Federal Register Vol. 81, No.171,

Title VII of the Consolidated Natural Resources Act of 2008 (CNRA) extended U.S. immigration law, with limited exception, to the CNMI and provided CNMI-specific provisions affecting foreign workers. See Public Law 110-229, 122 Stat. 754, 853-854. The CNRA provided for a “transition period” to phase out the CNMI's nonresident contract worker program and phase in the U.S. federal immigration system in a manner that minimizes adverse economic and fiscal effects and maximizes the CNMI's potential for future economic and business growth. See sections 701(b) and 702(a) of the CNRA.

The CNRA authorized the Secretary of Homeland Security to create a nonimmigrant classification that would ensure adequate employment in the CNMI during the transition period. See section 702(a) of the CNRA; 48 U.S.C. 1806(d). The Department of Homeland Security (DHS) published a final rule on September 7, 2011, amending the regulations at 8 CFR 214.2(w) to implement a temporary, CNMI-only transitional worker nonimmigrant classification (CW classification, which includes CW-1 for principal workers and CW-2 for spouses and minor children). See Commonwealth of the Northern Mariana Islands Transitional Worker Classification, 76 FR 55502 (Sept. 7, 2011).

The CNRA mandated an annual reduction in the allocation of the number of permits issued per year and in 2014 Congress extended the sunset date to provide for the total elimination of the CW nonimmigrant classification by the December 31, 2019 sunset date. See 48 U.S.C. 1806(d)(2). At the outset of the transitional worker program, DHS set the CW-1 numerical limitation for FY 2011 at 22,417 and for FY 2012 at 22,416. DHS announced these annual numerical limitations in DHS regulations at 8 CFR 214.2(w)(1)(viii)(A) and (B).

DHS subsequently opted to publish any future annual numerical limitations by Federal Register notice. See 8 CFR 214.2(w)(1)(viii)(C). Instead of developing a numerical limit reduction plan, DHS determined that it would assess the CNMI's workforce needs on a yearly basis during the transition period. Id. This approach to the allocation system ensured that CNMI employers had an adequate supply of workers to better facilitate a smooth transition into the federal immigration system. It also provided DHS with the flexibility to adjust to the future needs of the CNMI economy and to assess the total foreign workforce needs based on the number of requests for transitional worker nonimmigrant classification received following implementation of the CW-1 program.

DHS followed this same rationale for the FY 2013 and FY 2014 numerical limitations. After assessing all workforce needs, including the opportunity for economic growth, DHS set the CW-1 numerical limitation at 15,000 and 14,000 respectively for FY 2013 and FY 2014. See CNMI-Only Transitional Worker Numerical Limitation for Fiscal Year 2013, 77 FR 71287 (Nov. 30, 2012); CNMI-Only Transitional Worker Numerical Limitation for Fiscal Year 2014, 78 FR 58867 (Sept. 25, 2013). DHS based the FY 2013 and FY 2014 numerical limitations on the actual demonstrated need for foreign workers in the CNMI during FY 2012. See 77 FR 71287, 78 FR 58867.

The CNRA directed that the U.S. Secretary of Labor must determine whether an extension of the CW program for an additional period of up to 5 years is necessary to ensure that an adequate number of workers will be available for legitimate businesses in the CNMI. The CNRA further provided the Secretary of Labor with the authority to provide for such an extension through notice in the Federal Register. On June 3, 2014, the Secretary of Labor extended the CW program for an additional 5 years, through December 31, 2019. See Secretary of Labor Extends the Transition Period of the Commonwealth of the Northern Mariana Islands-Only Transitional Worker Program, 79 FR 31988 (June 3, 2014).

DHS based the FY 2015 numerical limitation on a number of factors, including:

• The Department of Labor's extension of the CW program;

• The CNMI's labor market needs; and

• The CNRA's mandate to annually reduce the number of transitional workers until the end of the extended transitional worker program.

On December 16, 2014, Congress amended the law to extend the transition period until December 31, 2019. See Consolidated and Further Continuing Appropriations Act, 2015, Public Law 113-235, sec. 10, 128 Stat. 2130, 2134 (codified at 48 U.S.C. 1806(d)). Congress also eliminated the Secretary of Labor's authority to provide for future extensions of the CW-1 program, requiring the CW-1 program to end (or sunset) on December 31, 2019. See id.

For FY 2016, DHS reduced the numerical limitation by 1,000 to a limit of 12,999. See CNMI-Only Transitional Worker Numerical Limitation for Fiscal Year 2016, 80 FR 63911 (Oct. 22, 2015). On May 20, 2016, U.S. Citizenship and Immigration Services (USCIS) notified the public that it had received a sufficient number of petitions to reach the numerical limit (the “cap”) of 12,999 workers who may be issued CW-1 visas or otherwise provided with CW-1 status for FY 2016. The USCIS Update advised stakeholders that May 5, 2016 was the final receipt date for CW-1 worker petitions requesting an employment start date before October 1, 2016.1

The CNRA requires an annual reduction in the number of transitional workers but does not mandate a specific numerical reduction. See 48 U.S.C. 1806(d)(2). In addition, DHS regulations provide that the numerical limitation for any fiscal year will be less than the number established for the previous fiscal year, and that the adjusted number will be reasonably calculated to reduce the number of CW-1 nonimmigrant workers to zero by the end of the program. 8 CFR 214.2(w)(1)(viii)(C). DHS may adjust the numerical limitation at any time by publishing a notice in the Federal Register, but the Department may only reduce the figure. See 8 CFR 214.2(w)(1)(viii)(D).

Because the CW-1 numerical limit was reached for FY 2016 on May 5, DHS has decided to preserve the status quo, or current conditions, rather than aggressively reduce CW-1 numbers for FY 2017. DHS recognizes that any numerical limitation must account for the fact that the CNMI economy continues to be based on a workforce composed primarily of foreign workers. DHS must reduce the annual numerical limitation as statutorily mandated. At the same time, DHS should ensure that there are enough CW-1 workers for future fiscal years until the end of the program. DHS therefore is reducing the numerical limitation nominally by one, resulting in an FY 2017 limit of 12,998.

This new numerical limitation preserves access to foreign labor in the CNMI. Accordingly, DHS is reducing the maximum number of transitional workers from the current fiscal year numerical limitation of 12,999 and establishing 12,998 as the maximum number of persons who may be granted CW-1 nonimmigrant status in FY 2017. DHS nonetheless emphasizes that the statute requires the Department to reduce the annual numerical limitation to zero no later than the end of calendar year 2019. It therefore may be prudent for CNMI employers and CW-1 workers to plan for more significant reductions in the annual numerical limitation in the years ahead.

The FY 2017 numerical limitation for CW-1 nonimmigrant workers will be in effect beginning on October 1, 2016. Consistent with the rules applicable to other nonimmigrant worker visa classifications, if the numerical limitation for the fiscal year is not reached, the unused numbers do not carry over to the next fiscal year. See 8 CFR 214.2(w)(1)(viii)(E).

Generally, each CW-1 nonimmigrant worker with an approved employment start date that falls within FY 2017 (October 1, 2016—September 30, 2017) will be counted against the new numerical limitation of 12,998. Counting each CW-1 nonimmigrant worker in this manner will help ensure that USCIS does not approve requests that would exceed the numerical limitation of 12,998 CW-1 nonimmigrant workers granted such status in FY 2017.

This notice does not affect the current immigration status of foreign workers who have CW-1 nonimmigrant status. Foreign workers, however, will be affected by this notice when their CNMI employers file:

• For an extension of their CW-1 nonimmigrant classification, or

• A change of status from another nonimmigrant status to that of CW-1 nonimmigrant status.

This notice does not affect the status of any individual currently holding CW-2 nonimmigrant status as the spouse or minor child of a CW-1 nonimmigrant worker. This notice also does not directly affect the ability of any individual to extend or otherwise obtain CW-2 status, as the numerical limitation applies to CW-1 principals only. This notice, however, may indirectly affect individuals seeking CW-2 status since their status depends on the CW-1 principal's ability to obtain or retain CW-1 status.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain IAE V2522-A5, V2524-A5, V2525-D5, V2527-A5, V2527E-A5, V2527M-A5, V2528-D5, V2530-A5, and V2533-A5 turbofan engines. The NPRM published in the Federal Register on April 5, 2016 (81 FR 19516). The NPRM was prompted by the fracture of the HPT stage 2 hub during flight, which resulted in an IFSD, undercowl fire, and smoke in the cabin. The NPRM proposed to require inspecting the HPT stage 1 hub and HPT stage 2 hub, and, if necessary, their replacement with parts that are eligible for installation. We are issuing this AD to prevent failure of the HPT stage 1 or HPT stage 2 hubs, which could result in uncontained HPT blade release, damage to the engine, and damage to the airplane.

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.

IAE and Cathay Pacific requested that we update this AD to refer to Non-Modification Service Bulletin (NMSB) V2500-ENG-72-0661 Revision 2, dated May 27, 2016, and allow credit for previous actions to include hubs inspected and cleared to IAE's NMSB V2500-ENG-72-0661, Original issue, dated November 10, 2015; and Revision 1, dated February 5, 2016.

We agree. We updated this AD to refer to NMSB V2500-ENG-72-0661, Revision 2, dated May 27, 2016. We are also including a Credit for Previous Actions paragraph that references IAE NMSB V2500-ENG-72-0661, Original issue, dated November 10, 2015; and Revision 1, dated February 5, 2016.

IndiGo and Cathay Pacific stated that the NPRM uses hub cycles since new (CSN) to determine when hub inspections are required. However, the commenters requested that this AD be specific as to the date on which CSN of the hubs are established. The IAE NMSB, Compliance Section, Table 1 refers to a compliance time within “Hub cycles as of February 1, 2016”, but the NPRM does not mention any date. One commenter states that compliance to the February 1, 2016 date will not provide adequate planning time to operators for compliance.

We agree. This AD requires actions after the effective date of this AD. Therefore, we changed paragraphs (e)(1)(i), (ii), (iii), and (iv) of this AD to read “for hubs with [xxx] CSN on the effective date of this AD”.

Germanwings GmbH requested that the effective date of this AD be aligned with IAE NMSB V2500-ENG-72-0661, Revision 2, dated May 27, 2016, which refers to “Hub cycles as of February 1, 2016.” The commenter states that the difference in time between the effective date of this AD and February 1, 2016 listed in the NMSB will cause a mismatch in the compliance time.

We disagree. Basing the compliance times on the effective date of this AD is less restrictive than the IAE NMSB, so complying with this AD based on hub CSN as of the earlier NMSB date, would satisfy this AD. We did not change this AD.

Delta Airlines and one other commenter requested that we change the definition of shop visit from separation of pairs of major mating engine flanges, to either piece-part exposure, HPT flange separation, or disassembly of the HPT rotor and stator assemblies.

Delta Airlines stated that compliance at the next shop visit, as defined in this AD would result in unnecessary cost and extended shop time. The other commenter stated that changing the definition would allow more flexibility in fleet management. Both commenters state that inspection at the next shop visit is not needed, since removal of the suspect hubs within the proposed cycle limits will provide an acceptable level of safety.

We disagree. Allowing all engines to operate until their respective cycle limit would not provide an acceptable level of safety. By inspecting a specific quantity of engines that will be inducted into the shop before the cycle limit occurs, the safety risk assessment is satisfied. Therefore, waiting until the piece-part exposure, HPT flange separation, or the cycle threshold in lieu of inspection at the next shop visit, does not meet the requirement of this AD. We did not change this AD.

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. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (81 FR 19516, April 5, 2016) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (81 FR 19516, April 5, 2016).

We reviewed IAE NMSB V2500-ENG-72-0661, Revision 2, dated May 27, 2016. The NMSB describes procedures for inspecting the HPT stage 1 and stage 2 hubs. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 668 engines with 947 hubs installed on airplanes of U.S. registry. Some of the 668 engines have two hubs installed. We estimate that it would take about 8 hours per hub to perform the piece-part inspection. The average labor rate is $85 per hour. We estimate that 568 hubs will require replacement. We estimate the pro-rated cost to replace an HPT stage 1 hub to be $50,271 and the pro-rated cost to replace an HPT stage 2 hub to be $40,063. Based on these figures, we estimate the cost of this AD on U.S. operators to be $26,298,816.

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

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

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

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

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

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

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

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

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

The Commission is adding paragraphs (b)(9) and (b)(10) to Exchange Act rule 13n-4 to implement the statutory requirement that security-based swap data repositories conditionally provide data to certain regulators and other authorities. The Commission also is adding paragraph (d) to rule 13n-4 to specify the method to be used to comply with the associated statutory notification requirement.

Title VII of the Dodd-Frank Act amended the Exchange Act to provide a comprehensive regulatory framework for security-based swaps, including the regulation of security-based swap data repositories.1

Those amendments, among other things, require that security-based swap data repositories make data available to certain regulators and other entities. In particular, the amendments conditionally require that security-based swap data repositories “on a confidential basis pursuant to section 24, upon request, and after notifying the Commission of the request, make available security-based swap data obtained by the security-based swap data repository, including individual counterparty trade and position data” to specified recipients.2 As provided by the statute, these recipients include “each appropriate prudential regulator” 3 ; the Financial Stability Oversight Council (“FSOC”); the Commodity Futures Trading Commission (“CFTC”); the Department of Justice; and “any other person that the Commission determines to be appropriate,” including foreign financial supervisors (including foreign futures authorities), foreign central banks, foreign ministries and other foreign authorities.4

Access to data pursuant to these provisions is conditioned on the repository receiving “a written agreement from each entity stating that the entity shall abide by the confidentiality requirements described in section 24 relating to the information on security-based swap transactions that is provided.” 5

As enacted in 2010, moreover, the data access provisions stated that before such data is shared, “each entity shall agree to indemnify the security-based swap data repository and the Commission for any expenses arising from litigation relating to the information provided under section 24.” 6 Congress repealed the indemnification requirement in December 2015.7

In 2015, prior to the legislative revision of the data access provisions, the Commission proposed rule amendments to implement the data access provisions.8 This proposal built upon two earlier Commission proposals,9 and specifically set forth proposed amendments to Exchange Act rule 13n-4—which the Commission previously adopted as part of a series of rules governing the registration process, duties and core principles applicable to security-based swap data repositories.10 Key elements of the proposal were:

• Designation of entities eligible to access data. The proposal: (i) Specifically identified each of the five applicable prudential regulators as being eligible to access data under these provisions 11 ; (ii) identified the Federal Reserve Banks and the Office of Financial Research (“OFR”) as being able to access data 12 ; and (iii) stated that the Commission would consider the presence of certain confidentiality-related protections in determining whether to permit other entities to access data pursuant to these provisions, and that the associated determination orders typically would incorporate conditions that “specify the scope of a relevant authority's access to data, and that limit this access in a manner that reflects the relevant authority's regulatory mandate or legal responsibility or authority.” 13

• Confidentiality condition. To implement the statutory confidentiality condition, the proposal stated that before a repository could provide access, there would have to be in effect an arrangement between the Commission and the entity (in the form of a memorandum of understanding (“MOU”) or otherwise) to address the confidentiality of the information made available. This arrangement would be deemed to satisfy the statutory requirement that the repository receive a written confidentiality agreement from the recipient entity.14

• Notification requirement. To implement the statutory requirement that the Commission be notified of data access requests, the proposal provided that a repository must notify the Commission of the first request for data from a particular entity, and must maintain records of all information related to the initial and all subsequent request for data access from that entity.15

• Limitation to security-based swap data. The proposal specified that data access under the rules would apply only to “security-based swap data.” 16

• Scope of application of data access provisions. The proposal stated that the data access provisions and its associated conditions would not apply in certain circumstances, including when information is received directly from the Commission.17

• Indemnification exemption. The proposal set forth a conditional exemption to the then-extant indemnification requirement. The proposed exemption was conditioned in part on the applicable security-based swap information relating to persons or activities being within the recipient entity's “regulatory mandate, or legal responsibility or authority.” 18

A commenter criticized the inclusion of a notification requirement,19 suggesting that the scope of certain regulators' access to security-based swap data should be determined on a case-by-case basis,20 and supported elimination of the statutory indemnification requirement.21

The Commission reopened the comment period earlier this year to allow the public the opportunity to comment on the remainder of the proposal in light of the statutory changes, including removal of the statutory indemnification requirement.22 That release recognized that Congress eliminated the indemnification requirement discussed above, making unnecessary paragraph (d) of proposed rule 13n-4. The Commission received two additional comments in response.23

For the reasons discussed below, and after considering commenter concerns, the Commission is adopting final rules to implement the data access statutory provisions. The final rules largely are the same as those that were proposed, apart from eliminating the proposed indemnification exemption in response to the removal of the underlying statutory provision.24

Accordingly, should the confidentiality condition to data access be satisfied, security-based swap data repositories would be legally obligated to provide relevant authorities with access to security-based swap data, consistent with the parameters of any Commission orders, MOUs or other arrangements that are relevant to the availability and scope of access.25

As noted above, the Exchange Act provides that a repository is conditionally obligated to make information available to, among others, “each appropriate prudential regulator.” 26 To implement this, the proposed rules identified, as being eligible to access data, each of the entities encompassed within the statutory “prudential regulator” definition: The Board of Governors of the Federal Reserve System (“Board”), the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (“FDIC”), the Farm Credit Administration, and the Federal Housing Finance Agency.27 The proposed rules also included “any Federal Reserve Bank” among the entities conditionally eligible to access data,28 in accordance with the Exchange Act provision that extends data access to “any other person that the Commission determines to be appropriate.” 29

No commenter addressed the proposal to specifically identify the prudential regulators or the Federal Reserve Banks as being eligible to access such data.30

The final rule incorporates the elements of proposed Exchange Act rule 13n-4(b)(9)(i)-(v), as discussed below, without change.31

The final rule accordingly identifies each of the five prudential regulators as being able to access data. Consistent with the discussion in the proposal, this is to specify that those regulators' ability to access security-based swap data would not vary depending on whether entities regulated by the regulators are acting as security-based swap dealers, as major security-based swap participants, or in some other capacity,32 or vary depending on whether the regulator acts in a “prudential” capacity in connection with the information, so long as the prerequisites to data access, including the confidentiality condition, have been met.33

The final rules also include “any Federal Reserve Bank” among the entities conditionally eligible to access security-based swap data from repositories,34 in accordance with the Exchange Act provision that extends data access to “any other person that the Commission determines to be appropriate.” 35 The Commission believes that it is appropriate for the Federal Reserve Banks to be able to access security-based swap data, subject to the confidentiality condition and other applicable prerequisites. In part, this conclusion is based on the Commission's understanding that the Federal Reserve Banks occupy important oversight roles under delegated authority from the Board, including supervision of banks that are under the Board's authority, and gathering and analyzing information to inform the Federal Open Market Committee regarding financial conditions.36 The Commission further understands that the Federal Reserve Banks, as well as the Board, would use data from security-based swap data repositories to fulfill statutory responsibilities related to prudential supervision and financial stability.37 The Commission accordingly concludes that the Federal Reserve Banks should conditionally have access to the security-based swap data.38

A Federal Reserve Bank's ability to access such data would be subject to conditions related to confidentiality, as would the ability of any other entity that is identified by statute or determined by the Commission to access such data.39 As discussed below, the Commission may consider the recipient entity's regulatory mandate or legal responsibility or authority, and tailor the entity's access in accordance with that regulatory mandate or legal responsibility or authority.40

The Exchange Act also states that FSOC, CFTC, and the Department of Justice may access security-based swap data,41 and the proposed rules accordingly identified those entities as being conditionally authorized to access such data.42 The proposed rules further stated that the OFR conditionally would be eligible to access such data,43 in accordance with the Exchange Act provision that extends data access to “any other person that the Commission determines to be appropriate.” 44

No commenter addressed these aspects of the proposal.

The final rule incorporates these elements of the proposal without change.45 As discussed in the Proposing Release, the rule includes the FSOC, CFTC, and the Department of Justice among the entities that may access data.

Moreover, the Commission believes that such access by the OFR is appropriate in light of the OFR's regulatory mandate and legal responsibility and authority.46 The OFR was established by Title I of the Dodd-Frank Act to support FSOC and FSOC's member agencies by identifying, monitoring and assessing potential threats to financial stability through the collection and analysis of financial data gathered from across the public and private sectors.47 In connection with this statutory mandate to monitor and assess potential threats to financial stability, the OFR's access to security-based swap transaction data may be expected to help assist it in examining the manner in which derivatives exposures and counterparty risks are distributed through the financial system, and in otherwise assessing those risks. The Commission accordingly concludes that the OFR should conditionally have access to the security-based swap data.48

As with the other entities that may access data pursuant to the data access provision, the OFR's ability to access such data would be subject to conditions related to confidentiality.49

As noted, the Dodd-Frank Act amended the Exchange Act to provide that data access under these provisions would be available to “any other person that the Commission” determines to be appropriate, including foreign financial supervisors (including foreign futures authorities), foreign central banks and foreign ministries.50 To implement that requirement, the proposed rule provided that data access would be available to any other person that the Commission determines to be appropriate, conditionally or unconditionally, by order, including but not limited to foreign financial supervisors, foreign central banks and foreign ministries.51 The Commission noted that one or more self-regulatory organizations potentially may seek such access under this provision.52

In the proposal, the Commission further stated that in connection with making such a determination, it would consider the presence of a confidentiality-related MOU or other arrangement between the Commission and a relevant authority, and whether the information would be subject to robust confidentiality safeguards. The Commission added that it would consider an authority's interest in access to security-based swap data based on the relevant authority's regulatory mandate or legal responsibility or authority, and that the Commission preliminarily expected that determination orders typically would incorporate conditions that specify the scope of a relevant authority's access to data, and that limit such access in a manner that reflects the relevant authority's regulatory mandate or legal responsibility or authority.53 In addition, the Commission anticipated that it would take into account any other factors appropriate to the determination, including whether the determination was in the public interest, and whether the relevant authority agrees to provide the Commission and other U.S. authorities with reciprocal assistance in matters within their jurisdiction.54

As part of the proposal, the Commission noted that it may issue determination orders of a limited duration, and that the Commission may revoke a determination at any time.55 The Commission also stated the preliminary belief that it is not necessary to prescribe by rule specific processes to govern a repository's treatment of requests for access.56

As discussed below, one commenter addressed the Commission's future determination orders regarding data access.57

To implement its determination authority the Commission largely is adopting these provisions as proposed, except that the final rule, consistent with the recent statutory change, also identifies “other foreign authorities” within the nonexclusive list of the types of entities that may be subject to a determination pursuant to this authority.58 The Commission will make such determinations through the issuance of Commission orders, and such determinations may be conditional or unconditional.59

As stated in the proposal, the Commission expects that it would consider a variety of factors in connection with making such a determination, and that it may impose associated conditions in connection with the determination. In part, given the importance of maintaining the confidentiality of security-based swap data, the Commission expects to consider whether there is an MOU or other arrangement between the Commission and the relevant authority that is designed to protect the confidentiality of the security-based swap data provided to the authority.60 The Commission also expects to consider whether such data would be subject to robust confidentiality safeguards, such as safeguards set forth in the relevant jurisdiction's statutes, rules or regulations with regard to disclosure of confidential information by an authority or its personnel, and/or safeguards set forth in the authority's internal policies and procedures.

In addition, the Commission may consider the relevant authority's interest in access to security-based swap data based on the relevant authority's regulatory mandate or legal responsibility or authority. Consistent with that factor, the Commission expects that such determination orders typically would incorporate conditions that specify the scope of a relevant authority's access to data, and that limit this access in a manner that reflects the relevant authority's regulatory mandate or legal responsibility or authority.61 Depending on the nature of the relevant authority's interest in the data, such conditions could address factors such as the domicile of the counterparties to the security-based swap, and the domicile of the underlying reference entity. Limiting the amount of information accessed by an authority in this manner should be expected to help minimize the risk of unauthorized disclosure, misappropriation or misuse of security-based swap data, as each relevant authority will only have access to information within its regulatory mandate, or legal responsibility or authority.62

The Commission continues to anticipate taking into account any other factors that are appropriate to the determination, including whether such a determination would be in the public interest, and whether the relevant authority agrees to provide the Commission and other U.S. authorities with reciprocal assistance in matters within their jurisdiction.

One commenter suggested that the ability of authorities (other than prudential regulators) to access data pursuant to these provisions should be subject to request-by-request Commission determinations that address permissible uses and disclosures of such data, to balance the need for information sharing against “overly expansive access to confidential information.” 63 That commenter subsequently expressed the view that the Commission should simplify its proposal to allow access to data by certain named entities, consistent with their interest based on their regulatory mandate or legal responsibility or authority, “without further action needed to be taken by the requesting body or the [repository].” The commenter added that trade repositories needed “clear and specific guidance”—such as that expressed in the CPMI-IOSCO guidance regarding access to trade repository data—regarding the type of data that should be made accessible to each of the different requesting entities.” 64

The Commission has considered these suggestions, but has determined not to change the approach of the proposal, either by implementing a request-by-request approach toward access for some entities, or by allowing data access to other entities without further action. The Commission concludes that a request-by-request approach for access generally would be impracticable in terms of resources and operational delays, as well as unnecessary in light of the final rule's approach of linking access under the Commission's determination authority in a manner that reflects an entity's regulatory mandate or legal responsibility or authority. In our view, this approach reasonably achieves the goal of providing clear and specific guidance to repositories, as suggested by the commenter, in a manner that appropriately balances the benefits of information sharing with the need to protect the confidentiality of information. Moreover, with respect to the suggestion that data access may be allowed for certain entities without further action by these entities or the repository, in our view such an approach would not achieve the confidentiality benefits that will flow from using MOUs or other arrangements. The final rule's approach of using MOUs or other arrangements between the Commission and recipient entities to satisfy the confidentiality condition, in any event, addresses the commenter's suggestion in part by obviating the need for the repository (as opposed to the recipient entities) to take further action with respect to satisfying the confidentiality condition. In addition, this approach will provide a vehicle for the Commission to provide the type of “clear and specific guidance” requested by the commenter. Moreover, the use of the Commission-negotiated confidentiality arrangements will eliminate the need for each recipient entity to negotiate separate confidentiality arrangements with each trade repository.

Consistent with the proposal, the Commission may take various approaches in deciding whether to impose additional conditions in connection with its consideration of requests for determination orders. For example, the Commission may issue a determination order that is of a limited duration. In addition, the Commission further may revoke a determination at any time, such as, for example, if a relevant authority fails to comply with the MOU or other arrangement by failing to keep confidential security-based swap data provided to it by a repository. Even absent such a revocation, an authority's access to data pursuant to these provisions also would cease upon the termination of the MOU or other arrangement used to satisfy the confidentiality condition.65

The Commission continues to expect that repositories will provide relevant authorities with access to security-based swap data in accordance with the determination orders, and the Commission generally does not expect to be involved in reviewing, signing-off on or otherwise approving relevant authorities' requests for security-based swap data from repositories that are made in accordance with a determination order. The final rule also does not prescribe any specific processes to govern a repository's treatment of requests for access.66

Finally, consistent with the proposal, the Commission notes that when it designates an authority to receive direct electronic access to data under section 13(n)(5)(D)—which states that a repository must provide such access to the Commission “or any designee of the Commission, including another registered entity”—the Commission may elect to apply these determination factors and consider applying protections similar to those in the data access provisions of Exchange Act sections 13(n)(5)(G) and (H).67

The Exchange Act states that a repository must notify the Commission when an entity requests the repository to make available security-based swap data.68 The Commission proposed to implement that notification requirement by requiring that the repository inform the Commission upon its receipt of the first request for data from a particular entity (which may include any request that the entity be provided ongoing online or electronic access to the data), and to maintain records of all information related to the initial and all subsequent requests for data access requests from that entity, including records of all instances of online or electronic access, and records of all data provided in connection with such requests or access.69

In making this proposal, the Commission noted that one commenter had opposed any requirement that the Commission receive notice of a recipient's initial request, on the grounds that such notice may cause other authorities to hesitate to make such requests. The Commission explained, however, that it is necessary for the Commission to be informed of the initial request from a particular entity, and that commenter's concerns that other regulators may be reluctant to place the Commission on notice of such initial requests are mitigated by the Commission's long history of cooperation with other authorities in supervisory and enforcement matters.70 As discussed below, one commenter addressed the notification requirement.71

The Commission is adopting as proposed the approach for implementing the notification requirement.72 Accordingly, a security-based swap data repository would be required to inform the Commission upon its receipt of the first request for data from a particular entity (which may include any request that the entity be provided ongoing online or electronic access to the data).73 A repository must keep such notifications and any related requests confidential.74

Under the final rule, the repository also must maintain records of all information related to the initial and all subsequent requests for data access requests from that entity, including records of all instances of online or electronic access, and records of all data provided in connection with such requests or access.75 For these purposes, we believe that “all information related to” such requests would likely include, among other things: The identity of the requestor or person accessing the data; the date, time and substance of the request or access; date and time access is provided; and copies of all data reports or other aggregations of data provided in connection with the request or access.76

Consistent with the discussion accompanying the proposal, the Commission concludes that the final rule regarding the notification requirement appropriately accounts for the way in which entities are likely to access such data from repositories, by distinguishing steps that an entity takes to arrange access from subsequent electronic instructions and other means by which the recipient obtains data. By making relevant data available to the Commission in this manner, the approach would place the Commission on notice that a recipient has the ability to access security-based swap data, and place the Commission in a position to examine such access as appropriate, while avoiding the inefficiencies that would accompany an approach whereby a repository must direct to the Commission information regarding each instance of access by each recipient. The approach of the final rule accordingly is more consistent with the manner in which the Commission examines the records of other regulated entities under the Commission's authority.77

In response to the proposal, one commenter reiterated its opposition to the Commission being provided notice of a recipient's initial request, on the grounds that such notice might cause other authorities to hesitate to make such requests.78 As we discussed at the time of the proposal, the Commission believes that it is necessary that it be informed of the initial request from a particular entity so that the Commission may assess whether the initial conditions to data access (i.e., MOUs or other arrangements as needed to satisfy the confidentiality condition 79 ) have been met at the time the repository first is requested to provide the entity with information pursuant to the data access provisions, and, more generally, to facilitate the Commission's ongoing assessment of the repository's compliance with the data access provisions. Also, as previously stated, the Commission believes that commenter concerns that other regulators may be reluctant to place the Commission on notice of such initial requests are mitigated by the Commission's long history of cooperation with other authorities in supervisory and enforcement matters.80 For the same reasons, we decline to follow that commenter's suggestion that a repository may comply with the notification requirement without submitting the identity of the requesting party to the Commission.

The proposed rule amendments specifically addressed access to “security-based swap data” obtained by a security-based swap data repository.81 In taking that approach, the Commission recognized that repositories that obtain security-based swap data may also obtain data regarding other types of financial instruments, such as swaps under the CFTC's jurisdiction,82 but preliminarily concluded that the relevant data access provisions should not be read to require a repository to make available data that does not involve security-based swaps.83

No commenter addressed this limitation on the type of data made available by repositories.

The 2015 amendment to the data access provisions under the Exchange Act clarified that those provisions specifically addressed the disclosure of security-based swap data.84 This clarification is consistent with the proposal. The Commission accordingly is adopting this part of the rule as proposed.

As noted, the Exchange Act provides that, prior to providing data, a repository “shall receive a written agreement from each entity stating that the entity shall abide by the confidentiality requirements described in section 24 relating to the information on security-based swap transactions that is provided.” 85

The proposed rule implementing this condition would require that, before a repository provides information to an entity pursuant to the data access provisions, the Commission and the entity shall have entered into an MOU or other arrangement addressing confidentiality. This arrangement would be deemed to satisfy the statutory requirement that the repository receive a written confidentiality agreement from the entity.86

As discussed below, one commenter addressed the Commission's future determination orders regarding data access in response to the Comment Reopening Release.87

The Commission is adopting as proposed the approach for implementing the confidentiality requirement. Accordingly, the final rule provides that “there shall be in effect an arrangement between the Commission and the entity (in the form of a memorandum of understanding or otherwise) to address the confidentiality of the security-based swap information made available to the entity,” and that this arrangement between the Commission and a regulator or other recipient entity will satisfy the statutory confidentiality condition. 88

As discussed in the proposal, in the Commission's view this approach should help obviate the need for each individual repository to negotiate and enter into multiple agreements and help avoid the possibility of uneven and potentially inconsistent application of confidentiality protections across data repositories and recipient entities. 89 This approach also should appropriately implement the statutory reference to the “confidentiality requirements described in section 24” of the Exchange Act, which articulates an approach whereby the Commission determines standards for confidentiality assurances.90

Consistent with the importance of protecting confidentiality of the security-based swap data provided, MOUs or other arrangements may include a variety of means of safeguarding confidentiality. These may include, for example, restrictions regarding the personnel who may access the data provided, and limits on the distribution of that data to third parties. Moreover, such MOUs or other arrangements may incorporate conditions that specify the scope of the relevant authority's access to data, and that limit this access in a manner that reflects the relevant authority's regulatory mandate or legal responsibility or authority.

One commenter expressed the view that an MOU should help determine a regulatory body's interest in security-based swap data, notify the Commission of the intent to access the data and provide the Commission with “confirmation that an appropriate confidentiality agreement has been made by the requesting regulatory authority or that statutory confidentiality requirements are applicable to such requesting authority.” The commenter further requested that the rule permit repositories to require entities to certify their ability to keep such data confidential.91 Consistent with that commenter's view, we anticipate that, as appropriate, each MOU or other arrangement will set forth access provisions that reflect a recipient's interest in security-based swap data. We decline to adopt the commenter's suggestion that the MOU or other arrangement should be deemed to provide the Commission with notification of an entity's intent to access data, given that we are adopting separately a requirement with respect to notification from the repository to the Commission.92 While an SDR may seek additional confidentiality certifications from other regulatory authorities, consistent with the statute, an SDR may not decline the regulatory authority access to the data based on another regulatory authority's refusal to agree to these certifications. Allowing repositories to require additional confidentiality certifications, moreover, could lead to an uneven application of the data access provisions, potentially undermining the benefits of using arrangements between the Commission and recipient entities to satisfy the statutory confidentiality condition.

In the Proposing Release, the Commission discussed how Exchange Act sections 13(n)(5)(G) and (H) 93 do not provide the exclusive means by which regulators or other authorities might access security-based swap data. In part, the Proposing Release suggested that regulators and other authorities may separately access security-based swap data directly from the Commission.94 The Commission preliminarily stated that the conditions associated with the data access provisions of sections 13(n)(5)(G) and 13(n)(5)(H) should not govern access in those circumstances. The Commission received no comments on that proposed interpretation.95

The Exchange Act provides that relevant authorities may obtain security-based swap data from the Commission, rather than directly from data repositories.96 First, Exchange Act section 21(a)(2) 97 states that, upon request of a foreign securities authority, the Commission may provide assistance in connection with an investigation the foreign securities authority is conducting to determine whether any person has violated, is violating or is about to violate any laws or rules relating to securities matters that the requesting authority administers or enforces.98 That section further provides that, as part of this assistance, the Commission in its discretion may conduct an investigation to collect information and evidence pertinent to the foreign securities authority's request for assistance.99 In addition, the Commission may share “nonpublic information in its possession” with, among others, any “federal, state, local, or foreign government, or any political subdivision, authority, agency or instrumentality of such government . . . [or] a foreign financial regulatory authority,” subject to the recipient providing “such assurances of confidentiality as the Commission deems appropriate.” 100 Consistent with the Commission practice for many years, these sections provide the Commission with separate, additional authority to assist a domestic or a foreign authority in certain circumstances, such as, for example, by providing security-based swap data directly to the authority. At those times, the foreign authority would receive information not from the data repository, but instead from the Commission.

These amendments to Exchange Act rule 13n-4 to implement the data access requirements will become effective 60 days following publication of the rule amendments in the Federal Register.

The obligation of a security-based swap data repository to provide data pursuant to the rules will be conditioned on the Commission and a relevant authority entering into an MOU or other arrangement addressing the confidentiality of the security-based swap information that is made available. A repository accordingly will have no disclosure obligation pursuant to these rules until such MOUs or other arrangements have been entered into and become effective.101

Certain provisions of the final rules contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).102 The Commission has submitted them to the Office of Management and Budget (“OMB”) for review in accordance with 44 U.S.C. 3507 and 5 CFR 1320.11. The title of the new collection of information is “Security-Based Swap Data Repository Data Access Requirements.” An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. OMB has not yet assigned a control number to the new collection of information.

In the Proposing Release, the Commission solicited comment on the collection of information requirements and the accuracy of the Commission's statements.103 Although, as discussed above, one commenter addressed certain substantive issues with regard to the proposal,104 that commenter did not address the burden estimates in the Proposing Release related to the collection of information.

Although the final rules have been changed from the proposal to reflect the removal of the proposed indemnification exemption, in the Commission's view this change does not alter the estimates from the Proposing Release. In particular, although the conditions to the proposed indemnification exemption would have caused the Commission and a relevant authority to enter into an MOU or other arrangement to address confidentiality, and to address the types of activities that would be within the regulatory mandate or legal responsibility or authority of that relevant authority, the Commission would still expect to enter into that type of MOU or other arrangement with the relevant authority in connection with the confidentiality condition. Accordingly, the Commission's estimates remain unchanged from the Proposing Release.

The final rules would require security-based swap data repositories to make security-based swap data available to other parties, including certain government bodies. This data access obligation would be conditioned on a confidentiality requirement. The final rules further would require such repositories to create and maintain information regarding such data access.

The data access requirement and associated conditions would provide the regulators and other authorities that receive the relevant security-based swap data with tools to assist with the oversight of the security-based swap market and of dealers and other participants in the market, and to assist with the monitoring of risks associated with that market.

The data access requirement will apply to every person required to be registered with the Commission as a security-based swap data repository—that is, every U.S. person performing the functions of a security-based swap data repository, and to every non-U.S. person performing the functions of a security-based swap data repository within the United States absent an exemption. The Commission continues to estimate, for PRA purposes, that ten persons might register with the Commission as security-based swap data repositories.105

The conditions to data access under these rules further will affect all persons that may seek access to security-based swap data pursuant to these provisions. As discussed below, these may include up to 30 domestic entities.

The data access provisions may implicate various types of PRA burdens and costs: (i) Burdens and costs that regulators and other authorities incur in connection with negotiating MOUs or other arrangements with the Commission in connection with the data access provisions; (ii) burdens and costs that certain authorities that have not been determined by statute or Commission rule may incur in connection with requesting that the Commission grant them access to repository data; 106 (iii) burdens and costs associated with information technology systems that repositories develop in connection with providing data to regulators and other authorities; and (iv) burdens and costs associated with the requirement that repositories notify the Commission of requests for access to security-based swap data, including associated recordkeeping requirements.

As discussed above, entities that access security-based swap data pursuant to these data access provisions would be required to enter into MOUs or other arrangements with the Commission to address the confidentiality condition. In some cases, any such entity also would enter into an MOU or other arrangement in connection with the Commission's determination of the entity as authorized to access such data (to the extent that the entity's access is not already determined by statute or by the final rules). For purposes of the PRA requirements, the Commission estimates that up to 30 domestic entities potentially might enter into such MOUs or other arrangements, reflecting the nine entities specifically identified by statute or the final rules, and up to 21 additional domestic governmental entities or self-regulatory organizations that may seek access to such data. Based on the Commission's experience in negotiating similar MOUs that address regulatory cooperation, including confidentiality issues associated with regulatory cooperation, the Commission believes that each regulator on average would expend 500 hours in negotiating such MOUs and other arrangements.107

The Department is amending § 51.60 of subpart E within part 51 of title 22 of the Code of Federal Regulations. The rules incorporate statutory passport denial and revocation requirements as codified at 22 U.S.C. 2714a for certain individuals who have seriously delinquent tax debt or submit passport applications without correct and valid Social Security numbers. The rules incorporate new provisions for denial and revocation of passport books that do not contain conspicuous identifiers for covered sex offenders as defined in 42 U.S.C. 16935a. The rule provides for denial of passport cards to these same covered sex offenders, as passport cards are not able to contain the unique identifier required by 22 U.S.C. 212b.

The new § 51.60(a)(3) requires denial of a passport to an individual who is certified by the Secretary of the Treasury as having a seriously delinquent tax debt as described in 26 U.S.C. 7345.

The new § 51.60(f) permits denial of a passport to an individual who does not include his or her Social Security number or willfully, intentionally, negligently, or recklessly includes an incorrect or invalid Social Security number on his or her passport application.

The new § 51.60(g) requires denial of a passport card to an individual who is a covered sex offender as described in 42 U.S.C. 16935a.

Because this rulemaking implements the Congressional mandates within the FAST Act and IML, the Department is publishing this rulemaking without notice and comment under the “good cause” exemption of 5 U.S.C. 553(b). The Department believes that public comment on this rulemaking would be unnecessary, impractical, and contrary to the public interest. In addition, for the same reasons, the effective date for this rulemaking is the date of publication in accordance with the “good cause” provision of 5 U.S.C. 553(d)(3).

The Department of State, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and, by approving it, certifies that this rule will not have a significant economic impact on a substantial number of small entities.

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

This 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 U.S.-based companies to compete with foreign based companies in domestic and import markets.

The Department of State does not consider this rule to be an economically significant regulatory action under Executive Order 12866, Regulatory Planning and Review. The Department has nevertheless reviewed the regulation to ensure its consistency with the regulatory philosophy and principles set forth in both Executive Order 12866 and Executive Order 13563, and certifies that the benefits of this regulation outweigh any cost to the public.

This regulation 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 require consultations or warrant the preparation of a federalism summary impact statement.

The Department has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on tribal governments, and will not pre-empt tribal law. Accordingly, the requirements of Executive Order 13175 do not apply to this rulemaking.

This rule does not impose any new reporting or record-keeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35. Prior to the passage of the FAST Act, passport applicants were already asked to provide their Social Security numbers to obtain or renew passports. With respect to the IML requirements, the applicant does not report his or her status as a covered sex offender to the Department during the application process; rather, the Department obtains that information from other government sources. Therefore, this rulemaking imposes no additional burden on the applicant.

Accordingly, for the reasons set forth in the preamble, the Department has amended 22 CFR part 51 as follows:

Background

This document contains amendments to the Income Tax Regulations (26 CFR part 1), the Estate Tax Regulations (26 CFR part 20), the Gift Tax Regulations (26 CFR part 25), the Generation-Skipping Transfer Tax Regulations (26 CFR part 26), the Employment Tax and Collection of Income Tax at Source Regulations (26 CFR part 31), and the Regulations on Procedure and Administration (26 CFR part 301).

On October 23, 2015, the Department of the Treasury (Treasury) and the IRS published in the Federal Register (80 FR 64378) a notice of proposed rulemaking (REG-148998-13), which proposed to amend the regulations under section 7701 of the Internal Revenue Code (Code) to provide that, for federal tax purposes, the terms “spouse,” “husband,” and “wife” mean an individual lawfully married to another individual, and the term “husband and wife” means two individuals lawfully married to each other. In addition, the proposed regulations provided that a marriage of two individuals will be recognized for federal tax purposes if that marriage would be recognized by any state, possession, or territory of the United States. Finally, the proposed regulations clarified that the term “marriage” does not include registered domestic partnerships, civil unions, or other similar relationships recognized under state law that are not denominated as a marriage under that state's law, and the terms “spouse,” “husband and wife,” “husband,” and “wife” do not include individuals who have entered into such a relationship.

Written comments responding to the proposed regulations were received, and one person requested a public hearing. A public hearing was held on January 28, 2016; however, the individual who requested the hearing was not able to attend, but did submit supplemental comments. When given the opportunity, no one who attended the hearing asked to speak. After consideration of the comments, Treasury and the IRS adopt the proposed regulations as revised by this Treasury Decision.

The IRS received twelve comments in response to the notice of proposed rulemaking. All comments were considered and are available for public inspection at http://www.regulations.gov. The comments are summarized and discussed in this preamble.

The majority of commenters strongly supported the proposed regulations. Many commended Treasury and the IRS for publishing proposed regulations that reflect the holdings of Obergefell v. Hodges, 576 U.S. ___, 135 S. Ct. 2584 (2015), and Windsor v. United States, 570 U.S. ___, 133 S. Ct. 2675 (2013), instead of relying on sub-regulatory guidance. In general, commenters applauded Treasury and the IRS for determining that, in light of the Windsor and Obergefell holdings, marriages of same-sex couples should be treated the same as marriages of opposite-sex couples for federal tax purposes.

One commenter suggested that the regulations specifically reference “same-sex marriage” so that the definitions apply regardless of gender and to avoid any potential issues of interpretation. Treasury and the IRS believe that the definitions in the proposed regulations apply equally to same-sex couples and opposite-sex couples, and that no clarification is needed. Proposed § 301.7701-18(a) states, without qualification, that, “[f]or federal tax purposes, the terms spouse, husband, and wife mean an individual lawfully married to another individual,” and that the “term husband and wife means two individuals lawfully married to each other.” The language is specifically gender neutral, which reflects the holdings in Windsor and Obergefell and is consistent with Revenue Ruling 2013-17. Similarly, the language in proposed § 301.7701-18(b) refers to a marriage of two individuals, without specifying gender. Amending the regulations to specifically address a marriage of two individuals of the same sex would undermine the goal of these regulations to eliminate distinctions in federal tax law based on gender. For these reasons, the final regulations do not adopt this comment.

One comment reflected an overall negative view of same-sex marriage. However, the comment did not recommend any specific amendment to the proposed regulations. Because this comment addresses issues outside the scope of these regulations, the final regulations do not address this comment.

Section 301.7701-18(a) of the proposed regulations provides that for federal tax purposes, the terms “spouse,” “husband,” and “wife” mean an individual lawfully married to another individual. The term “husband and wife” means two individuals lawfully married to each other. The preamble to the proposed regulations explains that after Windsor and Obergefell, marriages of couples of the same sex should be treated the same as marriages of couples of the opposite sex for federal tax purposes, and therefore, the proposed regulations interpret these terms in a neutral way to include same-sex as well as opposite-sex couples.

The overwhelming majority of commenters expressed support for proposed § 301.7701-18(a). However, one of the commenters recommended that the IRS update all relevant forms to use the gender-neutral term “spouse” instead of “husband and wife.” The commenter stated that updating the forms to use gender-neutral terms would be cost-neutral and would more accurately reflect the varied composition of today's families. The commenter further stated that updating the forms to be inclusive of same-sex couples would increase government efficiency by alleviating confusion, delays, and denials caused by current forms using outdated terms.

The commenter's recommendation relates to forms and is therefore outside the scope of these final regulations. Nevertheless, Treasury and the IRS will consider the commenter's recommendation when updating IRS forms and publications.

Section 301.7701-18(b) of the proposed regulations provides that a marriage of two individuals is recognized for federal tax purposes if the marriage would be recognized by any state, possession, or territory of the United States. The comments received on paragraph (b) are summarized below.

One commenter stated that proposed § 301.7701-18(b) is redundant and unnecessary in light of Obergefell. According to the commenter, after Obergefell, same-sex marriage should be recognized in every state. Therefore, the commenter states that there is no need for a definition of marriage for federal tax purposes and proposed § 301.7701-18 (b) should not be finalized.

Treasury and the IRS disagree that proposed § 301.7701-18(b) is unnecessary in light of Obergefell. The purpose of publishing these regulations is to ensure that, regardless of the term used in the Code, a marriage between two individuals entered into in, and recognized by, any state, possession, or territory of the United States will be treated as a marriage for federal tax purposes. The majority of comments supporting the proposed regulations agree with this view and specifically applaud Treasury and the IRS for publishing regulations to make this clear rather than relying on sub-regulatory guidance. Accordingly, the comment is not adopted and a definition of marriage for federal tax purposes is included in the final regulations under § 301.7701-18(b). However, the definition in proposed § 301.7701-18(b) is amended by these final regulations, as described below.

Another commenter recommended amending § 301.7701-18(b) of the proposed regulations to simply state that the determination of an individual's marital status will be made under the laws of the relevant state, possession, or territory of the United States or, where appropriate, under the laws of the relevant foreign country (for example, the country where the marriage was celebrated or, if conflict of laws questions arise, another country). The commenter pointed out that this revision is needed to ensure that a couple's intended marital status is recognized by the IRS. Specifically, the commenter explains that the language in proposed § 301.7701-18(b) makes it possible for unmarried couples living in a state that does not recognize common-law marriage to be treated as married for federal tax purposes if the couple would be treated as having entered into a common-law marriage under the law of any state, possession, or territory of the United States.

Next, the commenter explains that the language of the proposed regulations could result in questions about the validity of a divorce. Under Revenue Ruling 67-442, a divorce is recognized for federal tax purposes unless the divorce is invalidated by a court of competent jurisdiction. The language of the proposed regulations would undermine this longstanding revenue ruling if any state would recognize the couple as still married despite the divorce.

Finally, the commenter states that the language of proposed § 301.7701-18(b) could create a conflict with proposed § 301.7701-18(c) if at least one state, possession, or territory of the United States recognizes a couple's registered domestic partnership, civil union, or other similar relationship as marriage. The commenter points out that in such a situation, regardless of the couple's intention and where they entered into their alternative legal relationship, they could be treated as married for federal tax purposes under the language of proposed § 301.7701-18(b) if any state, possession, or territory recognizes their alternative legal relationship as a marriage.

According to the commenter, these examples demonstrate that the language in proposed § 301.7701-18(b) could be interpreted to treat couples who divorce or who never intended to enter into a marriage under the laws of the state where they live or where they entered into an alternative legal relationship as married for federal tax purposes. Without a change to proposed § 301.7701-18(b), these couples would be required to analyze the laws of all the states, possessions, and territories of the United States to determine whether any of these laws would fail to recognize their divorce or would denominate their alternative legal relationship as a marriage

This was not the intent of the proposed regulations. Rather, the proposed regulations were intended to recognize a marriage only when a couple entered into a relationship denominated as marriage under the law of any state, territory, or possession of the United States or under the law of a foreign jurisdiction if such a marriage would be recognized by any state, possession, or territory of the United States. To address these concerns, § 301.7701-18(b) is revised in the final regulations to provide a general rule for recognizing a domestic marriage for federal tax purposes and a separate rule for recognizing foreign marriages for federal tax purposes (discussed in section III.C. Comments on Marriages Entered Into in Foreign Jurisdictions of this preamble).

Accordingly, under the general rule in § 301.7701-18(b)(1) of the final regulations, a marriage of two individuals is recognized for federal tax purposes if the marriage is recognized by the state, possession, or territory of the United States in which the marriage is entered into, regardless of the married couple's place of domicile. This revision addresses the concerns raised by the commenter and ensures that only couples entering into a relationship denominated as marriage, and who have not divorced, are treated as married for federal tax purposes. By relying on the place of celebration to determine which state, possession, or territory of the United States is the point of reference for determining whether a couple is married for federal tax purposes, this rule is consistent with the longstanding position of Treasury and the IRS regarding the determination of marital status for federal tax purposes. See Revenue Ruling 2013-17; Revenue Ruling 58-66 (1958-1 CB 60).

Section 301.7701-18(b) of the proposed regulations generally provides that a marriage of two individuals is recognized for federal tax purposes if the marriage would be recognized by any state, possession, or territory of the United States. The preamble to the proposed regulations explains that under this rule, as a matter of comity, a marriage conducted in a foreign jurisdiction will be recognized for federal tax purposes if that marriage would be recognized in at least one state, possession, or territory of the United States. The rule in § 301.7701-18(b) of the proposed regulations was intended to address both domestic and foreign marriages, regardless of where the couple is domiciled and regardless of whether the couple ever resides in the United States (or a possession or territory of the United States). One commenter suggested amending the proposed regulation to recognize marriages performed in any foreign jurisdiction, for federal tax purposes, if the marriage is recognized in at least one state, possession, or territory of the United States. Similarly, another commenter recommended amending the proposed regulation to reflect the discussion in the preamble to the proposed regulation regarding the recognition of marriages conducted in foreign jurisdictions. This commenter noted that the preamble to the proposed regulation states, “[W]hether a marriage conducted in a foreign jurisdiction will be recognized for federal tax purposes depends on whether that marriage would be recognized in at least one state, possession, or territory of the United States.” The commenter recommended that, rather than relying on the preamble, language should be included in the regulations' text making this recognition explicit.

Proposed § 301.7701-18(b) was drafted to apply to both domestic and foreign marriages. In light of the comments, the proposed rule has been amended to be more explicit. To clarify how foreign marriages will be recognized for federal tax law, § 301.7701-18(b) has been amended to provide a specific rule for foreign marriages. Accordingly, a new paragraph (b)(2) has been added to § 301.7701-18 to provide that two individuals entering into a relationship denominated as marriage under the laws of a foreign jurisdiction are married for federal tax purposes if the relationship would be recognized as marriage under the laws of at least one state, possession, or territory of the United States. This rule enables couples who are married outside the United States to determine marital status for federal tax purposes, regardless of where they are domiciled and regardless of whether they ever reside in the United States. Although this rule requires couples to review the laws of the various states, possessions, and territories to determine if they would be treated as married, it is sufficient if they would be treated as married in a single jurisdiction and there is no need to consider the laws of all of the states, territories, and possessions of the United States. In addition, unlike the language in § 301.7701-18(b) of the proposed regulations, this rule incorporates the place of celebration as the reference point for determining whether the legal relationship is a marriage or a legal alternative to marriage, avoiding the potential conflict with § 301.7701-18(c) identified by the commenter, above. Finally, this rule avoids the concern that a couple intending to enter into a legal alternative to marriage will be treated as married because this rule recognizes only legal relationships denominated as marriage under foreign law as eligible to be treated as marriage for federal tax purposes. This separate rule for foreign marriages in § 301.7701-18(b)(2) is consistent with the proposed regulations' intent, as described in the preamble to the notice of proposed rulemaking, and provides the clarity commenters request.

One commenter stated that some states that recognize common-law marriage only do so in the case of opposite-sex couples. Accordingly, the commenter recommended amending the regulations to clarify that common-law marriages of same-sex couples will be recognized for federal tax purposes. The commenter further suggested that any same-sex couple that would have been considered married under the common law of a state but for the fact that the state's law prohibited same-sex couples from being treated as married under common law be allowed to file an amended return for any open tax year to claim married status.

As discussed in the preamble to the proposed regulations, on June 26, 2013, the Supreme Court in Windsor held that Section 3 of the Defense of Marriage Act, which generally prohibited the federal government from recognizing marriages of same-sex couples, is unconstitutional because it violates the principles of equal protection and due process. On June 26, 2015, the Supreme Court held in Obergefell that state laws are “invalid to the extent they exclude same-sex couples from civil marriage on the same terms and conditions as opposite-sex couples” and “that there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State on the ground of its same-sex character.” Obergefell, 576 U.S. at _(slip op., at 23, 28).

In light of these holdings, Treasury and the IRS determined that marriages of couples of the same sex should be treated the same as marriages of couples of the opposite sex for federal tax purposes. See 80 FR 64378, 64379. Neither the proposed regulations nor these final regulations differentiate between civil marriages and common-law marriages, nor is such differentiation warranted or required for federal tax purposes. See Revenue Ruling 58-66 (treating common-law marriage as valid, lawful marriage for federal tax purposes) and Revenue Ruling 2013-17 (reiterating that common-law marriages are valid, lawful marriages for federal tax purposes). Thus, the general rules regarding marital status for federal tax purposes provided in the proposed and final regulations address marital status regardless of whether the marriage is a civil marriage or a common-law marriage.

Furthermore, even after the Obergefell decision, there are several states, including some states that recognize common-law marriage, that still have statutes prohibiting same-sex marriage. However, after Obergefell, we are unaware of any state enforcing such statutes or preventing a couple from entering into a common-law marriage because the couple is a same-sex couple. Accordingly, the commenter's suggestion has not been adopted.

In addition, Revenue Ruling 2013-17 does not distinguish between civil marriages and common-law marriages of same-sex couples. Therefore, same-sex couples in common-law marriages may rely on Revenue Ruling 2013-17 for the purpose of filing original returns, amended returns, adjusted returns, or claims for credit or refund for any overpayment of tax resulting from the holdings of Revenue Ruling 2013-17 and the definitions provided in these regulations, provided the applicable limitations period for filing such claim under section 6511 has not expired.

Section 301.7701-18(c) of the proposed regulations provides that the terms “spouse,” “husband,” and “wife” do not include individuals who have entered into a registered domestic partnership, civil union, or other similar relationship not denominated as marriage under the law of a state, possession, or territory of the United States. That section further provides that the term “husband and wife” does not include couples who have entered into such a relationship and that the term “marriage” does not include such relationship.

The preamble to the proposed regulations provides several reasons for the rule in proposed regulation § 301.7701-18(c). First, except when prohibited by statute, the IRS has traditionally looked to states to define marriage. Second, regardless of rights accorded to relationships such as civil unions, registered domestic partnerships, and similar relationships under state law, states have intentionally chosen not to denominate those relationships as marriage. Third, some couples deliberately choose to enter into or remain in a civil union, registered domestic partnership, or similar relationship even when they could have married or converted these relationships to marriage, and these couples have an expectation that their relationship will not be treated as marriage for purposes of federal tax law. Finally, no Code provision indicates that Congress intended to recognize civil unions, registered domestic partnerships, or similar relationships as marriages. Several commenters submitted comments addressing this section of the proposed regulations. Many agreed with proposed § 301.7701-18(c), but three did not. These comments are discussed below.

In addition to the four commenters that expressed strong support for the proposed regulations generally, two commenters provided specific comments agreeing with the position taken in proposed § 301.7701-18(c). One of these commenters stated that because no Code section requires, or even permits, Treasury and the IRS to allow individuals in registered domestic partnerships, civil unions, and other similar relationships, to elect a married filing status under section 6013, any extension of section 6013 is a policy choice that Congress should make. This commenter also noted that to evaluate the rights and obligations created by various state legal relationships to determine if they are the same as relationships denominated as a marriage would be a significant drain on IRS resources. Finally, the commenter provided historical examples demonstrating how states have attempted to change state family law to reduce their residents' federal income tax obligations. Based on this historical analysis, the commenter concluded that if Treasury and the IRS were to reverse their position on the status of registered domestic partnerships, civil unions, and other similar relationships, there would be nothing to prevent states from permitting a private contract to create an equivalent state-law marriage to enable their residents to choose a filing status that reduces their federal income tax obligations.

The second commenter that agreed with proposed § 301.7701-18(c) observed that the proposed regulations respect the choices made by couples who entered into a civil union or registered domestic partnership with the expectation that their relationship will not be treated as a marriage for federal law purposes. The commenter also observed that the proposed regulations recognize that couples deliberately remain in these relationships, rather than marry, for lawful reasons.

Three commenters disagreed with the proposed regulations, stating that registered domestic partnerships, civil unions, and similar formal relationships should be treated as marriage for federal tax purposes. Their comments are summarized below.

Two of the commenters recommended that the substance of the legal rights and obligations of individuals in registered domestic partnerships, civil unions, and similar relationships should control whether these relationships are recognized as marriage for federal tax purposes, rather than the label applied to the relationship. These commenters stated that regardless of whether a relationship is denominated as marriage, any relationship that has the same rights and responsibilities as marriage under state law should be treated as marriage for federal tax purposes. One commenter cited registered domestic partners in California as an example of a relationship not denominated as marriage but with the same rights and responsibilities as marriage under state law. Another commenter cited civil unions in New Jersey and Connecticut as an example of a relationship not denominated as marriage where the couple has the same rights and obligations as spouses.

While some states extend the rights and responsibilities of marriage to couples in registered domestic partnerships, civil unions, or other similar relationships, as the commenters point out, these states also retain marriage as a separately denominated legal relationship. We also recognize that some states have permitted couples in those relationships to convert them to marriage under state law. Many of those states have continued to designate marriage separately from alternative legal relationships that are not a marriage, such as registered domestic partnerships, civil unions, or other similar relationships.

The IRS has traditionally recognized a couple's relationship as a marriage if the state where the relationship was entered into denominates the relationship as a marriage. See Revenue Ruling 58-66 (if a state recognizes a common-law marriage as a valid marriage, the IRS will also recognize the couple as married for purposes of federal income tax filing status and personal exemptions). Similarly, the IRS has not traditionally evaluated the rights and obligations provided by a state to determine if an alternative legal relationship should be treated as marriage for federal tax purposes.

Adopting the commenters' recommendation to treat registered domestic partnerships, civil unions, and similar relationships as married for federal tax purposes if the couple has the same rights and responsibilities as individuals who are married under state law would be inconsistent with Treasury and the IRS's longstanding position to recognize the marital status of individuals as determined under state law in the administration of the federal income tax. This position is, moreover, consistent with the reasoning of the only federal court that has addressed whether registered domestic partners should be treated as spouses under the Code. See Dragovich v. U.S. Dept. of Treasury, 2014 WL 6844926 (N.D. Cal. Dec. 4, 2014) (on remand following dismissal of appeal by the Ninth Circuit, 12-16628 (9th Cir. Oct. 28, 2013)) (granting government's motion to dismiss claim that section 7702B(f) discriminates because it does not interpret the term spouse to include registered domestic partners).

In addition, it would be unduly burdensome for the IRS to evaluate state laws to determine if a relationship not denominated as marriage should be treated as a marriage. It would be also be burdensome for taxpayers in these alternative legal relationships, to evaluate state law to determine marital status for federal tax purposes. Besides being burdensome, the determination of whether the relationship should be treated as a marriage could result in controversy between the IRS and the affected taxpayers. This can be avoided by treating a relationship as a marriage only if a state denominates the relationship as a marriage, as the IRS has traditionally done.

Two of the commenters stated that by not recognizing registered domestic partnerships, civil unions, and other similar relationships as marriage for federal tax purposes, the IRS is disregarding the states' intent in creating these alternative legal relationships rather than deferring to state law.

To illustrate, one of the commenters noted that Illinois affords parties to a civil union the same rights and obligations as married spouses, and that when Illinois extended marriage to same-sex couples, it enacted a statutory provision permitting parties to a civil union to convert their union to a marriage during the one-year period following the law's enactment. 750 Ill. Comp. Stat. Sec. 75/65 (2014). The Illinois law also provides that, for a couple converting their civil union to a marriage, the date of marriage relates back to the date the couple entered into the civil union. The commenter stated that the fact that couples could convert their civil union to a marriage, and that the date of their marriage would relate back to the date of their union, indicates that Illinois defines civil unions as marriages.

The commenter further observed that when Delaware extended the right to marry to same-sex couples, it stopped allowing its residents to enter into civil unions. Following a one-year period during which couples could voluntarily convert their civil union into marriage, Delaware automatically converted into marriage all remaining civil unions (except those subject to a pending proceeding for dissolution, annulment or legal separation), with the date of each marriage relating back to the date that each civil union was established. The commenter concluded that the laws in Delaware and Illinois make it clear that by not recognizing civil unions and domestic partnerships as marriage, the IRS is not deferring to the state's judgment in defining marital status.

Rather than support the commenter's position, these examples actually support proposed § 301.7701-18(c). As discussed in the preamble to the proposed regulations, states have carefully considered which legal relationships will be recognized as a marriage and which will be recognized as a legal alternative to marriage, and have enacted statutes accordingly. For instance, Illinois did not automatically convert all civil unions into marriages or include civil unions in the definition of marriage. Instead, it allowed couples affected by the new law to either remain in a civil union or convert their civil union into a marriage. Furthermore, under Illinois law, couples who waited longer than one year to convert their civil union into marriage must perform a new ceremony and pay a fee to have their civil union converted into and be recognized as a marriage. Moreover, Illinois continues to allow both same-sex couples and opposite-sex couples to enter into civil unions, rather than marriages.

The law in Delaware also demonstrates the care that states have taken to determine which legal relationships will be denominated as marriage. In 2014, Delaware law eliminated the separate designation of civil union in favor of recognizing only marriages for couples who want the legal status afforded to couples under state law. On July 1, 2014, Delaware automatically converted all civil unions to marriage by operation of law. Del. Code Ann. tit. 13, Sec. 218(c). Civil unions that were subject to a pending proceeding for dissolution, annulment, or legal separation as of the date the law went into effect, however, were not automatically converted. As a result, these couples are not treated as married under Delaware law, and the dissolution, annulment, or legal separation of their civil union is governed by Delaware law relating to civil unions rather than by Delaware law relating to marriage. Del. Code Ann. tit. 13, Sec. 218(d).

As these examples demonstrate, states have carefully determined which relationships will be denominated as marriage. In addition, states may retain alternatives to marriage even after allowing couples to convert those relationships to marriage. IRS's reliance on a state's denomination of a relationship as marriage to determine marital status for federal tax purposes avoids inconsistencies with a state's intent regarding the status of a couple's relationship under state law.

As explained in the notice of proposed rulemaking, some couples have chosen to enter into a civil union or registered domestic partnership even when they could have married. In addition, some couples who are in civil unions or registered domestic partnerships have chosen not to convert those relationships into marriage when they had the opportunity to do so. In many cases, the choice not to enter into a relationship denominated as marriage was deliberate, and may have been made to avoid treating the relationship as marriage for purposes of federal law, including federal tax law.

Two commenters stated that taxpayer expectations do not support § 301.7701-18(c). According to the commenters, many same-sex couples entered into a domestic partnership or civil union because at the time they were prohibited under state law from marrying. According to the commenters, now that they have the option to marry, some of these couples have remained in domestic partnerships or civil unions not by choice, but because one member of the couple has died, has become incapacitated, or otherwise lacks the capacity to enter into a marriage. One of the commenters stated that these couples are trapped in this alternative legal relationship and have no ability to marry, even if they have an expectation that their relationship be treated as a marriage for federal tax purposes. The other commenter pointed out that some taxpayers may have resisted entering into or converting their relationship into marriage because of a principled opposition to the marriage institution, but may still have an expectation of being treated as married for federal tax purposes. Thus, the commenters conclude, many taxpayers do not voluntarily enter into or remain in alternative legal relationships because of any particular expectation that they will not be treated as married for federal purposes.

The commenters stated that even if the type of relationship entered into represents a decision not to be treated as married for federal purposes, taxpayer expectations should not be taken into account for purposes of determining whether alternative legal relationships are recognized as marriage for federal tax purposes. One commenter stated that taking taxpayer expectations into account encourages tax-avoidance behavior. The other commenter stated that it is inappropriate for the IRS to determine tax policy based on taxpayers' expectations of reaping nontax benefits, such as Social Security.

However, another commenter, who also disagreed with proposed § 301.7701-18(c), stated the opposite, explaining that non-tax reasons support treating alternative legal relationships as marriage for federal tax purposes. According to this commenter, because nationwide protections for employment and housing are lacking, many same-sex couples remain at risk for termination at work or eviction from an apartment if their sexual orientation is discovered. Similarly, the commenter contends that individuals in the Foreign Service who work overseas may also feel unsafe entering into a same-sex marriage. Therefore, the commenter explained, in light of these realities, registered domestic partnerships, civil unions, and similar relationships provide a level of stability and recognition for many couples through federal programs like Social Security, and, therefore, should be treated as marriages for federal tax purposes. Finally, the commentator stated that recognizing these relationships as marriages for federal tax purposes would not impede the IRS's ability to effectively administer the internal revenue laws.

Treasury and the IRS disagree with the commenters and continue to believe that the regulation should not treat registered domestic partnerships, civil unions, and other similar relationships—entered into in states that continue to distinguish these relationships from marriages—as marriage for federal tax purposes. While not all same-sex couples in registered domestic partnerships, civil unions, or similar relationships had an opportunity to marry when they entered into their relationship, after Obergefell, same-sex couples now have the option to marry under state law.

In addition, the fact that some couples may not voluntarily enter into marriage because of a principled opposition to marriage supports not treating alternative legal relationships as marriages for federal tax purposes because this ensures that these couples do not risk having their relationship characterized as marriage. Further, as discussed in the preamble to the proposed regulations, treating alternative legal relationships as marriages for federal tax purposes may have legal consequences that are inconsistent with these couples' expectations. For instance, the filing status of a couple treated as married for federal tax purposes is strictly limited to filing jointly or filing as married filing separately, which often results in a higher tax liability than filing as single or head of household. After Obergefell, a rule that treats a couple as married for federal tax purposes only if their relationship is denominated as marriage for state law purposes allows couples in a registered domestic partnership, civil union, or similar relationship to make a choice: they may either stay in that relationship and avoid being married for federal tax purposes or they may marry under state law and be treated as married for federal tax purposes. The rule recommended by the commenters would eliminate this choice.

Two commenters stated that not recognizing registered domestic partnerships, civil unions, and other similar relationships as marriages for federal tax purposes makes it difficult for couples in these relationships to calculate their federal tax liability. One commenter explained that when these couples dissolve their relationships, they are required to go through the same processes that spouses go through in a divorce; alimony obligations are calculated in the same way, and property divisions occur in the same way as for spouses. Yet, because they are not treated as married for federal tax purposes, these couples cannot rely on the certainty of tax treatment associated with provisions under the Code such as sections 71 (relating to exclusion from income for alimony and separate maintenance), 215 (relating to the deduction for alimony or separate maintenance payments), 414(p) (defining qualified domestic relations orders), 1041 (relating to transfers of property between spouses incident to divorce), 2056 (relating to the estate tax marital deduction), and 2523 (relating to gifts to spouses).

The purpose of these regulations is to define marital status for federal tax law purposes. The fact that the Code includes rules that address transfers of property between individuals who are or were married should not control how marriage is defined for federal tax purposes. Rather, as discussed in this preamble, the regulations are consistent with the IRS's longstanding position that marital status for federal tax purposes is determined based on state law. See Revenue Ruling 2013-17; Revenue Ruling 58-66. Accordingly, the proposed regulations have not been changed based on this comment. In addition, although not addressed specifically in the Code, guidance relating to registered domestic partnerships, civil unions, and other similar relationships, including answers to frequently asked questions, is available at www.irs.gov.

After describing the reasons for not treating civil unions, registered domestic partnerships, and similar relationships as marriage for federal tax purposes, the preamble to the proposed regulations states “Further, no provision of the Code indicates that Congress intended to recognize as marriages civil unions, registered domestic partnerships, or similar relationships.” That language makes clear that the Code is silent with respect to alternative legal relationships, and therefore, does not preclude the IRS from not recognizing these relationships as marriage for federal tax purposes.

Two commenters took issue with this language and stated that the government should not interpret the lack of a Code provision specifically addressing the marital status of legal alternatives to marriage as an indication of Congressional intent that such relationships should not be recognized as marriage for federal tax purposes. In addition, the commenters explained that the reason Congress did not enact such a provision after DOMA is because it would have been inconsistent with DOMA's restriction on treating same-sex couples as married for federal law purposes.

These comments are unpersuasive. Since DOMA was enacted on September 21, 1996, many states have allowed both same-sex and opposite-sex couples to enter into registered domestic partnerships, civil unions, and similar relationships. Although it would have been inconsistent for Congress to recognize alternative legal relationships between same-sex couples as marriage under DOMA, nothing prevented Congress from recognizing these relationships as marriages for federal tax purposes in the case of opposite-sex couples. Yet, since DOMA was enacted nearly 20 years ago, Congress has passed no law indicating that opposite-sex couples in registered domestic partnerships, civil unions, or similar relationships are recognized as married for federal tax purposes. Because no Code provision specifically addresses the marital status of alternative legal relationships for federal tax purposes, there is no indication that Congress intended to recognize registered domestic partnerships, civil unions, or similar relationships as marriage for purposes of federal tax law.

In sum, Treasury and the IRS received twelve comments with respect to the proposed regulations. Only three of those comments disagreed with the approach taken in proposed § 301.7701-18(c), which provides that registered domestic partnerships, civil unions, and similar relationships not denominated as marriage by state law are not treated as marriage for federal tax purposes. Of the nine comments that supported the proposed regulations, two provided specific reasons why they agreed with the approach taken in proposed § 301.7701-18(c). Accordingly, the majority of comments supported the approach taken in proposed § 301.7701-18(c).

For the reasons discussed above, the points raised by the three comments that disagreed with the approach taken in proposed § 301.7701-18(c) are not persuasive. Treasury and the IRS believe that federal tax law should continue to defer to states for the determination of marital status, and the rule in proposed § 301.7701-18(c) does that. Any other approach would unduly burden the IRS and taxpayers by requiring an interpretation of multiple state laws and potential controversy when disagreements arise regarding this interpretation. In addition, Treasury and the IRS continue to believe that treating couples in registered domestic partnerships, civil unions, and similar relationships not denominated as marriage under state law, as married for federal tax purposes could undermine taxpayer expectations regarding the federal tax consequences of these relationships. To provide a rule that concludes otherwise would leave those couples who choose alternative legal relationships over marriage without a remedy to avoid the federal tax consequences of being married. In contrast, couples who wish to be treated as married may do so after Windsor and Obergefell.

While § 301.7701-18(c) of the regulations will continue to provide that registered domestic partnerships, civil unions, and other similar relationships not denominated as marriage under state law are not recognized as married for federal tax purposes, § 301.7701-18(c) is revised in the final regulations similar to revisions to § 301.7701-18(b) to account for the place of celebration. As discussed in section III. Comments on Proposed § 301.7701-18(b) Regarding Persons Who are Married for Federal Tax Purposes of this preamble, this change is necessary to ensure that there is a point of reference for which state law is applicable when determining whether the alternative legal relationship is recognized as marriage under state law. Accordingly, § 301.7701-18(c) is revised in the final regulations to provide that the terms “spouse,” “husband,” and “wife” and “husband and wife” do not include individuals who have entered into a registered domestic partnership, civil union, or other similar relationship not denominated as a marriage under the law of the state, possession, or territory of the United States where such relationship was entered into, regardless of domicile.

One commenter recommended amending the proposed regulations to make a clear connection between marital status and community property tax treatment under state law. These regulations provide definitions for purposes of determining marital status for federal tax law purposes. These regulations do not provide substantive rules for the treatment of married or non-married couples under federal tax law. Accordingly, because the federal tax treatment of issues that arise under community-property law involves resolution of issues under substantive tax law, which is outside the scope of these regulations, the commenter's recommendation is not adopted by these final regulations.

These final regulations will obsolete Revenue Ruling 2013-17 as of September 2, 2016. Taxpayers may continue to rely on guidance related to the application of Revenue Ruling 2013-17 to employee benefit plans and the benefits provided under such plans, including Notice 2013-61, Notice 2014-37, Notice 2014-19, Notice 2014-1, and Notice 2015-86 to the extent they are not modified, superseded, obsoleted, or clarified by subsequent guidance.

These regulations are effective on September 2, 2016.

IRS Revenue Procedures, Revenue Rulings notices, notices and other guidance 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 Printing Office, Washington, DC 20402, or by visiting the IRS Web site at http://www.irs.gov.

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 has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. In addition, 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. Accordingly, a regulatory flexibility analysis is not required under the Regulatory Flexibility Act (5 U.S.C. chapter 6).

The principal author of these regulations is Mark Shurtliff of the Office of the Associate Chief Counsel, Procedure and Administration.

Accordingly, 26 CFR parts 1, 20, 25, 26, 31, and 301 are amended as follows:

On December 18, 2015, President Obama signed into law the James Zadroga 9/11 Victim Compensation Fund Reauthorization Act (the “Reauthorized Zadroga Act”), Public Law 114-113, Div. O, Title IV. The Act extends the September 11th Victim Compensation Fund of 2001 (the “Fund”) which provides compensation to any individual (or a personal representative of a deceased individual) who suffered physical harm or was killed as a result of the terrorist-related aircraft crashes of September 11, 2001, or the rescue and recovery efforts during the immediate aftermath of such crashes or the debris removal efforts that took place in the immediate aftermath of those crashes.

On June 15, 2016, Special Master Sheila L. Birnbaum published an Interim Final Rule to revise the existing regulations to implement changes required by the Reauthorized Zadroga Act. (81 FR 38936). Since the issuance of the Interim Final Rule, Sheila Birnbaum has stepped down as Special Master and the Attorney General has appointed Rupa Bhattacharyya in her place, effective July 21, 2016.

The Interim Final Rule took effect on the date of publication (June 15, 2016), but provided a 30-day period for interested persons to submit public comments. Special Master Bhattacharyya is issuing this Final Rule, which addresses the issues that have been raised. For the reasons described below, after consideration of all of the public comments, the Special Master has concluded that no substantive changes to the Interim Final Rule are needed. Accordingly, this Final Rule adopts the provisions of the Interim Final Rule without change, except for two minor technical corrections.

The June 15, 2016, Interim Final Rule (81 FR 38936) provided a brief history of the September 11th Victim Compensation Fund of 2001, the James Zadroga 9/11 Health and Compensation Act of 2010 (Zadroga Act), and the regulations issued by the Special Masters pursuant to those statutes.

On December 18, 2015, President Obama signed into law Public Law 114-113, providing for the reauthorization of the Zadroga Act. The Reauthorized Zadroga Act extends the time period during which eligible claimants may submit claims, increases the Fund's total funding available to pay claims, creates different categories of claims, directs the Special Master to issue full compensation to eligible claimants, and instructs the Special Master to implement certain changes to the policies and procedures used to evaluate and process claims.

The Interim Final Rule addressed those changes mandated by the statute. The Interim Final Rule was published in the Federal Register (81 FR 38936) and became effective on June 15, 2016, and was followed by a 30-day public comment period. The Department received 31 comments since the publication of the Interim Final Rule. The Special Master's office has reviewed and evaluated each of these comments in preparing this Final Rule. Significant comments received in response to the Interim Final Rule are discussed below. After careful review and consideration, and for the reasons described below, the Special Master has concluded that no substantive changes to the Interim Final Rule are warranted.

Accordingly, this Final Rule adopts the provisions of the Interim Final Rule without change, except for two technical corrections, as follows. These are not substantive changes and merely correct minor drafting errors in the wording of the Interim Final Rule as published.

(1) In section 104.21, Presumptively covered conditions, this Final Rule corrects an unintended wording error in the second sentence of paragraph (a), by restoring the missing word “or,” in this sentence.

(2) In section 104.62, Time limit for filing claims, in paragraph (b), this Final Rule restores the missing cross-reference to paragraph “(a)” of the section.

Many comments focused on the statutory definition of Group A claims and the decision by Congress to define the two categories of claims by reference to the date the Special Master “postmarks and transmits” a final award determination to the claimant. Several commenters argued that the “cut-off” date for inclusion in Group A should have been the date the claim was submitted or filed by the claimant, rather than the date the final award amount was determined by the Special Master. The commenters asserted that claims that had been submitted to the Fund on or before December 17, 2015, but did not have a loss determined by that time, should be considered Group A claims and subject to the standards in effect at the time of their submission.

The Reauthorized Zadroga Act makes clear that the critical date is the date that the final award determination was postmarked and transmitted, not the date the claim was submitted. Therefore, under the plain language of the statute, claims that were pending but not determined as of December 17, 2015 cannot be considered Group A claims. Because Congress expressly set forth this definition in the statute, this definition cannot be changed by the Special Master.

Some commenters asserted that the statutory definition is unfair or contrary to laws and principles that ensure that certain rights and benefits are not changed or compromised without notice. These comments focused on the unfairness of evaluating a claim submitted prior to reauthorization under the standards set forth in subsequently enacted legislation. In this regard, however, the Special Master is constrained by the law as Congress enacted it, and cannot disregard the clear language of the statute.

One commenter suggested a change that would violate other applicable law. This commenter proposed that the Special Master backdate loss determination letters to December 17, 2015, for all claims or amendments that were pending at the time of reauthorization. Such an action would be in violation of the law and of generally accepted accounting principles. Therefore, the Special Master cannot accept that suggestion.

Several commenters argued about the fairness of the statutory $200,000 cap on annual gross income. One commenter was concerned about the broad scope of the definition of “annual gross income” in computing economic loss. The Reauthorized Zadroga Act explicitly provides that the term “gross income” is defined as set forth in Section 61 of the Internal Revenue Code. Section 405(b)(7)(B), (C). There, the definition of “gross income” is broadly defined to include “all income from whatever source derived,” including (but not limited to) compensation for services, including fees, commissions, fringe benefits, and other similar items, pensions, annuities, interest, and other sources of income. Sections 104.43 and 104.45 of the Interim Final Rule, the provisions that address the determination of economic loss for decedents and for injured claimants who suffered an eligible physical harm respectively, were revised to account for the $200,000 annual gross income cap as required by the Reauthorized Zadroga Act. Because Congress explicitly provided this definition and annual income cap requirement in the statute, these requirements cannot be changed by the Special Master.

One commenter noted that the cap may have unintended consequences for a claimant who is disabled at a young age and therefore has a long remaining work life. Another commenter suggested that the Special Master should mitigate the effect of the $200,000 annual gross income cap by adjusting certain components of the loss calculation methodology, such as extending work life, reducing the tax offset, or lowering the residual earnings deduction, in claims where the cap is implicated. The Special Master cannot make adjustments to the loss calculation methodology for the purpose of eliminating the effect of the annual gross income cap, as doing so would violate Congressional intent. The Special Master, however, intends to exercise her discretion to apply the cap in ways that are favorable to claimants, while consistent with the language and intent of the statute. For example, the VCF will apply the tax adjustment to earnings before computing the annual cap, rather than after computing the cap. By applying this adjustment before the annual cap is computed, the amount of gross income is reduced and thus the award reduction resulting from the application of the cap is reduced. This is consistent with the overall purpose of the loss computation which is to determine the amount of earnings—after all deductions—that is lost to the claimant as a result of the September 11th attacks. The Special Master will provide additional information concerning the Fund's valuation methodologies on the Fund's Web site in order to give claimants greater insight into, and confidence in, its decision-making process.

Other comments questioned how the $200,000 annual gross income cap ended up in the statute. One commenter stated that a citizens group that advocated for the extension of the Zadroga Act in 2015 made no mention of such a cap. Another commenter asked whether the Fund advised Congress to designate the cap. The Fund took no such action. The Special Master cannot respond to questions about the process by which Congress develops legislation.

The Reauthorized Zadroga Act imposes caps on the amount of noneconomic loss that may be awarded for a claim that results from any type of cancer at $250,000 and for a claim that does not result from any type of cancer at $90,000. The Interim Final Rule, sections 104.45 and 104.46, clarified that, in computing the total noneconomic loss, the Special Master has discretion to consider the effect of multiple cancer conditions or multiple cancer and non-cancer conditions, and that, in computing the amount of noneconomic loss for economic loss claims, the Special Master has discretion to consider the extent of disability and the fact that different eligible conditions may contribute to the disability. Several commenters commended the Special Master for interpreting the statutory noneconomic loss caps as not imposing an aggregate cap on noneconomic loss, noting that this interpretation is consistent with both the letter and spirit of the statute. One commenter stated that the Special Master's interpretation appropriately addresses the realities of the first responders who are diagnosed with multiple forms of cancer and non-cancer conditions and is therefore important in ensuring that claimants receive full compensation as contemplated by the Reauthorized Zadroga Act. This commenter also noted that the Interim Final Rule properly interpreted the statute as not affecting the noneconomic loss amounts for claims filed on behalf of decedents.

The Zadroga Act defines the timing requirements for filing a claim as the date no later than two years after the claimant “knew (or reasonably should have known) . . . that the individual suffered a physical harm at a 9/11 crash site as a result of the terrorist-related aircraft crashes of September 11, 2001, or as a result of debris removal,” and “knew (or should have known) . . . that the individual was eligible to file a claim” with the Fund. Section 405(c)(3)(A). The Reauthorized Zadroga Act does not change this requirement.

One commenter suggested that the Special Master interpret the “knowledge” component to mean personal knowledge that the claimant's eligible physical condition was related to his/her 9/11-related exposure based on the date the claimant received a diagnosis from the WTC Health Program of an eligible physical harm. The commenter argued that it is not reasonable to assume that a clean-up worker, resident, or other “survivor” knew or reasonably should have known that his/her physical condition was related to his/her 9/11-related exposure until that time, given repeated assurances from public officials regarding the safety of the air quality around the WTC site, the lack of resources available to that community for medical screening and treatment until 2007, and the media's focus on the health-related impact on 9/11 responders.

While these comments do not require changes in the regulations, they raise issues that merit consideration by the Special Master in evaluating the issue of “timeliness.” The Special Master will provide additional information concerning this issue on the Fund's Web site in order to give claimants greater insight into the decision-making process.

Two comments were submitted regarding revisions or clarifications to the provisions on the amounts that a representative of a claimant may charge in connection with a claim to the Fund. One commenter suggested that the Special Master clarify that Section 104.81 be revised to make clear that the limitation on attorneys' fees applies to charges “to a claimant” and that expenses not charged to a claimant need not be approved by the Special Master. The Special Master believes that the existing language is sufficiently clear and that no change is needed.

Another commenter suggested the addition of a provision to address how costs associated with the transfer of claimant files should be allocated if a claimant terminates counsel and retains new counsel. The commenter suggested that any costs for such a transfer should be borne solely by “incoming” counsel. The Special Master does not believe that this is an issue to be addressed in the regulations and therefore no changes to the Final Rule are made with respect to this issue.

The Special Master received a number of additional comments that, while not requiring changes to the regulations, raise important issues for the administration of the Fund. Former Special Master Birnbaum indicated from the reopening of the Fund in 2011 that her goal was to design, implement, and administer a program that is transparent and fair. Special Master Bhattacharyya is similarly committed to those goals in the administration of the Fund for the next five years.

Comments stressed the importance of transparency so that claimants can understand the reasons for how their claims are handled. Some commenters suggested that certain claims were submitted months or years before the reauthorization and did not receive a loss calculation or other correspondence from the Fund requesting missing information or clarification of previously submitted information, and as a result, those claims will be unfairly subject to Group B statutory standards. These commenters did not identify specific claims and therefore the Special Master could not investigate the reasons why this may have happened or whether the loss amount in those claims would yield a different value under Group B standards. As a general matter, many claims that did not receive a loss calculation letter at the time of reauthorization had incomplete compensation forms, had an eligibility issue that precluded compensation review, were missing required supporting documents that were not submitted with the claim, or presented unique circumstances related to compensation that require additional research or third-party verification. Other claims may have submitted all of the paperwork necessary to process the claim but unfortunately were not fully evaluated and determined when Congress enacted the new legislation. The Fund has prioritized and granted expedited review for claimants suffering from a terminal illness or extreme financial hardship and undertook great efforts to review claims in the order in which they were submitted. The Fund continues its commitment to reviewing claims when they are fully submitted in a first in, first out order.

The Special Master appreciates these comments. While these comments do not require changes in the regulations, they suggest ways that the Fund can better achieve its mission. The Special Master is attuned to these issues and will take them into account as she works to ensure that the Fund serves the 9/11 community as the Zadroga Act intended.

Other commenters suggested changes that are outside the scope of this program. For example, two commenters called for the expansion of the New York State World Trade Center (WTC) Disability Law, which allows certain first responders to receive a disability pension due to injuries sustained as a result of 9/11 exposure, to include first responders who voluntarily left their employment or are not otherwise covered. Such an action would have to be addressed by the state legislature.

One commenter objected to the definition of the “9/11 crash site” on the grounds that the northern boundary line does not encompass the full New York City exposure zone and is inconsistent with the boundary used in the WTC Health Program, but properly recognized that it would require an act of Congress to revise the boundary.

This Final Rule is being made effective on the date of publication in the Federal Register. The Special Master, pursuant to 5 U.S.C. 553(d)(3), finds that there is good cause to forgo a 30-day delayed effective date for this Final Rule. The Final Rule makes no change to the provisions of the Interim Final Rule (except for two minor technical corrections fixing unintended errors). The preamble of this Final Rule responds to the public comments and explains why no substantive changes to the Interim Final Rule are needed. In the interests of transparency, the Special Master has deferred the issuance of payments on pending claims until after the publication of this Final Rule, which serves to make clear the final standards applicable to the adjudication of claims under the Fund. Thus, a 30-day delay in the effective date of this Final Rule would also have had the effect of further delaying the issuance of payments on claims under the revised provisions of Part 104, which would be undesirable and contrary to sound public policy.

This Final Rule implements Public Law 114-113 which reauthorizes the September 11th Victim Compensation Fund of 2001. In order to be able to evaluate claims and provide compensation, the Fund must collect information from an individual (or a personal representatives of a deceased individual) who suffered physical harm or was killed as a result of the terrorist-related aircraft crashes of September 11, 2001 or the debris removal efforts that took place in the immediate aftermath of those crashes. Accordingly, in connection with the approval of the Interim Final Rule, the Department of Justice, Civil Division, submitted an information collection request to the Office of Management and Budget for review and clearance in accordance with the emergency review procedures of the Paperwork Reduction Act of 1995. This request sought reinstatement of the prior information collection authorized under Public Law 111-347. The Department also published a Notice in the Federal Register soliciting public comment on the information collection associated with this rulemaking. 81 FR 20674 (April 8, 2016). The Office of Management and Budget approved the information collection on June 13, 2016. The information collection will be effective until June 30, 2019.

These regulations set forth procedures by which the Federal government will award compensation benefits to eligible victims of the September 11, 2001, terrorist attacks. Under 5 U.S.C. 601(6), the term “small entity” does not include the Federal government, the party charged with incurring the costs attendant to the implementation and administration of the Victim Compensation Fund. This rule provides compensation to individuals, not to entities.

Further, because a general notice of proposed rulemaking was not required for the Interim Final rule, and in accordance with the Regulatory Flexibility Act (5 U.S.C. 603(a) and 604(a)), a Regulatory Flexibility Act analysis was not required.

This Final Rule has been drafted and reviewed in accordance with Executive Order 12866, “Regulatory Planning and Review” section 1(b), Principles of Regulation and in accordance with Executive Order 13563 “Improving Regulation and Regulatory Review” section 1(b) General Principles of Regulation. The Office of Management and Budget had determined that the Interim Final Rule was an “economically significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review, and accordingly the Interim Final Rule had been reviewed by the Office of Management and Budget. This Final Rule, however, adopts as final the regulatory provisions promulgated by the Interim Final Rule, with no substantive change. Accordingly, the Department has determined that this Final Rule is not a significant regulatory action under Executive Order 12866, and this rule has not been reviewed by the Office of Management and Budget.

This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. This rule is substantively identical to the Interim Final Rule published on June 15, 2016, and the Department of Justice worked cooperatively with state and local officials in the affected communities, and notified national associations representing elected officials, in the preparation of the Interim Final Rule.

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

This rule will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

This rule adopts as final the provisions of the Interim Final Rule published on June 15, 2016 (81 FR 38936). Upon consideration of the public comments submitted in response to the Interim Final Rule, the Special Master has determined that no substantive changes need to be made in the regulations in 28 CFR part 104, which took effect on June 15, 2016. This rule makes no amendments to the existing regulations in 28 CFR part 104, except for two technical changes correcting minor drafting errors.

The Special Master has determined that this Final Rule does not fall within the definition of a “rule” under the Congressional Review Act, 5 U.S.C. 804(3)(C), because it is a rule of agency practice or procedure that does not substantially affect the rights or obligations of non-agency parties. Accordingly, the requirement to submit a report pursuant to 5 U.S.C. 801 is not applicable.

Accordingly, for the reasons set forth in the preamble, the interim rule amending 28 CFR part 104, which was published at 81 FR 38936, on June 15, 2016, is adopted as final with the following changes:

The DelMoSports, LLC, on behalf of the New Jersey Department of Transportation, who owns the US 40-322 (Albany Avenue) Bridge across the NJICW (Inside Thorofare), mile 70.0, at Atlantic City, NJ, has requested a temporary deviation from the current operating regulations set out in 33 CFR 117.733(f) to ensure the safety of the participants and spectators associated with the Atlantic City IRONMAN Triathlon.

Under this temporary deviation, the bridge will be maintained in the closed-to-navigation position from 6:30 a.m. to 2 p.m. on September 18, 2016. The bridge is a double bascule bridge and has a vertical clearance in the closed-to-navigation position of 10 feet above mean high water.

The NJICW (Inside Thorofare) is used by recreational vessels. The Coast Guard has carefully considered the nature and volume of vessel traffic in publishing this temporary deviation.

Vessels able to pass through the bridge in the closed position may do so at anytime. The bridge will be able to open in case of an emergency. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notice to Mariners of the change in operating schedule for the bridge so that vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The City of San Francisco has requested a temporary change to the operation of the 3rd Street Drawbridge, mile 0.0, over China Basin, at San Francisco, CA. The drawbridge navigation span provides a vertical clearance of 3 feet above Mean High Water in the closed-to-navigation position. The draw opens on signal if at least one hour notice is given, as required by 33 CFR 117.149. Navigation on the waterway is recreational.

The drawspan will be secured in the closed-to-navigation position from 5 a.m. to 12 p.m. on September 11, 2016, to allow participants to cross the bridge during the San Francisco Giant Race at AT&T Park event. This temporary deviation has been coordinated with the waterway users. No objections to the proposed temporary deviation were raised.

Vessels able to pass through the bridge in the closed position may do so at anytime. The bridge will be able to open for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterway through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2016-0201 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before November 1, 2016. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2016-0201, by one of the following methods.

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

In the Federal Register of May 19, 2016 (81) FR (31585) (FRL-9946-02), EPA issued a document pursuant to FFDCA section 408, 21 U.S.C. 346a, announcing the receipt of a pesticide petition (PP IN-10907) filed by Keller and Heckman (1001 G Street NW., Suite 500, Washington, DC 20001) on behalf of Trinseo LLC (1000 Chesterbrook Blvd., Berwyn, PA 19312-1084). The petition requested that 40 CFR 180.960 be amended by establishing an exemption from the requirement of a tolerance for residues of butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate (CAS Reg. No. 36089-06-2). That document included a summary of the petition prepared by the petitioner and solicited comments on the petitioner's request. The Agency did not receive any comments.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and use in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing an exemption from the requirement of a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . .” and specifies factors EPA is to consider in establishing an exemption.

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be shown that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

Consistent with FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness and reliability and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. In the case of certain chemical substances that are defined as polymers, the Agency has established a set of criteria to identify categories of polymers expected to present minimal or no risk. The definition of a polymer is given in 40 CFR 723.250(b) and the exclusion criteria for identifying these low-risk polymers are described in 40 CFR 723.250(d). Butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate conforms to the definition of a polymer given in 40 CFR 723.250(b) and meets the following criteria that are used to identify low-risk polymers.

1. The polymer is not a cationic polymer nor is it reasonably anticipated to become a cationic polymer in a natural aquatic environment.

2. The polymer does contain as an integral part of its composition the atomic elements carbon, hydrogen, and oxygen.

3. The polymer does not contain as an integral part of its composition, except as impurities, any element other than those listed in 40 CFR 723.250(d)(2)(ii).

4. The polymer is neither designed nor can it be reasonably anticipated to substantially degrade, decompose, or depolymerize.

5. The polymer is manufactured or imported from monomers and/or reactants that are already included on the TSCA Chemical Substance Inventory or manufactured under an applicable TSCA section 5 exemption.

6. The polymer is not a water absorbing polymer with a number average molecular weight (MW) greater than or equal to 10,000 daltons.

7. The polymer does not contain certain perfluoroalkyl moieties consisting of a CF3- or longer chain length as specified in 40 CFR 723.250(d)(6).

Additionally, the polymer also meets as required the following exemption criteria specified in 40 CFR 723.250(e).

8. The polymer's number average MW of 10,000 is greater than or equal to 10,000 daltons. The polymer contains less than 2% oligomeric material below MW 500 and less than 5% oligomeric material below MW 1,000.

Thus, butanedioic acid, 2-methy-lene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate meets the criteria for a polymer to be considered low risk under 40 CFR 723.250. Based on its conformance to the criteria in this unit, no mammalian toxicity is anticipated from dietary, inhalation, or dermal exposure to butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate.

For the purposes of assessing potential exposure under this exemption, EPA considered that the butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate could be present in all raw and processed agricultural commodities and drinking water, and that non-occupational non-dietary exposure was possible. The minimum number average MW of butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate is 10,000 daltons. Generally, a polymer of this size would be poorly absorbed through the intact gastrointestinal tract or through intact human skin. Since butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate conforms to the criteria that identify a low-risk polymer, there are no concerns for risks associated with any potential exposure scenarios that are reasonably foreseeable. The Agency has determined that a tolerance is not necessary to protect the public health.

Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate to share a common mechanism of toxicity with any other substances, and butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base unless EPA concludes that a different margin of safety will be safe for infants and children. Due to the expected low toxicity of butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate, EPA has not used a safety factor analysis to assess the risk. For the same reasons the additional tenfold safety factor is unnecessary.

Based on the conformance to the criteria used to identify a low-risk polymer, EPA concludes that there is a reasonable certainty of no harm to the U.S. population, including infants and children, from aggregate exposure to residues of butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate.

There are no existing exemptions from the requirements of a tolerance.

An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has not established a MRL for butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate.

Accordingly, EPA finds that exempting residues of butanedioic acid, 2-methylene-, polymer with 1,3-butadiene, ethenylbenzene and 2-hydroxyethyl 2-propenoate from the requirement of a tolerance will be safe.

This action establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

This is a summary of the Federal Communications Commission's Report and Order in WT Docket 15-285, adopted August 4, 2016, and released August 5, 2016. The document is available for download at http://fjallfoss.fcc.gov/edocs_public/. The complete text of this document is also available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

1. In this Report and Order, the Commission takes several steps to implement a historic consensus proposal for ensuring that people with hearing loss have full access to innovative handsets. First, the Commission amends the hearing aid compatibility requirements that are generally applicable to wireless service providers and manufacturers of digital wireless handsets. Specifically, the Commission increases the number of hearing aid-compatible handsets that service providers and manufacturers are required to offer with two new percentage benchmarks: (1) 66 Percent of offered handset models must be compliant following a two-year transition period for manufacturers, with additional compliance time for service providers, and (2) 85 percent of offered handset models must be compliant following a five-year transition period for manufacturers, with additional compliance time for service providers. The Commission also expands the de minimis exception to provide a more limited obligation for entities offering four or five handsets.

2. The Commission also reconfirms its commitment to pursuing 100 percent hearing aid compatibility to the extent achievable. The Commission therefore invites consensus plan stakeholders and other interested parties to make supplemental submissions over the next several years on the achievability of a 100 percent hearing aid compatibility deployment benchmark considering technical and market conditions. As part of this process, the Commission also expects stakeholders to make submissions on additional points of agreement regarding other unresolved issues raised in this proceeding, including using alternative technologies to achieve hearing aid compatibility and establishing a safe harbor for service providers based on a public clearinghouse that claims to identify compliant handsets.

3. In order to advance towards the Commission's proposed 100 percent compatibility deployment benchmark, the Commission seeks to continue the productive collaboration between stakeholders and other interested parties so that it can obtain data and information about the technical and market conditions involving wireless handsets and hearing improvement technologies. In this regard, the Commission suggests a timeline identifying general milestones over the next several years when the consensus plan stakeholders and other interested parties may, at their election, make additional submissions. Based in significant part on the information it receives, the Commission intends to determine the achievability of a 100 percent compliance standard for wireless hearing aid compatibility by no later than 2024.

4. The current hearing aid compatibility deployment benchmarks require that, subject to a de minimis exception described below, a handset manufacturer must meet, for each air interface over which its models operate, (1) at least an M3 rating for acoustic coupling for at least one-third of its models using that air interface (rounded down), with a minimum of two models, and (2) at least a T3 rating for inductive coupling for at least one-third of its models using that interface (rounded down), with a minimum of two models. Similarly, a service provider must meet, for each air interface over which its models operate, (1) at least an M3 rating for acoustic coupling for at least 50 percent of its models using that air interface (rounded up) or ten models, and (2) at least a T3 rating for inductive coupling for at least one-third of its models using that interface (rounded up) or ten models.

5. In general, under the de minimis exception, most manufacturers and service providers that offer two or fewer digital wireless handset models operating over a particular air interface are exempt from the benchmark deployment requirements in connection with that air interface. Larger manufacturers with two or fewer handset models in an air interface have a limited obligation, as do service providers offering two or fewer models that obtain those models only from larger manufacturers. The provision further provides that any manufacturer or service provider that offers three digital wireless handset models operating over a particular air interface must offer at least one such handset model that meets the Commission's acoustic and inductive coupling requirements for that air interface.

6. To help ensure compliance with these benchmarks, the Commission's hearing aid compatibility rules also require wireless handset manufacturers and wireless service providers to submit annual reports to the Commission detailing the covered handsets that they offer for sale, the models that are hearing aid-compatible (and the specific rating), and other information relating to the requirements of the rule. In June 2009, the Commission introduced the electronic FCC Form 655 as the mandatory form for filing these reports, and since that time, both service providers and manufacturers have filed reports using the electronic system. Service provider compliance filings are due January 15 each year and manufacturer reports are due July 15 each year.

7. On November 12, 2015, three consumer advocacy organizations and three industry trade associations submitted a Joint Consensus Proposal (JCP) providing for a process for moving away from the current fractional benchmark regime. The parties to the JCP state that they “agree that hearing aid compatibility for all wireless handsets is the Commission's collective goal” and that “the Commission's regulations must balance this goal with the ability to encourage innovations that can benefit all people with disabilities.” With these principles in mind, the JCP proposes staged increases in the applicable deployment benchmarks, culminating in a 100 percent benchmark in eight years, subject to an assessment by the Commission of whether complete compatibility is achievable.

8. Specifically, the JCP provides that within two years of the effective date of the new rules, 66 percent of wireless handset models offered to consumers should be compliant with the Commission's acoustic coupling (M rating) and inductive coupling (T rating) requirements. The proposal provides further that within five years of the effective date, 85 percent of wireless handset models offered to consumers should be compliant with the Commission's M and T rating requirements.

9. In addition to these two-year and five-year benchmarks, the proposal provides that “[t]he Commission should commit to pursue that 100% of wireless handsets offered to consumers should be compliant with [the M and T rating requirements] within eight years.” The JCP conditions the transition to 100 percent, however, on a Commission determination within seven years of the rules' effective date that reaching the 100 percent goal is “achievable.” The JCP prescribes the following process for making that determination:

10. The proposal provides that these new benchmarks should apply to manufacturers and service providers that offer six or more digital wireless handset models in an air interface, except that compliance dates for Tier I carriers and service providers other than Tier I carriers would be imposed six months and eighteen months, respectively, behind those for manufacturers, to account for the availability of handsets and inventory turn-over rates. The proposal recommends that the existing de minimis exception continue to apply for manufacturers and service providers that offer three or fewer handset models in an air interface and that manufacturers and service providers that offer four or five digital wireless handset models in an air interface should ensure that at least two of those handsets models are compliant with the Commission's M and T rating requirements. In addition, the proposal provides that these benchmarks should only be applicable if testing protocols are available for a particular air interface.

11. On April 21, 2016 and July 29, 2016, the parties to the JCP filed ex parte letters supplementing their proposal and further addressing the proposed multi-stakeholder task force process.

12. As proposed in the JCP and the Notice, in place of the current percentage and minimum number handset deployment obligations, the Commission adopts the 66 and 85 percent benchmarks for manufacturers and service providers who offer six or more handset models per air interface. Manufacturers must comply with these benchmarks following a transition period of two and five years, respectively, running from the effective date of the new rules. Each of these transition periods is further extended by six months for Tier I carriers and 18 months for service providers other than Tier I carriers. To satisfy these new benchmarks, handset models must meet both a rating of M3 or higher for reduced RF interference in acoustic coupling mode and T3 or higher for inductive coupling capability. The Commission will maintain its current rounding rules, which means that the Commission's rules will continue to allow manufacturers to round their fractional deployment obligations down and the Commission's rules will continue to require service providers to round their fractional deployment obligations up.

13. Consistent with the JCP and the Notice, the Commission will also maintain the current de minimis exception that applies to manufacturers and service providers that offer three or fewer handset models in an air interface. In addition, as proposed in the Notice and the JCP, the Commission amends the de minimis rule to additionally provide that when the new benchmarks become applicable, a more limited obligation will apply to manufacturers and service providers that offer 4 or 5 handsets. Specifically, the Commission adopts, in most respects, the amendment proposed in the Notice and the JCP, and provide that (1) manufacturers and service providers that offer four wireless handset models in an air interface must ensure that at least two of those handset models are compliant with the Commission's M and T rating requirements; and (2) manufacturers who offer five wireless handset models in an air interface must similarly offer at least two that are compliant with the Commission's M and T rating requirements.

14. The Commission modifies the JCP's proposed modification to the de minimis rule with regard to service providers that offer five wireless handset models in an air interface. Under the JCP, such service providers, like manufacturers offering that number of handset models, would in the future only have to offer two handset models that are compliant with the Commission's M and T rating requirements. Unlike in the cases discussed above, however, adoption of this requirement would result in a reduction of the obligations that such service providers have under the current rules. The Commission's current acoustic coupling deployment obligation for service providers offering five handset models in an air interface is 50 percent, or 2.5 handset models. Unlike manufacturers, service providers are required to round up when calculating their fractional deployment obligations and, therefore, under the Commission's existing rules the minimum number of models rated M3 or better for service providers offering five handset models in an air interface is three. No commenter argued that the Commission's current rounding rules should be revised, and considering the broader context—a transition toward universal handset compliance—the Commission is unwilling to reduce the existing obligation. The parties to the JCP argue that fractional obligations for both manufacturers and service providers should be rounded down, but they make this proposal solely on the grounds that it is “consistent with current requirements.” Further, the most recent submission from the parties to the JCP state their understanding that service providers offering five handset models will be required to offer three compatible handsets and raise no objection. Therefore, under the expanded de minimis exception, service providers who offer five handset models will have to ensure that at least three meet the Commission's M and T rating requirements. While this decision results in an increase in the number of T-rated handsets that a service provider who offers five handset models in an air interface currently must offer under the Commission's existing rules (i.e., from two to three), it is consistent with the JCP's proposal that handsets offered to satisfy the new benchmarks meet both an M3 and T3 rating (or better). It is also consistent with a general goal of moving toward 100 percent hearing aid compatibility.

15. The expanded de minimis rule for manufacturers and service providers offering four or five handset models in an air interface will take effect for manufacturers, Tier I carriers, and service providers other than Tier I carriers at the same time in each case as the new 66 percent benchmark (e.g., it will take effect for manufacturers in two years, and for Tier I carriers in two years and six months). This implementation schedule will run from the effective date of the new rules. For enforcement purposes, however, the Commission will review compliance with the new benchmarks and de minimis requirements starting the first day of the month after the new benchmarks become effective. This approach will eliminate any partial month compliance issues that may arise with the new requirements.

16. The Commission concludes that the changes it adopts today satisfy the Commission's statutory obligations. The Commission notes that the Section 710(b)(2)(b) four-part test for lifting an exemption does not apply here where the Commission is assessing benchmarks for services and equipment already within the scope of Section 20.19 of the rules. Section 710(e), however, requires the Commission to “consider costs and benefits to all telephone users, including persons with and without hearing loss,” and to “ensure that regulations adopted to implement [the Hearing Aid Compatibility Act] encourage the use of currently available technology and do not discourage or impair the development of improved technology.” Section 710(e) further directs that the Commission should use appropriate timetables and benchmarks to the extent necessary due to technical feasibility or to ensure marketability or availability of new technologies to users. As discussed below, considering the costs and benefits to all end users, including persons with and without hearing loss and the impact on the use and development of technology, the Commission finds the new benchmarks and implementation schedule to be appropriate, reasonable, and technically feasible, and therefore in the public interest. The Commission further finds, given the acceptance of these benchmarks by both industry and consumer stakeholders, there does not appear to be any suggestion or evidence that they would impede the marketability and availability of new technologies to users.

17. As reflected in the wide and unanimous support in the record for revising the Commission's hearing aid compatibility requirements as described above, these changes strike an appropriate balance between the interests of handset manufacturers, large and small service providers, and consumers with hearing loss. The Commission's actions today will provide significant benefits by expanding access to hearing aid-compatible handsets, while preserving the flexibility that allows competition and innovation in devices to flourish. Consumers with hearing loss, including those who rely on hearing aids or cochlear implants, will have more compatible handsets from which to choose when purchasing new phones, and manufacturers and service providers will have the time they need to meet the Commission's new benchmark requirements. This approach properly accounts for the realities of technology constraints as well as the needs of those with hearing loss. Further, no commenting party has argued that the costs of complying with the new benchmarks and their related implementation provisions would be detrimental to any consumers, with or without hearing loss. In fact, commenters broadly support the new benchmarks, timelines, additional implementation periods, and related provisions.

18. In addition to benefitting hearing aid users generally, raising the benchmarks to increase the percentage of handset models with at least a T3 rating will be particularly beneficial to wireless users in the deaf and hard of hearing community who rely on telecoil-equipped hearing aids and cochlear implants. Further, given that these benchmarks were agreed to by the parties to the JCP, the stakeholders have already agreed that the associated costs of meeting hearing aid compatibility requirements for a higher percentage of models are reasonable. In light of the support for these changes from both consumers and the industries that would bear the costs, and given the lack of any significant related opposition or evidence to the contrary, the Commission finds it reasonable, consistent with the mandate of Section 710(e), to conclude that the benefits of adopting these benchmarks will exceed their costs.

19. Further, the Commission finds that the transition periods the Commission adopts today are reasonable and are in the public interest. The Commission notes in particular that the JCP stakeholders crafted and proposed them, signaling broad support for these timelines. Moreover, the Commission has previously determined that two years is an appropriate period to accommodate the typical handset industry product cycle. The Commission believes that the transition periods identified in the JCP provide adequate time for handset manufacturers and service providers to adjust handset portfolios to ensure compliance with the new benchmarks, and the Commission therefore adopts them.

20. While RWA argues that the compliance deadline for small service providers should be 24 months beyond the end of the two and five year transition periods for manufacturers, the Commission finds that the additional 18 months proposed in the JCP and the Notice is sufficient to address their concerns. In the Fourth Report and Order, the Commission allowed such providers only an additional three months after the compliance date for manufacturers and Tier I carriers to meet new deployment benchmarks and related requirements. In prior hearing aid compatibility transitions, the Commission has consistently allowed service providers that are not Tier I carriers no more than three months' time beyond the transition period provided to Tier I carriers. Here, the Commission is allowing service providers other than Tier I carriers an additional 12 months beyond the compliance date for Tier I carriers before they must be in compliance, and 18 months after manufacturers have to meet the new benchmarks. Therefore, there should be sufficient hearing aid-compatible handsets available to small service providers to integrate into their product lines. The Commission also notes that other commenters—including commenters that represent small wireless service providers—support the transition period for small providers proposed in the JCP and the Notice. Taking into account that the latest hearing aid compatibility reports show a high rate of compliance for such providers, but also considering the significant increase the Commission is adopting in the applicable benchmarks, the Commission believes the agreed upon transition period for service providers other than Tier I carriers is reasonable.

21. In addition, the Commission finds it in the public interest to continue to use the M3 and T3 ratings as the minimum that covered handsets must meet. The Commission declines to adopt ACI Alliance's proposal to put in place a benchmark or other mechanism that would require manufacturers to offer M4 and T4 rated handsets. The Commission believes this issue is better considered in the ANSI standards setting process or the ongoing stakeholder consensus process. Further, the Commission disagrees with ACI Alliance's assertion that the number of M4 and T4 rated handsets has been decreasing. In fact, manufacturers' compliance filings show the opposite. In light of this increase, it does not appear necessary to revise this component of the hearing aid compatibility requirements at this time.

22. As proposed by the JCP and the Notice, meeting the new benchmarks of 66 and 85 percent will require offering handset models that have both an M3 rating (or higher) and a T3 rating (or higher). The current rules allow manufacturers and service providers to meet their M rating and T rating benchmarks with handset models that meet one rating but not the other. As a practical matter, however, all T3-rated handsets already meet the M3 rating standard as well. None of the comments the Commission received indicate that requiring manufacturers and service providers to meet their benchmarks only with handsets that meet both standards is technically infeasible or will affect the marketability of these handsets in the United States. The Commission's approach encourages the use of currently available technology by relying on existing M3 and T3 coupling standards. Further, handsets that are hearing aid-compatible in either acoustic or telecoil mode will further benefit consumers with hearing loss by reducing the need for consumers to research whether a handset works only in one mode or the other. Moreover, the Commission's approach will not discourage or impair the development of improved technology. The Commission notes that wireless technology has continued to evolve rapidly over the years that the hearing aid compatibility rules have been in effect. The Commission anticipates that such innovation will continue with these revised benchmarks in place.

23. The JCP proposed that the new benchmarks apply only “if testing protocols are available for a particular interface.” The Commission notes that, as with the current deployment requirements and consistent with past Commission precedent, manufacturers and service providers will be required to meet the new benchmarks only for technologies operating in the frequency bands covered by the approved technical standards. Further, these approved technical standards specify testing protocols for determining M and T ratings for mobile devices operating within the frequency range covered by the standards. Accordingly, the Commission does not agree that testing protocols are unavailable for new technologies within the scope of the standards. The Commission acknowledges, however, that, there may be cases of new technologies for which additional guidance or clarification on the application of the procedures may be helpful, and that temporary relief may be appropriate pending such guidance. In the past, the Commission has considered such issues on a case-by-case basis as they are raised by parties, and the Commission finds no reason to depart from this approach, given that there is no indication that this approach has not been successful in addressing any industry concerns. Accordingly, to the extent that parties request further guidance on testing procedures in connection with a particular new technology deployed in those bands, the Commission will, as it has in the past, address such requests on a case-by-case basis and provide appropriate guidance, or tailored accommodations pending guidance from the Commission or appropriate standards-setting bodies, as needed. The Commission would not, however, want the development of such testing protocols to delay hearing aid compatibility for new air interfaces or equipment. Therefore, the Commission expects the timely development of such testing protocols, and caution against unnecessary delays.

24. The Commission also finds that it is in the public interest to retain the existing de minimis exception for manufacturers and service providers that offer three handset models or less, and to expand it to manufacturers and service providers that offer four or five digital wireless handset models in an air interface. No commenter objects to retaining or expanding the current de minimis rule while the new benchmarks of 66 and 85 percent are in effect. The Commission's expansion of the de minimis rule is generally consistent with the JCP and will reduce the burden on small and new industry participants. As discussed above, however, the Commission will require service providers who offer five handset models in an air interface to ensure that at least three meet the Commission's M and T rating requirements. The Commission believes the de minimis rule as revised today appropriately balances the goal of facilitating widespread deployment of hearing aid-compatible devices to consumers while reducing burdens on small and new industry participants.

25. The Commission finds it in the public interest to maintain the Commission's current rounding rules for fractional deployment obligations. Currently, when calculating the total number of handset models that must be offered over an air interface results in a fractional deployment obligation, manufacturers may round this number down, but service providers must round this number up. The Commission sees no reason to change this current practice.

26. By no later than 2024, the Commission intends to make a determination regarding the Commission's proposed requirement that 100 percent of covered handsets be hearing aid-compatible. In consideration of the fact that both the hearing aid and mobile device markets will evolve during the time before the Commission makes this determination, the Commission will keep this docket open for all relevant submissions. The Commission anticipates that it will provide additional notice of wireless hearing aid compatibility proposals as they arise and become appropriate for more specific comment by manufacturers, service providers, consumer groups, and members of the public. The Commission believes this open process will afford all interested parties the same flexibility with which the Commission and stakeholders worked in the past to achieve consensus and establish the current hearing aid compatibility benchmarks and related requirements.

27. In the discussion below, the Commission sets forth a process and timeline, consistent with the proposals in the JCP and the supplemental filings, for stakeholders to submit information individually or collectively, including from any independent task force or consensus group that they create. The Commission also identifies for specific consideration additional issues. Although the Commission is making a decision to leave many issues open and the Commission defers action on any final rule codifying a possible 100 percent compatibility deployment benchmark, the Commission sets a pathway of milestones for submissions over the next several years that will ensure a resolution of this proceeding within the timeframe agreed to by the parties to the JCP and consistent with the Commission's intent that the Commission revisit this issue. These submissions are purely voluntary, however; the Commission does not require any party to make them, or to make them in the timeframes discussed, and will take no enforcement or other action against any party for failure to file. Further, in making these submissions, parties are not expected to produce any confidential, proprietary, or work product documents, nor, prior to the final report on achievability, does the Commission ask parties to provide more than summary descriptions of activities or any information or data being collected. In addition, the Commission does not expect any submissions to be filed until an independent task force or other consensus group to implement the JCP's commitments is created, and the Commission primarily expects these submissions to be filed by or on behalf of such a group. The Commission welcomes submissions from other parties, however, as well as submissions prior to the creation of the task force to the extent parties find it appropriate, particularly if they experience unanticipated difficulties in convening such a group.

28. In the July Supplemental Filing, the parties to the JCP discussed “how the Commission can be kept apprised of the status of the Task force's progress once the Task Force is established.” Recognizing the need for transparency through the process, they “acknowledge that an annual report once the Task Force is established could satisfy the Commission's interest in the Task Force's activities.” They further recommend that, “[r]ather than prescribe the specific contents of any additional reports . . . the Commission should permit the Task Force the flexibility to work together to determine the best way to communicate the status of the determination process to the FCC and the public.” The consumer group signatories further suggest that “so long as the language is not proscriptive, they would not object to guidance from the Commission on the kind of information that could be included in the yearly reports.”

29. Consistent with these proposals, and to allow stakeholders to reach further consensus on the various proposals set forth in the JCP and raised in the Commission's subsequent Notice, the Commission asks interested parties to file additional comments, reports, and other submissions in this docket in accordance with the timeline detailed below. The Commission will use this open docket to develop a record on whether and when a regime under which all wireless handsets are required to be hearing aid-compatible is “achievable.” The Commission will also use this docket to collect additional points of consensus on the question of a 100 percent wireless hearing aid compatibility deployment requirement, alternative hearing aid compatibility standards, and the other issues raised in the Commission's Notice.

30. The Commission finds that maintaining an open docket is the best method to reach an outcome that reflects a consensus among all interested parties. Although the Commission's open docket will permit broad participation among many interested participants over the next several years, the Commission expects that parties will continue to work together to establish whatever task force and/or working groups are necessary to submit consensus filings. The Commission therefore does not expect that every party affected by the outstanding issues in this proceeding will file reports or other submissions, and anticipates that such filings will most likely be filed solely by the task force or other groups that are established. Stakeholders themselves are best positioned to work collectively to obtain and report the data necessary to craft a regime that ensures full hearing aid compatibility while protecting market incentives to innovate and invest. The Commission encourages the formation of groups that represent the broadest number of participants, including representatives of consumers who use hearing aid devices, research and technical advisors, wireless industry policy and technical representatives, and hearing aid manufacturers.

31. With the assumption that interested parties will convene a task force to make submissions in this docket, the Commission notes that such a group would be established by the stakeholders themselves and would operate separate from the Commission. Although the Commission anticipates that any such task force group will use its best efforts to reach compromises that result in consensus positions, the Commission realizes that it may not be possible in all cases to achieve agreement among all participants or on all issues. Accordingly, by maintaining an open docket for submissions from all interested parties, the Commission also provides an opportunity for any individual, as well as any minority, positions to be presented to the Commission during the course of this proceeding.

32. The Commission asks interested parties to make submissions in accordance with the timeframes outlined below. These timeframes generally correspond to the timeline in the April 21, 2016 ex parte filing from the parties to the JCP, which describes the steps leading to a report helping to inform the Commission whether 100 percent hearing aid compatibility is “achievable considering technical and market conditions.” For example, it states that the signatories will determine appropriate task force participants “within two years, but no later than the start of year four.” The filing states that the parties will develop questions and explore the scope of the issues prior to year four, and that the official start of the achievability determination process will begin in year four. It also states that the task force will take all reasonable steps to file a report with the Commission by no later than the end of year six and, at that point, disband. The proposed submissions described below are intended to encourage transparency and to facilitate a collaborative process among hearing aid manufacturers, digital wireless handset manufacturers, consumer groups representing those with hearing loss, and wireless service providers.

33. The Commission clarifies that the submissions described below are intended to be illustrative and that it will be up to any task force or consensus group to determine the best means of apprising the Commission of its activities. Guided by the additional data, information, and reports the Commission expects to receive, the Commission's intent is to make a final determination in this proceeding by no later than 2024. The Commission expects that interested parties will work independently and collectively to obtain valuable information and assist the Commission's ultimate achievability determination by making submissions as follows:

Stakeholder Participation:

By December 31, 2017 (end of Year 1)—

Report on outreach efforts by or to relevant stakeholders to gain commitments to participate in a consensus group.

Report on the formation of any stakeholder consensus group(s), including membership, leadership, and operations.

By December 31, 2018 (end of Year 2)—

Report on outreach efforts by or to relevant stakeholders to gain commitments to participate in a consensus group.

Report on the formation of any stakeholder consensus group(s), including membership, leadership, and operations.

Consensus Issues and Data:

By December 31, 2019 (end of Year 3)—

Report on any meetings, operations, and accomplishments to date of any stakeholder consensus group(s).

Report on the questions and scope of hearing aid compatibility issues to be evaluated by any stakeholder consensus group(s).

Report on any information and data planned to be collected by any stakeholder consensus group(s).

Report on any developments regarding the matters identified above under Stakeholder Participation (if applicable).

By December 31, 2020 (end of Year 4)—

Report on any meetings, operations, and accomplishments to date of any stakeholder consensus group(s).

Report on the information and data collected over Year 4 on those hearing aid compatibility issues being evaluated by any stakeholder consensus group(s).

By December 31, 2021 (end of Year 5)—

Report on any meetings, operations, and accomplishments to date of any stakeholder consensus group(s).

Report on the information and data collected over Year 5 on those hearing aid compatibility issues being evaluated by any stakeholder consensus group(s).

Determination and Report:

By December 31, 2022 (end of Year 6)—

Report on any meetings, operations, and accomplishments to date of any stakeholder consensus group(s).

Report on the information and data collected over Years 4 and 5 on those hearing aid compatibility issues being evaluated by any stakeholder consensus group(s).

Submit final report on the achievability of a 100 percent hearing aid compatibility deployment benchmark and on other hearing aid compatibility issues being evaluated by any stakeholder consensus group(s).

34. Although the Commission has decided to generally leave matters open and defer action until a future proceeding, the Commission expects stakeholders and other interested parties to use their best efforts to reach consensus on the remaining issues and proposals set forth in the JCP filed on November 12, 2015 and raised in the subsequent Notice. The Commission encourages interested parties to address four issues in particular: (1) Whether 100 percent compatibility is achievable, with any analysis framed under the standard articulated in Section 710(e) of the Act, as appropriate; (2) how a 100 percent deployment benchmark could rely in part or in whole on alternative hearing aid compatibility technologies, bearing in mind the importance of ensuring interoperability between hearing aids and alternative technologies; (3) whether service providers should be able to legally rely on information in the Accessibility Clearinghouse in connection with meeting applicable benchmarks; and (4) whether the Commission should establish a fixed period of time or shot clock for the resolution of petitions for waiver of the hearing aid compatibility requirements. The Commission further discusses these issues below in the context of the record that has developed to date.

35. The Commission's ultimate approach on the outstanding issues from the JCP and the subsequent Notice depends in many cases on the outcome of the achievability determination. Accordingly, in these cases, the Commission plans to defer specific action on final rules regarding compliance processes, legacy models, burden reduction, the appropriate transition period for any new deployment requirements the Commission adopts, and other alternatives and implementation issues until the point at which the Commission receives a final report on the achievability of a 100 percent hearing aid compatibility standard from the stakeholder consensus group(s) that the Commission anticipates will participate in this proceeding. As such issues are relevant to the milestones the Commission describes above, however, the Commission expects that interested parties will make submissions as appropriate, as these issues remain open for consideration within the scope of this proceeding. Moreover, as interested parties seek points of agreement on these issues separate from the aforementioned milestones, the Commission expects they will make submissions summarizing points of consensus.

36. Determination of Achievability. The Commission intends to base the determination of the achievability of a 100 percent compatibility deployment benchmark on the factors identified in Section 710(e) of the Act. Section 710(e) requires the Commission to “consider costs and benefits to all telephone users, including persons with and without hearing loss,” and to “ensure that regulations adopted to implement [the Hearing Aid Compatibility Act] encourage the use of currently available technology and do not discourage or impair the development of improved technology.” Section 710(e) further directs that the Commission should use appropriate timetables and benchmarks to the extent necessary due to technical feasibility or to ensure marketability or availability of new technologies to users.

37. The Commission notes that in response to the Notice, Wireless Associations and Consumer Groups recommend that the Commission use a Section 710 analysis (as opposed to the achievability requirements of Section 716 and 718) to determine whether a 100 percent standard is achievable. The Commission agrees with this recommendation, as it intends to rely on the factors identified in Section 710(e) of the Act. This approach is consistent with the analysis undertaken by the Commission in the 2008 First Report and Order when it adopted modifications to the then-current deployment benchmarks. The Commission does not plan to base its determination of achievability on certain other Section 710 provisions, however, such as Section 710(b)(2)(B) which directs the Commission to use a four-part test to periodically reassess exemptions from the hearing aid compatibility requirements for wireless handsets. Accordingly, as interested parties prepare a report on the achievability of a 100 percent hearing aid compatibility deployment benchmark, the Commission encourages them to submit conclusions based on the factors identified in Section 710(e), including cost/benefit, technical feasibility, marketability, and availability of new technologies.

38. Alternative Hearing Aid Compatibility Technologies. In connection with the achievability assessment, the Commission encourages stakeholders to work towards consensus submissions on whether a 100 percent standard should permit technologies other than those designed to meet the current M and T rating requirements, and to “consider which data would be needed to determine if the existing definition of [hearing aid compatibility] is the most effective means for ensuring access to wireless handsets for consumers who use hearing aids while encouraging technological innovation.” The JCP provides that the Commission should consider “whether wireless handsets can be deemed compliant with the HAC rules through means other than by measuring RF interference and inductive coupling.” In the Notice, the Commission sought comment on whether any new benchmarks should specifically require both a minimum M3 and T3 rating, or whether manufacturers should be allowed to meet the requirement by incorporating other methods of achieving compatibility with hearing aids, such as Bluetooth®. In response to the Notice, Apple and ASTAC both support rules that recognize solutions such as Bluetooth as alternative hearing aid compatibility technologies, while HIA and other individual commenters oppose permitting certification of Bluetooth profiles that are not universally standardized in the same way as the telecoils found in hearing aids and cochlear implants. Wireless Associations, Consumer Groups, and T-Mobile state that the Commission should use the stakeholder process to evaluate new and innovative ways to consider the definition of hearing aid compatibility.

39. As interested parties prepare a report on the achievability of a 100 percent hearing aid compatibility deployment benchmark, the Commission expects that they will consider alternative hearing aid compatibility technologies, along with emerging technologies and devices designed to assist in modifying or amplifying sound for individuals with hearing loss, such as personal sound amplification (PSA) products. The Commission also invites parties to explain how these technologies and devices should be incorporated into a future benchmark framework. Because telecoils may be comparable to analog technologies, the Commission invites submissions regarding the inclusion of digital technologies, such as Bluetooth, within the rules as alternatives for meeting some or all of any future deployment benchmark(s). The Commission emphasizes the importance of broad interoperability between hearing aids and compatibility technologies, and the Commission flags the costs the consumers could face if certain technologies work only with select hearing aids. The Commission is encouraged by the extent to which Apple's proprietary solutions may lead to further research towards more universal standards that can someday be recognized by a standards body like ANSI, particularly if they lead to interoperable alternative solutions that can be deployed more widely across all manufacturers' devices and can work reliably with more than just certain select hearing aid models.

40. Relying on the Accessibility Clearinghouse. The Commission also sought comment in the Notice on whether and how compatibility information that manufacturers supply on Form 655 could be used to automatically supplement the Accessibility Clearinghouse database, and whether service providers should be able to rely on information in the Accessibility Clearinghouse or in manufacturers' Form 655 submissions as a compliance safe harbor. Very few commenters address these issues, and those that did offered only general support without input on how these measures could or should be implemented. The Commission notes that the existing Accessibility Clearinghouse database contains information gathered from and curated by third parties and, despite questions on this issue in the Notice, no commenters addressed whether the database reliably identifies devices that are in fact fully compliant with the hearing aid compatibility rules. The Commission therefore invites interested parties to address these issues regarding the Clearinghouse in supplemental submissions, and the Commission encourages them to offer consensus positions to the extent possible. Because these issues may become less impactful in the event the Commission transitions to 100 percent compatibility, it would be most beneficial to receive stakeholders' views toward the beginning of the timetable presented above.

41. While the Commission reaches no conclusion at this time about a safe harbor based on the Accessibility Clearinghouse, it finds that the hearing aid compatibility rating information contained in manufacturers' Form 655 reports is reliable. In those reports, manufacturers must identify each handset model's hearing aid compatibility rating, which in turn must reflect the testing results produced by a Commission-approved Telecommunications Certification Body. Manufacturers are further required to certify that statements reported in the form “are accurate, true and correct.” Because the Commission concludes that this information is reliable, it will treat a service provider as compliant with the hearing aid compatibility rules to the extent that its compliance is based on its reasonable reliance on data contained in, or aggregated from, manufacturers' Form 655 submissions.

42. Waiver Requests. The Commission also sought comment in the Notice on potential modifications to the Commission's compliance processes in the context of implementing the JCP, including how best to apply the Section 710(b)(3) waiver process. In particular, the Commission sought comment on whether it should establish a fixed time period within which the Commission must take action on waiver requests, and if so, whether 180 days or another amount of time would be appropriate considering both the need to develop a full record and the importance of avoiding delay in the introduction of new technologies. While some commenters recommend that a waiver process should continue to be available to provide relief in appropriate cases, no commenter addresses the adoption of such a time period. The Commission again invites interested parties to address in this proceeding the adoption of a shot clock on the resolution of hearing aid compatibility waiver requests involving new technologies or other circumstances, and the extent to which such a measure (or other modifications to the waiver process or the Commission's other compliance processes) may contribute to the achievability of a 100 percent requirement, to addressing the concerns of small entities, or to ensuring that hearing aid compatibility requirements do not hinder the development or deployment of new technologies.

43. To ensure that a wide selection of digital wireless handset models are available to consumers with hearing loss, the Commission's rules require both manufacturers and service providers to meet defined benchmarks for offering hearing aid-compatible wireless phones.

44. As proposed in the Joint Consensus Proposal (JCP) and the Notice, the Commission adopted the 66 and 85 percent benchmarks for manufacturers and service providers who offer six or more handset models per air interface, with the two and five year transition periods, respectively, for manufacturers and the additional transition periods of six months for Tier I carriers and 18 months for non-Tier I carriers. To satisfy these benchmarks, handset models must meet both a rating of M3 or higher for acoustic coupling and T3 or higher for inductive coupling capability. The Commission determined to maintain its current rounding rules that allow manufacturers to round their fractional deployment obligations down, but require service providers to round their fractional deployment obligations up.

45. Consistent with the JCP, the Commission also determined to maintain the current de minimis exception that applies to manufacturers and service providers that offer three or fewer handset models in an air interface and provides that manufacturers and service providers that offer four wireless handset models in an air interface must ensure that at least two of those handsets models are compliant with the Commission's M and T rating requirements.

46. In the Report and Order, the Commission also set forth a process and timeline, consistent with the proposals in the JCP, for interested parties to make submissions individually or collectively, including from any independent task force or consensus group that they create. The Commission determined to leave many hearing aid compatibility issues open and deferred action on a final rule codifying a 100 percent compatibility deployment benchmark. It also identified for specific consideration several issues raised by parties to the JCP and the Notice. The Commission explained that it will use submissions over the next several years to develop a record on whether and when a regime under which all wireless handsets are required to be hearing aid-compatible is “achievable.” The Commission further explained that it will use this docket to collect additional points of consensus that it anticipates will be the basis for a final rule that codifies a 100 percent wireless hearing aid compatibility deployment standard and addresses the other hearing aid compatibility requirements raised in the Notice.

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

48. Pursuant to the Small Business Jobs Act of 2010, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding.

49. The following small entity licensees and regulatees may be affected by the rules changes adopted in the Report and Order: Small Businesses, Small Organizations, and Small Governmental Jurisdictions; Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing; Part 15 Handset Manufacturers; Wireless Telecommunications Carriers (except satellite); Internet Service Providers; and All Other Information and Telecommunications Services.

50. The current hearing aid compatibility regulations impose a number of obligations on covered wireless service providers and the manufacturers of digital wireless handsets used with those services, including: (1) Requirements to deploy a certain number or percentage of handset models that meet hearing aid compatibility standards, (2) “refresh” requirements on manufacturers to meet their hearing aid-compatible handset deployment benchmarks in part using new models, (3) a requirement that service providers offer hearing aid-compatible handsets with varying levels of functionality, (4) a requirement that service providers make their hearing aid-compatible models available to consumers for testing at their owned or operated stores, (5) point of sale disclosure requirements, (6) requirements to make consumer information available on the manufacturer's or service provider's Web site, and (7) annual reporting requirements. In the Report and Order, the Commission did not impose any additional reporting, record keeping, or other compliance requirements.

51. In the Report and Order, the Commission adopted a number of provisions to help small businesses in meeting the new hearing aid compatibility deployment requirements. Specifically, the Commission decided to keep in place and expand the existing de minimis exception. In addition, the Commission allowed small business service providers an additional 18 months after the effective date of the new rules to comply with the new benchmarks.

52. None.

53. The Commission will send a copy of the Report and Order, including this FRFA, in a report to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Report and Order, including this FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Report and Order and FRFA (or summaries thereof) will also be published in the Federal Register.

54. The Report and Order does not contain substantive new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any substantive new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

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

56. Accordingly, it is ordered, pursuant to Sections 4(i), 303(r), and 710 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(r), and 610, this Report and Order is hereby adopted.

57. It is further ordered that the rule amendments set forth in Appendix B will become effective 30 days after publication in the Federal Register.

58. It is further ordered that the Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of the Report and Order to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends part 20 of title 47 of the Code of Federal Regulations as follows:

To view comments submitted to previous rulemaking documents on this subject, go to http://www.regulations.gov and click on the “Read Comments” box in the upper right hand side of the screen. Then, in the “Keyword” box, insert “FMCSA-2015-0176” and click “Search.” Next, click “Open Docket Folder” in the “Actions” column. Finally, in the “Title” column, click on the document you would like to review. If you do not have access to the Internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., ET, Monday through Friday, except Federal holidays.

All comments received were posted without change to http://www.regulations.gov. In accordance with 5 U.S.C. 553(c), DOT previously solicited comments from the public to better inform its rulemaking process. DOT posted these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.

FMCSA is making minor corrections to fix errors found in the final rule published on July 22, 2016. In § 393.11, the Agency corrects Footnote 11 of Table 1 to read “No rear license plate lamp is required on vehicles that do not display a rear license plate.” FMCSA inadvertently omitted the word “not” in this footnote.

The Agency corrects section 1.l.(4)(b) of Appendix G to Subchapter B of Chapter III, to read “only to the vehicle's stop lamp circuit.” FMCSA inadvertently omitted the phrase “vehicle's stop lamp circuit” in this section.

As noted in the final rule, the National Highway Traffic Safety Administration had extended the compliance date for antilock brake systems (ABS) on hydraulic braked vehicles from March 1, 1999, to September 1, 1999, but that action was limited to an extension of the malfunction indicator lamp requirement in S5.3.3(b) of FMVSS No. 105—and not for the general requirement to equip hydraulic-braked vehicles with ABS. As such, all hydraulic-braked vehicles were still expected to be equipped with ABS effective March 1, 1999. While FMCSA included footnotes to help explain the different effective dates for the various ABS requirements in the Appendix G periodic inspection requirements, those footnotes are amended and repositioned to accurately reflect the effective dates for the various ABS requirements in Appendix G.

Lastly, section 1.l.(5) is amended to note that it only applies to towed vehicles equipped with air brakes.

Accordingly, for reasons set forth in the preamble, FMCSA amends 49 CFR part 393 and appendix G to subchapter B of chapter III as follows:

On August 17, 2016, we published a final rule for Framework Adjustment 3 to the Northeast Skate Complex Fishery Management Plan (81 FR 54744). That final rule included two errors in the 2016-2017 final specifications that are not consistent with the values included in Framework Adjustment 3 and the June 6, 2016, proposed rule (81 FR 36251). The specifications in Framework Adjustment 3 and its proposed rule are correct and will remain.

The final rule mistakenly stated that the skate complex total allowable landings (TAL) is 12,872 mt. A draft version of Framework 3 specified a TAL of 12,872 mt, but the TAL was later revised through an addendum to the Framework after the formula used to calculate the proportion of dead skate discards was revised. The correct skate TAL for fishing years 2016-2017 is 12,590 mt.

A typographical error for the Season 1 skate wing TAL was included in Table 1 of the final rule. This correction rule adjusts the Season 1 skate wing TAL from 4,722 mt to the correct value of 4,772 mt, as specified in the Framework 3 proposed rule.

In FR Doc. 2016-19601 appearing on page 54744 in the Federal Register of Wednesday, August 17, 2016, the following corrections are made:

1. On page 54744, in the third column, the first paragraph under Specifications for Fishing Years 2016-2017 is corrected to read as follows:

Specifications including the acceptable biological catch (ABC), annual catch limit (ACL), annual catch target (ACT), and total allowable landings (TALs) for the skate wing and bait fisheries, as well as possession limits, may be specified for up to 2 years. The 2016-2017 skate complex ABC and ACL is 31,081 metric tons (mt). After removing management uncertainty from the ABC, the ACT that remains is 23,311 mt. After removing discards and state landings from the ACT, the TAL that remains is 12,590 mt. Tables 1 and 2 (below) detail TALs and possession limits for the skate wing and skate bait fisheries—there are no possession limit changes from last year. These specifications and possession limits remain in effect until they are replaced.

2. On pages 54744 and 54745, Table 1 is corrected to read as follows:

Regulations governing the Atlantic bluefish fishery are found in 50 CFR 648.160 through 648.167. The regulations require annual specification of a commercial quota that is apportioned among the coastal states from Maine through Florida. The process to set the annual commercial quota and the percent allocated to each state are described in § 648.162.

The final rule implementing Amendment 1 to the Bluefish Fishery Management Plan published in the Federal Register on July 26, 2000 (65 FR 45844), and provided a mechanism for transferring bluefish quota from one state to another. Two or more states, under mutual agreement and with the concurrence of the Administrator, Greater Atlantic Region, NMFS (Regional Administrator), can request approval of a transfer of bluefish commercial quota under § 648.162(e)(1)(i) through (iii). The Regional Administrator must first approve any such transfer based on the criteria in § 648.162(e).

New York and North Carolina have requested the transfer of 100,000 lb (45,359 kg) of Atlantic bluefish commercial quota from North Carolina to New York and have certified that the transfer meets all pertinent state requirements. This quota transfer was requested by the State of New York to ensure that its 2016 quota would not be exceeded. The Regional Administrator has approved this quota transfer based on his determination that the criteria set forth in § 648.162(e)(1)(i) through (iii) have been met. The revised bluefish quotas for calendar year 2016 are: North Carolina, 1,466,100 lb (665,012 kg); and New York, 687,289 lb (311,749 kg). These quota adjustments revise the quotas specified in the final rule implementing the 2016-2018 Atlantic Bluefish Specifications published on August 4, 2016 (81 FR 51370), and reflect all subsequent commercial bluefish quota transfers completed to date.

This action is taken under 50 CFR part 648 and is exempt from review under Executive Order 12866.

We recently approved Framework Adjustment 55, which set annual catch limits for groundfish stocks and three jointly managed U.S./Canada stocks for the 2016 fishing year. This action became effective on May 1, 2016 (81 FR 26412). Framework 55 included allocations for the 19 sectors approved to operate in 2016 based on enrollment as of March 15, 2016. A sector receives an allocation of each stock, or annual catch entitlement (referred to as ACE, or allocation), based on its members' catch histories. State-operated permit banks also receive an allocation that can be transferred to qualifying sector vessels. The sum of all sector and state-operated permit bank allocations is referred to as the sector sub-annual catch limit (sub-ACL). The groundfish allocations remaining after sectors and state-operated permit banks receive their allocations are then allocated to the common pool (i.e., vessels not enrolled in a sector), which is referred to as the common pool sub-ACL.

This rule adjusts the 2016 fishing year sector and common pool allocations based on final sector membership as of May 1, 2016. Permits enrolled in a sector and the vessels associated with those permits have until April 30, the last day prior to the beginning of a new fishing year, to withdraw from a sector and fish in the common pool. As a result, the actual sector enrollment for the new fishing year is unknown when the final specifications are published and sector enrollment from an earlier date is used until final enrollment is known. Consistent with regulatory requirements, each year we subsequently publish an adjustment rule modifying sector and common pool allocations based on final sector enrollment. The Framework 55 proposed and final rules both explained that sector enrollments may change and that there would be a need to adjust the sub-ACLs and sector ACEs accordingly.

Adjustments to sector ACEs and the sub-ACLs for sectors and the common pool are typically minimal as there has been little change in sector enrollment since 2010. Vessels currently enrolled in sectors have accounted for approximately 99 percent of the historical groundfish landings. This year's sector final rule specified sector ACEs based on the 837 permits enrolled in sectors on March 15, 2016. As of May 1, 2016, there were 841 Northeast multispecies permits enrolled in sectors, which means four additional permits elected to join sectors for the 2016 fishing year. Tables 1, 2, and 3 explain the revised 2016 fishing year allocations. Table 4 compares the allocation changes between the Framework 55 final rule and this adjustment rule.

This rulemaking also corrects transcription errors in the 2016-2018 Southern New England/Mid-Atlantic (SNE/MA) yellowtail flounder ACLs published in the Framework 55 final rule. Specifically, there were errors in the total groundfish fishery sub-ACL, the sector and common pool sub-ACLs, and the scallop fishery sub-ACL. Table 5 presents both the incorrect values presented in the Framework 55 final rule, as well as the corrected values. Although the values were listed incorrectly in the Framework 55 final rule, the total fishery ACLs for SNE/MA yellowtail flounder (255 mt) were listed correctly for all three years. In addition, the Environmental Assessment and supporting analysis for Framework 55 included the correct values. These adjustments are minor, and will not affect fishery operations.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council (Council) under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The annual pollock TACs in Statistical Areas 610, 620, and 630 of the GOA are apportioned among four seasons, in accordance with § 679.23(d)(2). Regulations at § 679.20(a)(5)(iv)(B) allow the underharvest of a seasonal apportionment to be added to subsequent seasonal apportionments, provided that any revised seasonal apportionment does not exceed 20 percent of the seasonal apportionment for a given statistical area. Therefore, NMFS is increasing the C season apportionment of pollock in Statistical Area 620 of the GOA to reflect the underