the proposed rule. Even if an entity meets the investment or funding criteria discussed herein, additional evidence would generally assist USCIS officers in determining whether an applicant has met the required standard for parole and merits a favorable exercise of discretion. Among other things, such supplementary evidence may: provide additional external validation of the start-up entity (
DHS proposes to allow an applicant to demonstrate his or her entity's substantial potential for rapid growth and job creation by showing that the entity has received substantial investment of capital from established U.S. investors (such as venture capital firms, angel investors, or start-up accelerators) with a history of successful investments in start-up entities.
DHS is proposing a general qualified investment threshold of $345,000, which DHS believes is a reasonable minimum investment amount that will serve as a reliable external validation factor by qualified investors.
DHS is also proposing a requirement that the substantial investment be received within the 365 days immediately preceding the filing of the application for initial parole. In addition to addressing potential fraud concerns, this requirement assists in validating the entity's substantial potential for rapid growth and job creation and, ultimately, of the significant public benefit that a grant of parole to the entrepreneur would provide. This requirement ensures that a qualified investor or government entity has recently validated (within 365 days) the start-up entity's potential for rapid growth and job creation. However, DHS recognizes that start-up investment is a rapidly evolving field, and welcomes additional feedback, including data on trends in investment that may be available, as such feedback and data may impact the minimum investment threshold in the Department's final rule.
As noted above, in order to meet the investment criteria for consideration of parole under this proposed rule, the $345,000 total investment must be made by one or more qualified U.S. investors.
In addition, DHS proposes to limit qualifying investors to those who have an established record of successful investments in start-up entities. DHS proposes that such a record would include, during the 5-year period prior to the date of filing of the parole application, 1 or more investments in other start-up entities in at least 3 separate calendar years in exchange for equity or convertible debt comprising a total of no less than $1,000,000.
These criteria are intended to ensure that investors are bona fide, and thus to prevent fraud and protect the integrity of the parole process under this rule. They are also intended to ensure that a qualifying investment serves as a strong and reliable indication of the start-up entity's substantial potential for rapid growth and job creation. By requiring an investor to have a track record of investing substantial funds in start-up entities that subsequently achieve significant revenue and job creation, these provisions would enhance the Department's ability to have confidence in the investments made by qualified investors as reliable validation of a start-up entity's potential. At the same time, the criteria would mitigate potential misuse of the parole process, including by individuals or entities that may claim to be bona fide investors to conceal fraud or other illicit activity. DHS expects that individuals and entities that meet these criteria would include existing and bona fide start-up investors that are known to operate successfully in the business community—including established venture capital firms, angel investors, and start-up accelerators.
Finally, DHS proposes to limit “qualified investments” under this rule to investments of lawfully derived capital in start-up entities through the purchase of equity or convertible debt issued by such entities.
DHS welcomes comments on all aspects of this section, including the proposed investment threshold, any potential alternative amounts for that threshold, and additional data. For comments recommending investment threshold amounts, the Department requests that commenters provide rationales and data, if available, to support their recommendations.
DHS proposes that an applicant may alternatively demonstrate a start-up entity's substantial potential for rapid growth and job creation by showing that the entity has received significant funding in the form of awards or grants from Federal, State or local government entities. DHS proposes that to satisfy this criterion, the awards or grants generally would need to be made by one or more Federal, State, or local government entities that regularly provide such funding to U.S. businesses for economic development, innovation, research and development, or job creation reasons. DHS proposes to exclude any contractual commitment for goods or services, including any contracts that might appear to be, or could be made to look like, an award or grant. DHS believes this exclusion is reasonable since a contract for goods and services with a Federal, State or local government entity would typically provide a direct benefit to that government entity and not a public benefit, such as encouraging economic development and innovation, that an award or grant would provide as required by this proposed rule.
In the United States today, a range of Federal, State, and local government entities, including State or local economic development corporations (EDCs), evaluate U.S. businesses and provide awards or grants when such funding is deemed to be in the public interest.
DHS welcomes comments on all aspects of this section, including the proposed government funding threshold, any potential alternative amounts for that threshold, and additional data. For comments recommending government funding threshold amounts, the Department requests that commenters provide rationales and data, if available, to support their recommendations.
Additionally, DHS proposes that an applicant who only partially meets one or both of the above investment or government funding sub-criteria for parole under this rule may still be considered for parole under this rule in certain limited circumstances.
DHS is not proposing to define the specific types of evidence that may be deemed “reliable and compelling” at this time, as the Department seeks to retain flexibility as to the kinds of supporting evidence that may warrant the Secretary's exercise of discretion in granting parole based on significant public benefit. But DHS believes that to meet the parole standard in this context without meeting the threshold criteria,
DHS anticipates that the necessary amount and requisite evidentiary weight of such additional evidence would depend on the degree to which an applicant meets one or both of the threshold sub-criteria related to capital investment or government funding. For example, an applicant whose entity has received $200,000 in qualifying capital investment would be expected to provide more validating evidence than an applicant whose entity received $300,000 in such investment. Moreover, DHS may give particular weight to evidence that tends to serve as a strong validation of the entity's substantial potential for rapid growth and job creation. For example, evidence that an entity has been selected to participate in, is participating in, or has graduated from one or more established and reputable start-up accelerators (or incubators) may serve as, depending on the accelerator's success rate and other factors, a strong indicator of the entity's potential. With respect to start-up accelerators, DHS expects to evaluate them on several relevant factors, including years in existence, graduation rates, significant exits by portfolio start-ups, significant investment or fundraising by portfolio start-ups, and valuation of portfolio start-ups.
Ultimately, the USCIS adjudicator would be required to determine whether such additional evidence—in conjunction with the entity's substantial capital investment or government funding, among other factors—is sufficient to establish that the applicant's parole into the United States will provide a significant public benefit (and that the applicant merits a favorable exercise of discretion). This approach is consistent with the discretionary nature of the Secretary's statutory parole authority and the fact that each parole request will be adjudicated, on a case-by-case basis, after considering the particularized facts of each case. DHS invites public comment on the types of reliable and compelling evidence that may warrant a discretionary grant of parole in such cases.
As noted above, DHS also invites public comment on alternatives to the proposed investment amount and government funding thresholds that applicants may use to demonstrate a start-up entity's substantial potential for rapid growth and job creation and that may serve as a principal basis for seeking parole under this rule. Commenters are invited to submit comments on whether significant revenue generation, participation in established and reputable start-up accelerators, or any other significant external validation factor should be included as a principal basis for seeking parole under this rule. DHS specifically invites comment on whether applicants can adequately demonstrate the future substantial potential for rapid growth and job creation through established records of revenue generation, revenue growth, job creation, or any combination of these and other factors. Commenters should recommend threshold levels for obtaining parole under suggested criteria, data to support the recommended alternative thresholds, and the types of reliable evidence that applicants may submit to substantiate their claims. Comments should include any relevant data to substantiate recommendations, if available.
DHS is proposing to establish new application requirements for entrepreneurs seeking parole under this rule. Prior to appearing before DHS as an applicant for admission requesting parole, entrepreneurs would be required to file with USCIS an Application for Entrepreneur Parole (Form I-941 or successor form), established by this rulemaking, along with supporting documentation. This application is designed to capture information pertaining to the criteria that are specific to parole requests filed under this rule. USCIS would accept Applications for Entrepreneur Parole filed from within the United States or outside the United States. DHS is proposing an application filing fee of $1200.
DHS proposes that all individuals filing the Application for Entrepreneur Parole would be required to appear for collection of their biometric information, including fingerprints and photographs.
As is currently the case for other applicants for parole, the location for the collection of biometric information will depend on whether the applicant filed the application from within the United States or outside the United States.
Under the process proposed by this rule, DHS would consider granting parole to individuals whose enterprises have the substantial potential for rapid growth and job creation, including through the development of new technologies or the pursuit of cutting-edge research. To further ensure this is the case, and in addition to the high threshold criteria discussed above, DHS is proposing that an individual who is paroled into the United States under this rule must, as a condition of that parole, maintain household income while in the United States that is greater than 400 percent of the Federal poverty line for his or her household size as defined by the Department of Health and Human Services (HHS).
This income threshold is intended to establish that applicants seeking parole under this rule will have sufficient personal economic stability so as to better ensure that they will make significant economic and related contributions to the United States. The income threshold and time limits on parole also mean that individuals eligible for parole under this rule would generally not be eligible for Federal public benefits or premium tax credits under the Health Insurance Marketplace of the Affordable Care Act.
DHS welcomes comment on the proposed income threshold.
When adjudicating the Application for Entrepreneur Parole, DHS is proposing that USCIS will examine whether the entrepreneur has demonstrated, through credible and probative evidence, that he or she warrants a favorable exercise of the Secretary's discretion.
If USCIS, in its discretion, determines that the applicant does not warrant a grant of parole under the proposed rule, it may deny the application.
DHS, however, proposes to retain its authority and discretion to reopen or reconsider a decision only on its own motion.
Because the determination to grant or deny a request for parole is a discretionary determination, the parole process proposed in this rule may not be relied upon to create any right or benefit, substantive or procedural, enforceable at law or by any individual or other party in removal proceedings, in litigation with the United States, or in any other form or manner. Parole determinations would continue to be discretionary, case-by-case determinations made by DHS, and parole may be revoked or terminated at any time. Parolees under this proposal would assume sole risk for any and all costs, expenses, opportunity costs, and any other potential liability resulting from a revocation or termination of parole. A grant of parole would in no way create any reliance or due process interest in obtaining or maintaining parole or being able to remain in the United States to continue to direct a start-up entity or for other reasons.
DHS proposes to limit the number of entrepreneurs who may be granted parole under this rule with the same start-up entity. DHS recognizes that a start-up entity may be developed by more than one entrepreneur. DHS also believes that it would be difficult for a large number of entrepreneurs associated with the same start-up entity to each meet the proposed criteria and comply with the proposed conditions while ultimately developing a successful business in the United States. DHS therefore believes that imposing a limit on the number of entrepreneurs who may be granted parole based on the same start-up entity is consistent with ensuring that each entrepreneur's parole will provide a significant public benefit. Specifically, DHS is proposing that parole may be granted to no more than 3 entrepreneurs per start-up entity.
This limitation is intended to strengthen the integrity of the proposed entrepreneur parole process in various ways. Among other things, limiting the number of individuals who may be granted parole under this rule with respect to the same start-up entity will be an additional means of preventing an entity from being used as a means to fraudulently allow individuals to enter the United States. Such a limit, for example, diminishes the incentive to dilute equity in the start-up entity as a means to fraudulently acquire parole for individuals who are not bona fide entrepreneurs. Such a limit will also help ensure that the tangible benefits that may flow from the start-up entity's success in the United States—such as rapid revenue generation and job creation—are more likely to inure to the United States and its workers. Relatedly, DHS is concerned that a higher number of entrepreneurs associated with the same start-up entity may affect the start-up's ability to grow and succeed, and may even result in the startup's failure, thus preventing the goals of the proposed parole process.
DHS welcomes comments on the proposed limitation on the number of entrepreneurs who can qualify for parole under this rule with the same start-up entity, including alternative proposals.
DHS proposes that applicants who are granted entrepreneur parole may be
DHS welcomes public comment on the proposed limits on the duration of parole under this rule and any relevant data to support alternative durations of parole.
DHS proposes that the spouse and children
DHS is proposing to consider granting parole to the spouses and children of entrepreneur parolees to further the central purpose of the rulemaking—encouraging foreign entrepreneurs to come to and remain in the United States to develop and grow their start-up entities and provide the benefits of such growth to the United States. DHS retains the authority to decide whether to grant parole to such spouses and children on a case-by-case basis and may determine that such individuals do not warrant parole (or re-parole) either because their parole would not be justified on significant public benefit grounds or as a matter of discretion.
DHS is proposing that an entrepreneur who is paroled into the United States under this rule would be authorized for employment incident to his or her parole with the start-up entity.
DHS further proposes that such employment authorization be “automatic” upon the grant of parole so that the entrepreneur can pursue his or her parole-related activities with the start-up entity without delay. DHS believes that requiring entrepreneurs to file separate applications for employment authorization and wait for Employment Authorization Documents (EADs, Form I-766) before beginning work
Finally, DHS is proposing several conforming amendments to 8 CFR 274a.12(b), which lists the classes of foreign nationals authorized for employment incident to status with specific employers. DHS proposes to amend the introductory paragraph of this provision, which currently refers only to employment-authorized “nonimmigrants,” by adding a reference to parolees under this rule.
DHS is also proposing to extend eligibility for employment authorization to the accompanying spouses (but not the children) of entrepreneur parolees who have been paroled into the United States.
DHS has proposed not to extend employment authorization to the children of entrepreneurs, as it does not view the employment of these children in the United States as a significant deciding factor for an entrepreneur considering to create and develop start-up entities with high growth potential in the United States. DHS has extended eligibility for employment authorization to minors within the following nonimmigrant categories: Dependents of Taipei Economic and Cultural Representative Office (TECRO) E-1 nonimmigrants; J-2 dependent children of J-1 exchange visitors; dependents of A-1 and A-2 foreign government officials; dependents of G-1, G-3, and G-4 international organization officials; and dependents of NATO officials. But in each of these instances, DHS has extended eligibility for employment authorization to minor children based on particular foreign policy considerations; these underlying considerations are not present in the proposed entrepreneur parole process.
As with other classes of aliens listed as employment authorized incident to status with a specific employer in 8 CFR 274a.12(b), entrepreneur parolees would not be issued EADs (Forms I-766) as evidence of employment authorization. Instead, DHS would issue Arrival/Departure Records (Forms I-94) with the entrepreneur's code of admission (“PE-1”), which indicates that the entrepreneur is employment-authorized incident to parole. Because the Arrival/Departure Record would contain this code, the record would be sufficient evidence of employment authorization for Employment Eligibility Verification (Form I-9) purposes.
As with other employers, the start-up entity would be required to verify the employment authorization of its employees, including the entrepreneur paroled under this rule, to comply with employment eligibility verification requirements. DHS is proposing to amend the regulations governing these requirements by adding to the list of documents acceptable by employers for completion of the Form I-9. The proposed rule would add to this list a combination of the entrepreneur's valid foreign passport and his or her Arrival/Departure Record indicating employment-authorization pursuant to parole.
This proposal would ensure that entrepreneur parolees under this rule will have documentation evidencing identity and employment authorization that is acceptable for meeting the Form I-9 requirements immediately upon receiving parole to the United States. Because the document combination described above (foreign passport and Arrival/Departure Record) has been acceptable for Form I-9 purposes since the Employment Eligibility Verification requirements were first established in 1987, employers should readily recognize the document combination as acceptable for such purposes.
Further, DHS is satisfied that this document combination contains sufficient security features, as required by section 274A(b)(1)(B)(ii)(III) of the INA, 8 U.S.C. 1324a(b)(1)(B)(ii)(III). An Arrival/Departure Record issued to an entrepreneur parolee will indicate the validity period for parole and the new code of admission (“PE-1”) that is specific to such parolees. In addition, DHS proposes to automatically extend the employment authorization of an entrepreneur parolee whose parole has expired but who has filed a timely application for re-parole with the same start-up entity.
DHS is proposing to revise the existing, general parolee employment eligibility provision at 8 CFR 274a.12(c)(11) to clarify that the employment eligibility of entrepreneur parolees and their spouses under this rule are governed by proposed 8 CFR 274a.12(b)(37) and 8 CFR 274a.12(c)(34) rather than 8 CFR 274a.12(c)(11). In addition, DHS is proposing to update 8 CFR 274a.12(c)(11) to replace outdated references to parole “for emergency reasons” and “reasons deemed strictly in the public interest” with the current statutory standards for parole—“urgent humanitarian reasons” and “significant public benefit.”
DHS proposes that, consistent with filing requirements for reporting material changes in other contexts (such as the requirement to submit amended petitions when there are material changes), an entrepreneur who has been granted parole under this rule would be required to immediately report to USCIS any material changes potentially affecting his or her grant of parole.
For purposes of this rule, DHS proposes the term “material change” to
DHS welcomes public comment on the proposed definition of the term “material change.” DHS also welcomes comment on the types of situations that would constitute material changes.
DHS proposes that individuals who have been granted entrepreneur parole may be eligible for one additional, successive period of re-parole of up to 3 years with the same start-up entity if such additional period of parole is determined to serve a significant public benefit.
As discussed above, DHS believes that a total maximum 5-year period of parole under this rule (an initial period of up to 2 years, plus one possible re-parole period of up to 3 years) is consistent with the amount of time successful start-up entities generally require to realize their growth potential. This would generally allow sufficient time for a successful start-up entity to engage in an initial public offering, or otherwise advance past the generally recognized start-up phase.
DHS welcomes comments regarding the length of parole and re-parole.
To be considered for re-parole, an entrepreneur parolee must demonstrate that his or her stay in the United States pursuant to parole would continue to provide a significant public benefit. DHS proposes that an individual may meet this standard by demonstrating that his or her start-up entity continues to demonstrate substantial potential for rapid growth and job creation and that his or her parole would significantly help the entity continue to conduct and grow its business here.
As noted above, the key to meriting parole under this proposed rule is the formation of an entity in the United States with the substantial potential to show rapid growth, including through increased revenue and job creation. DHS thus proposes that an applicant for re-parole show that his or her entity continues to be a “start-up entity” as that term is defined at proposed 8 CFR 212.19(a)(2).
As with the application for initial parole, DHS anticipates that an applicant for re-parole would be able to meet the above criteria by submitting various forms of evidence. In addition to meeting the investment, revenue, or job creation criteria described further below, an applicant will be expected to provide supplementary evidence of the entity's continued substantial potential for rapid growth and job creation.
To ensure that any successive grant of parole would continue to serve a significant public benefit, DHS is proposing that an applicant for re-parole show that he or she continues to meet
As discussed in section IV.B.2., DHS believes that the definition of “entrepreneur” proposed in this rule is essential to ensuring that granting parole in an individual case would provide a significant public benefit. By requiring an applicant for re-parole to demonstrate that he or she continues to serve in an active and central capacity and continues to have knowledge, skills, or experience integral to the entity's success, DHS is ensuring that the applicant is directly related to the entity's ability to benefit the United States, including by conducting research and development, increasing revenue, or creating jobs. Similarly, the ownership standard is also essential for connecting the individual to the start-up entity and ensuring that he or she continues to assume more than a nominal financial risk related to the entity. The reduced 10 percent equity requirement for seeking re-parole (as opposed to the 15 percent requirement for seeking initial parole) takes into account the need of some successful start-up entities to raise additional venture capital financing by selling ownership interest during their initial years of operation.
As also discussed in section IV.B.2., DHS believes that an entrepreneur seeking re-parole would be able to demonstrate sufficient satisfaction of the above criteria by providing various forms of evidence. With respect to ownership, DHS anticipates that an applicant would be able to provide copies of legal or financial documents—such as formation and organizational documents, equity certificates, equity ledgers, ownership schedules, and capitalization tables—indicating the applicant's ownership interest in the start-up entity. With respect to the applicant's role within the entity, DHS expects that an applicant could satisfy the criterion by providing evidence showing that he or she continues to serve in the same capacity as that described in the initial parole application. If the applicant has changed positions within the entity, he or she would need to provide evidence demonstrating that he or she continues to serve in a central and active capacity within the entity and that his or her knowledge, skills, or experience would continue to substantially assist the entity with the growth and success of its business.
DHS further proposes that, to seek re-parole under this rule, an entrepreneur would need to further validate, through additional reliable evidence, the start-up entity's continued substantial potential for rapid growth and job creation. DHS is proposing that this requirement may generally be satisfied by demonstrating that the entity has: (1) Received substantial additional qualifying funding, such as awards or grants from qualifying government entities or investments of capital from U.S. investors with established records of successful investment; (2) generated substantial and rapidly increasing revenue in the United States over the prior parole period; or (3) generated a substantial number of qualified jobs for U.S. workers.
DHS proposes to allow an applicant to demonstrate that a start-up entity continues to have substantial potential for rapid growth and job creation by showing that during the preceding period of parole the entity received additional substantial qualifying funding—through “qualifying investments,” “qualified government grants or awards,” or a combination of both.
DHS believes that these investment criteria are reasonable for subsequent grants of parole based on consultation with the SBA, as well as the amounts of investment made in start-up entities during initial rounds of capital investment.
DHS welcomes comment on all aspects of this section, including the proposed investment threshold for re-parole and any potential alternatives to such thresholds. For comments regarding investment threshold amounts, the Department requests that commenters provide rationales and data, if available, to support their recommendations.
DHS also proposes to allow an applicant to demonstrate that a start-up entity continues to have substantial potential for rapid growth and job creation by showing that the entity has exhibited rapid growth in terms of revenue generation in the United States during the relevant parole period. DHS proposes that an applicant may generally be able to meet this standard by demonstrating that the entity reached at least $500,000 in annual revenue, with at least 20 percent average annual revenue growth, during the initial parole period.
Based on consultation with the SBA, DHS believes $500,000 and 20 percent annual revenue growth would be reasonable criteria for purposes of re-parole. Notably, evaluating revenue generation and growth is industry- and location-specific, and start-up entities may be at different stages of development at the time applicants file their parole requests. DHS considered proposing revenue and growth thresholds that varied by industry and geographic location, but determined that such an approach would be extremely difficult to administer. Instead, DHS decided to propose threshold criteria that would generally apply to start-up entities under this parole process. DHS chose $500,000 in revenue and 20 percent annual revenue growth as proposed threshold criteria because, after consulting with SBA, DHS determined these criteria: (1) Would be reasonable as applied across start-up entities regardless of industry or location; and (2) would serve as strong indications of an entity's potential for rapid growth and job creation (and that such entity is not, for example, a small business created for the sole or primary purpose to provide income to the owner and his or her family).
DHS's proposed revenue amount is based on analysis of available data
DHS is proposing
DHS further proposes to allow an applicant to demonstrate his or her entity's substantial potential for rapid growth and job creation by showing that the entity has exhibited rapid growth in terms of job creation during the relevant parole period. DHS proposes that an applicant may generally be able to meet this standard by demonstrating that the entity created at least 10 qualified jobs with the start-up entity for U.S. workers during the initial parole period. DHS decided to require at least 10 qualified jobs for re-parole based on survey data indicating that the average employment at new businesses in 2011 was 8.7 employees.
Moreover, DHS is proposing a definition for the term “qualified job” to limit the types of jobs that may be used to justify a grant of parole under this rule.
Additionally, DHS proposes that the term “full-time employment,” as referenced in the proposed definition of “qualified job,” would mean paid employment of an employee by the entrepreneur's start-up entity in a position that requires a minimum of 35 working hours per week.
Finally, as with the application for an initial grant of parole, DHS proposes that an applicant who only partially meets one or more of the above sub-criteria related to capital investment, revenue generation, or job creation may be considered for re-parole under this rule in certain limited circumstances.
As noted previously, DHS is not proposing to define the specific types of evidence that may be deemed “reliable and compelling” at this time, because DHS seeks to retain flexibility as to the kinds of supporting evidence that may warrant the Secretary's exercise of discretion in granting parole based on significant public benefit. But DHS believes that such evidence would need to be compelling to demonstrate that the entrepreneur's presence here would provide a significant public benefit considering the entity's inability to meet the otherwise applicable threshold criteria for consideration. DHS will ultimately be required to decide whether such evidence—in conjunction with the entity's substantial investment, revenue generation, or job creation—is sufficient to establish that the applicant's presence in the United States will provide a significant public benefit. This approach is consistent with the discretionary nature of the Secretary's statutory parole authority and the fact that each parole request will be adjudicated, on a case-by-case basis, after considering the particularized facts of each case.
DHS invites public comment on the level and types of reliable and compelling evidence that may warrant a discretionary grant of parole in such cases. DHS also invites public comment on alternatives to the proposed funding, revenue generation, and job creation thresholds that applicants may use to demonstrate a start-up entity's continued substantial potential for rapid growth and job creation and that may serve as a principal basis for seeking re-parole under this rule. Commenters should recommend threshold levels for obtaining re-parole under suggested criteria, along with the types of reliable evidence that applicants may submit to substantiate their claims, including any relevant data if available.
Under the proposed rule, an entrepreneur parolee seeking a period of re-parole would be required to file a request for re-parole with USCIS using the same form as for initial parole, the Application for Entrepreneur Parole (Form I-941, or successor form), and pay the same fees (filing and biometric services fees).
The entrepreneur (or spouse or dependent child), if outside the United States upon the approval of the re-parole application, would have to obtain a travel document from USCIS or DOS (
To facilitate maintenance of continuous work authorization and parole, DHS is proposing that an entrepreneur parolee may file a request for re-parole beginning 90 days prior to the expiration date of his or her current period of parole.
DHS is proposing provisions governing termination of parole under this rule in cases where DHS believes such termination is appropriate, including circumstances indicating that continued parole would no longer provide a significant public benefit, pursuant to section 212(d)(5)(A) of the INA, 8 U.S.C. 1182(d)(5)(A). Consistent with DHS's parole authority, under this proposed rule DHS may, in its discretion, terminate parole granted under 8 CFR 212.19 at any time and without prior notice or opportunity to respond. Alternatively, DHS may, in its discretion, provide the entrepreneur notice and an opportunity to respond prior to terminating his or her parole under 8 CFR 212.19. In addition to the general grounds for termination of parole described at 8 CFR 212.5(e),
DHS believes that certain circumstances warrant automatic termination of parole. In this rule, DHS proposes that parole will automatically terminate if: (a) The period of parole expires, unless the individual timely files a non-frivolous application for re-parole; or (b) USCIS receives written notice from the entrepreneur that he or she will no longer be employed by the start-up entity or ceases to possess at least a 10 percent ownership stake in the start-up entity in accordance with 8 CFR 212.19(j).
Even though DHS has the discretion to terminate parole without prior notice, USCIS will generally attempt to provide the entrepreneur or his or her spouse or children, as applicable, written notice of its intent to terminate parole if USCIS believes that: (a) The facts or information contained in the request for parole were not true and accurate; (b) the alien failed to timely file or otherwise comply with the material change reporting requirements in this section; (c) the entrepreneur is no longer employed in a central and active role by the start-up entity or ceases to possess at least a 10 percent ownership stake in the start-up entity; (d) the alien otherwise violated the terms and conditions of parole; or (e) parole was erroneously granted.
In cases where USCIS provides written notice and an opportunity to respond, through a notice of intent to terminate, DHS is proposing to provide a period of up to 30 days for the alien's written rebuttal.
If a charging document is served on the alien, the charging document will constitute written notice of termination of parole (if parole has not already been terminated), unless otherwise specified.
In the event of a violation of one or more terms and conditions of parole solely by the spouse or a child of the entrepreneur, parole may be terminated for the violator (
The entrepreneur and any dependents granted parole under this program will be required to depart the United States when their parole periods have expired or have otherwise been terminated, unless such individuals are otherwise eligible to lawfully remain in the United States. At any time prior to reaching the 5-year limit for parole under this proposed rule, such individuals may apply for any immigrant or nonimmigrant classification for which they may be eligible (such as classification as an O-1 nonimmigrant or lawful permanent residency through employer sponsorship). If such individuals are approved for a nonimmigrant or employment-based immigrant visa classification, they would generally be required to depart the United States and apply for a visa with DOS. As noted above, because parole is not considered an admission to the United States, parolees are unable to apply to adjust or change their status in the United States under many immigrant or nonimmigrant visa classifications.
DHS proposes that the investment and revenue amounts specified at proposed 8 CFR 212.19(a)(5), (b)(2)(ii) and (c)(2)(ii) will be automatically adjusted every 3 years by the Consumer Price Index for All Urban Consumers (CPI-U).
DHS is proposing a technical change to 8 CFR 274a.2(b)(1)(v)(C) to add the Department of State (DOS) Form FS-240 Consular Report of Birth Abroad, or successor form, to the list of acceptable documents under the “list C” column of Form I-9, Employment Verification Eligibility. Since 2011, Form FS-240 has been exclusively issued by DOS as evidence of a U.S. citizen's birth abroad and acquisition of U.S. citizenship at birth, as well as used to replace a lost, stolen, or damaged Form FS-545 Certification of Birth Abroad or Form DS-1350 Certification of Report of Birth. This technical change will formally recognize the Form FS-240, or successor form, as an acceptable document to establish employment authorization for Form I-9 purposes.
The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments. Title II of the Act 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 a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector. The value equivalent of $100 million in 1995 adjusted for inflation to 2015 levels by the Consumer Price Index for All Urban Consumers (CPI-U) is $155 million.
This rule does not exceed the $100 million expenditure in any one year when adjusted for inflation ($155 million in 2015 dollars), and this rulemaking does not contain such a mandate. The requirements of Title II of the Act, therefore, do not apply, and DHS has not prepared a statement under the Act.
This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States companies to compete with foreign-based companies in domestic and export markets.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.
The proposed rule is intended to add new regulatory provisions guiding the use of parole with respect to individual foreign entrepreneurs of start-up entities whose entry into the United States would provide a significant public benefit through the substantial and demonstrated potential for rapid growth and job creation. Such potential would be indicated by, among other things, the receipt of significant capital financing from U.S. investors with established records of successful investments, or obtaining significant awards or grants from certain Federal, State or local government entities. The regulatory amendments would provide the general criteria for considering requests for parole submitted by such entrepreneurs.
DHS assesses that the rule, if finalized, will reduce a barrier to entry for new innovative research and entrepreneurial activity in the U.S. economy. The full potential of foreign entrepreneurs to benefit the U.S. economy is presently limited since many foreign entrepreneurs who seek to enter the United States and manage their own start-up entities do not qualify under existing nonimmigrant and
Based on review of data on startup entities, foreign ownership trends, and Federal research grants, DHS expects that approximately 2,940 entrepreneurs, sourced to 2,105 new firms with investment capital and about 835 new firms with Federal research grants could be eligible for this parole program annually. This estimate assumes that each new firm is started by one person despite the possibility of up to three owners being associated with each startup. DHS has not estimated the potential for increased demand for parole among foreign nationals who may obtain substantial investment from U.S. investors and otherwise qualify for entrepreneur parole, because changes in the global market for entrepreneurs, or other exogenous factors, could affect the eligible population. Therefore, these volume projections should be interpreted as a reasonable estimate of the eligible population based on past conditions extrapolated forward. Eligible foreign nationals who wish to apply for parole as an entrepreneur would incur the following costs: A filing fee for the Application for Entrepreneur Parole (Form I-941) in the amount of $1,200 to cover the processing costs for the proposed application; a fee of $85 for biometrics submission; and the opportunity costs of time associated with completing the proposed application and biometrics collection. After monetizing the expected opportunity costs and combining them with the filing fees, an eligible foreign national applying for parole as an entrepreneur would face a total cost of $1,480. Any subsequent renewals of the parole period would result in the same previously discussed costs. Filings to notify USCIS of material changes to the entrepreneur's parole, when required, would result in similar costs; specifically, in certain instances the entrepreneur would be required to submit to USCIS a new form I-941 to notify USCIS of material changes to their parole and would thus bear the direct filing cost and concomitant opportunity cost. However, because the $85 biometrics fee would not be required with such filings, these costs will be slightly lower than those associated with the initial parole request and any request for re-parole.
Dependent spouses and children who seek parole to accompany or join the principal applicant by filing a Form I-131, Application for Travel Document, would be required to submit biographical information and biometrics as well. Based on a principal applicant population of 2,940 entrepreneurs, DHS assumes a total of 3,234 spouses and children would be seeking parole and submitting biometrics. Each dependent would incur a filing fee of $360, a biometric processing fee of $85 (if 14 years of age and over) and the opportunity costs associated with biometrics collection. After monetizing the expected opportunity costs associated with providing biographical information to USCIS and submitting biometrics and combining it with the biometrics processing fee, each dependent applicant would face a total cost of $550. DHS is also proposing to allow the spouse of an entrepreneur paroled under this proposed rule to apply for work authorization. Using a one-to-one mapping of principal filers to spouses, the total population of spouses expected to apply for work authorization is 2,940, which is an upper bound estimate. To obtain work authorization, the entrepreneur's spouse would be required to file Form I-765, Application for Employment Authorization, incurring a $380 filing fee and the opportunity costs of time associated with completing the application. After monetizing the expected opportunity costs and combining it with the filing fees, an eligible spouse would face a total additional cost of $416 (rounded). DHS does not anticipate that this rule, if finalized, would generate significant costs and burdens to private or public entities. While applicants may face a number of costs linked to their business or research endeavors, these costs would be driven by the business and innovative activity that the entrepreneur is engaged in and many other exogenous factors, not the rule itself or any processes related to the rule. Thorough review of academic, business, and policy research does not indicate that significant expected costs or negative consequences linked to drawing in foreign entrepreneurs are likely to occur. As such, DHS expects that the negative consequences, if any, would be greatly exceeded by the positive effects of this rule.
In each case where an entrepreneur would be granted parole under this rule, DHS would have made a determination that parole would yield a significant public benefit and that the person requesting parole merits a favorable exercise of discretion. Consistent with those decisions, the rule would be expected to produce broad economic benefits through the creation of new business ventures that otherwise would not be formed in the United States. These businesses are likely to create significant additional innovation, productivity, and job creation. It is reasonable to conclude that investment and research spending on new firms associated with this proposed rule will directly and indirectly benefit the U.S. economy and create jobs for American workers. In addition, innovation and research and development (R&D) spending are likely to generate new patents and new technologies, further enhancing innovation. Some portion of the foreign entrepreneurs likely to be attracted to this parole process may develop high growth and high impact firms that can be expected to contribute disproportionately to job creation. In summary, DHS anticipates that this proposed rule would produce positive effects that would greatly exceed any negative consequences.
Using an estimate of 2,940 annual applications for significant public benefit entrepreneur parole developed in the ensuing volume projections section of this analysis (these estimates focus only on principal initial filers, not entrepreneurs who might be eligible for a re-parole period of up to three years, or their spouses), DHS anticipates the total cost of this rule for principal filers who face a total per applicant cost of $1,480 to be $4,349.827 (undiscounted) annually for any given year. Dependent spouses and children who must submit Form I-131 and biometrics would face a per-applicant cost of $550, for a total cost of $1,779,604 (undiscounted). Dependent spouses who apply for employment authorization would face a per applicant cost of $416, which DHS projects would total $1,123,630 (undiscounted). Adding together the costs for the principal filers and family members—including filing costs, costs of submitting biometrics, and monetized opportunity costs—yields a total cost of this rule for the first year, 2017 and subsequently 2018, of $7,353,061
As described more fully in preceding sections of the preamble, Section 212(d)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. 1182(d)(5), grants the Secretary of Homeland Security the discretionary authority to parole individuals into the United States, on a case-by-case basis, for urgent humanitarian reasons or significant public benefit. DHS proposes to amend its regulations implementing this authority to increase and enhance entrepreneurship, research and development and other forms of innovation, and job creation in the United States. The proposed rule would establish general criteria for the use of parole with respect to individual entrepreneurs of start-up entities whose entry into the United States would provide a significant public benefit through the substantial and demonstrated potential for rapid growth and job creation.
The purpose of the proposed rule is to attract talented entrepreneurs to the United States who might otherwise choose to pursue such innovative activities abroad, or otherwise be significantly delayed, given the barriers they presently face. In addition to the intangible benefits associated with entrepreneurial innovation, and more tangible but difficult to measure benefits associated with new products, business networks, and possible production efficiencies that such activities are likely to generate, entrepreneurs have been and remain vital to economic growth and job creation in the United States and have generated a cohort of high-growth firms that have driven a highly disproportionate share of net new job creation.
A body of research documents both the importance of entrepreneurial activity to the U.S. economy and its link to immigration. In this background section, DHS does not attempt to comprehensively summarize this large body of work but instead focuses on specific aspects central to the purpose of the rule and to its potential impacts.
The labor market of the United States is highly dynamic. DHS analysis of data published by the U.S. Department of Labor's Bureau of Labor Statistics (BLS) indicates that between 2004 and 2013, on average about 847,000 firms were “born” each year and 784,000 “died.”
This proposed rule focuses on identifying entrepreneurs associated with types of entrepreneurial firms that are more likely to experience high growth, contribute to innovation in the United States, and create jobs in the country. This narrowed focus is critical to ensuring that parole in individual cases is justified by significant public benefit. Research has shown that the average start-up company does not survive long.
There is significant research, however, demonstrating that a small subset of new firms tends to be highly dynamic and to contribute disproportionately to net job creation. The BLS has highlighted the role of the small subset of high-growth firms that comprise about 2 percent of all firms but have accounted for 35 percent of gross job gains in recent years. “High-growth firms” are defined by the BLS and the Organization for Economic Cooperation (OECD) as those with at least ten employees that grow by at least 20 percent for each of 3 consecutive years based on employment. As of 2012, there were 96,900 high-growth firms in the United States that had created about 4.2 million jobs.
This highly disproportionate, “up or out” dynamism of high-growth firms has been substantiated by many researchers. The SBA reported that about 350,000 “high impact firms”—defined as enterprises whose sales have at least doubled over a 4-year period and which have an employment growth quantifier of 2 or more over the same period—generated almost all net new jobs in the United States between 1994 and 2006.
Despite the finding across a large number of studies that small new firms tend to exhibit an “up or out” dynamic in which a small number survive to age five to become high-growth firms or “gazelles,” other key findings that have emerged in the literature suggest that the growth and performance (as indicated by metrics that include labor productivity, profitability, revenue, and research and development intensity) of new firms, even high-growth firms, vary substantially.
Broadly speaking, entrepreneurs engage in research and development (R&D) in order to develop and commercialize new products and technologies. Several studies have found that entrepreneurs tend to engage in R&D spending in the first year, tend to attract patents and other forms of intellectual capital, and tend to attract venture capital financing.
Immigrants have been central contributors to business ownership and entrepreneurship in the United States and abroad. According to OECD data, self-employment rates for immigrants are higher than those of the native-born populations in many counties, including in the United States.
Many high-growth firms are involved in activities classified in the STEM (science, technology, engineering, and math) fields. The high concentration of immigrant entrepreneurs in these industries has gained much attention. Between 2006 and 2012, one-third of companies financed with venture capital that made an initial public offering had an immigrant founder, a sharp rise from seven percent in 1980. These companies have generated 66,000 jobs and $17 billion in sales.
Further evidence points to similar findings. Between 1995 and 2005, 25 percent of science and technology focused businesses founded in the United States had a foreign-born chief executive or lead technologist. In 2005, those companies generated $52 billion in sales revenue and employed 450,000 workers. In Silicon Valley, the share of immigrant-founded start-ups increased to 52 percent by 2005. In 2006, foreign nationals residing in the United States were involved (as inventors or co-inventors) in about 26 percent of patent applications filed that year. Immigrant founders of Silicon Valley firms tend to be highly educated, with 96 percent holding bachelor's degrees and 74 percent holding advanced degrees, and with 3-quarters of the latter in STEM fields. As of 2010, more than 40 percent of the Fortune 500 companies had been
To reiterate, high-growth firms tend to be new and young, and one of their primary contributions to the highly dynamic labor market of the United States has been through job creation. High-growth firms tend to innovate and focus on developing new products and services. While no evidence points to immigrant entrepreneurs outperforming native-born entrepreneurs, the relatively intense involvement of immigrant entrepreneurs in successful technology-driven activities suggests substantial economic contributions. While measuring the precise value and impact of innovation is difficult and still at a nascent stage in research, many economists believe innovation creates positive externalities and spillover effects that further drive economic growth.
Notwithstanding the research on the positive effects of high-growth entrepreneurship, there is some evidence of a long-term slowing in start-up dynamism and entrepreneurial activity in the United States; this trend began well over a decade ago, compelling many economists to advocate for policies that attract more entrepreneurs in general.
DHS cannot precisely predict the volume of new businesses that would start in the United States due to this rule. DHS has instead examined available data to provide an estimate of the population of individual entrepreneurs who may be eligible to request parole consideration under this proposed rule. Given limits on DHS's information about such entrepreneurs, DHS does not know how many people within the estimated eligible population would actually seek such consideration; as such, the estimates contained in this section represent an upper bound to the size of the eligible population. DHS estimated the population of entrepreneurs potentially eligible for parole under this rule based on two sub-groups: (1) Foreign individuals who seek to come to the United States to start a new business with financial backing from a qualified U.S. investor; and (2) foreign individuals who seek to come to the United States to start a new business as recipients of U.S. funded and awarded research grants and who intend to conduct the concomitant research in the United States. DHS assumes that each member of the eligible population will start a business and proposes that the general criterion for investment from a qualified investor (
DHS has no way of predicting with certainty the actual number of foreign nationals who would seek parole under this proposed rule over time, as the size of the eligible population could change significantly. DHS acknowledges that the estimate of individuals applying annually is an approximation based on past foreign ownership and start-up capital amounts. The analysis utilized to estimate the potential eligible population is also based implicitly on assumptions that: (1) The rule, if finalized, will not significantly change the frequency of U.S. funded grant applications from foreign researchers; and (2) that the rule, if finalized, will not significantly affect the market for foreign entrepreneurs and the market for the types of investment structures the rule will involve. Based on these assumptions and the data limitations, DHS projects that for the first full year that the rule would be effective, and for the second year, annual eligibility will be approximately 2,940.
Because U.S.-funded research grants may be a qualifying investment under this rule, DHS obtained publicly available data on federally funded grants for fiscal years 2013-2015.
To estimate the number of potential new entrepreneurial start-ups, DHS obtained and analyzed data from the BLS and the Census Bureau. From the BLS Business Employment Dynamics (BED) data suite, DHS obtained the number of private establishments aged 1 year or less for nine broad sectors likely to be involved in innovative activity, in order to focus on entrants.
For each sector, DHS obtained the corresponding share of firms owned by a person “born a citizen of the United States” from the Census Bureau's Survey of Business Owners data set.
Next, DHS attempted to calculate how many of the firms were started with at least $345,000, the minimum investment threshold that the rule proposes. The SBO data provides ranges of such startup capital amounts but DHS could not conduct a precise estimate because the data does not provide a category bound by the threshold minimum. In fact, the encompassing tranche is very large, from $249,500 to $1 million in range. The SBO does not provide actual cohort data or other information from which DHS could evaluate the distribution and, therefore, DHS has no way of ascertaining how many firms in this large range would occupy the $345,000 to $1 million
DHS recognizes the imperfections in estimating the potential population of eligible entrepreneurs based on extrapolating past conditions of foreign ownership rates and capital thresholds—and specifically, a lack of a demarcation threshold of $345,000—but this approach provides a reasonable approximation of the upper bound of the eligible population in light of the significant data limitations and the uncertainty involved with estimating future entrepreneurial activity. The main benefit of this method is that it is based on official data; a limitation is that it assumes that the annual crop of firms created are entrepreneurial and the types of firms covered by the parole process in the proposed rule. In practice, some, but not all, will be innovators, even though the present analysis focuses on the sectors of the economy linked to STEM activity (DHS is not aware of any methods or data that can allocate a research-innovation share of firms to each sector). Because the volume projections are derived from information obtained from official sources—the BLS and Census Bureau—DHS retains them for purposes of the costs and volume estimates of the proposed rule. However, DHS believes that an alternative method of estimation will inform readers and strengthen the regulatory analysis, by providing a viable comparison to the official projections. In this alternative approach, DHS focuses on the types of investment structures and ventures likely to be involved in the proposed parole process. Specifically, DHS believes that there will be three primary sources of investment for innovative firms (excluding research grants, which are not addressed in this alternative estimate): Venture capital firms, angel investors, and business accelerators and incubators (“incubators” for brevity, henceforth).
As is the case with the official estimates, this alternative method, which focuses on innovative firms and investment types, also suffers from limitations. Foremost, DHS recognizes uncertainty around utilization rates,
For venture capital, DHS consulted the National Venture Capital Association (NVCA) 2016 yearbook. This yearbook provides the number of annual seed venture investments. The data reveal that between 2013 and 2015, an average of 169 first sequence seed investments were made, which DHS considers to be new firms financed with venture capital.
To obtain an incubator estimate, DHS obtained publicly available information from SeedDb, which provides data on U.S. incubators collected from industry associations and fee-based data providers, including CB Insights and Crunchbase, which are two of the largest data providers for venture capital, angel investors, and accelerators.
Having estimated 56 venture firms and 144 incubator firms as potentially eligible, DHS next estimated the largest source of startup investment, angel investors. Based on the most recent data from the Center for Venture Research, about 25 percent of angel investments are made at the seed and startup stage. For the 71,000 companies receiving angel financing per year, about 17,750 could be considered new, which compares favorably to other, unrelated sources that note that about 16,000 new firms are financed with angel investments per year.
DHS used the 17,750 annual figure for angel backed startups and multiplied that number by the same 25 percent rate for foreign identifiers found in the SeedDB data. DHS is aware that many angel investments are made at low levels and that there is a wide range of such investment amounts. DHS does not have publicly available data in which to analyze a distribution of angel backed firms, and operates under the assumption that the $345,000 average is also the median, as is the case for a normal distribution. DHS multiplied the resulting foreign cohort by 0.5. The result of these extrapolations yields a figure of 2,151, which is an estimate of the potential population of eligible new firms annually financed by angel investments. By adding the three investment-type estimates together—144 incubator firms, 56 venture-backed firms, and 2,151 angel-backed firms—the resulting sum is 2,351. While uncertainties and limitations of the data involved in the volume estimates have been enunciated in detail, the closeness of this estimate to the 2,105 figure based on the Census and BLS data, adds robustness and confidence to the official estimate utilized in the cost projections.
This section discusses several potential cohorts involving entrepreneurial activity that is difficult to estimate.
In light of the potential benefits to the U.S. economy and job creation, DHS is proposing this rule to provide a mechanism that, consistent with the requirements of the INA, encourages foreign entrepreneurs described herein to form and create innovative firms in the United States. In 2011, DHS began outreach and stood up the Entrepreneurs in Residence initiative to try to encourage entrepreneurship among foreign nationals.
In addition, the proposed rule lists a number of ancillary conditions for eligibility—and conversely a number of conditions that would leave individuals unlikely or unable to be paroled into the United States (or continue to be paroled in the country). Because ancillary conditions can be considered for eligibility, the actual volume may be larger than the estimates herein. Two examples are that under the proposed rule, applicants must maintain household income greater than 400 percent of the poverty line and that the qualifying start-up capital cannot come from family members. The volume estimates presented in this analysis assume all ancillary eligibility conditions are met.
Finally, two potential elements of the eligible population are considered. First, as alluded to in the summary, the volume estimates and ensuing cost estimates assume one individual owner for each new firm; under the proposed rule, DHS would allow up to three individuals per firm to seek parole but does not attempt to estimate how many of the startups could have more than one owner. Second, the volume estimate for grants is based on Federal awards only. DHS will consider eligibility based on State or local grants and awards, including those from State or local Economic Development Corporations (EDCs). Although, unlike in the case of Federal awards, there is not a database capturing State and local grants or the transmission mechanisms through which some Federal grants are distributed to other entities, such as EDCs.
The proposed rule would permit certain foreign nationals to apply for a 2-year initial period of parole into the United States provided they meet the proposed eligibility criteria. Those who seek such parole into the United States would face the costs associated with the application, which involve a $1,200 application fee plus other costs, detailed below. The costs would stem from filing fees and the opportunity costs of time associated with filing the Application for Entrepreneur Parole, Form I-941.
The proposed filing fee for Form I-941 is $1,200. The fee is set at a level intended to recover the anticipated processing costs to DHS.
DHS estimates that the proposed application would take 1.33 hours to complete. After DHS receives the application and fees, if the applicant is physically present in the United States, USCIS will send the applicant a notice scheduling him or her to visit a USCIS Application Support Center (ASC) for biometrics collection. Along with the $85 biometric services fee, the applicant would incur the following costs to comply with the proposed biometrics submission requirement: The opportunity cost of traveling to an ASC, the mileage cost of traveling to an ASC, and the opportunity cost of time for submitting his or her biometrics. While travel times and distances vary, DHS estimates that an applicant's average roundtrip distance to an ASC is 50 miles, and that the average time for that trip is 2.5 hours. DHS estimates that an applicant waits an average of 1.17 hours for service and to have his or her biometrics collected at an ASC, adding up to a total biometrics-related time burden of 3.67 hours.
DHS estimates that each principal parole applicant would incur the following costs: $1,285 in filing fees to cover the processing costs for the application and biometrics; $194.53 after summing the monetized cost of travel to submit biometrics, the total opportunity costs of time of the initial applications, biometrics, and estimated travel costs, resulting in a total cost of $1,479.53 per application, rounded to $1,480.
The proposed rule would require all dependent family members (spouses and children) accompanying or joining the entrepreneur to file a Form I-131, Application for Travel Document, and would require all spouses and children 14 years of age through age 79 to submit biometrics. Those spouses and children would face the costs associated with filing the application and submitting biometrics.
DHS recognizes that many dependent spouses and children do not currently participate in the U.S. labor market, and as a result, are not represented in national average wage calculations. In order to provide a reasonable proxy of time valuation, DHS has to assume some value of time above zero and therefore uses an hourly cost burdened minimum wage rate of $10.59 to estimate the opportunity cost of time for dependent spouses. The value of $10.59 per hour represents the Federal minimum wage with an upward adjustment for benefits.
DHS would require dependents of parole applicants (spouses and children
DHS projects that approximately 3,234 dependents would be required to file a Form I-131 and submit biometrics, based on the estimate of 2,940 principal applicants and using a multiplier for expected family members of 1.1.
In addition, DHS proposes to allow unrestricted employment authorization for spouses of entrepreneurs granted parole under this rule. DHS proposes to permit these individuals to apply for employment authorization by filing Form I-765. To estimate the number of potential persons applying for employment authorization, DHS used a simple one-to-one mapping of entrepreneurs to spouses to obtain 1,813 spouses, the same number as entrepreneur parolees.
The current filing fee for Form I-765 is $380.00. The fee is set at a level to recover the processing costs to DHS. Based on the projection of 2,940 applicants, the total filing cost is $1,117,200 (undiscounted). DHS estimates the time burden of completing Form I-765 is 3.42 hours.
In addition to the filing costs, applicants for parole may face other costs associated with their entrepreneurial activities. These could include the administrative costs of starting up a business, applying for grants, obtaining various types of licenses and permits, and pursuing qualified investments. However, these costs apply to the entrepreneurial activity and the business activity that the applicant has chosen to be involved in and are not driven by the parole process or other governmental functions attributable to the rule itself. Hence, DHS does not attempt to estimate, quantify, or monetize such costs.
Lastly, DHS recognizes that some individuals who were lawfully admitted in the United States in certain nonimmigrant classifications may seek parole. They would thus apply for parole and, if approved, exit the United States and request to be paroled into the United States at a port of entry, as parole will not involve any direct change from other nonimmigrant status. Such applicants would bear the travel costs of exit and returning to a port of entry. However, because there are no similar programs for comparison, DHS cannot determine the demand for parole or substitution effects from other classifications and thus cannot estimate, quantify, or monetize such potential travel costs. Finally, because the program allows for re-parole under conditions that DHS has set, entrepreneurs and their spouse and children, if applicable, would likely face filing and opportunity costs associated with applying for re-parole. However, DHS has no means of estimating the share of the potential eligible population that would seek and be eligible for re-parole, hence re-parole conditions are not included in this analysis. In summary, DHS believes that it is possible that there could be some substitution into the proposed parole program from other programs and such applicants and dependents would incur travel and possible other costs related to exit and re-entry.
DHS does not expect the rule to generate significant costs or negative consequences. Extensive review of information relevant to immigrant entrepreneurship indicates that while much about the impact of such entrepreneurship is not known, there is no reason to expect that substantial negative consequences, including adverse impact on domestic workers,
DHS recognizes that the potential inclusion of spouses can incur labor market implications and possibly impact U.S. workers. As was noted in previous sections of the regulatory impact analysis, DHS did not attempt to assess or measure the labor market impact of the estimated entrepreneurs potentially eligible for parole because as founders of firms, these persons would not affect the labor market in the same way as other workers. Although spouses could have labor market impacts as new labor market entrants, DHS believes such potential impacts will be negligible. The main reason is that the size of the potential new cohort is very small. As of the end of 2015, there were an estimated 157,130,000 people in the U.S. civilian labor force.
While the figures above apply to the general U.S. labor force, DHS recognizes that concentration of new labor force entrants can impact specific labor markets. DHS believes that any such potential impacts linked to this rule will be insignificant. The NVCA and other sources of information that DHS reviewed indicates that while the area of California known as Silicon Valley has traditionally been, and continues to be, the primary recipient geographically for technology startup capital, other large urban centers on the East Coast and, even more recently, parts of the Mid- and Mountain West have seen increased technology startup activity. To provide just one example of a potential area-specific impact, DHS considered the San Jose-San Francisco-Oakland (CA) Combined Statistical Area (CSA) conjoining the seven Metropolitan Statistical Areas (MSAs) and nine encompassed counties constituting the economic linkages of Silicon Valley. Based on data from the BLS, the population of this CSA is about 8.6 million (as of May 2014) and the employed population (a narrower measure of the labor market than the labor force) about 3.75 million. If the share of new entrants is based on the proportion of venture capital to the area, which is 42 percent, then 2,746 spousal entrants could impact the area.
The INA provides for the collection of fees at a level that will ensure recovery of the full costs of providing services, including administrative costs and services provided without charge to certain applicants and petitioners.
As referenced previously, evidence suggests that innovation-focused start-ups contribute disproportionately to job creation. The proposed rule would reduce entry barriers, and thus support efforts by foreign entrepreneurs to generate entrepreneurial activity in the United States.
The proposed rule is expected to generate important net benefits to the United States economy. For one, expenditures on research and development by the estimated annual grant-based researchers that DHS has identified that could qualify for entrepreneur parole would generate direct and indirect jobs. In addition, this research-focused spending could potentially generate patents, intellectual property, licensing, and other intangible assets that can be expected to contribute to innovation and technological advances and spill over into other sectors of the overall economy. DHS acknowledges that it is extremely difficult to gauge the actual economic value of such assets and that peer-reviewed research in this area is still nascent. Despite the nascent stage of the research and the difficulty of measuring quantitatively the benefit of innovation driven by new high technology firms, various research indicates that the innovation driven by entrepreneurs contributes directly to economic growth, generates important efficiencies and cost reductions for firms that utilize such innovation, and increases productivities and profitability for firms that benefit indirectly through new products generated by such innovation.
Lastly, DHS believes that a subset of the start-up firms formed by foreign entrepreneurs during the proposed parole period could eventually become high-growth firms that generate high levels of profitability and contribute disproportionately to job creation in the United States.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121 (Mar. 29, 1996), requires Federal agencies to consider the potential impact of regulations on small businesses, small governmental jurisdictions, and small organizations during the development of their rules. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of fewer than 50,000. Individuals are not defined as a “small entity” by the RFA.
DHS has reviewed this regulation in accordance with the Regulatory Flexibility Act and certifies that this rule would not have a significant economic impact on a substantial number of small entities. This proposed rule would provide guidance on the use of parole for entrepreneurs who seek it on a voluntary basis. The proposed rule would not mandate that all individuals apply for parole. This proposed rule provides flexibilities and options that do not currently exist for individuals who wish to establish or operate a start-up business in the United States. Importantly, the proposed rule does not require any individuals or businesses, including those created by foreign nationals, to seek parole—either generally or as a specific condition for establishing or operating a business in the United States. Rather, as mentioned previously, this proposed rule is intended to provide an additional flexibility for foreign individuals who are unable to obtain another appropriate nonimmigrant or immigrant classification, in order to facilitate the applicant's ability to oversee and grow the start-up entity. If any individual believes this rule imposes a significant economic impact, that individual could simply choose to not avail themselves to the requirements of the rule and would then incur no economic impact. As discussed previously, this rule imposes direct filing costs of $1,285 (which includes the $1,200 application fee and the $85 biometrics fee), plus $194 in time-related opportunity costs for those individuals who do choose to apply for entrepreneur parole. This cost is relatively minor when considering the costs of starting up a new business and the capital necessary to start a business.
Under the general term “entrepreneur,” DHS includes those who desire to form firms with investment funds from certain U.S. investors. For purposes of the RFA, the regulatory requirements place compliance costs and establish eligibility criteria for the individual requesting consideration for parole under this proposal. DHS believes that the costs of application for parole would burden the individual applicant, and not the entrepreneurial venture (firm). This proposed rule would not alter or change the normal procedure for fundraising or other start-up administrative costs that occur in forming a business entity. Such costs are not direct costs of this rule and could include, but are not limited to, business application fees, legal fees, and licensing that precede significant infusions of investment, the latter of which are primarily utilized for operational and capital expenses in order to produce goods or services.
It is possible that some of the 2,940 estimated entrepreneurs who could be eligible for parole annually could involve business structures in which the filing fees are paid by a business entity. In the event that small business entities are impacted by this proposed rule because they choose to pay the filing fees on behalf of an individual entrepreneur, DHS believes that the filing cost of $1,285 per application would be insignificant compared to such entities' annual gross revenues, potential for revenue, and other economic activity. DHS welcomes public comment on the numbers of small business entities that may be impacted by this rule, the likely compliance costs for these entities, and any potential alternatives that may minimize these compliance costs.
For businesses that may pay the filing costs, the expected impact to such businesses would be small. For businesses that utilize either the minimum threshold of $100,000 from a Federal grant or $345,000 in capital investment to source the filing costs, such costs would constitute 1.3 percent and 0.4 percent, respectively, of the total capital amount. These relatively low cost proportions apply to those firms that only obtain the minimum investment amounts. In addition, DHS analyzed the cost impact relative to more typical RFA indices. DHS analysis of Census Bureau data on the smallest firms found that the average revenue based on sales receipts for firms with no paid employees is $309,000, while the average for firms with one to four paid employees is $411,000.
DHS also analyzed the average revenue for new firms. Since the proposed rule defines a new firm as one that is less than three years old, DHS grouped private sector firms for the 2012 survey as those responding that the year of establishment was either 2012, 2011, or 2010. DHS obtained the average revenue per firm and then weighted the average by the yearly proportion of firms. Based on the resulting weighted average of $162,000, such new firms would face a filing-cost burden of 0.8 percent.
In summary, DHS believes that per-applicant costs would be primarily incurred by the individual (which is not covered by the RFA), any direct cost due to this rule would be relatively minor, and these costs would only be borne by those who voluntarily choose to apply for parole under this rule. While the applicant for parole may be the owner of a firm that could be considered small within the definition of small entities established by 5 U.S.C. 601(6), DHS considers the applicants to be individuals at the point in time they are applying for parole, particularly since it is the individual and not the entity that files the application and it is the individual whose parole must serve a significant public benefit under this proposed rule. Furthermore, even if firms do voluntarily decide to incur the compliance costs on behalf of the
Based on the evidence presented in this RFA section and throughout this preamble, DHS certifies that this rule would not have a significant economic impact on a substantial number of small entities.
This 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, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.
This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.
Under the Paperwork Reduction Act (PRA) of 1995, Public Law 104-13, all Departments are required to submit to the Office of Management and Budget (OMB), for review and approval, any reporting requirements inherent in a rule.
This proposed rule requires that an applicant requesting entrepreneur parole complete an Application for Entrepreneur Parole, Form I-941, and is considered a new information collection that is covered under the PRA. To allow spouses and dependent children of the entrepreneur to remain united as a family, DHS will need to revise the Application for Travel Document, Form I-131, for these dependent family members to request parole.
This proposed rule also requires a revision to Employment Eligibility Verification, Form I-9, which has been previously approved for use by OMB under the PRA. The OMB Control Number for this information collection is 1615-0047. In accordance with new 8 CFR 274a.2(b)(1)(v)(A)(
Lastly, this proposed rule will require minor revisions to the Application for Employment Authorization, Form I-765, to reflect proposed changes that allow spouses of an entrepreneur parolee to request employment authorization.
DHS has submitted these information collection requests to OMB for review and approval under the PRA. Accordingly, DHS is requesting comments on these impacted information collections. See the
(1) Evaluate whether the collection of information is necessary for the proper performance 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 collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of the information on those who are to respond, including through the use of any and all appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology (
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• Time Burden for Employees—20 minutes (.33 hours) total;
• Time Burden for Employers—10 minutes (.17 hours) total;
• Time Burden for Recordkeeping—5 minutes (.08 hours) total.
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This form was developed for individual aliens to request employment authorization and evidence of that employment authorization. The form is being amended to add a new class of aliens eligible to apply for employment authorization: a spouse of an entrepreneur parolee described as eligible for employment authorization under this rule. Supporting documentation demonstrating eligibility must be filed with the application. The form lists examples of relevant documentation.
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Administrative practice and procedure, Authority delegations (Government agencies), Freedom of information, Immigration, Privacy, Reporting and recordkeeping requirements.
Administrative practice and procedure, Aliens, Immigration, Passports and visas, Reporting and recordkeeping requirements.
Administrative practice and procedure, Aliens, Employment, Penalties, Reporting and recordkeeping requirements.
Accordingly, DHS is proposing to amend chapter I of title 8 of the Code of Federal Regulations as follows:
5 U.S.C. 301, 552, 552a; 8 U.S.C. 1101, 1103, 1304, 1356, 1365b; 31 U.S.C. 9701; Pub. L. 107-296, 116 Stat. 2135 (6 U.S.C. 1
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6 U.S.C. 111, 202(4) and 271; 8 U.S.C. 1101 and note, 1102, 1103, 1182 and note, 1184, 1185 note (section 7209 of Pub. L. 108-458), 1187, 1223, 1225, 1226, 1227, 1255, 1359; 8 CFR part 2.
Section 212.1(q) also issued under section 702, Public Law 110-229, 122 Stat. 754, 854.
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(i) The individual or organization made investments in start-up entities in exchange for equity or convertible debt in at least 3 separate calendar years comprising a total in such 5-year period of no less than $1,000,000; and
(ii) Subsequent to such investment by such individual or organization, at least 2 such entities each created at least 5 qualified jobs or generated at least $500,000 in revenue with average annualized revenue growth of at least 20 percent.
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(A) Demonstrating that the alien is an entrepreneur as defined in paragraph (a)(1) of this section and that his or her entity is a start-up entity as defined in paragraph (a)(2) of this section; and
(B) Establishing that the alien's entity has:
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(
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(A) Demonstrating that the alien continues to be an entrepreneur as defined in paragraph (a)(1) of this section and that his or her entity continues to be a start-up entity as defined in paragraph (a)(2) of this section; and
(B) Establishing that the alien's entity has:
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(2) The spouse and children of an entrepreneur granted parole under this section may be granted parole under this section for no longer than the period of parole granted to such entrepreneur.
(3) The spouse of the entrepreneur parolee, after being paroled into the United States, may be eligible for employment authorization on the basis of parole under this section. To request employment authorization, an eligible spouse paroled into the United States must file an Application for Employment Authorization (Form I-765, or successor form), in accordance with 8 CFR 274a.13 and form instructions. An Application for Employment Authorization must be accompanied by documentary evidence establishing eligibility, including evidence of the spousal relationship.
(4) Notwithstanding 8 CFR 274a.12(c)(11), a child of the entrepreneur parolee may not be authorized for and may not accept employment on the basis of parole under this section.
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(i) The facts or information contained in the request for parole were not true and accurate;
(ii) The alien failed to timely file or otherwise comply with the material change reporting requirements in this section;
(iii) The entrepreneur parolee is no longer employed in a central and active role by the start-up entity or ceases to possess at least a 10 percent ownership stake in the start-up entity;
(iv) The alien otherwise violated the terms and conditions of parole; or
(v) Parole was erroneously granted.
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8 U.S.C. 1101, 1103, 1324a; 48 U.S.C. 1806; 8 CFR part 2.
The revision reads as follows:
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The revisions and additions read as follows:
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(25)-(36) [Reserved] (37) An alien paroled into the United States as an entrepreneur pursuant to 8 CFR 212.19 for the period of authorized parole. An entrepreneur who has timely filed a non-frivolous application requesting re-
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(11) Except as provided in § 274a.12(b)(37) and (c)(34) and § 212.19(h)(4) of this chapter, an alien paroled into the United States temporarily for urgent humanitarian reasons or significant public benefit pursuant to section 212(d)(5) of the Act.
(27)-(33) [Reserved]
(34) A spouse of an entrepreneur parolee described as eligible for employment authorization in § 212.19(h)(3) of this chapter.
Food and Drug Administration, HHS.
Final rule.
The Food and Drug Administration (FDA) is amending its regulations governing drug establishment registration and drug listing. These amendments reorganize, modify, and clarify current regulations concerning who must register establishments and list human drugs, human drugs that are also biological products, and animal drugs. The final rule requires electronic submission, unless waived in certain circumstances, of registration and listing information. This rulemaking pertains to finished drug products and to active pharmaceutical ingredients (APIs) alone or together with one or more other ingredients. The final rule describes how and when owners or operators of establishments at which drugs are manufactured or processed must register their establishments with FDA and list the drugs they manufacture or process. In addition, the rule makes certain changes to the National Drug Code (NDC) system. We are taking this action to improve management of drug establishment registration and drug listing requirements and make these processes more efficient and effective for industry and for us. This action also supports implementation of the electronic prescribing provisions of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and the availability of current drug labeling information through DailyMed, a computerized repository of drug information maintained by the National Library of Medicine.
This rule is effective on November 29, 2016. See section IV for compliance dates.
This final rule amends FDA's longstanding regulations governing drug establishment registration and drug listing. The amendments are aimed at modernizing these regulations and improving efficiency and reliability for FDA and drug manufacturers. These amendments also bring FDA's regulations governing drug establishment registration and listing into conformance with section 510 of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 360) as amended by the Food and Drug Administration Amendments Act (FDAAA) (Pub. L. 110-85) and the Food and Drug Administration Safety and Innovation Act (FDASIA) (Pub. L. 112-144).
Since the 1962 Kefauver Harris amendments to the FD&C Act (Pub. L. 87-781), drug manufacturers have been required to register their establishments with FDA annually. Among other things, drug establishment registration identifies establishments for inspection by FDA. In 1973, the FD&C Act was further amended to require each registered establishment to submit a list of drugs it manufactures. FDA's regulations implementing these requirements are found in part 207 (21 CFR part 207) (pertaining to drugs and biological products generally) and part 607 (21 CFR part 607) (pertaining to blood and blood products). Manufacturers of HCT/Ps register and list either under part 207, part 807 (21 CFR 807), or under part 1271 (21 CFR part 1271), issued under authority of the Public Health Service Act (PHS Act), depending on the type of HCT/P product they manufacture.
The amendments to parts 207 and 607 adopted by this final rule modernize those regulations and bring them into conformance with section 510 of the FD&C Act following recent amendments.
This final rule requires electronic submission, unless waived in certain circumstances, of drug establishment registration and listing information. The electronic submission requirement is consistent with FDAAA and with current practice.
The rule makes clear that the establishment registration and listing obligation rests with persons who manufacture, repack, relabel, or salvage drug products. The rule does not require persons who act only as private label distributors of drug products to register establishments or list drugs, but allows them to submit drug listing information as agents acting on behalf of persons who manufacture, repack, relabel, or salvage drug products. The amendments make several adjustments to the timing and substance of the submission of information to register a drug establishment and list drugs manufactured, repacked, relabeled, or salvaged at the establishment. The amendments also update longstanding regulatory provisions governing FDA disclosure of drug registration and listing information, stating that with certain exceptions, establishment registration and drug listing information is generally available for public disclosure.
This final rule does not include certain aspects of the proposed rule that were opposed by many who submitted comments. Features of the proposed rule that have not been finalized include most significantly: (1) A requirement that FDA, not registrants, develop national drug codes (NDCs) for assignment to listed drugs and (2) a requirement that the NDC appear in human-readable form on the label of each listed drug and provisions that would have defined the appropriate NDC for that purpose. As discussed in section III, revisions to the FD&C Act require human-readable NDCs on certain drug labels.
All incremental costs from the final rule are one-time costs, except for registrants' annually recurring costs of certifying no change to listings upon annual registration for part 207 registrants. We estimate one-time total costs of $59.7 million and recurring costs of $0.5 million. These costs represent total annualized costs of $9 million when calculated at a 7-percent discount rate over 10 years, and $7.5 million when calculated using a 3-percent discount rate. The largest cost elements will be for registrants reading and understanding the final rule and making changes to their standard operating procedures.
By codifying the statutory requirements of FDAAA and FDASIA, the final rule clarifies and completes the modernization of our electronic registration and listing systems. Thus, the final rule will improve management of the establishment registration and drug listing requirements and make these processes more efficient and effective for industry and for us. The final rule also supports implementation of the electronic prescribing provisions of the MMA and the availability of current drug labeling information through DailyMed, a computerized repository of drug information maintained by the National Library of Medicine.
In the
After the proposed rule was published, FDAAA was adopted into law. FDAAA amended section 510(p) of the FD&C Act to require electronic submission of drug establishment registration and listing information, unless FDA waives the electronic submission requirement in individual cases. In June 2009, FDA announced publication of a guidance for industry on “Providing Regulatory Submissions in Electronic Format—Drug Establishment Registration and Drug Listing” consistent with FDAAA (74 FR 26248, June 1, 2009, available on the Internet at
FDASIA made further amendments to section 510 of the FD&C Act in 2012 to specify that:
• Annual registration of establishments takes place during the period beginning on October 1 and ending on December 31.
• The information registrants supply for annual registration includes a Unique Facility Identifier (UFI) for the establishment and includes a point-of-contact email address.
This final rule includes changes to the proposed rule consistent with these statutory provisions. The electronic registration and listing guidance stated that FDA intended to use the Data Universal Numbering System (DUNS) number, assigned and managed by Dun
The final rule adopts significant amendments to FDA's regulations governing drug registration and listing. It modernizes these regulations to require electronic submission of drug establishment registration and listing information and to otherwise match current statutory requirements and FDA's information needs.
The final rule:
• Makes minor technical amendments to §§ 20.100, 20.116, and 201.1 (updating citations to regulations in part 207).
• Removes from § 201.2 a statement about the manner in which NDCs are displayed on drug labels.
• Amends § 201.25 to allow an FDA Center Director to approve an additional bar code standard or format.
• Revises part 207 significantly.
• Amends § 314.81(b)(3)(iv) (requiring holders of approved new drug applications (NDAs) to report the withdrawal of approved drug products from sale) to make it consistent with part 207.
• Makes a minor conforming amendment to § 314.125(b)(11) (stating FDA may refuse to approve a new drug application if the drug will be manufactured in whole or in part in an establishment that is not registered and not exempt from registration under section 510 of the FD&C Act and part 207).
• Adds new § 514.111(a)(12) stating FDA will refuse to approve a new animal drug application if the drug will be produced in whole or in part in an establishment that is not registered and is not exempt from registration under section 510 of the FD&C Act and part 207.
• Makes a minor technical amendment to § 515.10(b)(8), updating a reference to the regulations in part 207.
• Adds new § 601.2(f) requiring holders of biologics license applications (BLAs) to report to FDA electronically in accordance with part 207 the withdrawal from sale of licensed biological products.
• Amends part 607 (ESTABLISHMENT REGISTRATION AND PRODUCT LISTING FOR MANUFACTURERS OF HUMAN BLOOD AND BLOOD PRODUCTS) consistent with the amendments to part 207, to require electronic submission of establishment registration and listing information.
• Amends part 1271 (HUMAN CELLS, TISSUES, AND CELLULAR AND TISSUE-BASED PRODUCTS) to require electronic submission of establishment registration and listing information, to state that manufacturers of HCT/Ps that are regulated as drugs, devices, and/or biological products under section 351 of the PHS Act (42 U.S.C. 262) or under the FD&C Act are subject to registration and listing under part 207 or part 807, and to make other revisions consistent with the amendments to part 207.
The final rule has been revised in response to comments received on the proposed rule. Our responses are discussed in section III. The final rule also includes several minor editorial revisions. The final rule makes the changes summarized in table 1.
This final rule does not include the proposed amendments to §§ 330.1, 610.60, and 610.61, all of which dealt with NDCs on labels. This final rule also does not include the proposed minor amendment to § 1271.37 (regarding public disclosure of HCT/P establishment registration and listing information) in light of the technical amendments adopted on April 3, 2015 (80 FR 18087).
Some changes from the proposed rule not addressed in section III (Comments on the Proposed Rule) are addressed in the following paragraphs.
The establishment registration number identifies establishments for inspection by FDA. Historically, an establishment registration number is assigned to each establishment of each manufacturer, repacker, relabeler, or salvager after the initial registration, when such activities begin. In the preamble to the proposed rule, we explained that “[c]urrently, the FDA Establishment Identifier (FEI) will be the number we assign as the establishment registration number. In the future, however, we may use a different number as the establishment registration number” (71 FR 51276 at 51288).
After the proposed rule was published, FDASIA amended section 510 of the FD&C Act to require persons subject to the drug establishment registration requirement to submit a UFI. In the electronic registration and listing guidance, FDA stated that it intended to use the DUNS number, assigned and managed by Dun & Bradstreet, as a registration number. To implement the UFI provision of FDASIA, FDA also issued guidance in 2014 that specified the DUNS number as the preferred UFI.
Under the final rule, the establishment registration number and the UFI are two distinct numbers. For now, FDA will continue to assign an FEI as the establishment registration number after an establishment is registered for the first time. The final rule requires registrants to submit the establishment registration number (currently the FEI), “if previously assigned by FDA,” under § 207.25. Someone registering an establishment for the first time is not expected to have a registration number for the establishment. Such a registrant is required to submit its registration number at the time of the first annual review and update of registration information under § 207.29(b) of this final rule and is encouraged to submit the registration number sooner, as soon as it is received from FDA. The establishment registration number does not need to be submitted at the time of each annual registration update under § 207.29 unless the establishment registration number has changed. Likewise, the UFI, currently specified as
In the
The docket for this rulemaking, Docket No. FDA-2005-N-0464, was also used to collect comments on FDA's draft guidance for industry entitled “Providing Regulatory Submissions in Electronic Format—Drug Establishment Registration and Drug Listing” (74 FR 26248). In this final rule, we are responding to comments that pertain to the rulemaking,
To make it easier to identify comments and our responses, the word “Comment,” in parentheses, appears before the comment's description, and the word “Response,” in parentheses, appears before our response. We have numbered each comment to help distinguish between different comments. Similar comments are grouped together under the same number. The number assigned to each comment is purely for organizational purposes and does not signify the comment's value or importance or the order in which comments were received.
The proposed rule included amendments to § 201.2 that would have required drugs subject to the listing requirement of part 207 to have labels that bear the appropriate NDC in human-readable form. As discussed in this document, this final rule does not include the proposed amendments that would have made human-readable NDCs mandatory on drug labels.
Section 201.2 currently states that NDCs are “requested but not required” to appear on all drug labels. Section 201.25 currently requires bar codes on prescription human drug labels with certain exceptions and on certain nonprescription human drug labels. Section 201.25(c) currently specifies that each bar code must contain, at a minimum, the appropriate NDC.
Sections 201.2 and 201.25 currently do not specify which NDC should appear on labels and in bar codes apart from referring to it as “the appropriate” NDC (§ 201.25(c)). This implies that the NDC appearing on a drug's label match an NDC under which the drug is appropriately listed under part 207.
Pharmacists and health care providers use NDCs currently appearing on drug labels in a variety of ways, including to help prevent medication errors and to process prescription drug reimbursement claims. We believe there is currently a high level of cooperation with FDA's request in § 201.2 that NDCs appear in human-readable form on labels, as drug manufacturers recognize the importance of this information.
In addition to making human-readable NDCs on drug labels mandatory, the proposed rule would have specified which NDC must appear on labels. Specifically, proposed § 201.2(b) sought to define the appropriate NDC for this purpose as being that of the last manufacturer, repacker, relabeler, or private label distributor responsible for the drug immediately before it is received by the wholesaler or retailer.
(Comment 1) Several comments recognized the importance of having NDCs in human-readable form on labels, but many objected to FDA's proposed provisions defining the appropriate NDC in proposed § 201.2(b). In particular, certain repackers objected to the proposed requirement that a repacker's NDC, rather than that of the original manufacturer, appear on the labels of repackaged drug products.
(Response) This final rule does not include the proposed amendments to § 201.2 that would have made human-readable NDCs mandatory on drug labels. It includes only a conforming amendment to that section (replacing the reference to § 207.3(b)(3) with an updated reference to new § 207.1).
The Drug Quality and Security Act (DQSA) (Pub. L. 113-54) of 2013 includes as Title II the Drug Supply Chain Security Act (DSCSA). The DSCSA requires drug manufacturers and repackagers (as defined in sections 581(10) and 581(16) of the FD&C Act, respectively) to affix or imprint a
Our determination that the proposed amendments to § 201.2 should not be finalized renders moot many comments concerning identification of the appropriate NDC for labeling purposes, along with placement and formatting issues. Therefore, we do not respond to those comments.
The DSCSA does not require manufacturers or repackagers to affix or imprint product identifiers on nonprescription human drug products or on animal drugs. Therefore, we will maintain the status quo for those drug products, meaning FDA will continue to request that NDCs in human-readable
Section 201.25 currently requires that a human drug product's NDC be included in its bar code. We proposed to amend § 201.25 in two minor ways: (1) To add a cross-reference to proposed new § 201.2(b), which would have described the “appropriate NDC” for labeling purposes and (2) to add new § 201.25(e) stating that a bar code may be displayed on certain drug product labels voluntarily but only if it meets the requirements of § 201.25(c). Neither proposed amendment to § 201.25 is retained in the final rule.
(Comment 2) The Animal Health Institute expressed concern that proposed § 201.25(e) would unreasonably burden its members who, although they are not currently required by § 201.25 to place bar codes on animal drug labels (because it applies to human drugs), may do so for logistical reasons. They asked that the animal health industry be exempt from the requirement to include an NDC in any bar codes appearing on animal drug labels. Similar comments were received from manufacturers of allergenic extracts. Allergenic extracts are currently exempt from the bar code requirement (see § 201.25(b)(1)(i)(B)). Commenters explained that manufacturers of allergenic extracts may place bar codes on their labels for inventory, warehousing, and other logistical purposes. They objected to proposed § 201.25(e) to the extent that it would require such bar codes to include NDCs.
(Response) FDA has not retained proposed § 201.25(e) in this final rule.
(Comment 3) A group of comments asserted that 11-digit NDCs cannot be encoded into a bar code that meets European Article Number/Uniform Code Council or Health Industry Business Communications Council standards, as required by current § 201.25(c). Another comment urged FDA to remove the NDC from bar codes.
(Response) This final rule acknowledges that 10-digit NDCs will be exhausted at some point in the future as a mathematical inevitability. As discussed in our response to Comment 52, this final rule reduces the number of occasions when a change to a drug requires a new NDC under § 207.35. This final rule also amends § 201.25 to allow FDA's Center Directors to approve additional bar code standards and formats.
As discussed in response to Comment 1, the DSCSA requires the inclusion of product identifiers on prescription human drug labels and defines “product identifier” to mean a standardized graphic that includes, in both human-readable form and on a machine-readable data carrier the standardized numerical identifier, lot number, and expiration date of the product. The standardized numerical identifier, a component of the product identifier, is comprised of the NDC and a serial number.
FDA continues to recognize the importance of NDCs on drug labels in both machine-readable and human-readable form. We remind manufacturers of the current requirement in § 201.25 that bar codes on human drug labels include the appropriate NDC, and we encourage manufacturers to continue to provide the NDC in human-readable form on drug labels where not required by the DSCSA.
The proposed rule included a set of terms and definitions in §§ 207.1, 607.3, and 1271.3. These definitions are retained in the final rule with several modifications. Additionally, the final rule includes definitions for the terms “finished drug product,” “unfinished drug product,” “bulk drug substance,” “outsourcing facility,” “private label distribution,” and “registrant” in § 207.1 and a definition of “foreign” in § 607.3.
In the final rule, the definition does not include the phrase “an active pharmaceutical ingredient” so that internal or interplant transfers between such registered establishments are not treated as commercial distribution under part 207, whether the transfer involves active pharmaceutical ingredients, other unfinished drug products, or finished drug products.
(Comment 4) A comment suggested that the definition of “commercial distribution” be revised to exclude transfers between a registered establishment and a marketing authorization holder when the two are in a contractual relationship. Otherwise, this comment argued, products marketed by private label distributors who employ contract manufacturers are held to a higher burden of documentation than products manufactured and distributed by the same entity.
(Response) We disagree with the suggestion that a transfer of drugs from a contract manufacturer to another contracting party should not qualify as commercial distribution. Such an exemption would interfere with FDA's ability to track drugs and establishments for inspection. However, by revising the definition of “commercial distribution” to exclude internal or interplant transfers of drugs, including active pharmaceutical ingredients, other unfinished drugs, and finished drug products, between registered establishments under common ownership and control, we have reduced the drug listing burden generally. This exclusion accommodates the common practices of specialized manufacturing at different registered establishments under common ownership and control. This practice often results in multiple internal and interplant transfers of these materials prior to marketing, which we do not consider commercial distribution for registration and listing purposes.
• Human prescription drugs that the manufacturer regards as subject to section 505 of the FD&C Act or section 351 of the PHS Act,
• Human prescription drugs that the manufacturer regards as not subject to section 505 of the FD&C Act or section 351 of the PHS Act;
• Human nonprescription drugs; and
• Animal drugs.
The term “content of labeling” was used in the proposed rule to describe some, but not all, labeling that must be submitted with drug listing information. For example, proposed § 207.49(g)(2)(i) stated that listing information for certain human over-the-counter (OTC) drugs must include “all current labeling . . . including the content of labeling.” Content of labeling is defined in a very similar way in the final rule with deletion of the phrase “that the manufacturer regards as” and the addition of a reference to the labeling requirements for veterinary drugs in 21 CFR part 201.
We removed the language “that the manufacturer regards as subject to section 505 [or 512] of the FD&C Act or section 351 of the PHS Act” and added in its place language that refers to drugs as being either subject or not subject to those provisions. We made this change after determining that the manner in which content of labeling is defined should not depend on a manufacturer's subjective understanding or intent with respect to sections 505 or 512 of the FD&C Act or section 351 of the PHS Act.
The revised definition includes, among others, the category “human prescription drugs that are not subject to section 505 of the FD&C Act or section 351 of the PHS Act.” We have retained this construction even though FDA considers it unlikely that any currently marketed human prescription drug product is grandfathered or is otherwise not a new drug subject to those provisions. However, the Agency recognizes that the existence of such drugs is at least theoretically possible. No part of this final rule is a finding as to the legal status of any particular drug product.
Regarding animal drugs, in part four of the definition of “content of labeling” and in other places throughout this final rule, the phrase “subject to section 512” means, for purposes of this final rule, drugs meeting the definition of “new animal drug” as that term is defined in section 201(v) of the FD&C Act, and which therefore are subject to some or all of the provisions relating to new animal drugs found in section 512 of the FD&C Act. This term includes not only new animal drugs that are approved under section 512 but also new animal drugs that are conditionally approved under section 571 of the FD&C Act (21 U.S.C. 360ccc) or indexed under section 572 of the FD&C Act (21 U.S.C. 360ccc-1). The phrase “all other animal drugs” as used in provisions of this final rule at §§ 207.49(a)(15)(iii) and 207.53(d)(3) describing the labeling registrants must provide as part of the listing for an animal drug, refers to animal drugs that do not meet the definition of new animal drug found in section 201(v) of the FD&C Act (
(Comment 5) Commenters asked FDA to clarify how content of labeling differs from package inserts and final printed labeling.
(Response) A prescription human drug product's FDA-approved labeling is sometimes referred to as a “package insert” or as “professional labeling.” In defining the term “content of labeling,” for human drugs, we use the phrase “prescription drug labeling” (instead of “package insert” or “professional labeling”) to mean FDA-approved labeling for prescription drug products described in §§ 201.56, 201.57, and 201.80. For human prescription drugs that are subject to section 505 of the FD&C Act or section 351 of the PHS Act, content of labeling is defined as the content of the prescription drug labeling. For human OTC drugs, content of labeling is not defined in these terms; it includes “all text, tables, and figures including the drug facts labeling required by § 201.66.” For animal drugs, “content of labeling” is defined to mean labeling that accompanies the drug that is necessary to enable safe and proper administration of the drug. This would generally include package inserts and final printed labeling. Sections 207.49 and 207.53 require submission of labeling with drug listing information. In most cases, all current labeling must be submitted, including the content of labeling.
(Comment 6) A comment stated that FDA should more clearly delineate between the terms “label” and “labeling” throughout the rulemaking, rather than using the term “labeling” to refer to both. This comment pointed out that the proposed rule's definition of content of labeling for human OTC drugs referred to “labeling required by § 201.66,” but § 201.66 pertains to information appearing on the “outside container or wrapper of the retail package, or the immediate container label if there is no outside container or wrapper” (§ 201.66(c)).
(Response) We have clarified in § 207.1(a) of the final rule that the definitions and interpretations of terms in sections 201 and 510 of the FD&C Act apply to the terms used in part 207 unless otherwise defined. Accordingly, the term “label” means a display of written, printed, or graphic matter upon the immediate container of any article consistent with section 201(k) of the FD&C Act. The term “labeling” more broadly includes both immediate container labels and other written, printed, or graphic matter accompanying such article consistent with section 201(m) of the FD&C Act. When we intend to refer only to immediate container or package labels, we use the term “label.” More often, we use the broader term “labeling” in this final rule to encompass both immediate container labels and/or other written, printed, or graphic matter accompanying the drug, as the labeling definition in section 201(m) of the FD&C Act has been interpreted. The term “content of labeling” is defined slightly differently for human prescription drugs, human OTC drugs, and animal drugs, and the term is intended to encompass both labels and labeling.
The proposed rule (proposed § 207.1) referred only to definitions in section 510 of the FD&C Act, and the preamble to the proposed rule suggested that reference to the definitions in section 201 of the FD&C Act was intentionally omitted (71 FR 51276 at 51285). Consistent with 21 CFR 1.1(b), this final rule clarifies that the definitions in section 201 of the FD&C Act apply to the terms used in part 207.
Rather than adopt this proposed definition, the final rule retains the definition of the term “establishment” that has appeared in the part 207 regulations since 1980. This definition states that an establishment is “at one general physical location.”
(Comment 7) One comment suggested that the phrase “within the same city” used in the proposed definition of “establishment” was too specific. This comment argued that a manufacturing facility located in a city with a warehouse located just outside that city should together be treated as a single establishment for registration purposes.
(Response) In reviewing this comment and considering it in light of the longstanding definition of “establishment” and the objectives behind the establishment registration requirement, we determined that the existing definition in part 207 is clearer and better serves our objectives than would the proposed amended definition. The longstanding language, “one general physical location,” generally restricts a single establishment to one street address or one or more contiguous plots of land. We do not agree with the comment that a second facility located in a different city should be covered by the first facility's establishment registration.
We note, however, that a facility operated only as a warehouse may not require registration. Section 510 of the FD&C Act and § 207.17 of this final rule
Likewise, the corporate headquarters of a drug establishment should not register under this rule if drugs are not manufactured, repacked, relabeled, or salvaged at that location.
We have omitted the words “or distributed” from this definition because only establishments at which drugs are manufactured, repacked, relabeled, or salvaged are required to be registered.
(Comment 8) One comment urged us to revise the definition of “foreign” to mean “located in a foreign country” while stating in § 207.9 that part 207 applies to foreign entities who import or offer for import products into the United States.
(Response) We do not agree that the proposed rule was confusing or difficult to understand in this respect and have decided against making this change.
(Comment 9) Some comments stated that our proposed definition of the term “importer” was too broad and would increase the burden on manufacturers to provide unnecessary information concerning a wide variety of entities that are not responsible for the drug. One comment noted that the inclusion of downstream recipients in our definition of “importer” would impose a significant reporting burden on foreign establishments that is not required of domestic establishments.
(Response) We agree that we should clarify and narrow the proposed definition of “importer.” As proposed, the definition included every U.S. recipient of a foreign-produced drug, excepting only the final consumer or patient. Of this large group, foreign establishments would be required to identify in their establishment registration submissions only those importers that are known to the establishment. To make this information element more useful to FDA and to reduce the burden on registered establishments, we have determined that in this context the term “importer” should include a U.S. owner, consignee, or recipient
(Comment 10) One comment recommended that we change “company or individual” to “person,” in the rule's definition of “importer,” consistent with the definition of the term “person” in section 201(e) of the FD&C Act.
(Response) We agree that the term “person,” as defined in the FD&C Act, is an improvement over “company or individual” in this definition. We have made this change in §§ 207.1 and 607.3 of the final rule, and as discussed in our response to comment 6, we have also added a statement in §§ 207.1(a) and 607.3(a) that the definitions and interpretations of terms in sections 201 and 510 of the FD&C Act apply if not otherwise defined.
(Comment 11) Some comments expressed concern regarding the potential breadth of this definition, noting in particular that the word “facilitate” could, in theory, encompass entities such as foreign insurance adjusters, underwriters, and international banks. Commenters pointed out the significant burden associated with the identification of such entities in foreign establishment registrations and updates to registrations, noting that international supply chains and business relationships are not static. One comment urged FDA to exclude customs brokers from the rule's definition of “person who imports or offers for import.” Another comment encouraged FDA to exclude middlemen from this definition, as their identities would change frequently.
(Response) Although we did not intend for the word “facilitate” to be read as broadly as some comments suggested, FDA agrees that the definition of “person who imports or offers for import” should be made more precise, narrow, and useful.
We note, as a matter of clarification, that in section 510(i) of the FD&C Act and in § 207.25 of the final rule, the requirement that foreign establishments identify each person who imports or offers for import is not said to be limited to persons known to the establishment (unlike the requirement that they identify “importers”). The preamble to the proposed rule included statements that were inconsistent with the FD&C Act in this regard, suggesting that foreign establishments would be required to report the name of each person
Our intention in defining this term is to include foreign persons who are primarily responsible for sending a drug to the United States. Foreign establishments are reasonably expected to know the identities of such persons. In many cases, the establishment itself will be a person who imports or offers for import its drugs into the United States. In other cases, it will be a person the foreign establishment engages to send one or more drugs to the United States. It will generally be the foreign person who owns the drug and sells or enters into a contractual obligation to supply the drug to a person in the United States.
In light of the comments received and FDA's objectives, the final rule defines “person who imports or offers for import” to mean the owner or exporter of a drug who consigns and ships a drug from a foreign country to the United States. This definition includes persons who send a drug to the United States by international mail or other private delivery service, but does not include carriers who merely transport the drug. This definition is not intended to include persons operating merely as customs brokers.
(Comment 12) Some comments stated that the definition of “manufacturer” should specify that it applies only to entities manufacturing drugs for commercial distribution.
(Response) We disagree with the recommendation that the definition of “manufacturer” be limited to drugs manufactured “for commercial distribution.” The underlying statutory provisions require registration of establishments where drugs are manufactured, without regard to commercial distribution (section 510(c) of the FD&C Act), but require listing of drugs that are manufactured for commercial distribution (section 510(j) of the FD&C Act). Accordingly, under § 207.17 of this final rule, each domestic establishment where a drug is manufactured (or repacked, relabeled, or salvaged) must be registered unless exempt from registration under section 510(g) of the FD&C Act or under § 207.13, regardless of whether the drug is commercially distributed. The drug listing obligation, as described in § 207.41, applies to drugs that are manufactured, repacked, relabeled, or salvaged for commercial distribution. (See separate definition of “commercial distribution.”)
(Comment 13) One comment asked that drug sponsors be included in the definition of manufacturer. Other comments suggested that FDA add “product formulator” to the definition of “manufacturer” or provide definitions for terms such as “drug sponsor.” These comments pointed out that the holder of an approved application, such as an NDA, or the formulator of a nonprescription monograph product may use a contract manufacturer to produce the product for distribution under the name of the application holder or the product formulator. Some comments recommended that the final rule treat such application holders or product formulators as manufacturers so they would register their establishments and list such products and that it exempt contract manufacturers from the drug listing requirement.
(Response) We decline to add the application holder or “product formulator” concepts to the definition of “manufacturer.” Under section 510(c) of the FD&C Act, the obligation to register drug establishments rests on owners or operators of establishments engaged in the manufacture (including repacking, relabeling, and salvaging) of drugs, and the listing obligation applies to “every person who registers.” FDA recognizes that this language could be read broadly to encompass entities that develop or formulate drug products without performing manufacturing operations. However, considering the objectives behind drug registration and listing, we are currently interested in the registration of establishments where manufacturing operations (including repacking, relabeling, and salvaging) take place and the listing of drugs handled at those establishments.
We recognize, however, that an application holder or a product formulator using a contract manufacturer to manufacture a drug may wish to submit drug listing information for that product directly to FDA. Although the actual manufacturer of the drug has the legal obligation to list it, FDA would accept listing information for the drug submitted by its formulator or any other person acting as an authorized agent for the manufacturer. When we use the term “authorized agent” in this final rule, we mean a person who is authorized to act on behalf of another. The term “authorized agent” should not be confused with the United States agent referred to in § 207.69(b).
(Comment 14) Several comments asked for clarification on how the terms “manufacture,” “repackage,” “relabel” and “private label distributor” would apply to the medical gas industry and pointed out that certain medical gas operations, such as the transfilling of gas from one container to another, have long been treated as drug manufacturing by FDA but, under the proposed rule, would seem to qualify as “repacking.” These comments asked FDA to classify medical gas refillers as “manufacturers” rather than “repackers” in the final rule.
(Response) FDA agrees that these important points require clarification. Nothing in this final rule is intended to alter the definitions applicable to FDA's regulations governing current good manufacturing practices for drug products, parts 210 and 211. Therefore, the definition of “manufacture, processing, packing, or holding of a drug product” currently appearing in § 210.3(b)(12) will continue to apply to medical gases as that definition has always applied.
For purposes of part 207, we will interpret the definition of “manufacture” in § 207.1 as including the initial manufacturing process that produces or purifies a medical gas, whether by air separation, chemical reaction, or other process. Additionally, the mixing of two or more medical gases to produce a combination would also qualify as “manufacture” under § 207.1. The impact of this interpretation is that a person who thus qualifies as a manufacturer of a medical gas will be required to submit the drug listing information required under § 207.49 of this final rule (“What listing information must a registrant submit for a drug it manufactures?”) in addition to registering the establishment(s) at which manufacturing is conducted.
All subsequent transfillings of a medical gas from one container to another (
The definition of “relabel” in § 207.1 of this final rule applies to medical gases. It refers to changing or altering the existing label on a drug or drug package, without repacking the drug or drug package. A person who places a label on a repackaged drug (
The term “private label distributor” is defined in § 207.1 of this final rule to mean, with respect to a particular drug, a person who did not manufacture, repack, relabel, or salvage the drug but under whose label or trade name the drug is commercially distributed. This definition applies equally to private label distributors of medical gases and other drugs. A medical gas transfiller is a repackager, and not a private label distributor, under this final rule. As discussed in our response to comment 16, private label distributors do not—by reason of their status as private label distributors—have an obligation to register establishments or list drugs. They must have labeler codes, obtained under new § 207.33(c), and they may submit drug listing information or establishment registration information if acting as the authorized agent of a registrant on whose behalf the information is submitted.
(Comment 15) One comment asked FDA to clarify the types of labeling changes that would qualify as a material change and, hence, require reporting as an update to drug listing information under § 207.57. This comment specifically suggested examples of labeling changes that would qualify as significant changes in the labeling of a prescription drug product or significant changes in the label or package insert of an OTC drug product.
(Response) In referring to “significant” labeling changes, this comment seems to relate to the longstanding definition of “material change” in § 207.3(a)(3), prior to this final rule, which encompassed labeling changes described as “significant.” Today's final rule revises that definition so that material change includes any labeling change other than changes in the format of labeling, changes of an editorial nature, inclusion of a bar code, or initial inclusion of an NDC. In this context, changes of an editorial nature would not include any changes that add or revise meaning.
Thus, the new definition of “material change” adopted as part of this final rule is broader than the previous definition and is not limited to “significant” changes. The definition includes—with very few exceptions—any change in previously reported drug listing information. FDA intends to rely primarily on new § 207.57 to maintain an up-to-date database of current drug labeling. Registrants should submit current labeling (and a resubmission of all listing information) each time they submit a drug listing update to report changed information under § 207.57.
In the final rule, private label distributor is defined to mean, with respect to a particular drug, a person who did not manufacture, repack, relabel, or salvage the drug but under whose label or trade name the drug is commercially distributed. We have also defined “private label distribution” in this final rule to mean commercial distribution of a drug under the label or trade name of a person who did not manufacture, repack, relabel, or salvage that drug.
(Comment 16) Some comments requested clarification regarding the distinction between private label distributors, manufacturers, and wholesale distributors. Others urged FDA to allow private label distributors to list the drugs they distribute. One comment requested clarification regarding the responsibilities of private label distributors under part 207.
(Response) We agree that more clarity is needed regarding these terms and the registration and listing obligations associated with private label distribution of drug products. We have eliminated the mention of establishment ownership in the proposed rule's definition of “private label distributor” because private label distributors do not necessarily own establishments that require registration under section 510 of the FD&C Act. We have also clarified that an entity may act as a private label distributor with respect to a particular drug. For example, if a drug manufacturer distributes, under its own name or trade name, a drug manufactured entirely by a contract manufacturer, it is acting as a private label distributor with respect to that drug. The difference between private label distributors and wholesale distributors or others involved in drug distribution is that a private label distributor's name, trade name, or label appears on the product. A common example of private label distribution is the sale of aspirin under a retail pharmacy's brand name when the retail pharmacy did not manufacture the product. As defined in this final rule, private label distribution encompasses the use of any brand name or business name on a drug product where the named business or the owner of the brand name did not manufacture the drug. Thus, as we are defining the term in part 207, a private label distributor may, but does not necessarily, operate retail stores or play a role in the physical distribution of the drug product. Even without using a brand name, if an entity is identified as the distributor or marketer of a drug under § 201.1 of the drug labeling regulations, without having manufactured the drug, that person will qualify as a private label distributor as the term is defined in this final rule.
Under this final rule, private label distributors do not have registration or listing obligations with respect to drugs for which they merely act as private label distributors. Only manufacturers, repackers, relabelers, and salvagers have an obligation to register and list. Private label distributors are subject to this final rule only in that they must apply for an NDC labeler code as described in § 207.33(c) and update the information submitted under that section when the information changes. Private label distributors are in the best position to obtain their own labeler codes and update information associated with those codes, thereby preventing potential submissions of inconsistent or inaccurate information by multiple contract manufacturers.
A person who is a private label distributor with respect to a particular drug does not for that reason incur an establishment registration or listing
We recognize, however, that some private label distributors are in a position to supply listing information, including NDCs, for drugs distributed under their names and may prefer to do so. FDA will accept registration and listing information submitted by any authorized agent acting on behalf of a manufacturer, repacker, relabeler, or salvager, and this includes a private label distributor authorized by a manufacturer, repacker, relabeler, or salvager, to submit drug listing information on its behalf. In these cases, the manufacturer, repacker, relabeler, or salvager remains responsible for compliance with all registration and listing requirements and the accuracy of the information submitted by its agent.
A person who acts merely as a wholesale distributor of a drug product (i.e, a person who did not manufacture, repack, relabel, or salvage the drug product and whose name, trade name, or label does not appear on the drug product) does not incur obligations under this rule.
We proposed to define “repack” to mean repack or repackage or otherwise change the container or wrapper of a drug or drug package. Similarly, we proposed to define “repacker” to mean a person who owns or operates an establishment that repacks a drug or drug package.
In the final rule, these definitions are clarified and revised in response to comments.
(Comment 17) Some comments noted that the definition of relabel could include wholesale drug distributors who add information to outer container labels for purposes of delivery to a customer, customer identification, inventory management, special handling instructions, or to aid in compliance with Federal and State pedigree requirements. Commenters urged us not to require establishments (
(Response) We agree generally with these comments and have revised the definition of “relabel” in the final rule to exclude the addition or modification of information affixed solely for purposes of delivery to a customer, customer identification, or inventory management. However, we did not exclude the addition of special handling instructions from the definition of “relabel,” as recommended in these comments. Such an exclusion might be misinterpreted as accommodating revised storage instructions in drug labeling. However, FDA would not object to the addition of storage information to an outer label if such information is not inconsistent in any way with storage instructions appearing elsewhere in the drug's labeling. In that case, FDA would not regard the addition of such storage information to an outer container label as relabeling that would subject a person to registration and listing.
(Comment 18) The preamble to the proposed rule included a brief discussion of these definitions. That discussion pointed out a confusing aspect of the previous definitions of these terms and the previous definition of the term “advertising and labeling” in part 207. See 71 FR 51276 at 51291. One comment argued that there was no conflict in these definitions and urged FDA to retain our previous definitions of “representative sampling of advertisements” and “representative sampling of any other labeling.” This comment pointed out that the examples given in those previous definitions were helpful.
(Response) We disagree with this comment. The revised definitions are intended to eliminate some confusion associated with the previous definitions as explained in the preamble to the proposed rule. The examples appearing in the previous definitions read as follows: “If more than one medical journal advertisement is used but the promotional content is essentially identical, only one need be submitted” and “if more than one brochure is used but the promotional content is essentially identical, only one need be submitted.” The quoted language served as common sense guidance regarding the application of the definitions without being a central part of the definitions. Although omitting that language from the definitions included in the proposed rule and this final rule, FDA is not disavowing the examples or suggesting that registrants should take a different approach.
The Agency proposed new § 207.9 to clarify the types of businesses that are subject to drug establishment registration and listing under part 207. Section 207.9 is retained in this final rule with certain revisions and clarifications.
Section 207.9(a)(3) of this final rule clarifies that private label distributors are subject to part 207. As discussed previously in this document, private label distributors do not have an obligation to register an establishment or list any drugs arising from their activities as private label distributors. They are, however, expected to obtain NDC labeler codes under § 207.33(c) of this final rule and update the information reported to FDA under § 207.33(c) as required by § 207.33(c)(2).
Section 207.9(a)(4) of this final rule is revised to state more clearly its applicability to establishments engaged in the manufacture, repacking, relabeling, or salvaging of drugs regulated under a BLA. These establishments are subject to part 207 unless they are required to register and list under part 607 (ESTABLISHMENT REGISTRATION AND PRODUCT LISTING FOR MANUFACTURERS OF HUMAN BLOOD AND BLOOD PRODUCTS).
Section 207.9(a)(5) of this final rule is revised to state that HCT/Ps, as defined in § 1271.3(d), are subject to registration and listing under part 207 if they are drugs regulated under section 505 of the FD&C Act or under section 351 of the PHS Act. A conforming amendment is made to § 1271.1. Manufacturers of HCT/Ps that are regulated under section 361 of the PHS Act (42 U.S.C. 264) and not under section 351 will remain subject to registration and listing under part 1271.
(Comment 19) Comments requested clarification on the applicability of this rule to contract manufacturers and private label distributors of drug products, saying it was not clear in the proposed rule how contract manufacturers are to handle establishment registration and labeler code assignment.
(Response) Manufacturers of drug products are obligated by the FD&C Act and by this final rule—whether or not
When listing a human drug manufactured for private label distribution (distribution under the name or trade name of someone other than the drug's manufacturer, as defined in new § 207.1), §§ 207.49 and 207.53 require registrants to provide two NDCs, one that includes the registrant's own NDC labeler code and one that includes the NDC labeler code of the private label distributor. As stated in response to comment 16, FDA will accept drug listing information submitted by a private label distributor (or anyone else) if properly authorized to act as an agent for the actual manufacturer. The use of an agent to handle establishment registration or drug listing submissions does not, however, transfer legal responsibility for complying with this final rule from a manufacturer, repacker, relabeler, or salvager to its agent. Animal drugs manufactured for private label distribution should be listed under a single NDC that includes the labeler code of the private label distributor.
Note that the term “private label distributor” is defined in new § 207.1 to mean, with respect to a particular drug, a person who did not manufacture, repack, relabel, or salvage the drug but under whose label or trade name the drug is commercially distributed. FDA's statements in this document that private label distributors are not obligated to register their establishments or list the drugs they distribute are premised on this definition. If someone who would otherwise qualify as a private label distributor carries out testing or control procedures applied to the final product,
Entities that qualify as private label distributors under this final rule and do not also manufacture, repack, relabel, or salvage any drugs may already have effective establishment registrations and drug listings submitted in the past. We do not expect these entities to renew their registrations after the effective date of this final rule. They may either cancel their registrations or allow their registrations to lapse by not making any further submissions. Any drug listings submitted in the past by entities that qualify as private label distributors under this final rule for drugs they do not manufacture, repack, relabel, or salvage should be transferred to the actual manufacturers, repackers, relabelers, or salvagers of the listed drugs.
(Comment 20) One comment asked FDA to clarify whether radiologic products are subject to this rule.
(Response) This comment did not elaborate on the types of products encompassed by the question so we are unable to respond specifically. There is not an exemption from the establishment registration and drug listing requirements for manufacturers of radioactive drugs, also known as radiopharmaceutical products. Anyone with questions about the applicability of part 207, either before or after this final rule, to radioactive drug products should contact the electronic Drug Registration and Listing System staff in the Office of Compliance at FDA's Center for Drug Evaluation and Research (CDER). For diagnostic device products that include a radioactive drug constituent part, see our response to comment 22 in this document regarding drug/device combination products. Also see part 807 regarding establishment registration and listing for radiologic device products. Positron emission tomography (PET) drugs are subject to part 207, as stated in § 207.13(l)(1) and as discussed in the proposed rule (71 FR 51276 at 51285).
(Comment 21) One comment requested guidance regarding the information needed for “active drug substance manufacturers” to register and list.
(Response) In this final rule, the term “active pharmaceutical ingredient” (API) is defined in § 207.1. The registration obligation applies to each domestic establishment that manufacturers, repacks, relabels, or salvages a drug or an animal feed bearing or containing a new animal drug (whether or not that product is commercially distributed). It also applies to each foreign establishment that manufacturers, repacks, relabels, or salvages a drug or an animal feed bearing or containing a new animal drug that is imported or offered for import into the United States. In each case, the term “drug” includes: (1) An API by itself, (2) an API that has been combined with one or more other APIs or inactive ingredients (see definition of “unfinished drug” in § 207.1), and (3) finished drug products (see definition of “finished drug product” in § 207.1).
The information that must be submitted for establishment registration is set forth in new § 207.25. These information elements do not differ depending on whether the registrant handles APIs, other unfinished drugs, or finished drugs.
The information that must be submitted with a drug listing is set forth in new § 207.49 for a drug the registrant manufactures, § 207.53 for a drug the registrant repacks or relabels, and in § 207.54 for a drug the registrant salvages. As specified in § 207.41, the drug listing obligation applies only to drugs that are manufactured, repacked, relabeled, or salvaged for commercial distribution. Sections 207.49, 207.53, and 207.54 indicate some minor differences in the information that must be submitted depending on whether the drug is finished or unfinished. For example, § 207.49(a)(15)(iv) describes the labeling that must be submitted for an unfinished drug.
(Comment 22) One comment asked, in the context of the proposed rule's requirement that NDCs appear on drug labels, how the rule would apply to drug/device combination products. Other comments asked how registration and listing should be handled for drug/device combination product kits. (See the definition of “combination product” in § 3.2(e) (21 CFR 3.2(e)), unaffected by this rulemaking.)
(Response) We acknowledge that the proposed rule did not include an explanation of its applicability to drug/device combination products, including how manufacturers of such products should register their establishments, list their combination products, and provide related information on the labels of their combination products. The codified of this final rule likewise does not contain specific provisions regarding drug/device combination products. FDA expects to further address drug/device combination product registration and listing in the future. As stated previously in this document, we also are not finalizing the proposed amendment to § 201.2 that would have required human-readable NDCs on the labels of all drugs subject to the listing requirement.
The proposed rule included a new § 207.13 aimed at clarifying the types of businesses that are exempt from drug establishment registration and listing under part 207. Section 207.13 is retained in this final rule with certain revisions and clarifications. Some exemptions described in § 207.13 are derived directly from section 510(g) of the FD&C Act. Other exemptions are established under section 510(g)(5) of the FD&C Act supported by our finding that registration by such classes of persons is not necessary for the protection of the public health.
(Comment 23) Several comments argued against the elimination of two existing exemptions from registration and listing that the proposed rule would have revoked. These two exemptions encompass: (1) Drugs imported under section 801(d)(3) of the FD&C Act (often referred to as “import for export”) and (2) drugs that enter a foreign trade zone and are re-exported from that foreign trade zone without having entered U.S. commerce.
(Response) Previous § 207.40(b) stated that no drug may be imported or offered for import into the United States unless the drug is listed and manufactured, prepared, propagated, compounded, or processed at a registered foreign establishment. The section also stated that this prohibition did not apply to, among other things, components of drugs imported under section 801(d)(3) of the FD&C Act. Section 801(d)(3) allows persons to import certain articles, including components of drugs, if specified conditions are met, provided that the imported articles are further processed or incorporated into products and exported or, if not used, the imported articles are destroyed or exported. Thus, previous § 207.40(b) exempted certain foreign establishments from the establishment registration and listing requirement.
Previous § 207.40(a) stated that a foreign establishment was not required to comply with the registration and listing requirements if its drug entered a foreign trade zone and was re-exported from that foreign trade zone without having entered U.S. commerce.
Upon careful consideration of the comments received, we have decided to retain both exemptions in this final rule. Therefore, under § 207.13(j) of this final rule, if all the conditions of section 801(d)(3) of the FD&C Act are satisfied, a component of a drug will not be excluded from importation into the United States by reason that it is unlisted or was manufactured at an unregistered foreign establishment. Additionally, under § 207.13(j) of this final rule, a foreign establishment does not incur a registration and listing obligation if its drug enters a foreign trade zone and is re-exported from that foreign trade zone without having entered U.S. commerce. These exemptions pertain only to drugs that are re-exported or components of drugs that are processed or incorporated into products and then exported, and these exemptions pertain only to foreign establishments. If an establishment located within a foreign trade zone manufactures, repacks, relabels, or salvages a drug for commercial distribution in the United States, that establishment would need to register and list those drugs it handles for U.S. commercial distribution. Additionally, if a foreign establishment exports drugs to the United States relying on either of these exemptions, but also exports other drugs for commercial distribution in the United States, it must comply with the registration and listing requirements for those drugs that are commercially distributed in the United States.
The corresponding exemptions for blood product establishments are also retained in § 607.40 under this final rule.
(Comment 24) One comment asked FDA to confirm that animal biological products are not subject to this rule.
(Response) Some biological drugs intended for administration to animals are regulated by the U.S. Department of Agriculture (USDA) under the Virus, Serum, and Toxins Act of 1913. Section 510.4 (21 CFR 510.4) states that animal drugs produced and distributed in full conformance with the Virus, Serum, and Toxins Act and any regulations issued thereunder shall not be deemed to be subject to section 512 of the FD&C Act (includes premarket approval and other requirements for new animal drugs regulated by FDA). As proposed in § 207.13(g), the final rule includes an exemption applicable to these products in § 207.13(h).
(Comment 25) Comments from the medical gas industry expressed concern about the ability of entities such as pharmacies, hospitals, clinics, and emergency responders to refill medical gas cylinders if the repackaging would require the repacker's NDC to appear on the label of the repackaged product. The comment stated that if these entities are exempt from part 207, they cannot obtain an NDC.
(Response) Our decision not to include the proposed amendments to § 201.2 that would have required human-readable NDCs on drug labels renders the concern expressed in this comment moot. We would like to confirm that pharmacies, hospitals, clinics, other health care entities, and public health agencies that qualify as exempt from the registration and listing requirements under § 207.13 of this final rule do not lose their exemptions by dispensing medical gases or filling medical gas containers in the normal course of their activities.
Section 207.17 describes who is required to register an establishment under part 207. This section is reworded in the final rule: (1) To distinguish between domestic and foreign manufacturers, repackers, relabelers, and salvagers and (2) to clarify that FDA will accept registration information submitted by a private label distributor only if it is acting as an authorized agent for and submitting information pertaining to an entity that has an establishment registration obligation.
(Comment 26) One comment asked FDA to clarify whether a storage facility that does not repack or relabel drugs is required to register under part 207.
(Response) A facility at which drugs are stored, such as a warehouse, does not need to be registered provided drugs are not manufactured, repacked, relabeled, or salvaged (as those terms are defined in § 207.1) at the facility. Note that the definition of “manufacture” includes sampling, testing, or control procedures applied to the final product or to any part of the process. Thus, for example, if a warehouse includes a temperature-controlled storage area where drug samples are stored for stability testing to satisfy current good manufacturing practice requirements, that activity would qualify as a manufacturing
As explained in response to Comment 17, we have revised the definitions of “relabel” and “relabeler” so they do not include the addition or modification of information affixed to drug packaging solely for purposes of delivery to a customer, customer identification, or inventory management. Therefore, the addition or modification of such information at a warehouse does not trigger the need to register it as an establishment.
Proposed § 207.21 described when initial registration information must be submitted for an establishment newly required to register under part 207. The provision is retained in this final rule and reorganized into paragraphs (a) and (b) for improved clarity.
(Comment 27) One comment suggested that the words “for commercial distribution” be added to § 207.21, suggesting that establishment registration is required only for establishments at which drugs intended for commercial distribution are manufactured, repacked, relabeled, or salvaged.
(Response) The absence of these words—“for commercial distribution”—from § 207.21 is intentional and comports with section 510 of the FD&C Act. Any establishment at which drugs are manufactured, repacked, relabeled, or salvaged must be registered under part 207, unless exempt from registration under section 510(g) of the FD&C Act or under the relevant regulations (§§ 207.13, 607.65, or 1271.15, as applicable) whether or not the drugs are commercially distributed. Accordingly, an establishment at which an investigational drug is manufactured is subject to the establishment registration requirement. The listing obligation, on the other hand, applies to drugs that are for commercial distribution.
Proposed § 207.25 described the information that must be submitted to register an establishment. The provision is retained in the final rule with minor substantive and editorial revisions. Substantively, new § 207.25 no longer requires the submission of fax numbers to register establishments and now includes the new statutory requirement that registrants provide a UFI for each establishment. (See our discussion of establishment registration numbers and UFIs in section II.B, Changes to the Proposed Rule.) New § 207.25 also clarifies that the physical address of each establishment is required (rather than a post office box, for example), and a mailing address is required for the establishment's official contact.
(Comment 28) One comment asked FDA to clarify what format should be used when a foreign establishment submits contact information for each importer. This comment also asked FDA to explain who should submit establishment registration information when a business has both foreign and U.S. establishments.
(Response) According to new § 207.61, all information transmitted to FDA under part 207, including establishment registration information, must be transmitted to FDA in electronic format unless a waiver is granted. FDA's systems for electronic registration include fields for information elements such as the required contact information for U.S. importers of drugs manufactured, repacked, relabeled, or salvaged at a foreign establishment.
Section 207.17 addresses this comment's second question, who should submit establishment registration information when a business has both foreign and U.S. establishments? This section states that when operations are conducted at more than one establishment, and common ownership and control among all the establishments exists, the parent, subsidiary, or affiliate company may submit registration information for all establishments. This applies whether the establishments are domestic, foreign, or both.
(Comment 29) One comment asked FDA to exempt contract manufacturers from the requirement that establishments identify each importer in the United States of drugs they manufacture, repack, relabel, or salvage that is known to the establishment as well as each person who imports or offers for import such drugs to the United States. This comment stated that contract manufactures may not have this information.
(Response) This requirement is retained in the final rule, in § 207.25(h). The provision implements a statutory requirement (section 510(i)(1) of the FD&C Act). This requirement pertains only to foreign establishments, and it requires them to identify “importers” known to the establishment and “persons who import or offer for import,” as these terms are defined in § 207.1. Both of these definitions have been refined and narrowed in this final rule. A foreign contract manufacturer exporting drugs to the United States should be able to identify such persons.
Section 207.29 describes the requirements for: (1) Expedited updating of certain changes to establishment registration information and (2) annual reviewing and updating of establishment registration. This section is retained in the final rule with very minor revisions. Fax numbers are no longer mentioned in § 207.29(a) because they are no longer required for establishment registration. Additionally, the dates during which the annual review and update of registration information must take place have been adjusted to match section 510(b)(2) of the FD&C Act, added by FDAAA.
(Comment 30) Some comments opposed the requirement that if no changes have occurred since the last registration, registrants certify that no changes have occurred.
(Response) The annual review and updating of establishment registration information is critical to the integrity of FDA's database. The requirement that registrants certify that no changes have occurred when that is true provides important assurance that registrants have reviewed the establishment registration information they previously submitted. Otherwise, FDA would need to interpret silence from a registrant as indicating either that the information remains up to date or that the registrant may have neglected to review and update the information. We further note that section 510(b)(1) of the FD&C Act now requires annual registration of establishments between October 1 and December 31, and the option to certify that no changes have occurred since the last registration is a minimally burdensome implementation of this statutory requirement.
Please see our response to Comment 74, which addresses this issue in the context of drug listing updates.
The NDC provisions in this final rule have been revised in response to comments received on the proposed rule. Most significantly, new § 207.33:
• Allows for 11 digits in the NDC (when 10-digit combinations are exhausted).
• Reflects that registrants will propose their own NDCs for drugs they
• Includes new NDC formatting requirements for registrants to observe when proposing NDCs.
• Transfers some information that would have been required under proposed § 207.33(c) (What information must a manufacturer submit before we will assign an NDC number to a drug?) to information that must be included in a drug listing submission.
• Allows certain drug products to be assigned alternatively formatted NDCs if approved by the Center Director. This applies to the HCT/Ps specified in new § 207.33(b)(4) if they are minimally manipulated.
• Includes a new § 207.33(c) that explains who must obtain an NDC labeler code and how labeler codes are assigned and updated.
• Includes new provisions in § 207.33(d) that explain how a proposed NDC can be voluntarily reserved.
Comments on the NDC provisions of the proposed rule and FDA's responses are summarized in this document. This does not include some comments that have been made moot by the revisions summarized previously.
(Comment 31) FDA received many comments opposing the proposed rule's requirement that FDA, rather than registrants, generate and assign the complete NDC for drugs that are subject to listing. Some comments were concerned about possible delays associated with NDC request submissions. Others were concerned about losing control over numbering conventions that individual registrants may apply to their own product codes and package codes. One comment expressed concern that subjecting OTC monograph products to an NDC assignment process could begin to resemble an FDA approval process for such products.
(Response) The objective behind FDA's proposal to generate and assign NDCs was to assure they are assigned appropriately. Although we did not intend FDA's issuance of NDCs to be time consuming or to operate as an approval process, we recognize that FDA's objectives can be met in a way that is more flexible and less burdensome for registrants. Accordingly, the proposed requirement that FDA generate the complete NDC for each listed drug is not included in this final rule.
Under new § 207.33(d), registrants, not FDA, will generate NDCs for assignment to their listed drugs. An NDC is considered to be “proposed for assignment” when a registrant submits it for the first time with drug listing information in accordance with § 207.49 or § 207.53. If the proposed NDC conforms to the formatting requirements of § 207.33, is not reserved for a different drug, and was not previously assigned to a different listed drug, FDA will assign the proposed NDC when it receives all required listing information for the drug.
(Comment 32) Some comments asked how far in advance of marketing a drug for the first time an NDC may be requested. Comments also pointed out that manufacturers need to know the NDC for a drug in development prior to the time of drug listing.
(Response) As explained in response to Comment 31, this final rule requires registrants to propose their own NDCs for drugs they list. FDA will assign a proposed NDC to the drug identified by the registrant if the proposed NDC conforms to the formatting requirements of § 207.33, is not reserved for a different drug, and was not previously assigned to a different listed drug.
We recognize that a mechanism for reserving a specific NDC may be helpful, as this would provide greater certainty that a proposed NDC will be accepted by FDA when it is included with a listing submission at the time of marketing. Accordingly, this final rule includes a new § 207.33(d)(3) that allows a person to voluntarily reserve a proposed NDC for a period of 2 years prior to its inclusion in a drug listing submission for the first time. Note that an NDC reserved under § 207.33(d)(3) would need to include most importantly a labeler code and a product code. At the discretion of the person submitting the reservation request, a single package code could be included, or not, with one or more package codes included later in NDC(s) submitted with complete drug listing information.
Certain minimal information must be submitted to reserve a proposed NDC, as specified in new § 207.33(d)(3). This information does not include identification of the drug's inactive ingredients. Many comments opposed the inclusion of such detailed information in the proposed rule's provision governing NDC requests.
NDCs reserved under § 207.33(d)(3) would be reserved for 2 years unless the person whose labeler code is included in the NDC asks FDA to cancel the reservation earlier. If a reserved NDC is not used during the 2-year reservation period (
In addition to the procedure established under § 207.33(d)(3), a registrant wishing to reserve an NDC also has the option of submitting complete listing information for a drug that is under development and specifying a future “start marketing date” in the listing submission. That listing submission could then be updated, as needed, when the actual marketing date arrives.
(Comment 33) One comment questioned how, when listing a drug for the first time, a registrant can supply a drug's labeling if the labeling must include the drug's NDC, and if the NDC is not assigned until the drug is listed.
(Response) As explained in response to Comment 1, unlike the proposed rule, this final rule does not require NDCs to appear in human-readable form on drug labels (but an intervening statutory amendment, the DSCSA, does require NDCs to appear as part of the product identifier on certain drug labels). After the effective date of this final rule, our regulations will continue to encourage, but not require, the appearance of human-readable NDCs on drug labels (§ 201.2) and continue to require that NDCs appear in bar codes on drug labels (§ 201.25(c)).
Under this final rule, unlike the proposed rule, registrants are able to develop and propose their own NDCs to FDA. Upon receipt of a first-time listing submission, FDA will assign the NDC proposed by the registrant to the drug being listed unless the NDC is improperly formatted, reserved for a different drug, or was previously assigned to a different listed drug. Registrants are also able to reserve an NDC for a drug under development under § 207.33(d)(3) of this final rule. Accordingly, registrants should not have difficulty determining, with adequate certainty, the NDC for a drug under development.
(Comment 34) Some comments supported the proposed rule's revocation of then-current § 207.35(b)(4)(ii), which stated that the product code of a discontinued product could be reassigned to another product 5 years after the expiration date of the discontinued product or, if there is no expiration date, 5 years after the last shipment of the discontinued product. Commenters generally agreed that the reuse of old NDCs for a different
(Response) FDA is retaining this general prohibition against the reuse of NDCs in the final rule. As indicated in new § 207.33(d)(2), an NDC will not be assigned to a drug if it was previously assigned to a different drug. The prohibition against reuse of NDCs applies to listings submitted on or after the effective date of this final rule. Drugs that are currently listed under NDCs that have been reused in accordance with previous § 207.35(b)(4)(ii) may continue to be listed under such NDCs.
Conversely, if a registrant reintroduces a drug it listed and discontinued in the past, that registrant must list the drug using the same NDC under which it was listed in the past. See § 207.37(b) of this final rule. However, if the reintroduced drug includes changes, compared to the discontinued drug, that would warrant a new NDC under new § 207.35, then it should be listed under a new NDC.
As discussed in response to Comment 19, under new § 207.49, if a private label distributor uses a contract manufacturer to produce a human drug, the contract manufacturer has an obligation to list the drug under two NDCs, one that includes the labeler code of the contract manufacturer and one that includes the labeler code of the private label distributor. If the private label distributor switches to a new contract manufacturer in the future, that new contract manufacturer would also have an obligation to list the drug under two NDCs, one that includes its own labeler code and one that includes the labeler code of the private label distributor. The NDC that includes the new contract manufacturer's labeler code will obviously differ from the NDC under which the previous contract manufacturer listed the drug (because the labeler codes will differ). The NDC that includes the private label distributor's labeler code may be the same as that under which the previous contract manufacturer listed the drug provided: (1) There have been no changes to the drug that warrant a new NDC under § 207.35 and (2) the previous contract manufacturer updates its listing information to indicate it no longer manufactures the drug (as it is required to do under § 207.57 at the time of its next June or December listing update, or sooner at its discretion). If those two conditions do not exist, FDA would accept a listing from the new contract manufacturer under a new NDC that includes the private label distributor's labeler code.
(Comment 35) We received several comments concerning the format of the NDC. Many comments expressed concern about the impact of any changes in the NDC format on various systems that track and use NDCs. Some comments urged FDA to retain the 10-digit NDC format. Others encouraged the adoption of a standard 11-digit NDC. Some comments opposed the possible introduction of alphanumeric NDCs, preferring all numeric NDCs. Others were concerned about the possible coexistence of 10- and 11-digit NDCs.
(Response) FDA is sensitive to these concerns. Section 207.33(b) of this final rule specifies the format of an NDC recognized by FDA. The final rule necessarily includes more specifications than did the proposed rule concerning NDC formatting because under the final rule, registrants, not FDA, develop their own proposed NDCs, and they must all meet certain formatting parameters. The final rule states, for example, that the NDC is 10 or 11 digits to preclude the submission of longer NDCs.
Our regulations have long stated that FDA will expand the labeler code from five to six numeric characters when the available five-character code combinations are exhausted (previous § 207.35(b)(2)(i)). This occurrence is mathematically inevitable and is reflected in new § 207.33(b)(1), which states that the NDC must consist of 10 or 11 digits. FDA will begin issuing 6-digit labeler codes, leading to 11-digit NDCs, only when the available 5-digit labeler codes are exhausted. FDA will not assign 11-digit NDCs until we begin to issue 6-digit labeler codes.
FDA recognizes the desirability of a single, standard format for NDCs, having three segments of consistent lengths, as we eventually transition to six-digit labeler codes. We intend to initiate a public discussion of future formatting options in the near future. In the meantime, the provisions included in this final rule are intended to accommodate the range of existing NDC formats, leaving room for necessary expansion to 11 digits.
This final rule refers to the NDC as a numeric code, not an alphanumeric code. This takes into account comments that objected to the inclusion of alpha characters in NDCs as disruptive of current systems and practices.
(Comment 36) Some comments urged FDA not to require NDCs for HCT/Ps, citing the International Society of Blood Transfusion (ISBT) number as a better means of identifying these products.
(Response) In response to these comments, § 207.33(b)(4) of this final rule states that an alternatively formatted NDC may be used for certain identified HCT/Ps if they are minimally manipulated and if the alternatively formatted NDC is approved by the Center Director (CDER or CBER, as appropriate). Such approval may be indicated in Guidance for Industry issued by one or both Centers or in this preamble, for example. Accordingly, FDA identifies ISBT-128 as a currently approved alternatively formatted NDC to identify HCT/Ps within the scope of § 207.33(b)(4). ISBT-128 is an international standard for the identification of medical products of human origin. Please note that an alternatively formatted NDC approved under § 207.33(b)(4) qualifies as an NDC. HCT/Ps that are not within the scope of § 207.33(b)(4) require traditionally formatted NDCs.
(Comment 37) One comment encouraged FDA to allow a single NDC, with a single package code, to be assigned to an API, which may be commercially distributed in various quantities.
(Response) This comment refers to APIs, but the question applies to any bulk product supplied in variable quantities. We would like to accept non-numeric characters, such as one or more asterisks, in the package code segment of an NDC to indicate a bulk product supplied in various quantities (as was previously done in paper submissions). However, the SPL format, currently specified in the electronic registration and listing guidance, does not accommodate non-numeric characters. Manufacturers in this situation may adopt a variety of practices. They may submit multiple NDCs with package codes corresponding to a variety of commonly ordered package sizes. They may submit an NDC package code corresponding to 1 kilogram (kg), for example, and then treat a shipment of 10 kg as being comprised of 10 units. In some cases, they may submit an NDC with a package code corresponding to a 55-gallon drum, for example, and use that packaging to ship 55-gallon orders as well as orders that are slightly less than 55 gallons in volume.
(Comment 38) One comment recommended that the NDC for a drug that was repacked or relabeled include the product code of the source drug.
(Response) Section 207.53 of this final rule requires repackers and relabelers to list drugs they repack or relabel and requires them to submit an appropriate NDC for each such drug that includes the repacker's/relabeler's labeler code. It would not be feasible to require the NDC for a repacked or relabled drug to include the labeler code of the repacker or relabeler combined with the product code of the source drug. Such a
Listing submissions for repacked or relabeled drugs must also include the complete NDC assigned to each finished drug received by the registrant for repacking or relabeling (
(Comment 39) Two comments asked whether FDA will assign NDCs to products that do not have application numbers,
(Response) This question was posed in the context of the proposed requirement that registrants request an NDC from FDA by submitting information specified in proposed § 207.33(c) prior to a listing submission. In the case of finished drugs, proposed § 207.33(c) would have allowed registrants to submit an approved U.S. application number in place of certain information. As discussed in response to Comment 31, this final rule allows registrants to propose their own NDCs with listing submissions, and FDA will accept those proposed NDCs unless they are formatted incorrectly, reserved for a different drug, or previously assigned to a different drug. Under this final rule, NDCs are still “assigned” only by FDA, after all required listing information is received. We affirm that NDCs will be assigned in this manner to all drugs subject to the listing requirement, including drugs that do not have application numbers. As we have stated in the past (
(Comment 40) Some comments asked how NDCs will be assigned to multidrug kits. Here we are addressing kits that do not contain medical devices. (See related discussion of drug/device combination products in response to Comment 22.)
(Response) If a product contains more than one finished drug product, co-packaged as a kit, and that kit is commercially distributed, the kit itself must be listed in accordance with § 207.41, under § 207.49 or § 207.53, as appropriate. A registrant submitting the listing should propose an NDC for the kit itself, distinct from any NDCs assigned to individual drug constituents contained in the kit. The NDC proposed for the kit should include the labeler code of the registrant obligated to submit the listing. If the kit is packaged for private label distribution, it should be listed under an additional NDC that includes the labeler code of the private label distributor.
(Comment 41) A comment asked whether a finished drug product, manufactured under one approved application at two different manufacturing sites under the same ownership and control could be listed under a single NDC. In this example, the finished product from each manufacturing site would have the same composition and physical appearance. The comment also asked whether the answer would change if the manufacturing sites are located in two different countries.
(Response) Each manufacturing site would need its own establishment registration under § 207.17 unless exempt under section 510(g) of the FD&C Act or under § 207.13. (Foreign establishments must register only if they manufacture, repack, relabel, or salvage drugs that are imported or offered for import into the United States.) With respect to the drug listing requirement, the proposed rule and the final rule specify in § 207.41(a) that when operations are conducted at more than one establishment, and common ownership and control exists among all the establishments, the parent, subsidiary, or affiliate company may submit listing information for any drug manufactured, repacked, relabeled, or salvaged at any such establishment. This language allows a registrant that manufactures a drug at more than one of its own establishments to submit a single listing for that product, while identifying all establishments where the registrant manufactures the drug under § 207.49(a)(12). The listed drug would have a single NDC in this scenario. The answer does not change if one or more manufacturing sites are located outside the United States.
Note, however, that FDA would also accept multiple listings if a manufacturer in this situation wished for any reason to submit separate listings and NDCs for the same drug manufactured at multiple establishments.
This analysis does not apply to an entity that uses one or more contract manufacturers to manufacture, repack, relabel, or salvage a drug. In that case, each contract manufacturing site must be registered under § 207.17, unless exempt under section 510(g) of the FD&C Act or under § 207.13. If more than one contract manufacturing site is used, and those sites are under common ownership and control, the contract manufacturer could submit a single listing for this drug covering its activities at multiple sites (also listing other drugs it is required to list under § 207.49 or § 207.53). Furthermore, as discussed in our response to comment 19, contract manufacturers must generally list a drug under two NDCs, one that includes the contract manufacturer's labeler code and one that includes the private label distributor's labeler code. In this scenario, a single NDC that includes the private label distributor's labeler code could be used with a drug manufactured at multiple contractor sites along with a single NDC that includes the contract manufacturer's labeler code, provided there are no differences in the product produced at the various sites that would warrant a new NDC under § 207.35.
(Comment 42) One comment asked how registrants should assess whether their existing NDCs comply with this rule. Some comments noted a statement in the preamble to the proposed rule that FDA intends to validate that current NDCs comply with the new regulations when the rule is finalized (71 FR 51276 at 51280) and requested more information about this process.
(Response) This final rule is not intended to require extensive changes to NDCs themselves. The NDC formatting provisions of new § 207.33(b) are intended to accommodate NDC formats currently in use. The 10-digit NDC formats provided for under § 207.33(b) of this final rule include (in terms of numbers of digits in the labeler code, product code, and package code respectively) 4-4-2, 5-3-2, and 5-4-1. Any NDC in one of those formats that is not assigned to multiple drug products and is not assigned to a non-drug product should comply with this final rule. When five-digit labeler codes are exhausted, FDA will begin issuing six-digit labeler codes, allowing for additional formats of 6-3-2 and 6-4-1.
(Comment 43) Some comments encouraged FDA to permit one registrant or business to maintain more than one labeler code. These comments pointed out that mergers and acquisitions in the pharmaceutical industry result in corporate entities responsible for drugs listed under multiple NDC labeler codes. Consolidation of such NDCs to a single labeler code would be burdensome and may not be possible in some cases if, for
(Response) FDA agrees with this comment. We encourage registrants and private label distributors to maintain a single labeler code wherever possible. But FDA will not require each registrant and private label distributor to maintain only one labeler code. This flexible approach accommodates mergers and acquisitions. It departs from a statement in the preamble to the proposed rule that only one labeler code would be used for new NDC numbers that FDA would have assigned prospectively for any given manufacturer, repacker, or relabeler (71 FR 51276 at 51299). It also accommodates situations in which any registrant wishes to maintain different labeler codes for different product lines or situations in which a registrant risks exhausting all available labeler code and product code combinations if the registrant operates with a single labeler code. Importantly, new § 207.33(c)(2) requires each person who is assigned a labeler code to update the information required under § 207.33(c)(1). This will allow FDA to reliably associate every labeler code with the person to whom it is assigned and the person's contact information.
Registrants and private label distributors who currently have NDC labeler codes but for whom FDA does not have up-to-date information described in § 207.33(c)(2) on the effective date of this rule are required to update their information. FDA may refuse to accept new drug listings that include an NDC labeler code for which the information required by § 207.33(c)(2) is not current in our system.
(Comment 44) One comment asked FDA to confirm that a business owning many registered establishments may maintain only one labeler code, so that all of its NDCs include a single labeler code.
(Response) FDA prefers that such a business maintain only one labeler code, and that it use this single labeler code when proposing NDCs for drugs it manufactures, repacks, relabels, or salvages at establishments under common ownership and control. However, as explained in our response to Comment 43, FDA will not require any business to maintain only one labeler code.
(Comment 45) One comment interpreted the proposed rule as preventing an entity that does not distribute its own products from maintaining its own labeler code. The comment recommended that such an entity not be required to assume distribution responsibilities to retain its labeler code.
(Response) FDA is not certain whether this comment is concerned with which NDC would have been required to appear on product labels had we finalized the proposed amendments to § 201.2, or more generally concerned with the NDCs under which private label distributor products are listed. Under § 207.33(c) of this final rule, a labeler code must be requested and maintained by any person who engages in manufacturing, repacking, relabeling, or private label distribution of drug products. The term “private label distribution” is defined in § 207.1 of this final rule to mean commercial distribution of a drug under the label or trade name of a person who did not manufacture, repack, relabel, or salvage that drug. A private label distributor does not need to physically engage in drug distribution to qualify as a private label distributor under this definition and maintain a labeler code under § 207.33(c).
(Comment 46) One comment gave an example of two establishments “located in the same geographical location within two cities located five miles apart” and asked whether those establishments would need separate NDC labeler codes and registration numbers.
(Response) Under the final rule's definition of “establishment,” two establishments located 5 miles apart would not qualify as being at “one general physical location” and would therefore require two separate registrations. Each establishment would be associated with its own UFI and establishment registration number. As stated in § 207.17 of this final rule, when operations are conducted at more than one establishment and common ownership and control among all the establishments exists, the parent, subsidiary, or affiliate company may submit registration information for all establishments. Likewise, with respect to drug listing information, § 207.41 states that when operations are conducted at more than one establishment, and common ownership and control exists among all the establishments, the parent, subsidiary, or affiliate company may submit listing information for any drug manufactured, repacked, relabeled, or salvaged at any such establishment. A single labeler code may be used in the NDCs for all drugs proposed by such a parent, subsidiary, or affiliate company.
(Comment 47) A comment asked FDA to confirm that the NDC assignment requirement for APIs applies to all APIs, whether they are supplied by domestic or foreign establishments.
(Response) Any drug, including an API, manufactured at a domestic establishment for commercial distribution in the United States must be listed under § 207.49 unless exempt under § 207.13. As proposed and under this final rule, the registration and listing requirements apply to foreign establishments whose drugs, including APIs, are imported or offered for import into the United States. See §§ 207.13(j), 207.49, and 207.53.
(Comment 48) Some comments urged FDA to exempt allergenic extract products from the NDC requirement or from drug establishment registration and listing generally. These comments argued that the proposed rule would require manufacturers of allergenic extracts to manage a large number of NDCs without obvious benefits.
(Response) Allergenic extracts are used in the diagnosis and treatment of allergies. As such, they are appropriately regulated as drugs under the FD&C Act and FDA's regulations. Section 510 of the FD&C Act authorizes FDA to exempt certain persons from establishment registration (and hence listing) if registration “is not necessary for the protection of the public health.” We decline to make this finding for allergenic extracts. Such an exemption would diminish FDA's ability to inspect establishments at which allergenic extracts are manufactured and track marketed products.
Both before and after this final rule, our regulations in part 207 have required that each listed drug product have an NDC. We understand that this requires manufacturers of allergenic extracts to associate a unique NDC with each product they manufacture for commercial distribution, and this may result in a large number of NDCs. We believe the public health benefits associated with drug registration and listing outweigh the burden this places on manufacturers to manage a large number of NDCs.
(Comment 49) One comment asked whether drug samples are subject to the NDC requirement.
(Response) Under this final rule, registrants must list drugs they manufacture, repack, relabel, or salvage for commercial distribution. The term “commercial distribution” is defined in a way that encompasses free samples. Because any listed drug requires an NDC, drugs packaged for distribution as promotional samples are expected to have NDCs.
(Comment 50) Some comments recommended that pharmacy compounded drugs be eligible for NDC
(Response) Drug products compounded by a licensed pharmacist or a licensed physician in conformance with section 503A of the FD&C Act are generally exempt from drug establishment registration and listing under part 207 before and after this final rule, consistent with the exemptions for pharmacies and practitioners in section 510(g) of the FD&C Act. The DQSA added section 503B to the FD&C Act. Under section 503B, a compounder can register with FDA as an “outsourcing facility.” Because the FD&C Act now establishes a separate registration and drug product reporting process for such outsourcing facilities, this final rule exempts outsourcing facilities from the registration and listing requirements of part 207. (See new § 207.13(k).)
Compounders that meet the conditions for exemption from registration and listing requirements under part 207 may elect to voluntarily register and list their products under part 207 and obtain NDCs.
Section 207.33(f) of the proposed rule identified the types of changes to a drug that require a new NDC. This final rule includes new § 207.35 that states with greater clarity the types of changes to a drug that require a new NDC. Substantively, new § 207.35 is similar to the corresponding requirements in the proposed rule, but the provision does not require a new NDC when changes are made to inactive ingredients or when the Drug Master File number or Veterinary Master File number, if any, assigned to an API changes.
(Comment 51) Some comments were concerned about the types of changes to a drug that would require a new NDC in the proposed rule. In particular, many comments opposed the proposed requirement that changes in a drug's inactive ingredients would necessitate a new NDC.
(Response) This proposed requirement—that a change in a drug's inactive ingredients would necessitate a new NDC—has not been retained in the final rule. Under both the proposed rule and the final rule, any change in information submitted with a drug listing must be reflected in an updated listing under § 207.57. Certain more significant changes also require a new NDC, as specified in new § 207.35. Upon careful consideration, we agree with those comments that stated it would be unreasonably burdensome to require registrants to submit a new NDC each time they change the inactive ingredient composition of a product.
Some comments questioned the scope of the proposed requirement: Would it apply to changes from one inactive ingredient supplier to another? Would it apply to changes in the quantity at which an inactive ingredient is used? Would it apply to changes in the compositional specifications of an inactive ingredient?
The justification for this requirement suggested in the proposed rule was that some patients may be sensitive to certain inactive ingredients, and a change in NDC would flag for those patients and their pharmacists and health care providers that a drug's composition may have changed (or that some other characteristic identified in § 207.35 changed).
Upon careful consideration, we agree with those comments that challenged this justification. Paying attention to changes in NDCs would be an inexact way for patients, pharmacists, and health care providers to discover changes in inactive ingredients. As proposed and under this final rule, updates to drug listing information (including a new NDC) will be submitted each June and December, or sooner at the registrant's discretion. Thus, manufacturers will not be obligated to change an NDC immediately upon changing an inactive ingredient and update the NDC on their labels on a batch specific basis.
Comments pointed out that, particularly in the case of OTC monograph products, manufacturers currently have the flexibility to use certain inactive ingredients interchangeably. FDA's current guidance regarding the labeling of OTC drug products acknowledges this practice and includes formatting recommendations to accommodate the practice.
Rather than impose this burden on some manufacturers, and recognizing that ingredient labeling and reference to batch numbers are more useful and exact ways to ascertain a drug's composition, this final rule does not require a new NDC when a drug's inactive ingredients change.
(Comment 52) One group of comments expressed concern about the many situations in which a new NDC would be needed under the proposed rule. In addition to mentioning changes in inactive ingredients, the comments cited any addition to a drug's label or labeling, including the addition of stickers with delivery and handling instructions and “any material change to a drug's labeling or packaging insert” as things that should not warrant a new NDC. The comments emphasized the burden associated with changes to a drug's NDC.
(Response) Several changes in this final rule will reduce the number of occasions when a drug requires a new or additional NDC, compared to the proposed rule. See the response to comment 51 regarding changes to inactive ingredients. See our response to Comment 17 regarding the revised definition of “relabel” in the final rule to exclude the addition or modification of information affixed solely for purposes of delivery to a customer, customer identification, or inventory management. Under this final rule, changes or additions to a label that do not qualify as relabeling do not necessitate a drug listing submission and NDC under § 207.53. Section 207.35 of this final rule does not include “any material change” to a drug's labeling or package insert among the changes that necessitate a new NDC. Labeling changes are generally not included in new § 207.35. Some labeling changes will be incidental to the changes included in new § 207.35 (
(Comment 53) The Animal Health Institute noted that Animal Drug User Fee Act (ADUFA) fees are assessed for each animal drug NDC. This comment pointed out that manufacturers of animal drug products will be potentially charged twice for a single drug product due to a change in the NDC during a fiscal year or due to multiple listings for a single product required under this final rule. The comment urged FDA to exempt animal drug manufacturers from paying such extra product fees imposed by this final rule.
(Response) As noted in our response to Comment 52, several changes in this
(Comment 54) One comment asked whether a new NDC will be required when a manufacturer changes to a new supplier of an API or, relatedly, whether multiple NDCs would be needed if multiple suppliers of an API are indicated in an approval application for a finished drug product.
(Response) Section 207.35 of this final rule requires a new NDC when there is a change to any API. This provision includes changes from one API to another (
(Comment 55) One comment requested clarification regarding when a change in drug product strength will require a new NDC (or when multiple strengths will require multiple NDCs). This comment distinguished between concentration and strength.
(Response) Section 207.35 of this final rule requires a new NDC if the strength of any API changes. The term “strength” is generally used to refer to the absolute quantity of API in a single unit dose (
(Comment 56) Some comments questioned whether two digits are sufficient for the package code segment of the NDC. Relatedly, some comments requested clarification regarding the need for a new NDC when changes are made to a drug's package size or type. For example, would a change from one type of plastic bottle to another necessitate a new NDC? Another comment argued that changes in medical gas packaging should not necessitate many new NDCs.
(Response) A 2-digit package code segment accommodates 100 different packaging configurations, counting “00” as one possibility.
There should be a separate package code for each package size. Therefore, if a package is enlarged to hold more of a drug product, it would need a new NDC.
A change in package configuration, such as a change from a bottle to a blister pack, would also require a new NDC.
Under new § 207.35(c), a new NDC (specifically a new package code segment) is needed for changes in the composition of packaging material that are significant enough so that the packaging type description previously submitted is no longer accurate. When submitting drug listing information electronically, registrants are currently prompted to identify the package type by selecting a choice from a drop down list. For example, “Bottle, Plastic” is currently one available selection in the drop down list. If a registrant originally described its packaging material using this term and later switched from one type of plastic bottle to another, there would be no need for a new NDC. But if a change in packaging material is more significant, from plastic bottle to glass bottle, for example, so that a new package type should be selected from the drop down list, FDA would require a new NDC with a new package code segment to accompany the revised listing under § 207.35(c). (This discussion pertains only to drug listing obligations. Please see the FDA guidance for industry on “Container Closure Systems for Packaging Human Drugs and Biologics” (May 1999, available on the Internet at
Medical gases are generally packaged in tanks, canisters, or cylinders. A registrant listing a medical gas would choose the appropriate packaging type from the drop down list, populated with such terms, in our electronic drug establishment registration and listing system. We do not currently require more detail about the composition of a tank, canister, or cylinder in which a medical gas is packaged and would not require a listing update or a new NDC if the composition of a tank, canister, or cylinder changes. Therefore, we do not anticipate an unreasonable proliferation of NDCs associated with medical gas packaging under this final rule.
If a registrant exhausts all 100 package codes for a single product, that registrant may add a second product code, effectively making 100 more package codes available. This provision is reflected in § 207.35(c) of this final rule.
(Comment 57) One comment stated that many minor changes are made to a drug's packaging, such as resin composition and size optimization. This comment stated that these minor changes are already the subject of submissions to FDA, for example, as an annual report (submitted under § 314.81(b)(2)), a prior approval supplement to an NDA, or a changes-being-effected supplement. This comment implicitly questioned the need for new NDC package codes triggered by these changes.
(Response) Section 207.35(c) of this final rule requires new NDCs, specifically new package codes, when changes are made to a drug's package size or type. See our response to comment 56 regarding our interpretation of this requirement. We acknowledge that certain postapproval packaging changes are reported to an NDA, BLA, or ANDA consistent with current § 314.70 and FDA
Proposed § 207.37 set forth restrictions pertaining to the use of NDCs. These provisions are retained in the final rule with minor revisions. New § 207.37 clarifies that a product improperly bearing an NDC may be deemed to be misbranded. Additionally, new § 207.37 is not addressed only to “manufacturers, repackers, and relabelers.” Persons who are not subject to part 207 are cautioned against concluding that the restrictions stated in § 207.37 do not apply to them. Improper use of an NDC, as described in § 207.37, may result in a misbranding charge under the FD&C Act, whether or not the responsible party is generally subject to part 207.
(Comment 58) One comment agreed that NDCs should not appear in the labeling of dietary supplements, foods, and medical devices, but encouraged FDA to exercise enforcement discretion in this area. Other comments urged FDA to permit the use of NDCs on medical devices and medical foods. Others asked FDA to implement an alternative identification system for medical devices before finalizing this rule.
(Response) Section 207.37 of this final rule states that a product may be deemed to be misbranded if an NDC is used on the product but it is not subject to part 207. Since publication of the proposed rule, FDA has issued a final rule requiring UDIs on medical devices (78 FR 58786, September 24, 2013). Section 801.57 of that rule (21 CFR 801.57) generally prohibits the use of an NDC on the label of a medical device after the date on which it must bear a UDI.
The use of an NDC on the label of a product that is not regulated as a drug may confuse and mislead consumers and health care providers into believing FDA regulates the product as a drug. Any enforcement actions in this area will be subject to a determination that a product violates § 801.57 or is misbranded, or otherwise violates the FD&C Act.
(Comment 59) One comment argued against the proposed rule's prohibition against the use of NDCs on non-drug products and asked, if this prohibition is retained in the final rule, how long manufacturers of such products would have to remove NDCs from their labels.
(Response) Please see our response to comment 58 regarding the nature of § 207.37, specifically our clarification that the use of NDCs in the labeling of non-drug products may be handled as misbranding violations or as violations of § 801.57 as appropriate. See FDA's Unique Device Identifier rule (78 FR 58786) and any guidance FDA may issue regarding the compliance deadline for § 801.57. When an NDC in the labeling of a non-drug product creates the misleading impression that FDA regulates the product as a drug, that product may be subject to enforcement action.
Proposed § 207.41 specified who must list drugs, and the provision is retained in this final rule. Section 207.41(c) now includes more detail about the manner in which drugs manufactured for private label distribution are listed.
(Comment 60) Some comments urged FDA to allow private label distributors to list drugs that are distributed under their names.
(Response) Please see our response to comment 16 regarding the definitions of “private label distributor” and “private label distribution” in § 207.1 for a discussion of the responsibilities of private label distributors in this final rule. Private label distributors are not obligated—by their status as private label distributors—to register an establishment or list drugs. They may, however, submit drug listing information or establishment registration information if acting as the authorized agent of a registrant on whose behalf the information is submitted.
Proposed § 207.45 described an establishment's drug listing obligation at the time of initial registration. It stated that an establishment must, at the time of initial registration, list any drug then being manufactured, repacked, relabeled, or salvaged for commercial distribution at the establishment. Section 207.45 is revised in this final rule to state that such drugs must be listed no later than 3 calendar days after initial registration of the establishment.
(Comment 61) One comment encouraged FDA to provide flexibility in the timing of new drug listing submissions. The comment stated that it supported the current requirement of 5 calendar days from the start of manufacturing.
(Response) Several provisions of this final rule relate to the time periods within which establishment registrations, drug listings, and drug listing updates must be submitted. Section 207.21 states that domestic establishments must register for the first time no later than 5 calendar days after beginning to manufacture, repack, relabel, or salvage a drug or an animal feed bearing or containing a new animal drug (whether or not commercially distributed). This 5-day window for initial establishment registration starts at the beginning of manufacture, not the beginning of commercial distribution. Section 207.45 states that each drug being manufactured, repacked, relabeled, or salvaged
FDA recognizes that because it has made findings that nondisclosure of most drug listing information would be inconsistent with the protection of the public health (see § 207.81), registrants may be reluctant to list drugs that have not yet been commercially launched. FDA intends to interpret the timing requirements in a way that accommodates this concern. FDA also encourages and expects registrants to list drugs promptly upon commercial launch (following § 207.45 or § 207.57 as appropriate), recognizing that manufacturers have an incentive to list drugs promptly and have their proposed NDCs assigned by FDA. After a drug is listed, it should appear in our public NDC database within approximately 1 business day and in our internal database almost immediately.
Proposed § 207.49 identified the information that a registrant must provide with a drug listing submission for a drug it manufactures. Section 207.49 is retained and reorganized in this final rule. Some information included in proposed § 207.33(c) (what information must a manufacturer submit before we will assign an NDC number to a drug?) has been incorporated into new § 207.49 as drug listing information because it is not necessary under this final rule for manufacturers to request an NDC from FDA.
(Comment 62) One comment noted that an approved U.S. application
(Response) Section 207.49(a)(7) of this final rule requires registrants to provide the approved U.S. application number with listing information for a drug if one exists. Thus, § 207.49 requires that an approved U.S. application number be provided with drug listing information only if it exists. Unapproved drugs can and must be listed without an application number.
Drugs that are the subject of an application need not be listed until they are manufactured for commercial distribution. Registrants who are awaiting approval of an application may voluntarily reserve an NDC for the drug that is the subject of the application prior to its approval under new § 207.33(d)(3). These registrants are also permitted, but not required, to list a drug before it is marketed, while providing a future start marketing date.
(Comment 63) Many comments opposed the submission of production volume information with drug listing information.
(Response) In the preamble to the proposed rule, FDA stated that it was considering whether to require establishments to provide the number of batches and batch size for each drug subject to the listing requirement that they manufactured, repacked, or relabeled since the establishment last provided listing information (71 FR 51276 at 51312). We have decided not to include such a requirement in this final rule.
(Comment 64) One comment urged FDA to eliminate the requirement that registrants submit representative samples of any other labeling for OTC drug products.
(Response) Section 207.49(a)(14)(ii)(b) of this final rule requires that for each human nonprescription drug not subject to section 505 of the FD&C Act or section 351 of the PHS Act (
(Comment 65) One comment questioned the proposed requirement that the “drug facts” labeling for OTC drug products be included in drug listing information, arguing that required labeling for OTC products is set forth in OTC monographs and in FDA's regulations in § 201.66.
(Response) We disagree with this comment. Section 207.49(a)(14)(ii)(B) of this final rule requires that labeling submitted with drug listing information for human nonprescription drugs not subject to section 505 of the FD&C Act or section 351 of the PHS Act include the “content of labeling.” This term is defined in § 207.1(b) to include, for these drugs, the drug facts labeling required by § 201.66. The submission of drug listing information is the only mechanism by which FDA has quick access to the labeling that is currently in use for marketed OTC drug products. Furthermore, section 510(j)(1)(B)(ii) of the FD&C Act requires that the label, package insert, and a representative sampling of any other labeling be provided with listing information for all such drugs, thus encompassing the drug facts labeling.
(Comment 66) One comment urged FDA to require that drug listing information for human OTC drugs include the current product label, but not other labeling. This comment also urged FDA to accept such labels in portable document format (PDF) files rather than structured product labeling (SPL).
(Response) As explained in response to Comments 64 and 65, the FD&C Act requires that drug listing information for OTC human drugs not subject to section 505 of the FD&C Act or section 351 of the PHS Act include the label, package insert, and a representative sampling of “any other labeling.” Therefore, this comment's recommendation that only the current product label (
This final rule does not specify a file format for the submission of drug listing information, but it does require electronic submission in a format FDA can “process, review, and archive.” (See § 207.61(a) of this final rule.) As explained in our electronic registration and listing guidance, to facilitate the submission of drug establishment registration and drug listing information (including the content of labeling), FDA has adopted the use of extensible markup language (XML) files in a standard SPL format. The automated submission process functions most efficiently and effectively when this information is provided in a standardized format with defined code sets and codes. Information in a properly created and complete SPL file can facilitate processing and allows for greater precision and accuracy through the use of coded data fields rather than merely electronic text. For these reasons, we will continue to expect drug listing information in SPL format.
In the case of unfinished drugs, § 207.49(a)(15)(iv) requires submission of the label (if any) but does not require registrants to submit the content of labeling. Because FDA does not currently electronically process the labels submitted for unfinished drugs, we have accepted and will continue to accept electronic submission unfinished drug labels in JPEG (Joint Photographic Experts Group) file format.
(Comment 67) One comment questioned the proposed requirement that drug listing information include the name of each inactive ingredient in a listed drug. Another comment argued that drug listing submissions for animal drug products in particular should not be required to identify inactive ingredients.
(Response) This requirement is retained in the final rule, specifically in new § 207.49(a)(5), applicable to both human and animal drugs. FDA finds it important to maintain up-to-date inactive ingredient information for all marketed drug products. This allows FDA, for example, to determine the extent to which a particular inactive ingredient is currently in use and identify drug products that contain it. FDA does not have access to this information in the form of a searchable database outside of our drug registration and listing information.
(Comment 68) We received several comments pertaining to the drug listing obligations of contract manufacturers, contract packagers, and contract laboratories. One requested clarification regarding the manner in which a contract manufacturer or packager would submit listing information for an investigational drug manufactured or packaged for use in a clinical trial.
(Response) Contract manufacturers, packagers, and laboratories—unless they are exempt under section 510(g) of the FD&C Act or § 207.13—will generally qualify as manufacturers under this final rule and will be required to register their establishments. Under § 207.41 of this final rule, registrants must list drugs they manufacture, repack, relabel or salvage
(Comment 69) Another comment asked how a contract manufacturer or
(Response) This comment relates to a wide variety of situations. We recognize that contractors play an important role in drug manufacture. Some perform specialized operations for another manufacturer (
If a contract manufacturer is performing one or more steps in a larger manufacturing operation, it may be shipping an unfinished drug to another contracting party. In that case, the contract manufacturer would submit listing information under § 207.49 for the unfinished drug it distributes commercially,
If a contractor is performing all steps or just the final steps in a drug manufacturing process, the contractor should describe the finished drug product in its listing submission. In some cases, a contract manufacturer may be responsible for formulating the product and developing its labeling. This might be true in the case of an OTC store brand, private label distribution product, for example. In that situation, the contracting parties would likely agree that the contract manufacturer is in the best position to submit drug listing information and updates (as it is required to do under this final rule), and this would include the submission of any labeling changes with twice annual listing updates. In other cases, a contractor might play a much smaller role. It might only place a product manufactured and developed by someone else into its final packaging. In that case, the contractor would be required by this final rule to submit listing information pertaining to the finished drug product, including the twice annual updates. The contractor might satisfy this obligation by consulting with the drug's developer about any changes in drug listing information or by letting the drug's developer act as its authorized agent for the submission of drug listing information and updates. At all times, however, the actual manufacturer of a drug (or repacker, relabeler, or salvager) is legally responsible for ensuring that the requirements of this final rule are satisfied.
(Comment 70) One comment stated that “the proposed requirement for finished product contract testing laboratories to list all of the products they test should be eliminated.” The comment pointed out that testing laboratories only handle representative samples of products that do not enter the supply chain.
(Response) This comment addresses an issue that arises under the FD&C Act and the drug registration and listing regulations as they have long existed. (See the definition of “manufacturing or processing” that has existed in § 207.3 prior to this final rule.) Testing laboratories, whether they test finished drug products or in-process materials, may have important roles in drug manufacturing and are appropriately treated as manufacturers under part 207 if they engage in testing or control procedures necessary for manufacture under current good manufacturing practices. Any testing laboratory that qualifies as a “manufacturer” under this final rule must register its establishment(s) where drugs are tested. The listing obligation, however, applies only to drugs that a registrant places into commercial distribution. Therefore, if a laboratory tests in-process materials or finished product and then commercially distributes the tested product,
(Comment 71) One comment expressed concern that importers would have to identify manufacturers for their drug components and provide a chain of custody description for each handler from manufacturer to importer.
(Response) This comment reflects a misunderstanding of a statement in the proposed rule describing section 801(d)(3) of the FD&C Act. To clarify, § 207.49(a)(12) of this final rule requires a registrant listing a drug it manufacturers to provide: (1) The name and UFI of the establishment where the registrant manufactures the drug and (2) the name and UFI of every other establishment where manufacturing is performed for the drug. With respect to this second category of information, if the registrant provides a properly assigned and listed NDC for unfinished drug(s) it uses to produce the listed drug (sometimes referred to as “immediate source NDCs”), the registrant does not need to provide names and UFIs of the upstream establishments.
(Comment 72) One comment asked FDA to clarify a statement in the preamble of the proposed rule regarding certificates of analysis for imported articles.
(Response) This comment reflects a misunderstanding of the proposed rule. The passage it refers to quotes section 801(d)(3) of the FD&C Act (71 FR 51276 at 51284). Section 801(d)(3) of the FD&C Act applies only to certain imported products, and this final rule does not implement it.
Proposed § 207.53 identified the information that a registrant must provide with a listing submission for a drug it repacks or relabels. Section 207.53 is retained and reorganized in this final rule. Some information included in proposed § 207.33(d) (What information must a repacker or relabeler submit before we will assign an NDC number to a drug?) has been incorporated into new § 207.53 as drug listing information because it is not necessary under this final rule for manufacturers to request an NDC from FDA.
(Comment 73) A comment from the medical gas industry expressed concern about the proposed rule's requirement that repackers identify, in drug listing information, the NDC associated with a drug immediately before it is received by the repacker for repackaging. This comment argued that the complexity of medical gas distribution makes this requirement difficult to satisfy.
(Response) We agree that medical gas repackers would need to significantly change the way they currently do business to identify immediate source NDCs as specified in the proposed rule. In response to this comment, we have included an exception in § 207.53 of
Proposed § 207.57 described the requirements for reviewing and updating drug listing information. The provision is retained in this final rule with editorial revisions intended to improve clarity. Additionally, the section now says registrants are encouraged to submit listing updates at the time of any change affecting previously submitted information. We have also deleted a reference to § 207.55. Under § 207.55, FDA may ask a registrant to explain the basis for its belief that a drug is not subject to approval. We do not expect registrants to routinely update information provided to us under § 207.55.
(Comment 74) Some comments opposed the requirement that to satisfy the June and December listing update obligation, registrants must certify that no changes have occurred if no changes have occurred since the last review and update of listing information.
(Response) The preamble to the proposed rule specifically requested comments regarding the burden that may result from the no changes certification requirement in the context of drug listing updates (71 FR 51276 at 51314). We have retained in this final rule the requirement in § 207.57(b) that registrants update their submitted drug listing information each June and December. The review and updating of drug listing information is critical to the integrity of FDA's database. We recognize, however, that requiring registrants to submit a twice-annual “no changes” certification, on a product-by-product basis, for each of their listings would impose a substantial burden on registrants, particularly those that maintain hundreds or thousands of drug listings. Therefore, § 207.57 of this final rule requires registrants to report changes to drug listing information either at the time of any change affecting information previously reported or during the next June or December listing update following the change. At the time of the annual registration update under § 207.29(b), a registrant may submit a blanket “no changes” certification covering all of its listed drug products for which no changes affecting previously reported listing information were made since the last annual registration update or listing submission. This blanket, “no changes” certification applies only to drug listing information that has been submitted electronically, as it would be too burdensome for FDA to maintain certifications for information that has not been submitted electronically. Therefore, it cannot be used to report that drug listing information submitted on paper in the past remains current. This limitation is intended to ease FDA's administrative burden and allow FDA to consider drug listing information to be fully migrated from paper submissions to our electronic drug registration and listing system.
Please see our response to Comment 30, which addresses this issue in the context of establishment registration updates.
(Comment 75) One comment stated that the obligation to provide updates on individual drug listings within 30 days will demand a great deal of resources from manufacturers.
(Response) This comment did not cite the specific provision of the proposed rule at issue. The preamble to the proposed rule acknowledged that proposed § 207.57(b) would require that drug listing information be reviewed and updated only every June and December, but also stated that FDA would request updates to listing information within 30 calendar days of a change, to maintain the accuracy of our drug listing database (71 FR 51276 at 51314). Under § 207.57 of this final rule, registrants are encouraged to submit updated drug listing information at the time of any change affecting information previously submitted, but they are required to submit such information only every June and December.
(Comment 76) Two comments asked FDA to clarify whether a registrant may report all changes to drug listing information when they occur,
(Response) Under § 207.57 of this final rule, registrants must review and update their drug listing information each June and December. This is a requirement of section 510(j)(2) of the FD&C Act. Registrants are additionally encouraged, but not required, to update drug listing information at the time when changes are made to previously reported information. These updates do not, however, take the place of the June and December updates, which may be satisfied by a no changes certification if no changes have occurred since the last review and update. We will read “since the last review and update” in § 207.57(b)(2) as referring to the registrant's most recent listing update for a given drug, whether submitted in June, December, or at any other time.
(Comment 77) One comment encouraged FDA to codify a registrant's ability to submit updated listing information at the time a change is made, rather than waiting for the next June or December review and update. This comment referred to a statement in the preamble to the proposed rule stating that registrants are requested to submit listing information within 30 days of a change.
(Response) We agree with this comment and have revised § 207.57 accordingly. New § 207.57 states that registrants are encouraged to submit listing updates at the time of any change affecting information previously submitted. This provision of the final rule does not refer to a 30-day window for such listing updates. We intend to read “at the time of any change” flexibly, encouraging registrants to submit listing updates as soon as possible, but allowing such updates at any time before they are due at the next June or December review and update.
(Comment 78) One comment expressed concern regarding the manner in which a drug's discontinuation is to be reported under § 207.57. This comment noted that historically, many registrants have waited to report that a drug has been discontinued until they no longer have to report the drug under applicable agreements with the Centers for Medicare and Medicaid Services. According to this comment, if an NDC is identified as discontinued while the drug is still in distribution up until expiration, there may be problems related to reimbursement and other matters.
(Response) The FD&C Act and § 207.57 of this final rule require listing updates, including information that a drug has been discontinued, at the latest, at the time of the next June or December review and update following the discontinuation. In the case of drugs that are subject to part 314, § 314.81(b)(3)(iv) also requires that their withdrawal from sale be reported to FDA. The reporting deadline under § 314.81(b)(3)(iv) is within 15 working days of the withdrawal from sale before the effective date of this final rule and within 30 calendar days of the withdrawal from sale after the effective date of this final rule. It is important that FDA receive this information soon after discontinuation for the integrity of our database.
In this final rule, as in the proposed rule, § 207.57 requires registrants, when reporting that a listed drug has been discontinued, to provide the expiration
Please note that, in addition to the requirements just discussed, section 506C of the FD&C Act, as amended by FDASIA, requires manufacturers of certain drugs that are life-supporting, life-sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, to notify FDA of a permanent discontinuance or certain interruptions in manufacture at least 6 months prior to the date of discontinuance or interruption or as soon as practicable if 6-month's prior notice is not possible.
(Comment 79) Two comments opposed the requirement in § 207.57 that registrants provide, for a discontinued drug, the expiration date of the last lot manufactured, repacked, relabeled, or salvaged, arguing that the expiration date of the last lot provides no assurance that the drug product will be available to consumers until that date is reached.
(Response) As explained in response to Comment 78, our use of the expiration date of the last lot as an “end marketing date” facilitates reimbursement while remaining stock of a discontinued drug works its way through distribution.
(Comment 80) Two comments requested clarification regarding how the inclusion of an approved application number in a drug listing submission can take the place of the content of labeling in SPL format, specifically how updated labeling would be provided at the time of a listing update if only the application number is referenced.
(Response) The proposed rule indicated that if “a manufacturer provides a drug's approved U.S. application number as part of a drug's listing information, the labeling required under proposed § 207.49(g)(1) and . . . 207.49(g)(2) would be deemed to accompany the listing information” (71 FR 51276 at 51309). This was written prior to FDA's adoption of SPL as the submission standard and is not an accurate reflection of how the process operates today. However, FDA has considered how our electronic system can avoid unnecessary duplication of effort between the submission of labeling updates to applications and the submission of drug listing information.
Under this final rule, a drug listing submission, whether it includes an approved application number or not, must include content of labeling as specified in § 207.49. An advantage of the SPL format is that it allows the holder of a newly approved application to submit the content of labeling once, satisfying its obligations under parts 314 and 207 in a single submission. Upon initial approval, an applicant is required to submit a copy of final approved labeling. An electronic drug listing submission that includes the content of labeling in SPL format can satisfy this obligation. Even if the drug product is not yet ready for commercial distribution upon approval, SPL allows for a future start marketing date in the listing information so that a second submission is not necessary when the product is commercially launched.
As discussed in response to Comment 15, most drug labeling changes necessitate a listing update under § 207.57 of this final rule. Registrants who submit drug listing information through FDA's CDER Direct electronic submission portal (as well as those using some commercial software) will be able to recall a previous submission, including the content of labeling, and make appropriate changes when a listing update is due. But reference to an application number alone will not satisfy the requirement that updated content of labeling be submitted under § 207.57 in this final rule.
Proposed § 207.61 stated that establishment registration and listing information must be submitted to FDA electronically. As proposed, § 207.61 would have allowed advertisements and some labeling to be submitted to FDA either in paper or electronic format. In this final rule, § 207.61 is revised for clarity. Additionally, the final version of § 207.61 requires electronic submission of all establishment registration and listing information, consistent with FDAAA (no longer allowing for the submission of advertising on paper), unless a waiver is granted, and states that FDA may issue guidance from time to time on how to provide information in electronic format. Because the SPL format currently used for electronic submission of registration and listing information does not accommodate the submission of drug advertising, taking into account various types of advertising media currently in use, FDA is not currently collecting advertisements as part of drug listing information. If this technical limitation is resolved, we will explain in future guidance how and what registrants should transmit electronically as a representative sampling of advertisements. In the meantime, we may ask individual registrants to submit a representative sampling of advertisements for specific prescription human drug products not subject to section 505 of the FD&C Act, relying on our authority under section 510(j)(1)(B)(i) of the FD&C Act and § 207.49(a)(14) of this final rule.
The final version of § 207.61 also clarifies that, while drug registration and listing information must generally be submitted in the English language, in some cases the content of labeling may be submitted in a foreign language along with an accurate English translation.
(Comment 81) One comment stated that information should be included in the final rule to address whether FDA intends to develop a separate database for animal health products or incorporate animal drugs into the proposed electronic drug registration and listing database. The comment recommended that if a separate database is planned, information on whether the same data elements will be required to obtain an NDC number and list products would be helpful.
(Response) At issue in this rulemaking are changes to FDA's regulations governing drug establishment registration and listing,
(Comment 82) One comment noted that at the time of the proposed rule and the comment period, FDA's electronic drug registration and listing system had yet to be developed. Accordingly, stakeholders were unable to comment on an electronic system that had yet to be developed.
(Response) We understand stakeholder interest in the development of our electronic system for drug registration and listing. As noted in response to Comment 81, however, the amended regulations adopted in this rulemaking do not describe the electronic drug registration and listing systems developed by FDA. They generally describe information that must be submitted to FDA, and they require that it be submitted electronically. Therefore, the proposed rule did not solicit comments on the electronic drug
After the proposed rule was published, Congress amended the FD&C Act to require electronic submission of drug establishment registration and listing information. To implement this statutory change, FDA published draft guidance in 2008 and final guidance in 2009 concerning electronic submission of drug establishment registration and listing information. Stakeholders had an opportunity to comment on the electronic system described in our draft guidance and, as with all FDA guidance, have an ongoing opportunity to comment at any time.
FDA currently accepts drug establishment registration and drug listing information submitted electronically. We expect registrants to find electronic submission less burdensome than the use of paper forms, and we accept comments and suggestions from stakeholders regarding improvements to our electronic submission systems.
(Comment 83) One comment recommended that to facilitate the annual review and updating of both establishment registration and drug listing information, FDA provide registrants with a report of their current registration and listing information.
(Response) This comment does not relate to language that would be included in the codified portion of this final rule, but it does raise an important issue we would like to address. At all times, registrants are responsible for keeping track of registration and listing information they have submitted to FDA and should ensure the information is securely stored and can be retrieved.
Registrants who use an agent to submit establishment registration and drug listing information to FDA are encouraged to maintain their own records of the submitted information or obtain assurances that the agent will do so and will make the information available to the registrant on request, including if their business relationship is terminated.
FDA currently maintains publicly searchable databases that can be used to confirm an establishment is registered. Information about registered blood establishments is available through FDA's electronic Blood Establishment Registration (eBER) public query application. Information about registered HCT/P establishments is available through the Human Cell and Tissue Establishment Registration (HCTERS) public query application. Information about registered drug establishments can be obtained through FDA's Drug Establishments Current Registration Site (DECRS). Additionally, FDA's NDC Directory currently includes listed finished drug products, but not unfinished drug products. It may be expanded in the future to include all listed drugs. Registrants can check these sources and may also request a report of their own registration and listing information from CDER's Drug Registration and Listing staff.
(Comment 84) Comments noted that changes to part 11 (21 CFR part 11) are being considered by the Agency and recommended that electronic submission of drug registration and listing information be delayed or exempt from compliance with part 11 until these changes have been decided.
(Response) Because of changes to section 510(p) of the FD&C Act adopted in FDAAA, registration and listing information is currently submitted electronically. Exceptions from the electronic submission requirement will be handled in accordance with the waiver provisions in this final rule (§§ 207.65, 607.22, and 1271.23).
Part 11 sets forth criteria under which FDA considers electronic records and signatures to be trustworthy and reliable. Part 11 applies to electronic records that are created, modified, maintained, archived, retrieved, or transmitted under statutory and regulatory requirements. In 2003, FDA published guidance for industry titled “Part 11, Electronic Records; Electronic Signatures—Scope and Application” (2003 Part 11 Guidance, available on the Internet at
Against this backdrop, the proposed rule included a discussion of how FDA intended to apply part 11 to electronic drug registration and listing. (See 71 FR 51276 at 51317.) Proposed §§ 207.61, 607.22, and 1271.22 specified that certain requirements of part 11 would not apply to information submitted to FDA under parts 207, 607, and 1271. In § 207.61 of this final rule, the applicability of part 11 is stated as follows: The submission of advertisements and labeling is exempt from the requirements of § 11.10(a), (c) through (h), and (k) and the corresponding requirements of § 11.30. Other information submitted under part 207, as well as information submitted under parts 607 and 1271, is exempt from the requirements of § 11.10(b), (c), and (e) and the corresponding requirements of § 11.30. These statements in the codified portion of this final rule are intended to be read together with any current FDA guidance concerning our enforcement of part 11. For example, FDA's 2003 Part 11 Guidance states that we do not intend to take action to enforce compliance with the validation and audit trail requirements of part 11. This includes requirements described in § 11.10(a) and (e). Until our 2003 Part 11 Guidance is withdrawn or modified, these statements regarding enforcement discretion remain current. Therefore, any person submitting information electronically to FDA under this final rule may rely on the exemptions from part 11 written into parts 207, 607, and 1271, in addition to statements regarding part 11 enforcement discretion in current FDA guidance.
(Comment 85) One comment noted that a citizen petition is currently pending before FDA requesting that part 11 be revoked in its entirety (Docket No. FDA-2004-P-0036, formerly Docket No. 2004P-0429/CP1). This comment asked FDA to respond to the citizen petition before it completes this rulemaking.
(Response) The referenced citizen petition remains under review, and the part 11 regulations are currently being implemented as explained in FDA's 2003 Part 11 Guidance. FDA's publication of this final rule should not be interpreted as providing any indication of the manner in which the citizen petition will be resolved.
Section 207.81 of the proposed rule identified establishment registration and listing information that will be available or not available for public disclosure after it is submitted to FDA. Section 510(f) of the FD&C Act states that establishment registration information is available for inspection and drug listing information is generally not available for inspection unless the Secretary (by delegation FDA) finds that an exemption from disclosure would be inconsistent with protection of the public health. Consistent with this statutory provision, proposed § 207.81 stated that establishment registration information would be generally available for disclosure and that most, but not all, drug listing information would be available for disclosure, as its nondisclosure would be inconsistent with protection of the public health. Generally categorized as not available for disclosure in the proposed rule was information obtained under:
• Proposed § 207.33(d)(1)(ii)—Source NDCs for repacked or relabeled drugs submitted in the context of an NDC request for such drugs,
• Proposed § 207.54(b)(1)—Source NDCs for salvaged drugs, and
• Information submitted as the basis upon which it has been determined that a particular drug product is not subject to section 505 or 512 of the FD&C Act, the premarket approval requirement for new drugs and new animal drugs.
In this final rule, § 207.81 has been revised in several ways. The section has been reorganized so that registration and listing information that will be available for public disclosure is identified in paragraph (a), and exceptions are identified in paragraphs (b) and (c). Cited section numbers have been revised, consistent with the renumbering of sections in this final rule (and the shifting of some information required in the proposed rule as supporting an NDC request to information required in the final rule as drug listing information). Substantively, § 207.81 of this final rule identifies an expanded set of information obtained under the following sections as information that will not be available for public disclosure:
• § 207.53(b)—Immediate source NDCs for repacked or relabeled drugs;
• § 207.54(a)—Immediate source NDCs for salvaged drugs;
• § 207.54(c)—The name or UFI of an establishment where a specific drug is salvaged;
• § 207.55—Information submitted as the basis upon which it has been determined that a particular drug is not subject to section 505 or 512 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act;
• § 207.33(d)(3)—Information submitted to reserve an NDC;
• § 207.49(a)(9)—For unfinished drugs, the number assigned to the Drug Master File or Veterinary Master File, if any;
• § 207.49(a)(12)—The names and UFIs of establishments where manufacturing is performed for listed drugs and/or immediate source NDCs;
• § 207.53(c)—The names and UFIs of establishments where repacking or relabeling is performed for listed drugs; and
• § 207.49(a)(5)—The names of any inactive ingredients submitted with drug listing information for which the registrant makes a valid assertion of confidentiality.
In this final rule, establishment registration information will be available for disclosure, consistent with section 510(f) of the FD&C Act, except in limited circumstances as described in § 207.81(c). FDA has found that nondisclosure of most drug listing information for marketed drugs would be inconsistent with the protection of the public health. In most cases, drug listing information is obvious or is disclosed elsewhere (
• Information obtained under § 207.33 will be available for public disclosure, but only after a drug is marketed. This information that will be available for public disclosure includes information a registrant or private label distributor submits or updates under § 207.33(c) to obtain an NDC labeler code but does not include information submitted under § 207.33(d)(3) to reserve an NDC. Information submitted under § 207.33(c) to obtain a labeler code (and updates to the information) includes basic contact information for the registrant or private label distributor to whom the labeler code is assigned, the types of activities (
• Most information obtained under § 207.49 (listing information a registrant must submit for a drug it manufactures) will be available for public disclosure after a drug is marketed. This information includes the drug's NDC; its established and proprietary name; the name and quantity of each active pharmaceutical ingredient in the drug; the name of each inactive ingredient (unless a valid assertion of confidentiality is made); the dosage form; the drug's approved U.S. application number if any; the drug type (finished vs. unfinished, human vs. animal, prescription vs. nonprescription); for drugs subject to the imprinting requirements of 21 CFR part 206, the drug's size, shape, color, scoring, and code imprint (if any); the route or routes of administration of the drug; the schedule of the drug under the Controlled Substances Act; advertisements; labeling; contact information for private label distributors; OTC monograph references if any; and the date on which a drug was introduced into commercial distribution. FDA makes the finding referred to in section 510(f) of the FD&C Act that nondisclosure of the foregoing information, in the case of marketed drugs, would be inconsistent with protection of the public health. The drug information described in §§ 207.49(a)(1), (3), (10), (15), and 207.49(b)(1) and (2) will enable individuals with concerns about counterfeiting to compare information about a product in their possession with information provided to FDA. The ingredient information described in §§ 207.49(a)(4) and (5) will in some cases allow individuals to verify ingredient information provided in labeling against FDA's records. The information described in §§ 207.49(a)(6), (8), and (11) relates to proper physical form and use of a drug. The application number described in § 207.49(a)(7) allows individuals to access disclosable FDA records about a drug's approval. Whether and how a drug is scheduled under the Controlled Substances Act (§ 207.49(a)(13)) relates to safe use of the drug. The advertisements and labeling described in §§ 207.49(a)(14) and (15) may include information individuals have not seen elsewhere describing the risks and benefits of a drug. Furthermore, FDA's disclosure of labeling information obtained under § 207.49(a)(15) will allow for the availability of current drug labeling information through DailyMed, a computerized repository of drug information maintained by the National Library of Medicine. The contact information described in § 207.49(a)(16)(ii) may provide additional contact information for an
• Most information obtained under § 207.53 (listing information a registrant must submit for a drug that it repacks or relabels) will be available for public disclosure after a drug is marketed. This information includes the repacked or relabeled drug's NDC, labeling, advertisements, and contact information for private label distributors. FDA makes the finding referred to in section 510(f) of the FD&C Act that nondisclosure of the foregoing information, in the case of marketed drugs, would be inconsistent with protection of the public health. The NDC described in § 207.53(a) helps identify who repacked or relabeled a drug. Labeling and advertising information described in §§ 207.53(d) and 207.53(e) may include information individuals have not seen elsewhere describing the risks and benefits of a drug. Furthermore, FDA's disclosure of labeling information obtained under § 207.53(d) will allow for the availability of current drug labeling information through DailyMed, a computerized repository of drug information maintained by the National Library of Medicine. The contact information for private label distributors described in § 207.53(f)(2) may provide additional contact information for an individual's reference. All of this information is largely available to the public, but centralizing it will promote the free flow of information. Note that two types of information obtained under § 207.53 are not available for disclosure: (1) The NDC assigned to a finished drug received by a registrant for repacking or relabeling and (2) the name and UFI of establishments where repacking or relabeling is performed.
• Some information obtained under § 207.54 (listing information a registrant must submit for a drug it salvages) will be available for public disclosure after a drug is marketed. This information includes the salvaged drug's lot number and expiration date. FDA makes the finding referred to in section 510(f) of the FD&C Act that nondisclosure of the foregoing information, in the case of marketed drugs, would be inconsistent with protection of the public health. Disclosure of the lot number and expiration date information described in § 207.54(b) may help address any concerns about a salvaged product's quality, potency, and shelf life.
• Most information obtained under § 207.57 (information registrants must submit when updating listing information) will be available for public disclosure. In most cases, information submitted under § 207.57 updates information previously submitted under §§ 207.49, 207.53, or 207.54. The same disclosure rules will apply whether information is submitted in an original drug listing submission or in an updated listing. Our findings under section 510(f) of the FD&C Act, described previously, that nondisclosure of certain listing information obtained under §§ 207.49, 207.53, and 207.54 would be inconsistent with protection of the public health apply whether the information is obtained in an original listing submission or an updated listing submission. Accordingly, the reasons supporting this finding discussed previously apply to updates submitted under § 207.57. Some information obtained under § 207.57 will not have been received previously under §§ 207.49, 207.53, or 207.54. This information includes: (1) The date a registrant discontinues the manufacture, repacking, relabeling, or salvaging for commercial distribution of a listed drug and the expiration date of the last lot manufactured, repacked, relabeled, or salvaged, (2) the date a registrant resumes the manufacture, repacking, or relabeling, for commercial distribution or a drug previously discontinued, and (3) certifications that no changes have occurred since the last listing review and update. FDA makes the finding referred to in section 510(f) of the FD&C Act that nondisclosure of the foregoing information, in the case of marketed or discontinued drugs, would be inconsistent with protection of the public health. The date a business discontinues or resumes manufacturing a drug, submitted under § 207.57(b)(1)(ii) or (iii), may help address concerns some individuals may have about whether a drug in their possession is counterfeit. The certification that no changes have occurred described in § 207.57(b)(2) will inform individuals that drug listing information previously submitted to FDA is up to date as of the no changes certification date.
(Comment 86) One comment requested that FDA not disclose the names of inactive ingredients in animal drugs submitted with drug listing information. This comment stated that inactive ingredients in animal drugs are generally not listed on labels. Another comment urged FDA not to place the burden on registrants to proactively request that the names of inactive ingredients in human drugs be treated as trade secrets.
(Response) The proposed rule included a discussion about disclosure of inactive ingredients reported in drug listing submissions and stated that FDA will disclose this information unless it is subject to trade secret protection. See 71 FR 51276 at 51321. In this final rule, we are codifying that approach by making it clear in § 207.81 that we will not disclose the names of any inactive ingredients submitted with drug listing information for which the registrant makes a valid assertion of confidentiality under § 20.61 or other applicable provision of law.
This approach will apply to both human and animal drugs in an ingredient-specific way. In other words, in the absence of a well-supported assertion of confidentiality for any given inactive ingredient reported under § 207.49, the name of that inactive ingredient will be available for public disclosure. The inactive ingredient composition of a drug product is of interest to consumers and in most cases is already disclosed on drug labels. We find that categorical nondisclosure of inactive ingredient information would be inconsistent with protection of the public health. It is therefore appropriate that FDA consider this information disclosable in the absence of a valid assertion of confidentiality that supports nondisclosure.
(Comment 87) One comment urged FDA not to disclose the relationship between customs brokers and their clients. This comment noted that the proposed rule would have required foreign establishments to identify in their establishment registrations each person who imports or offers for import their drugs into the United States. The proposed rule would have defined the term “person who imports or offers for import” broadly to include agents and brokers. As with establishment registration information generally, this information would have been available for disclosure under § 207.81 of the proposed rule.
(Response) As explained in our response to comment 11, in this final rule, we define the term “person who imports or offers for import” more narrowly than it was defined in the proposed rule. The new definition is not intended to include persons operating
(Comment 88) One comment asked FDA to clarify the confidentiality of information submitted to obtain an NDC. Several comments stated that disclosure of listing information is inappropriate for a yet-to-be approved product.
(Response) As discussed in response to comment 31, under this final rule, registrants will propose their own NDCs with drug listing submissions. It is not necessary under this final rule to request an NDC from FDA and support that request with the information specified in § 207.33(c) of the proposed rule. Some of the information specified in proposed § 207.33(c) (
Section 207.33(d)(3) of this final rule allows anyone with a labeler code to voluntarily reserve an NDC for a drug product under development before it is listed. Information submitted under § 207.33(d)(3) to reserve an NDC is identified in § 207.81(b)(3) as generally exempt from disclosure. Because information submitted to FDA under § 207.33(d)(3) will relate to drug products under development, this exemption from disclosure prior to marketing is not inconsistent with protection of the public health.
(Comment 89) Two comments stated that under the proposed rule, drug listing information would be exempt from public disclosure unless the Secretary deemed its release to be necessary. These comments asked FDA to clarify the circumstances under which disclosure of drug listing information would be considered necessary.
(Response) These comments reflect a misunderstanding of the proposed rule. In the proposed rule, § 207.81 stated unambiguously that “[a]fter a drug is listed, all information obtained for that drug under §§ 207.33, 207.49, 207.53, and 207.54,” except for stated exceptions, would be made available for public disclosure upon request or at FDA's discretion (71 FR 51276 at 51353). We have determined, under section 510(f) of the FD&C Act and as explained in the foregoing discussion, that most drug listing information relating to marketed products will be categorically presumed to be available for public disclosure because an exemption from disclosure would be inconsistent with protection of the public health. In the foregoing discussion, we have explained that § 207.81 of this final rule identifies a set of drug listing information that will generally not be available for public disclosure.
(Comment 90) One comment urged FDA not to disclose registration and listing information that reveals business relationships among trading partners, such as those between a drug's manufacturer and a private label distributor or between a manufacturer and a retail service repackager.
(Response) We have carefully considered this comment, along with section 510(f) of the FD&C Act and our longstanding rules and policies regarding disclosure of registration and listing information. As a statutory matter, establishment registration information is generally disclosable. (See section 510(f) of the FD&C Act.) Thus, information required for establishment registration under § 207.25 of this final rule is disclosable.
This final rule requires that foreign establishments report the name of each importer known to the establishment and the name of each person who imports or offers to import its drugs into the United States. This information is treated as establishment registration information under section 510(i) of the FD&C Act and under § 207.25 of this final rule, rather than as drug listing information. Because the information is establishment registration information, both the FD&C Act and this final rule require that it be available for public disclosure. FDA's intention to make this information available for disclosure was highlighted in the proposed rule (71 FR 51276 at 51321).
Drug listing information will not be available for public disclosure under this final rule unless its nondisclosure would be inconsistent with protection of the public health, as set forth in section 510(f) of the FD&C Act. Most drug listing information is obvious or is disclosed elsewhere such as in labeling (
(Comment 91) One comment urged FDA to treat all registration and listing information as categorically exempt from disclosure.
(Response) We decline to take this approach. As explained in the foregoing discussion, the disclosure provisions in this final rule are consistent with section 510(f) of the FD&C Act, notably its requirement that establishment registration information be made publicly available and that drug listing information be disclosed only to the extent that its nondisclosure would be inconsistent with protection of the public health.
The proposed rule included relatively minor amendments to part 1271 to require electronic submission of establishment registration and listing information for HCT/Ps. These amendments are retained in this final rule with some revisions. Under this final rule, manufacturers of HCT/Ps that are regulated solely under section 361 of the PHS Act are subject to establishment registration and listing under part 1271. Manufacturers of HCT/Ps that are regulated under section 351 of the PHS Act or as drugs under section 505 of the FD&C Act are subject to establishment registration and listing under part 207. (HCT/Ps that are regulated as medical devices under the FD&C Act are subject to establishment registration and listing under part 807.)
(Comment 92) One comment was concerned about the breadth of the definition of “importer” in proposed § 1271.3(mm). This comment noted that the proposed rule's definition of “importer” appeared to include domestic transplant centers (hospitals) housing patients awaiting hematopoietic stem cell (HSC) transplant and argued that requiring foreign establishments to identify such hospitals as “importers” would be unreasonably burdensome.
(Response) Please see our response to Comment 9 regarding the definition of “importer” in § 207.1. We agree with those comments that challenged the proposed definition as too broad, particularly as it would have captured downstream recipients of imported products. In parts 207, 607, and 1271,
This final rule is effective November 29, 2016.
The proposed rule included proposed compliance dates by which registrants and other affected persons would be required to comply with different aspects of a final rule. For example, we proposed that manufacturers, repackers, and relabelers be given 3 years from the effective date of a final rule to ensure that the appropriate NDC appear on their labels. Proposed compliance deadlines were set forth in the preamble to the proposed rule but were not reflected in proposed codified regulatory language. (See 71 FR 51276 at 51345.)
The compliance dates are adjusted in this final rule to account for changes we have made in the final rule and to account for our 2009 implementation of electronic registration and listing under part 207 in accordance with revisions to the FD&C Act. Compliance dates associated with this final rule are presented in table 2.
Registrants are encouraged to comply with this final rule as soon as possible after its effective date. In many cases, the final rule will not necessitate changes in a registrant's current registration and listing practices because electronic submission of registration and listing information already takes place, and the information currently collected generally comports with this final rule. We recognize, however, that this final rule introduces new requirements, and some registrants will need to adjust their registration and listing activities. Table 2 should be read as a statement that FDA intends to exercise enforcement discretion between the effective date of this final rule and the compliance deadlines set forth in the table with respect to changes introduced in this final rule. At all times, however, persons subject to registration and listing must fulfill their statutory obligations and the relevant regulatory provisions set forth in parts 207, 607, and 1271, either before or after the effective date of this final rule.
We have the legal authority to amend our regulations on foreign and domestic establishment registration and listing for human drugs, including drugs that are regulated under a BLA, and animal drugs. The statutory basis for our authority includes sections 201, 301, 501, 502, 503, 505, 506, 506A, 506B, 506C, 510, 512, 513-516, 518-520, 701, 704, 721, 801, and 903 of the FD&C Act (21 U.S.C. 321, 331, 351, 352, 353, 355, 356, 356a, 356b, 356c, 360, 360b, 360c-360f, 360h-360j, 371, 374, 379e, 381, and 393); 15 U.S.C. 1451-1561; sections 351 and 361 of the PHS Act (42 U.S.C. 262 and 264); and section 122, Pub. L. 105-115, 111 Stat. 2322 (21 U.S.C. 355 note).
Section 510(c) of the FD&C Act requires every person upon first engaging in the manufacture, preparation, propagation, compounding, or processing of a drug to immediately register with the Secretary his name, place of business, any such manufacturing establishments and their unique facility identifiers, and a point-of-contact email address. The provisions in section 510(b) and (d) of the FD&C Act require annual registration beginning on October 1 and ending on December 31 of each year and registration of additional establishments, respectively. Section 510(i) of the FD&C Act requires any establishment within any foreign country engaged in the manufacture, preparation, propagation, compounding, or processing of a drug that is imported or offered for import into the United States to register with the Secretary by providing certain information. These provisions, together with section 701(a) of the FD&C Act (among others), authorize us to require the submission of the registration information specified in the final rule. The information specified in this final rule will help us identify who is manufacturing, repacking, relabeling, or salvaging drugs and where those operations are being performed. In addition, some information (
Section 510(j)(1) of the FD&C Act requires every person who registers to file with the Secretary, at the time of registration, a list of all drugs that are being manufactured, prepared, propagated, compounded, or processed by the registrant for commercial distribution. That list must be prepared in the form and manner prescribed by the Secretary and must be accompanied by a copy of labeling (or the label and package insert) and, in some cases, advertising. Section 510(j)(2) of the FD&C Act requires listing information updates every June and December. This listing information gives us a current inventory of marketed drugs. These provisions of the FD&C Act and others, together with section 701(a) of the FD&C Act, provide authority for requiring the
Section 510(b) of the FD&C Act requires that information registrants supply for annual registration includes a UFI for the establishment and includes a point-of-contact email address. FDA published final guidance in November 2014 specifying that FDA's preferred UFI for drug establishment registration is the DUNS number, assigned and managed by Dun & Bradstreet.
Section 510(p) of the FD&C Act requires electronic submission of establishment registration and listing information, unless FDA waives the electronic submission requirement in individual cases. Establishments that manufacture HCT/Ps currently register and list HCT/Ps under FDA's regulations in part 1271. Pursuant to authority under section 361 of the PHS Act, FDA is requiring electronic submission of registration and listing information for HCT/Ps.
Section 510(j) requires biannual updates of certain listing information. Requiring certification under section 701(a) authority will help us with the efficient enforcement of the FD&C Act because we will be able to distinguish between situations where there has been noncompliance with registration and listing requirements from situations where there have been no changes in information. The failure to register or list under section 510 is a prohibited act under section 301(p) of the FD&C Act, and the failure to do either renders a drug misbranded under section 502(
We have determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct us to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). We have developed a comprehensive Economic Analysis of Impacts that assesses the impacts of the final rule. We believe that this final rule is not a significant regulatory action as defined by Executive Order 12866.
The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the final requirements will not impose a significant burden on a substantial number of small entities (annualized costs represent at most, 0.01 percent of sales for small firms, and 0.002 percent for large firms, on average), we certify that the final rule will not have a significant economic impact on a substantial number of small entities.
The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes an assessment of anticipated costs and benefits, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $146 million, using the most current (2015) Implicit Price Deflator for the Gross Domestic Product. This final rule will not result in an expenditure in any year that meets or exceeds this amount.
The full assessment of the economic analysis is available in Docket No. FDA-2005-N-0464 (Ref. 1) and at
The final rule clarifies and codifies the Congressionally mandated requirements in FDAAA and FDASIA, and adds a few additional requirements to the information needed to list products. The final rule will improve management of the establishment registration and drug listing requirements and make these processes more efficient and effective for industry and for FDA. Maintaining a comprehensive electronic registration and listing system supports implementation of the electronic prescribing provisions of the MMA. Because registrants submit electronic copies of the drug labeling with their drug listing, this rule also ensures the availability of current drug information through DailyMed, a computerized repository of drug labeling maintained by the National Library of Medicine. Establishment registration information helps FDA identify who is manufacturing, repacking, relabeling, and salvaging drugs and where those operations are performed. Quickly accessible electronic information about each establishment in the supply chain will help inform our enforcement efforts and improve our oversight of the entire drug supply chain. Product listing information also gives FDA a current inventory of drugs manufactured, repacked, relabeled, or salvaged for commercial distribution. Under current practices, registrants would only update listings when the listing information has changed. Consequently, some registrants have never submitted listings in an electronic format. By requiring electronic listings for all marketed drugs, the final rule will modernize our electronic systems and close an existing gap in data for drugs that are listed in our legacy system but not currently listed in our electronic system. Because the final rule primarily codifies current business practices, we anticipate that most of the benefits of a modern electronic drug registration and listing system were achieved as firms implemented electronic submissions in response to the FDAAA and FDASIA legislation. The incremental changes required by the final rule will yield benefits in addition to those already achieved. However, we lack sufficient information to quantify these marginal benefits.
Table 3 provides an itemized description of each incremental cost associated with registration and listing for part 207, part 607, and part 1271 registrants. For part 207 registrants, the final rule will require immediate source NDCs for unfinished drugs, listing missing inactive ingredients, and certification of no changes to their drug listings. Without the final rule, FDA faces an information gap because companies do not always notify the Agency when they stop marketing a product. For part 607 and part 1271 registrants, the requirements are quite slight for those that already submit registration and listing information electronically and minimal for the much smaller number of establishments that need to migrate their paper registration
Table 4 summarizes the total incremental costs; total annualized costs are $9.0 million when calculated at a 7-percent discount rate over 10 years, or $7.5 million when calculated using a 3-percent discount rate.
Most of the comments on the regulatory impact analysis of the proposed rule (PRIA) concerned the assignment of NDC numbers and the requirement that they be printed on container labels. Because these proposed changes are not included in the final rule, the comments are moot and are not discussed here. We also do not discuss the comments on the analysis of the proposed implementation of mandatory electronic registration and listing as this was mandated by FDAAA and largely implemented by guidance in 2009. Interested parties were able to comment on the burden estimates presented in the draft guidance entitled “Providing Regulatory Submissions in Electronic Format—Drug Establishment Registration and Drug Listing” when it was announced in the
(Comment 93) Some manufacturers believed the PRIA did not address the financial impact on their sector of the industry and disagreed with the Agency's assertion of no significant economic impact on a substantial number of small businesses. In particular, manufacturers of medical foods and medical devices did not believe we properly addressed the loss of revenue they could experience if they could not use NDC numbers on their products. Contract manufacturers felt there should be a separate analysis of their sector of the industry as did medical gas firms who asserted their numbers were underrepresented.
(Response) We disagree with the comments. NDC numbers were never intended for use on medical foods. The medical food industry began using NDCs to simplify reimbursement payments by insurance companies. There are other mechanisms that can be used for medical food product reimbursement, and the secondary impact from FDA enforcement of existing rules is not part of a regulatory impact analysis of new requirements. The Unique Device Identification System final rule (78 FR 58786, September 24, 2013) replaces the use of NDC numbers on medical devices with a UDI number. The impact of this change was accounted for in that rule.
The PRIA measured the incremental cost to comply with the new or changed requirements on a per-establishment and per-listing basis. Most of the data in the analysis of the proposed rule are not relevant for the final rule because mandatory electronic submission began in June 2009 with the statutory implementation authorized by FDAAA; however, the methodology is relevant. We estimated the incremental cost for registration on a per establishment basis. We included all registered establishments in our estimate, so establishments in all industry sectors required to register are included in the analysis if they comply with the requirement. The information required for each establishment is essentially the same. Any economies of scale for a large firm to register multiple establishments at one time are economically insignificant. The same is true for the incremental cost to list products. A contract manufacturer, or a repackager, may have more than one product to list, but the information required for each product is essentially the same for a contract manufacture and other manufacturers. The final rule provides that a private label distributer can list the products it distributes on behalf of contract manufacturers, but the legal obligation remains the contract manufacturers'.
The Regulatory Flexibility Act requires Agencies to assess the regulatory impact on domestic small entities and to analyze options that would lessen the burden on small entities. The Small Business Administration defines a drug manufacturer as small if it employs fewer than 750 people and a biological products entity as small if it employs fewer than 500.
The size of the entity is determined by the total employment of the ultimate parent firm, which can include companies outside the drug and biological products industries. For example, if a drug manufacturer's ultimate parent is a financial holding company that employs more than 750 people across a variety of industrial and service sectors, the firm would be considered large even if employment in drug manufacturing is only 100 employees.
For the proposed rule, we used a crude method, using U.S. Census information and a database of FDA's “Approved Drug Products with Therapeutic Equivalence Evaluations” (commonly referred to as the Orange Book) to characterize the number and size of the affected firms and used U.S.
The regulatory impact analysis for this final rule uses Dun & Bradstreet information on total employment of the ultimate parent company to determine the size of entities affected by the rule, but we still use the Census data for NAICS 325412 and 325414 for the financial information because of limitations of available data.
There were a number of comments regarding the burden of submitting certain information in listing, in particular batch information, inactive ingredients, and certifying that there has been no change to a listing.
(Comment 94) Some comments noted that batch information is already included in annual reports for products that require applications, so the information is a duplication of effort. These comments also noted that this information can change often and adds an additional element that needs to be tracked and updated.
(Response) After considering the comments, FDA has decided not to include the batch information requirement in the final rule.
(Comment 95) Some comments suggested FDA reconsider the requirement or frequency of the requirement to certify that no change is necessary for listings every June and December. Using the 0.25-hour estimate from the proposed rule for the time required to verify and certify a listing, one company with 800 products calculated that it would take 114 hours (around 14, 8-hour days) twice a year to comply with the requirement, assuming about 60 percent of their total products did not require updates in June and December. Another company with over 7,000 products said it would take 6 months to validate and certify their listings with no changes. They suggested making the no changes certification requirement every 2 years rather than biannually. Another comment suggested that changing the requirement to certifying by establishment, rather than by listing, would result in a savings of $1 million per year.
(Response) After considering the comments, we have revised the requirement for no changes certification from a per-listing basis to an establishment basis. Rather than certifying each June and December that there is no change to each individual listing, registrants can certify by establishment that the electronically listed products are up to date when they annually renew their registrations.
(Comment 96) Some comments regarding submitting inactive ingredients as part of listing stated it was unnecessary, burdensome, and in some cases would result in the release of information a company considered proprietary. These comments noted that inactive ingredients are included in human and animal drug applications and must be listed on the labels of OTC products. Some manufacturers of animal drugs claimed that inactive ingredients are not customarily supplied on the label and were concerned with the release of proprietary information.
(Response) Although inactive ingredients are identified in product applications and, in many cases, on product labels, the information is not easily accessible and the names are not fully standardized. Listing is the only mechanism by which FDA can readily access ingredient information across all products. Entering the inactive ingredients using defined terminology increases the accuracy and the efficiency of data searches. We use the information in listing to inform many processes FDA uses for protecting public health, including surveillance for serious drug adverse reactions, inspection of facilities used for drug manufacturing and processing, and monitoring drug products imported into the United States. To prevent public disclosure of information a registrant views as confidential, an inactive ingredient can be designated as confidential during the listing process.
This final rule contains information collection requirements that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). The title, description, and respondent description of the information collection provisions are shown with an estimate of the annual reporting burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.
The final rule codifies the current statutory requirement that registration and listing information be submitted to FDA electronically instead of using paper forms unless a waiver is obtained. Historically, drug establishment registration and drug listing information was submitted using Form FDA 2656 (Registration of Drug Establishment/Labeler Code Assignment), Form FDA 2657 (Drug Product Listing), and Form FDA 2658 (Registered Establishments' Report of Private Label Distributors). Before the enactment of FDAAA, section 510(p) of the FD&C Act expressly provided for electronic submission of drug establishment registration information upon a finding that electronic receipt was feasible, and section 510(j) of the FD&C Act specified that drug listing information was to be prepared in the form and manner prescribed by FDA. Section 224 of FDAAA, which amended section 510(p) of the FD&C Act, now requires electronic drug listing in addition to electronic drug establishment registration. In certain cases, and as discussed in section VIII.E, if it is unreasonable to expect a person to submit registration and listing information electronically, FDA may grant a waiver from the electronic submission requirement.
In June 2009, FDA made available the electronic registration and listing
In addition to the information that previously was collected on the FDA forms, the electronic registration and listing guidance addresses, with respect to part 207, the electronic submission of other statutorily required information as follows:
• The name of each importer that is known to the establishment (the U.S. company or individual in the United States that is an owner, consignee, or recipient of the foreign establishment's drug that is imported into the United States) (section 510(i)(1)(A) of the FD&C Act);
• The name of each person who imports or offers the foreign establishment's drug for import (the name of each agent, broker, or other entity, other than a carrier, that the foreign drug establishment uses to facilitate the import of its drug into the United States) (section 510(i)(1)(A) of the FD&C Act); and
• For a registered foreign drug establishment, the name, address, and telephone number of its U.S. agent (§ 207.40(c)).
The electronic registration and listing guidance also recommends the voluntary submission of the following additional information, when applicable:
• The email address for the United States agent, and the telephone number(s) and email address for the importer and person who imports or offers for import their drug;
• A site-specific Data Universal Numbering System (DUNS) number for each entity (in November 2014, we issued the guidance for industry entitled “Specification of the Unique Facility Identifier System for Drug Establishment Registration” (79 FR 65977, available on the Internet at
• The NDC product code for the source drug that is repacked or relabeled;
• Distinctive characteristics of certain listed drugs (
• Registrants may indicate that they view as confidential an inactive ingredient or the registrant's business relationship with an establishment.
We currently have OMB approval under the PRA (OMB control number 0910-0045) for the information collection in current part 207, the information that was submitted using Form FDA 2656, Form FDA 2657, and Form FDA 2658, and the information collection set forth in the electronic registration and listing guidance, including the electronic submission of registration and listing information as required by FDAAA. The information collection for current part 607 is approved by OMB under OMB control number 0910-0052. The information collection for current part 1271 is approved by OMB under OMB control number 0910-0543.
In tables 5, 6, 7, and 8, we estimate the total burden to comply with the applicable information collection requirements for parts 207, 607, and 1271 as set forth in this final rule. These burden estimates for the applicable regulations will replace some of the currently approved estimates in OMB control numbers 0910-0045, 0910-0052, and 0910-0543. These estimates are based on FDA's experience with reviewing registration and listing submissions under part 207 since June 2009 and on the number of submissions currently received, the number of respondents submitting this information, and the number of registered establishments and listed drugs, blood products, and HCT/Ps currently in FDA's drug registration and listing database.
Under § 207.17, manufacturers, repackers, relabelers, and drug product salvagers must register their establishments. This is consistent with current registration information collection, except that PET drug producers are not exempt from registration under the final rule, and the final rule states that FDA will accept registration information from a private label distributor if it is acting as an authorized agent for and submitting information that pertains to an establishment that manufactures, repacks, relabels, or salvages drugs.
Under § 207.21, domestic manufacturers, domestic repackers, domestic relabelers, and domestic drug product salvagers must complete initial registration of each establishment no later than 5 calendar days after beginning to manufacture, repack, relabel, or salvage a drug. In addition, foreign manufacturers, foreign repackers, foreign relabelers, and foreign drug product salvagers must register each establishment before the drug is imported or offered for import into the United States. This is consistent with current registration information collection.
The information that must be provided to FDA for registration is described in § 207.25. The final rule does not require the following currently required information collection:
• Kind of ownership or operation.
• Title of each corporate officer and director.
The final rule requires the following new registration information collection:
• Type of operations performed at each establishment.
• Contact information for the establishment's official contact.
Under § 207.29, registrants must review their registration information annually between October 1 and December 31and report all changes to their registration information or certify that no changes have occurred. In addition to the annual review and update, registrants must submit expedited reports of certain changes within 30 calendar days of the change. Currently, registrants must renew their registration information annually and submit certain amendments to registration within 5 days of a change. Section 207.29 differs from the current requirement to submit amendments to registration in the following ways:
• The final rule lengthens the current time period for reporting changes to registration information from 5 days (10 business days for a change in United States agent information) to 30 calendar days.
• The final rule revokes the current requirement to report a change in individual ownership and corporate or partnership structure and the current requirement to submit a signed
New registration information collected under the final rule includes the certification that no changes have occurred and reporting certain changes as expedited updates within 30 calendar days.
Based on the number of new establishments that currently register each year, we estimate that approximately 1,400 registrants will submit electronically approximately 2,800 new establishment registrations annually. Based on the number of registered establishments in our database, we estimate that approximately 10,000 registrants will provide approximately 10,000 annual reviews and updates of registration information (including expedited updates) or reviews and certifications that no changes have occurred.
The estimates include the registration of establishments for both domestic and foreign manufacturers, repackers, relabelers, and drug product salvagers, and registration information submitted by anyone acting as an authorized agent for an establishment that manufactures, repacks, relabels, or salvages drugs. The estimates include an additional 80 PET drug producers who are not exempt from registration under the final rule and approximately 30 manufacturers of plasma derivatives.
We estimate that it will take approximately 1 hour for registrants to submit initial registration information electronically for each new establishment.
We also estimate that it will take approximately 30 minutes for each annual review and update of registration information (including any expedited updates) or each review and certification that no changes have occurred.
The burden hour estimates are based on our familiarity with the amount of time it takes registrants to input registration information electronically since June 2009. The estimates are an average of the time it would take to register a domestic or foreign establishment and an average of the time it would take to review registration information and update several registration items in the database or review registration information and only certify that no changes have occurred.
Under § 207.41, registrants must list drugs they manufacture, repack, relabel, or salvage for commercial distribution. This requirement is consistent with current listing information collection, except that drug product salvagers are not currently required to list under part 207.
The final rule revises current NDC-related listing submissions as follows:
• A registrant must list each drug it manufactures, repacks, or relabels using an NDC that includes the registrant's own labeler code, regardless of whether the drug is commercially distributed under the registrant's own label or trade name or under the label or trade name of a private label distributor.
• Each registrant must list each drug it manufactures, repacks, or relabels for commercial distribution under the trade name or label of a private label distributor using an NDC that includes such private label distributor's labeler code.
• During listing, each manufacturer, repacker, or relabeler must propose for assignment by FDA an NDC that includes its own labeler code for each package size and type of drug that it manufactures, repacks, or relabels for commercial distribution.
• If a drug is distributed under the trade name or label of a private label distributor, the manufacturer, repacker, or relabeler must also propose for assignment by FDA an NDC that includes the labeler code of the private label distributor under whose trade name or label the drug is distributed, for each package size and type so distributed.
• A manufacturer, repacker, relabeler, or private label distributor may also reserve a proposed NDC for a drug, before the drug is listed, by submitting certain information.
Under § 207.45, registrants must list, no later than 3 calendar days after the initial registration of each establishment, any drug being manufactured, repacked, relabeled, or salvaged for commercial distribution at that establishment. This requirement is consistent with current listing information collection, except that the final rule specifies within 3 calendar days after initial registration.
Under the final rule, the information registrants must submit to list a drug, including the information that must be submitted (by a registrant or a private label distributor) to receive a labeler code, is described in §§ 207.33, 207.49, 207.53, 207.54, 207.55, and 207.61. Under current part 207, we assign a labeler code to each registrant and the registrant assigns the product code and the package code for each drug product's NDC.
The listing and NDC information collections required by the final rule are already approved by OMB under OMB control number 0910-0045, except for the following: (1) The name of each inactive ingredient in a listed drug (assertions of confidentiality associated with individual inactive ingredients are covered in the electronic registration and listing guidance); (2) additional information, such as email address, to identify a domestic registrant (identifying information for foreign registrants is part of the electronic registration and listing guidance information collection and in current § 207.40(c)); (3) the drug master file or veterinary master file number, if one exists, must be submitted by the manufacturer for an unfinished drug; (4) drug product salvagers (who do not repack or relabel) must submit the lot number and expiration date and NDC assigned to the drug immediately before the drug is received by the drug product salvager; (5) all new labeling for a repacked or relabeled drug must be submitted, and not only the changed labeling; (6) package type and volume information corresponding to the package code segment of the NDC must be submitted; (7) a drug's OTC monograph reference (if any) and the date on which the drug was or will be introduced into commercial distribution are both requested for voluntary submission; and (8) the name and Unique Facility Identifier (UFI) of the establishment where the registrant who lists the drug manufactures it and the type of operation performed on the drug at that establishment, and, if an immediate source NDC is not provided, the name and UFI of every other establishment where manufacturing is performed for the drug and the type of operation performed at each such establishment must be provided.
Under § 207.57, registrants must update drug listing information submitted previously (either when the change is made or, at a minimum, each June and December). Registrants must also notify FDA if any listed drug has been discontinued from marketing or if any discontinued drug has been reintroduced and provide listing information for any drug not yet listed (at the time of annual establishment registration if not sooner). Under § 207.35, registrants must notify us of a change in any of the drug characteristics (except certain identifying information) for an NDC in § 207.33, and assign a new product code and package code for that drug. Current listing information collection does not specifically require any type of certification if there are no
Based on the number of drugs listed annually since June 2009, we estimate that approximately 1,713 registrants will submit electronically approximately 12,469 new listings annually (including the information submitted to obtain a labeler code and to reserve an NDC for future use).
Based on the number of drugs in our listing database and the current number of changes to listing information submitted, we estimate that approximately 5,300 registrants will provide approximately 10,000 June and 10,000 December reviews and updates of listing information—a total of approximately 20,000 submissions annually (including the information submitted to revise an NDC).
The estimates for the number of drug listings include both domestic and foreign listings, listings submitted by registrants for products sold under their own names as well as products intended for private label distribution, and information submitted related to an NDC and to obtain a labeler code. The estimate for the number of drugs subject to the listing requirements includes PET drugs and approximately 30 plasma derivatives. The estimates for the number of June and December reviews and updates of listing information include the number of changes to drug characteristics pertaining to the drug product code to obtain a new NDC and the reports of the withdrawal of an approved drug from sale under § 314.81(b)(3)(iii).
Based on our familiarity with the time required to input listing information electronically since June 2009, we estimate that it will take registrants approximately 1 hour and 30 minutes to submit information electronically for each drug they list for the first time (for both foreign and domestic registrant listings). These estimates are an average of the time it will take manufacturers, repackers, relabelers, and drug product salvagers, with drug product salvagers taking considerably less time than manufacturers. The estimates include the time for submitting the content of labeling and other labeling in electronic format. (For drugs subject to an approved marketing application, the electronic submission of the content of labeling under current § 314.50(l)(1)(i) is also approved under OMB control number 0910-0001.) We also estimate that it will take approximately 45 minutes for each June and December review and update of listing information. These estimates are an average of the time it would take to review and update listing information or to review and certify that no changes have occurred. The estimates include the time for submitting any labeling for each drug, changes to the drug's characteristics submitted for a new NDC, and reports of the withdrawal of an approved drug from sale under § 314.81(b)(3)(iii).
Under § 607.22(a) of the final rule, blood establishments must submit initial and subsequent registration and product listing electronically through the Blood Establishment Registration and Product Listing system, or any future superseding electronic system. All information submitted under this part must be transmitted to FDA electronically. Currently, under § 607.22, manufacturers must register establishments and list blood products on Form FDA 2830. The requested information is consistent with the current requirement to register establishments and list products approved under OMB control number 0910-0052. A separate discussion regarding waivers under § 607.22(b) is discussed in section E.
Under §§ 607.25(a) and 607.25 (b)(3) of the final rule, establishments must include the Unique Facility Identifier as part of the registration and product listing. The other requested information under this regulation is consistent with the current requirements to register establishments and list products approved under OMB control number 0910-0052.
Under § 607.25(b)(1) of the final rule, blood establishments are required to list blood products by the established and proprietary name. This is consistent with the current listing requirement approved under OMB control number 0910-0052. Currently, manufacturers of plasma derivatives and bulk product substances register and list under both parts 607 and 207. The final rule revises this requirement by requiring persons who engage solely in the production of plasma derivatives, bulk product substances, and recombinant version of plasma derivatives or animal derived plasma derivatives to register and list only under part 207. Any reduction in burden is expected to be minimal (approximately 20 establishments) and will be reflected under OMB control number 0910-0052. To be consistent with part 207, we are also deleting the reference in part 607 to Form FDA 2250 (National Drug Code Directory Input) because this form is no longer being used by CDER or CBER.
Under current § 607.40, foreign establishments must include information for the United States agent as part of its initial and updated registration. The final rule requires submission of minimal additional information (
Based on the number of new establishments that currently register with FDA each year, we estimate 68 establishments will provide new establishment registration and product listings annually under §§ 607.22(a), 607.25(a), and (b)(3).
We estimate that it takes approximately 60 minutes to provide the initial registration and listing information for each new establishment.
Based on the number of establishments that currently submit registration and product listing updates, we estimate 2,615 establishments will provide establishment registration and product listing updates annually under §§ 607.22(a), 607.25(a), and (b)(3).
We estimate that it takes approximately 30 minutes to provide the establishment registration and listing update information for establishment.
These burden hour estimates are based on institutional experience with the current registration and listing requirements.
Under § 1271.22, establishments must register, list products, and provide updates electronically. The current regulation includes the option to submit registration, listing, and updates electronically.
Under § 1271.25, establishments must also submit the telephone number and email address of the reporting official. Each foreign establishment must submit the name, the address, telephone number, and email address of each importer that is known to the
Under § 1271.26, establishments must report a change to the United States agent's name, address, telephone number, or email address. The final rule will also lengthen to 30 calendar days the current requirement of reporting the changes within 5 days.
Based on the number of new establishments that currently register with FDA each year, we estimate that approximately 225 establishments will provide new establishment registration annually. Based on information from FDA's database, we estimate that approximately 2,700 establishments are registered and listed with FDA and will provide establishment and listing updates. The number of establishments that currently register and list with FDA includes both foreign and domestic establishments. If no change has occurred, an update is not required. Based on the number of establishments from FDA's database, we estimate that approximately 1,200 establishments will provide changes to establishment ownership or location, or changes to the United States agent's information.
We estimate that it would take approximately 45 minutes to provide the initial registration and listing information for each new establishment.
We estimate that it would take approximately 30 minutes for each annual review and update of registration and listing information for each establishment.
We estimate that it would take approximately 15 minutes for each establishment to provide a change in ownership and location, or a change to the U.S. agent's information.
These burden hour estimates are based on institutional experience with the current registration and listing requirements. The estimates are an average of the time it would take to register an establishment, and an average of the time it would take to review registration and listing information, and update several registration and listing items in the database.
Under § 207.65, registrants may request a waiver from the requirement in § 207.61 that information must be provided to us in electronic format. We expect very few waiver requests because only a computer, Internet access, and an email address are needed to register and list electronically and because electronic submission has been required since June 2009.
We estimate that approximately one registrant will request a waiver annually and that each request will take approximately 30 minutes to prepare and submit to us.
Under § 607.22(b), both domestic and foreign establishments may request a waiver from the requirement that information must be provided to FDA in electronic format. We expect few waiver requests because only a computer, Internet access, and an email address are needed to register and list electronically.
We estimate that approximately 25 manufacturers will request a waiver annually and that each request will take approximately 1 hour to prepare and submit to us.
When we grant a request for a waiver, we intend to make available to the manufacturer the paper form—Form FDA 2830 for registration and listing.
Under § 1271.23, manufacturers may request a waiver from the requirement in § 1271.22 that information must be provided to FDA in electronic format. We expect a limited number of waiver requests because only a computer, Internet access, and an email address are needed to register and list electronically.
We estimate that approximately 100 manufacturers will request a waiver annually and that each request will take approximately 1 hour to prepare and submit to FDA.
When we grant a request for a waiver, we intend to make available to the manufacturer the paper form—revised Form FDA 3356 for registration and listing.
Under § 207.81(c), registrants may request that certain information in § 207.81(a) not be made available from their registration and listing information. Based on our experience with registration and listing information inspection requests under current § 207.37, we estimate that approximately 100 registrants will submit this request annually and that each request will take approximately 1 hour to prepare and submit to us. (Assertions of confidentiality associated with individual inactive ingredients or the registrant's business relationship with an establishment is part of the June 2009 electronic registration and listing guidance information collection and is covered under OMB control number 0910-0045).
The requirement under section 510(p) of the FD&C Act for electronic drug establishment registration and electronic drug listing resulted in our amending OMB control number 0910-0045 in June 2009 to include the burden for preparing a standard operating procedure (SOP) for the electronic submission requirement, creating the SPL file, including accessing and reviewing the technical specifications and instructional documents provided by FDA, reviewing and selecting appropriate terms and codes used to create the SPL file, obtaining the digital certificate used with FDA's electronic submission gateway, and uploading the SPL file for submission. Although most registrants have already prepared an SOP for the electronic submission requirements, each year additional firms will need to create an SOP. As provided in table 6, FDA estimates that approximately 1,000 firms will have to expend a one-time burden to prepare, review, and approve an SOP, and we estimate that it will take approximately 40 hours per recordkeeper to create 1,000 new SOPs, for a total of 40,000 hours. We also estimate approximately 3,295 hours for annual recordkeeping maintenance of these records.
There are one-time capital costs associated with this rulemaking. These costs are discussed in section VII, “Economic Analysis of Impacts.”
The information collection provisions of this final rule have been submitted to OMB for review, as required by section 3507(d) of the PRA. Prior to the effective date of this final rule, FDA will publish a notice in the
FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the Agency has concluded that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.
The following reference is on display in the Division of Dockets Management, (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and is available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday. It is also available electronically at
Confidential business information, Courts, Freedom of information, Government employees.
Drugs, Labeling, Reporting and recordkeeping requirements.
Drugs, Reporting and recordkeeping requirements.
Administrative practice and procedure, Confidential business information, Drugs, Reporting and recordkeeping requirements.
Administrative practice and procedure, Animal drugs, Confidential business information, Reporting and recordkeeping requirements.
Administrative practice and procedure, Biologics, Confidential business information.
Blood.
Biologics, Drugs, Human cells and tissue-based products, Medical devices, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 20, 201, 207, 314, 514, 515, 601, 607, and 1271 are amended as follows:
5 U.S.C. 552; 18 U.S.C. 1905; 19 U.S.C. 2531-2582; 21 U.S.C. 321-393, 1401-1403; 42 U.S.C. 241, 242, 242a, 242l, 242n, 243, 262, 263, 263b-263n, 264, 265, 300u-300u-5, 300aa-l.
Information submitted to the Food and Drug Administration pursuant to section 510(a) through (j) of the Federal Food, Drug, and Cosmetic Act shall be subject only to the special disclosure provisions established in §§ 207.81 and 807.37 of this chapter.
21 U.S.C. 321, 331, 351, 352, 353, 355, 358, 360, 360b, 360gg-360ss, 371, 374, 379e; 42 U.S.C. 216, 241, 262, 264.
(c) * * *
(1) Each drug product described in paragraph (b) of this section must have a bar code that contains, at a minimum, the appropriate National Drug Code (NDC) number in a linear bar code that meets European Article Number/Uniform Code Council (EAN/UCC) or Health Industry Business Communications Council (HIBCC) standards or another standard or format that has been approved by the relevant Food and Drug Administration Center Director. * * *
21 U.S.C. 321, 331, 351, 352, 355, 360, 360b, 371, 374, 381, 393; 42 U.S.C. 262, 264, 271.
The definitions and interpretations of terms in sections 201 and 510 of the Federal Food, Drug, and Cosmetic Act apply to the terms used in this part, if not otherwise defined in this section. The following definitions apply to this part:
(1) For human prescription drugs that are subject to section 505 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act: The content of the prescription drug labeling (as specified in §§ 201.56, 201.57, and 201.80 of this chapter), including all text, tables, and figures.
(2) For human prescription drugs that are not subject to section 505 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act: The labeling equivalent to the content of the prescription drug labeling (as specified in §§ 201.56, 201.57, and 201.80 of this chapter), including all text, tables, and figures.
(3) For human over-the-counter (OTC) drugs: All text, tables, and figures including the drug facts labeling required by § 201.66 of this chapter.
(4) For animal drugs (including, but not limited to, drugs that are subject to section 512 of the Federal Food, Drug, and Cosmetic Act): The content of the labeling that accompanies the drug that is necessary to enable safe and proper administration of the drug (
(1) When used to modify the term “manufacturer,” “repacker,” “relabeler,” or “salvager,” refers to a manufacturer, repacker, relabeler, or salvager, who is located in a foreign country and who manufactures, repacks, relabels, or salvages a drug, or an animal feed bearing or containing a new animal drug, that is imported or offered for import into the United States.
(2) When used to modify the term “establishment” refers to an establishment that is located in a foreign country and is engaged in the manufacture, repackaging, relabeling, or salvaging of any drug, or any animal feed bearing or containing a new animal drug, that is imported or offered for import into the United States.
Establishment registration information helps FDA identify who is manufacturing, repacking, relabeling, and salvaging drugs and where those operations are performed. Drug listing information gives FDA a current inventory of drugs manufactured, repacked, relabeled, or salvaged for commercial distribution. Both types of information facilitate implementation and enforcement of the Federal Food, Drug, and Cosmetic Act and are used for many important public health purposes.
(a) Except as provided in paragraph (b) of this section, this part applies to:
(1) Domestic manufacturers, domestic repackers, domestic relabelers and domestic salvagers, not exempt under section 510(g) of the Federal Food, Drug, and Cosmetic Act or § 207.13, regardless of whether their drugs enter interstate commerce;
(2) Foreign manufacturers, foreign repackers, foreign relabelers and foreign salvagers, not exempt under section 510(g) of the Federal Food, Drug, and Cosmetic Act or § 207.13;
(3) Private label distributors, because they must have labeler codes;
(4) Establishments engaged in the manufacture, repacking, relabeling, or salvaging of human drugs regulated under a biologics license application (BLA). These establishments are subject to the requirements of this part unless they are required to register and list such drugs as human blood or blood products under part 607 of this chapter and do not engage in activities that would otherwise require them to register and list under this part.
(5) Establishments engaged in the manufacture (as defined in § 1271.3(e) of this chapter) of human cells, tissues, and cellular and tissue-based products (HCT/Ps) (as defined in § 1271.3(d) of this chapter) that, under § 1271.20 of this chapter, are also drugs regulated under section 351 of the Public Health Service Act or section 505 of the Federal Food, Drug, and Cosmetic Act. These establishments must register and list those HCT/Ps following the procedures described in this part.
(b) This part does not apply to owners and operators of establishments that collect or process human whole blood
(c) This part does not apply to establishments that solely manufacture, prepare, propagate, compound, assemble, or process medical devices. Registration and listing regulations for such establishments are codified in part 807 of this chapter.
Except as provided in § 207.13(l), the following classes of persons are exempt from registration and drug listing in accordance with section 510(g) of the Federal Food, Drug, and Cosmetic Act or because FDA has determined, under section 510(g)(5) of the Federal Food, Drug, and Cosmetic Act, that their registration is not necessary for the protection of the public health. This exemption is limited to establishment registration and drug listing requirements and does not relieve a person from other statutory or regulatory obligations.
(a)(1) Pharmacies that:
(i) Operate in conformance with all applicable local laws regulating the practice of pharmacy and medicine, including all applicable local laws regulating the dispensing of prescription drugs;
(ii) Regularly engage in dispensing prescription drugs upon a valid prescription by practitioners licensed by law to administer these drugs to patients under their professional care; and
(iii) Do not manufacture, repack, relabel, or salvage drugs other than in the regular course of their business of dispensing or selling drugs at retail.
(2) The exemption in this paragraph (a) is limited to pharmacies located in any State as defined in section 201(a)(1) of the Federal Food, Drug, and Cosmetic Act.
(b)(1) Hospitals, clinics, other health care entities, and public health agencies that:
(i) Operate establishments in conformance with all applicable local laws regulating the practice of pharmacy and medicine, including all applicable local laws regulating the dispensing of prescription drugs;
(ii) Regularly engage in dispensing prescription drugs, other than human whole blood or blood products, upon a valid order or prescription by practitioners licensed by law to administer these drugs to patients under their professional care; and
(iii) Do not manufacture, repack, relabel, or salvage drugs other than in the regular course of their practice of pharmacy, including dispensing.
(2) The exemption in this paragraph (b) is limited to hospitals, clinics, other health care entities, and public health agencies located in any State as defined in section 201(a)(1) of the Federal Food, Drug, and Cosmetic Act.
(c) Individuals or establishments under contract, agreement, or other arrangement with a registered establishment and engaged solely in recovering cells or tissues and sending the recovered cells or tissues to the registered establishment to become components of a biological product are exempt from registration and listing under this part unless FDA determines that drug establishment registration and listing is necessary for the protection of the public health.
(d) Practitioners who are licensed by law to prescribe or administer drugs and who manufacture, repack, relabel, or salvage drugs solely for use in their professional practice.
(e) Manufacturers, repackers, relabelers, or salvagers who manufacture, repack, relabel, or salvage drugs solely for use in research, teaching, or chemical analysis and not for sale.
(f) Manufacturers, repackers, and relabelers of harmless inactive ingredients such as excipients, colorings, flavorings, emulsifiers, lubricants, preservatives, or solvents that become components of drugs.
(g) Manufacturers, repackers, relabelers, or salvagers of Type B or Type C medicated feeds, except for persons who manufacture, repack, relabel, or salvage Type B or Type C medicated feeds starting from Category II, Type A medicated articles for which a medicated feed mill license approved under part 515 of this chapter is required. This exemption also does not apply to persons that would otherwise be required to register (such as manufacturers, repackers, relabelers, or salvagers of certain free-choice feeds, as defined in § 510.455 of this chapter, or certain liquid feeds, as defined in § 558.5 of this chapter, where the specifications and/or formulas are not published and a medicated feed mill license is required). All manufacturers, repackers, relabelers, or salvagers of Type B or Type C medicated feeds are exempt from listing.
(h) Any manufacturer, repacker, relabeler, or salvager of a virus, serum, toxin, or analogous product intended for the treatment of domestic animals who holds an unsuspended and unrevoked license issued by the Secretary of Agriculture under the animal virus-serum-toxin law of March 4, 1913 (37 Stat. 832 (21 U.S.C. 151
(i) Carriers, in their receipt, carriage, holding, or delivery of drugs in the usual course of business as carriers.
(j) Foreign establishments whose drugs are imported or offered for import into the United States must comply with the establishment registration and listing requirements of this part unless exempt under this section or unless:
(1) Their drugs enter a foreign trade zone and are re-exported without having entered U.S. commerce, or
(2) Their drugs are imported in conformance with section 801(d)(3) of the Federal Food, Drug, and Cosmetic Act.
(k) Entities that are registered with FDA as outsourcing facilities and that compound drugs in conformance with section 503B of the Federal Food, Drug, and Cosmetic Act.
(l) The exemptions provided in paragraphs (a) through (k) of this section do not apply to such persons if they:
(1) Manufacture (as defined in § 207.1(b)), repack, relabel, or salvage compounded positron emission tomography drugs as defined in section 201(ii) of the Federal Food, Drug, and Cosmetic Act;
(2) Manufacture (as defined in § 600.3(u) of this chapter) a human biological product subject to licensing under section 351 of the Public Health Service Act; or
(3) Engage in activities that would otherwise require them to register under this part.
(a) Unless exempt under section 510(g) of the Federal Food, Drug, and Cosmetic Act or this part, all
(b) Private label distributors who do not also manufacture, repack, relabel, or salvage drugs are not required to register under this part. FDA will accept registration or listing information submitted by a private label distributor only if it is acting as an authorized agent for and submitting information that pertains to an establishment that manufactures, repacks, relabels, or salvages drugs.
(a) Registrants must register each domestic establishment no later than 5 calendar days after beginning to manufacture, repack, relabel, or salvage a drug or an animal feed bearing or containing a new animal drug at such establishment.
(b) Registrants must register each foreign establishment before a drug or an animal feed bearing or containing a new animal drug manufactured, repacked, relabeled, or salvaged at the establishment is imported or offered for import into the United States.
Registrants must provide the following information:
(a) Name of the owner or operator of each establishment; if a partnership, the name of each partner; if a corporation, the name of each corporate officer and director, and the place of incorporation;
(b) Each establishment's name, physical address, and telephone number(s);
(c) All name(s) of the establishment, including names under which the establishment conducts business or names by which the establishment is known;
(d) Registration number of each establishment, if previously assigned by FDA;
(e) A Unique Facility Identifier in accordance with the system specified under section 510 of the Federal Food, Drug, and Cosmetic Act.
(f) All types of operations performed at each establishment;
(g) Name, mailing address, telephone number, and email address of the official contact for the establishment, as provided in § 207.69(a); and
(h) Additionally, with respect to foreign establishments subject to registration, the name, mailing address, telephone number, and email address must be provided for:
(1) The United States agent, as provided in § 207.69(b);
(2) Each importer in the United States of drugs manufactured, repacked, relabeled, or salvaged at the establishment that is known to the establishment; and
(3) Each person who imports or offers for import such drug to the United States.
(a)
(1) Closing or selling an establishment;
(2) Changing an establishment's name or physical address; or
(3) Changing the name, mailing address, telephone number, or email address of the official contact or the United States agent. A registrant, official contact, or United States agent may notify FDA about a change of information for the designated official contact or United States agent, but only a registrant is permitted to designate a new official contact or United States agent.
(b)
(1) The first review and update must occur during the period beginning on October 1 and ending December 31 of the year of initial registration, if the initial registration occurs prior to October 1. Subsequent reviews and updates must occur annually, during the period beginning on October 1 and ending December 31 of each calendar year.
(2) The updates must reflect all changes that have occurred since the last annual review and update.
(3) If no changes have occurred since the last registration, registrants must certify that no changes have occurred.
(a)
(b)
(i) The first segment of the NDC is the labeler code and consists of 4, 5, or 6 digits. The labeler code is assigned by FDA.
(ii) The second segment of the NDC is the product code and consists of 3 or 4 digits, as specified in paragraphs (b)(2) and (3) of this section.
(iii) The third segment of the NDC is the package code and consists of 1 or 2 digits as specified in paragraphs (b)(2) and (3) of this section. The package code identifies the package size and type of the drug and differentiates between different quantitative and qualitative attributes of the product packaging.
(2) The following combinations of labeler code, product code and package code character lengths are permissible:
(i) If a labeler code is either 5 or 6 digits in length, it may be combined with:
(A) A product code consisting of 4 digits and a package code consisting of 1 digit for a total NDC length of 10 or 11 digits (5-4-1 or 6-4-1), or
(B) A product code consisting of 3 digits and a package code consisting of 2 digits for a total NDC length of 10 or 11 digits (5-3-2 or 6-3-2).
(ii) If a labeler code is 4 digits in length, it may be combined only with a product code consisting of 4 digits and a package code consisting of 2 digits for a total NDC length of 10 digits (4-4-2).
(3) A registrant or private label distributor with a given labeler code must use only one Product-Package Code configuration (
(4) An alternatively formatted NDC that is approved for use by the relevant Center Director may be used for the following HCT/Ps if they are minimally
(c)
(i) The name, physical address, email address, and other contact information FDA may request, of the person for whom the NDC labeler code is requested;
(ii) The type(s) of activities (
(iii) The type(s) of drug(s) (human, animal, or both, and prescription, nonprescription, or both) to which the NDC labeler code will be applied.
(2) Each person who is assigned an NDC labeler code must update the information submitted under paragraph (c)(1)of this section within 30 calendar days after any change to that information.
(d)
(i) Each manufacturer, repacker, or relabeler must propose for assignment by FDA an NDC that includes its own labeler code for each package size and type of drug that it manufactures, repacks, or relabels for commercial distribution.
(ii) In addition, if a drug is distributed under the trade name or label of a private label distributor, the manufacturer, repacker, or relabeler must also propose for assignment by FDA an NDC that includes the labeler code of the private label distributor under whose trade name or label the drug is distributed, for each package size and type so distributed.
(2) If a proposed NDC conforms to the requirements of this section and is not reserved for a different drug or was not previously assigned to a different drug, FDA will assign the NDC to a drug when it receives listing information required for that drug under § 207.49 or § 207.53.
(3) A manufacturer, repacker, relabeler, or private label distributor may voluntarily reserve a proposed NDC for a drug, before the drug is listed, by submitting the following information:
(i) A proposed NDC that conforms to the requirements of this section;
(ii) The established name of the active ingredient(s) and the strength of each active ingredient in the drug; and
(iii) In the case of a finished drug product, the dosage form, and route of administration.
(4) If the required information is submitted and the proposed NDC is properly formatted and not already assigned or reserved, FDA will reserve the proposed NDC for a period of 2 years from the date of submission. If the drug for which the proposed NDC is reserved is not listed in accordance with § 207.49 or § 207.53 during such 2-year period, the reservation of the proposed NDC will lapse. FDA may also cancel the reservation of a proposed NDC at any time on the request of the person whose labeler code is included in the proposed NDC.
(e)
(a) Once an NDC has been assigned by FDA, the registrant must propose a new and unique NDC for a drug when there is a change, after the drug is initially marketed, to any of the information identified in paragraphs (b) and (c) of this section. A new NDC must be proposed to FDA for assignment through an updated listing in accordance with § 207.57.
(b) The proposed new NDC must include a new product code when there is a change to any of the following information:
(1) The drug's established name or proprietary name, if any;
(2) Any active pharmaceutical ingredient or the strength of any active pharmaceutical ingredient;
(3) The dosage form;
(4) A change in the drug's status, between prescription and nonprescription, or for animal drugs, between prescription, nonprescription, or veterinary feed directive (VFD) status;
(5) A change in the drug's intended use between human and animal; or
(6) The drug's distinguishing characteristics such as size, shape, color, code imprint, flavor, and scoring (if any).
(c) When there is a change only to the package size or type, including the immediate unit-of-use container, if any, the proposed new NDC must include only a new package code and retain the existing product code unless all available package codes have already been combined with the existing product code in NDCs assigned by FDA.
(a) A product may be deemed to be misbranded if an NDC is used:
(1) To represent a different drug than the drug for which the NDC has been assigned, as described in § 207.33;
(2) To denote or imply FDA approval of a drug; or
(3) On products that are not subject to parts 207, 607 of this chapter, or 1271 of this chapter, such as dietary supplements and medical devices.
(b) If marketing is resumed for a discontinued drug, and no changes have been made to the drug that would require a new NDC under § 207.35, the drug must have the same NDC that was assigned to it as described in § 207.33, before marketing was discontinued.
(a) Each registrant must list each drug that it manufactures, repacks, relabels, or salvages for commercial distribution. Each domestic registrant must list each such drug regardless of whether the drug enters interstate commerce. When operations are conducted at more than one establishment, and common ownership and control exists among all the establishments, the parent, subsidiary, or affiliate company may submit listing information for any drug manufactured, repacked, relabeled, or salvaged at any such establishment. A drug manufactured, repacked, or relabeled for private label distribution must be listed in accordance with paragraph (c) of this section.
(b) Registrants must provide listing information for each drug in accordance with the listing requirements described in §§ 207.49, 207.53, and 207.54 that correspond to the activity or activities they engage in for that drug.
(c)(1) For both animal and human drugs, each registrant must list each drug it manufactures, repacks, or relabels for commercial distribution under the trade name or label of a private label distributor using an NDC that includes such private label distributor's labeler code.
(2) Additionally, in the case of human drugs, each registrant must list each human drug it manufactures, repacks, or relabels using an NDC that includes the registrant's own labeler code, regardless of whether the drug is commercially distributed under the registrant's own label or trade name or under the label
For each drug being manufactured, repacked, relabeled, or salvaged for commercial distribution at an establishment at the time of initial registration, drug listing information must be submitted no later than 3 calendar days after the initial registration of the establishment.
(a) Each registrant must provide the following listing information for each drug it manufactures for commercial distribution.
(1) The appropriate NDC(s), as described in § 207.33, that include all package code variations. In the case of human drugs, the appropriate NDC(s) submitted under this paragraph include the registrant's labeler code. In the case of animal drugs, the appropriate NDC(s) submitted under this paragraph include the registrant's labeler code, except that when the drug is manufactured for commercial distribution under the trade name or label of a private label distributor, the appropriate NDC(s) for animal drugs include the private label distributor's labeler code;
(2) Package type and volume information corresponding to the package code segment of the NDC;
(3) The listed drug's established name and proprietary name, if any;
(4) The name and quantity of each active pharmaceutical ingredient in the listed drug;
(5) The name of each inactive ingredient in the listed drug, along with any assertions of confidentiality associated with individual inactive ingredients;
(6) The dosage form;
(7) The drug's approved U.S. application number, if any;
(8) The drug type (
(9) In the case of an unfinished drug, the number assigned to the Drug Master File or Veterinary Master File, if any, that describes the manufacture of the drug;
(10) For each drug that is subject to the imprinting requirements of part 206 of this chapter including products that are exempted under § 206.7(b), the drug's size, shape, color, scoring, and code imprint (if any);
(11) The route or routes of administration of the drug;
(12) For each drug bearing an NDC:
(i) The name and Unique Facility Identifier of the establishment where the registrant who lists the drug manufactures it and the type of operation performed on the drug at that establishment, and
(ii) The name and Unique Facility Identifier of every other establishment where manufacturing is performed for the drug and the type of operation performed at each such establishment. This includes all establishments involved in the production of each unfinished drug received by the registrant for use in the production of the drug being listed. The names, Unique Facility Identifiers, and type of operations for establishments involved in production of each unfinished drug received by the registrant for use in the production of the drug being listed may be provided by including the properly assigned and listed NDC for such unfinished drug.
(13) The schedule of the drug under section 202 of the Controlled Substances Act, if applicable;
(14) Advertisements:
(i) A representative sampling of advertisements for a human prescription drug that is not subject to section 505 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act;
(ii) If FDA requests it, for good cause, a copy of all advertisements for a human prescription drug that is not subject to section 505 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act, including those advertisements described in § 202.1(
(15) For drugs bearing the NDC(s) reported under paragraph (a)(1) of this section, except those drugs manufactured exclusively for private label distribution and not distributed under the registrant's own name and label, provide the following labeling, as applicable:
(i)
(ii)
(B) For each human nonprescription drug not subject to section 505 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act, the current label (except that only one representative container or carton label need be submitted where differences exist only in the quantity of contents statement or the bar code), the package insert (if any), and a representative sampling of any other labeling. This labeling submission must include the content of labeling as defined in section § 207.1(b).
(iii)
(B) For all other animal drugs, a copy of the current label (except that only one representative container or carton label need be submitted where differences exist only in the quantity of contents statement), the package insert, the content of labeling as defined in § 207.1(b), and a representative sampling of any other labeling;
(iv)
(16) Listing submissions described in § 207.41(c)(2) for human drugs manufactured for private label distribution must include all information specified in § 207.49(a)(2) through (14) and:
(i) The appropriate NDC(s) (as described in § 207.33) that include the private label distributor's labeler code and all package code variations;
(ii) The name, mailing address, telephone number, and email address of the private label distributor; and
(iii) For drugs bearing the NDC(s) reported under paragraph (a)(16)(i) of this section, labeling as described in paragraph (a)(15) of this section that accompanies the private label distributor's product.
(b) Additionally, each registrant is requested, but not required, to provide the following information for each human drug it manufactures for commercial distribution:
(1) The drug's over-the-counter monograph reference, if any; and
(2) The date on which the drug was or will be introduced into commercial distribution.
Each registrant must provide the following listing information for each drug it repacks or relabels:
(a)
(b)
(c)
(d)
(1)
(2)
(ii) For each human nonprescription drug not subject to section 505 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act, the current label (except that only one representative container or carton label need be submitted where differences exist only in the quantity of contents statement or the bar code), the package insert (if any), and a representative sampling of any other labeling. This labeling submission must include the content of labeling as defined in § 207.1(b).
(3)
(ii) For all other animal drugs, a copy of the current label (except that only one representative container or carton label need be submitted where differences exist only in the quantity of contents statement), the package insert, the content of labeling as defined in § 207.1(b), and a representative sampling of any other labeling;
(4)
(e)
(2) If we request it for good cause, a copy of all advertisements for a particular drug described in paragraph (e)(1) of this section, including advertisements described in § 202.1(l)(1) of this chapter. Such advertisements must be submitted within 30 calendar days after our request.
(f)
(1) The appropriate NDC(s) (as described in § 207.33) that include the private label distributor's labeler code and all package code variations;
(2) The name, mailing address, telephone number, and email address of the private label distributor; and
(3) For drugs bearing the NDC(s) reported under paragraph (f)(1) of this section, labeling as described in paragraphs (d)(1) through (4) of this section, as applicable, that accompanies the private label distributor's product.
A registrant who also relabels or repacks a drug that it salvages must list the drug it relabels or repacks in accordance with § 207.53 rather than in accordance with this section. A registrant who performs only salvaging with respect to a drug must provide the following listing information for that drug.
(a) The NDC assigned to the drug immediately before the drug is received by the registrant for salvaging;
(b) The lot number and expiration date of the salvaged drug product; and
(c) The name and Unique Facility Identifier for each establishment where the registrant salvages the drug.
For a particular listed drug, upon our request, the registrant must briefly state the basis for its belief that the drug is not subject to section 505 or 512 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act.
Registrants must review and update listing information at a minimum, as follows:
(a) Registrants must provide listing information at the time of annual establishment registration for any drug manufactured, repacked, relabeled, or salvaged by them for commercial distribution that has not been listed previously.
(b) Registrants must review and update their drug listing information each June and December. When doing so, registrants must:
(1)(i) Provide listing information, in accordance with §§ 207.49, 207.53, and 207.54, for any drug manufactured, repacked, relabeled, or salvaged by them for commercial distribution that has not been previously listed;
(ii) Submit the date that they discontinued the manufacture, repacking, relabeling or salvaging for commercial distribution of a listed drug and provide the expiration date of the
(iii) Submit the date that they resumed the manufacture, repacking, or relabeling for commercial distribution of a drug previously discontinued, and provide any required listing information not previously submitted; and
(iv) Submit any material changes in any information previously submitted pursuant to §§ 207.49, 207.53, 207.54, or other relevant sections of this part; or
(2) For each listed drug, certify that no changes subject to reporting under paragraph (b)(1)(iv) of this section have occurred if no such changes have occurred since the last review and update. If a drug is discontinued and FDA has received the information required under paragraph (b)(1)(ii) of this section, no further certifications are necessary for the discontinued drug. After initial electronic listing, registrants may satisfy the listing update requirement with respect to unchanged listing information by making a single “no changes” certification during the annual registration update under § 207.29(b) applicable to all of the registrant's listed drugs for which no changes have been made since the previous annual registration update.
(c) Registrants are encouraged to submit listing information for every drug subject to listing under this part prior to commercial distribution and are encouraged to update listing information at the time of any change affecting information previously submitted.
(a)
(2) Information provided in electronic format must comply with part 11 of this chapter, except as follows:
(i) Advertisements and labeling, including the content of labeling, required under this part are exempt from the requirements in § 11.10(a), (c) through (h), and (k) of this chapter and the corresponding requirements in § 11.30 of this chapter.
(ii) All other information submitted under this part is exempt from the requirements in § 11.10(b), (c), and (e) of this chapter and the corresponding requirements in § 11.30 of this chapter.
(b)
(a) All information submitted under this part must be transmitted to FDA electronically in accordance with § 207.61(a) unless FDA has granted a request for waiver of this requirement prior to the date on which submission of such information is due. Submission of a request for waiver does not excuse timely compliance with the registration and listing requirements. FDA will grant a waiver request if FDA determines that the use of electronic means for submission of registration and listing information is not reasonable for the registrant making the waiver request.
(b) Waiver requests under this section must be submitted in writing and must include the specific reasons why electronic submission is not reasonable for the registrant and a U.S. telephone number and mailing address where FDA can contact the registrant. All waiver requests must be sent to: SPL Coordinator, U.S. Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Silver Spring, MD 20993.
(c) If FDA grants the waiver request, FDA may limit its duration and will specify terms of the waiver and provide information on how to submit establishment registration, drug listings, other information, and updates, as applicable.
(a)
(1) Ensuring the accuracy of registration and listing information; and
(2) Reviewing, disseminating, routing, and responding to all communications from FDA including emergency communications.
(b)
(1) Reviewing, disseminating, routing, and responding to all communications from FDA including emergency communications;
(2) Responding to questions concerning those drugs that are imported or offered for import to the United States;
(3) Assisting FDA in scheduling inspections; and
(4) If FDA is unable to contact a foreign registrant directly or expeditiously, FDA may provide the information and/or documents to the United States agent. FDA's providing information and/or documents to the United States agent is equivalent to providing the same information and/or documents to the foreign registrant.
(a) Registration of an establishment or listing of a drug does not denote approval of the establishment, the drug, or other drugs of the establishment, nor does it mean that a product may be legally marketed. Any representation that creates an impression of official approval or that a drug is approved or is legally marketable because of registration or listing is misleading and constitutes misbranding.
(b) FDA's acceptance of registration and listing information, inclusion of a drug in our database of drugs, or assignment of an NDC does not denote approval of the establishment or the drug or any other drugs of the establishment, nor does it mean that the drug may be legally marketed. Any representation that creates the impression that a drug is approved or is legally marketable because it appears in our database of drugs, has been assigned or displays an NDC, or the establishment has been assigned an establishment registration number or Unique Facility Identifier is misleading and constitutes misbranding. Failure to comply with § 207.37 may also constitute misbranding.
(c) Neither registration nor listing constitutes a determination by FDA that a product is a drug as defined by section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act. Registration or listing may, however, be evidence that a
(a) Except as provided in paragraphs (b) and (c) of this section, the following information will be available for public disclosure, upon request or at FDA's discretion:
(1) All establishment registration information, and
(2) After a drug is marketed, information obtained under § 207.33, § 207.49, § 207.53, § 207.54, or § 207.57.
(b) Unless such information is publicly available or FDA finds that confidentiality would be inconsistent with protection of the public health, FDA will not make publicly available:
(1) Any information submitted under § 207.55 as the basis upon which it has been determined that a particular drug is not subject to section 505 or 512 of the Federal Food, Drug, and Cosmetic Act or section 351 of the Public Health Service Act,
(2) The names of any inactive ingredients submitted under § 207.49(a)(4) for which the registrant makes a valid assertion of confidentiality under § 20.61 of this chapter or other provision of law, or
(3) Drug listing information obtained under § 207.33(d)(3), § 207.49(a)(9) and (12), § 207.53(b) and (c), or § 207.54(a) or (c).
(c) FDA may determine, in limited circumstances and on a case-by-case basis, that it would be consistent with the protection of the public health and the Freedom of Information Act to exempt from public disclosure specific information identified in paragraph (a) of this section.
21 U.S.C. 321, 331, 351, 352, 353, 355, 356, 356a, 356b, 356c, 356e, 371, 374, 379e, 379k-1.
(b) * * *
(3) * * *
(iv)
(
(
(
(
(
(
21 U.S.C. 321, 331, 351, 352, 354, 356a, 360b, 360ccc, 371, 379e, 381.
(a) * * *
(12) The drug will be produced in whole or in part in an establishment that is not registered and not exempt from registration under section 510 of the Federal Food, Drug, and Cosmetic Act and part 207 of this chapter.
21 U.S.C. 360b, 371.
15 U.S.C. 1451-1561; 21 U.S.C. 321, 351, 352, 353, 355, 356b, 360, 360c-360f, 360h-360j, 371, 374, 379e, 381; 42 U.S.C. 216, 241, 262, 263, 264; sec. 122, Pub. L. 105-115, 111 Stat. 2322 (21 U.S.C. 355 note).
(f)
21 U.S.C. 321, 331, 351, 352, 355, 360, 371, 374, 381, 393; 42 U.S.C. 262, 264, 271.
(a) This part establishes establishment registration and product listing requirements for manufacturers of human blood and blood products.
(b) This part establishes establishment registration and product listing requirements for manufacturers of products that meet the definition of a device under the Federal Food, Drug, and Cosmetic Act and that are licensed under section 351 of the Public Health
(b) * * * For the purposes of this part only, blood and blood product also means those products that meet the definition of a device under the Federal Food, Drug, and Cosmetic Act and that are licensed under section 351 of the Public Health Service Act, as well as licensed biological products used in the manufacture of a licensed device.
(k)
(
All owners or operators of establishments that engage in the manufacturing of blood products are required to register, pursuant to section 510 of the Federal Food, Drug, and Cosmetic Act. Registration and listing of blood products must comply with this part. Registration does not permit any blood bank or similar establishment to ship blood products in interstate commerce.
(c) Except in the case of licensed device manufacturers, no registration fee is required. * * *
* * * Owners or operators of all establishments so engaged must register annually between October 1 and December 31 and must update their blood product listing every June and December.
(a) Initial and subsequent registrations and product listings must be submitted electronically through the Blood Establishment Registration and Product Listing system, or any future superseding electronic system. This information must be submitted in accordance with part 11 of this chapter, except for the requirements in § 11.10(b), (c), and (e), and the corresponding requirements in § 11.30. All information submitted under this part must be transmitted to FDA electronically unless FDA has granted a request for waiver of this requirement prior to the date on which the information is due. Submission of a request for waiver does not excuse timely compliance with the registration and listing requirements. FDA will grant a waiver request if FDA determines that the use of electronic means for submission of registration and listing information is not reasonable for the registrant making the waiver request.
(b) Waiver requests under this section must be submitted in writing and must include the specific reasons why electronic submission is not reasonable for the registrant and a U.S. telephone number and mailing address where FDA can contact the registrant. All waiver requests must be sent to the Director of FDA's Center for Biologics Evaluation and Research through the Document Control Center (see addresses
(c) If FDA grants the waiver request, FDA may limit its duration and will specify terms of the waiver and provide information on how to submit establishment registration, drug listings, other information, and updates, as applicable.
(a) The Blood Establishment Registration and Product Listing system requires furnishing or confirming registration information required by the Federal Food, Drug, and Cosmetic Act. This information includes the name and street address of the establishment, including post office code; a registration number if previously assigned by FDA and a Unique Facility Identifier in accordance with the system specified under section 510 of the Federal Food, Drug, and Cosmetic Act; all trade names used by the establishment; the kind of ownership or operation (that is, individually owned partnership, or corporation); and the name of the owner or operator of such establishment. The term “name of the owner or operator” must include, in the case of a partnership, the name of each partner and, in the case of a corporation, the name and title of each corporate officer and director and the name of the State of incorporation. The information required must be given separately for each establishment, as defined in § 607.3(c).
(b) The following information must also be provided:
(1) A list of blood products by established name as defined in section 502(e) of the Federal Food, Drug, and Cosmetic Act and by proprietary name, if any, which are being manufactured for commercial distribution at the identified establishment and which have not been included in any list previously submitted to FDA through the Blood Establishment Registration and Product Listing system or any future superseding electronic system.
(2) For each blood product so listed that is subject to section 351 of the Public Health Service Act, the license number of the manufacturer issued by the Center for Biologics Evaluation and Research, Food and Drug Administration.
(3) For each blood product listed, the registration number if previously assigned by FDA and the Unique Facility Identifier of the parent establishment. An establishment not owned, operated, or controlled by another firm or establishment is its own parent establishment.
Changes in individual ownership, corporate or partnership structure, location, or blood product handling activity must be submitted electronically through the Blood Establishment Registration and Product Listing system, or any future superseding electronic system, as an amendment to registration within 5 calendar days of such changes. * * *
(a) After submission of the initial blood product listing information, every person who is required to list blood products under § 607.20 must submit electronically through the Blood Establishment Registration and Product
An establishment registration number will be assigned to each blood product establishment registered in accordance with this part.
(a) Except as provided in paragraph (b) of this section, all registration and listing information obtained under §§ 607.25, 607.26, and 607.30 will be made available for public disclosure through the Center for Biologics Evaluation and Research (CBER) Blood Establishment Registration Database Web site by using the CBER electronic Web-based application or by going in person to the Food and Drug Administration, Division of Freedom of Information Public Reading Room (see addresses in § 20.120(a) of this chapter).
(b) FDA may find, in limited circumstances and on a case-by-case basis, that it would be consistent with the protection of the public health to exempt from public disclosure specific listing information obtained under § 607.25 or § 607.30.
(c) Other requests for information regarding blood establishment registrations and blood product listings should be directed to the Food and Drug Administration, Center for Biologics Evaluation and Research Office of Communication, Outreach, and Development, 10903 New Hampshire Ave., Bldg. 71, Rm. 3103, Silver Spring, MD 20993-0002.
Registration of an establishment, validation of registration, or assignment of a registration number does not in any way denote approval of the firm or its products nor does it mean that the products may be legally marketed. Any representation that creates an impression of official approval because of establishment registration, validation of registration, or possession of a registration number is misleading and constitutes misbranding.
(d) Each foreign establishment required to register under paragraph (a) of this section must submit the name, address, telephone number, and email address of its United States agent as part of its initial and updated registration information in accordance with subpart B of this part. Each foreign establishment must designate only one United States agent.
(3) The foreign establishment or the United States agent must report changes in the United States agent's name, address, telephone number, or email address to FDA within 30 calendar days of the change.
(e) Each foreign establishment required to register under paragraph (a) of this section must register and list blood products using the Blood Establishment Registration and Product Listing system, or any superseding electronic system, unless FDA waives the electronic submission requirement in accordance with § 607.22.
(g) Persons who engage solely in the production of any plasma derivative, including, but not limited to, albumin, Immune Globulin, Factor VIII and Factor IX, bulk product substances such as fractionation intermediates or pastes, or recombinant versions of plasma derivatives or animal derived plasma derivatives. These persons must register and list under part 207 of this chapter.
Manufacturers of products that meet the definition of a device under the Federal Food, Drug, and Cosmetic Act and that are licensed under section 351 of the Public Health Service Act, as well as licensed biological products used in the manufacture of a licensed device, must register and list following the procedures under this part, with respect to their manufacture of those products, unless otherwise noted in this section.
42 U.S.C. 216, 243, 263a, 264, 271.
(mm)
(nn)
(a) You must use the electronic registration and listing system at
(1) Establishment registration,
(2) HCT/P listings, and
(3) Updates of registration and HCT/P listing.
(b) FDA will periodically issue guidance on recommended procedures for providing registration and listing information in electronic format (for
(c) You must provide the information under paragraph (a) of this section in accordance with part 11 of this chapter, except for the requirements in § 11.10(b), (c), and (e) and the corresponding requirements in § 11.30.
(a) You may request a waiver from the requirement in § 1271.22 that information must be provided to FDA in electronic format. Submission of a request for waiver does not excuse timely compliance with the registration and listing requirements. FDA will grant a waiver request if FDA determines that the use of electronic means for submission of registration and listing information is not reasonable for the registrant making the waiver request.
(b) Waiver requests under this section must be submitted in writing and must include the specific reasons why electronic submission is not reasonable for the registrant and a U.S. telephone number and mailing address where FDA can contact the registrant. Waiver requests may be sent to the Center for Biologics Evaluation and Research (CBER), Document Control Center (see addresses in § 600.2 of this chapter).
(c) If FDA grants the waiver request, FDA may limit its duration and will specify terms of the waiver and provide information on how to submit establishment registration, listings, other information, and updates, as applicable.
(a) Your establishment registration must include:
(2) Each physical location, including the street address, telephone number, email address, and the postal service ZIP code of the establishment;
(3) The name, address, telephone number, email address, and title of the reporting official;
(5) Each foreign establishment must also submit the name, address, telephone number, and email address of each importer that is known to the establishment, and the name of each person who imports or offers for import such HCT/P to the United States for purposes of importation; and
(6) Each foreign establishment must also submit the name, address, telephone number, and email address of its United States agent.
(i) The United States agent must reside or maintain a place of business in the United States.
(ii) Upon request from FDA, the United States agent must assist FDA in communications with the foreign establishment, respond to questions concerning the foreign establishment's products that are imported or offered for import into the United States, and assist FDA in scheduling inspections of the foreign establishment. If the Agency is unable to contact the foreign establishment directly or expeditiously, FDA may provide information or documents to the United States agent, and such an action is equivalent to providing the same information or documents to the foreign establishment.
(iii) The foreign establishment or the United States agent must report changes in the United States agent's name, address, telephone number, or email address to FDA within 30 calendar days of the change.
(c) * * *
(4) Any material change in any information previously submitted. Material changes include any change in registration and listing information, submitted, such as whether the HCT/P meets the criteria set out in § 1271.10.
(d) If your HCT/P is described under § 1271.20 and is regulated under a BLA, you must submit the information required under part 207 of this chapter using the procedures under subpart E of part 207.
If the ownership or location of your establishment changes, or if there is a change in the United States agent's name, address, telephone number, or email address, you must submit an amendment to registration within 30 calendar days of the change.
The Secretaries shall prohibit persons from conducting or causing to be conducted the following activities:
1. Exploring for, developing, or producing oil, gas, or minerals, or any energy development activities within the Monument Expansion;
2. Using or attempting to use poisons, electrical charges, or explosives in the collection or harvest of a Monument Expansion resource;
3. Introducing or otherwise releasing an introduced species from within or into the Monument Expansion;
4. Removing, moving, taking, harvesting, possessing, injuring, disturbing, or damaging, or attempting to remove, move, take, harvest, possess, injure, disturb, or damage, any living or nonliving Monument Expansion resource, except as provided under regulated activities below;
5. Drilling into, dredging, or otherwise altering the submerged lands, or constructing, placing, or abandoning any structure, material, or other matter on the submerged lands, except for scientific instruments;
6. Anchoring on or having a vessel anchored on any living or dead coral with an anchor, anchor chain, or anchor rope;
7. Deserting a vessel at anchor or adrift within the Monument Expansion; and
8. Commercial fishing and possessing commercial fishing gear except when stowed and not available for immediate use during passage without interruption through the Monument Expansion.
1. Native Hawaiian practices, including exercise of traditional, customary, cultural, subsistence, spiritual, and religious practices within the Monument Expansion;
2. Research and scientific exploration designed to further understanding of Monument Expansion resources and qualities;
3. Scientific research and development by Federal agencies that cannot be conducted in any other location;
4. Activities that will further the educational value of the Monument Expansion or will assist in the conservation and management of the Monument Expansion;
5. Anchoring scientific instruments; and
6. Non-commercial fishing, provided that the fish harvested, either in whole or in part, cannot enter commerce through sale, barter, or trade, and that the resource is managed sustainably.
1. The prohibitions required by this proclamation shall not apply to activities and exercises of the U.S. Armed Forces, including those carried out by the United States Coast Guard.
2. The U.S. Armed Forces shall ensure, by the adoption of appropriate measures not impairing operations or operation capabilities, that its vessels and aircraft act in a manner consistent, so far as is practicable, with this proclamation.
3. In the event of threatened or actual destruction of, loss of, or injury to a Monument Expansion resource or quality resulting from an incident, including but not limited to spills and groundings, caused by a component of the Department of Defense or the United States Coast Guard, the cognizant component shall promptly coordinate with the Secretaries for the purpose of taking appropriate action to respond to and mitigate any harm and, if possible, restore or replace the Monument resource or quality.
4. Nothing in this proclamation or any regulation implementing it shall limit or otherwise affect the U.S. Armed Forces discretion to use, maintain, improve, manage, or control any property under the administrative control of a Military Department or otherwise limit the availability of such property for military mission purposes, including, but not limited to, defensive areas and airspace reservations.
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration |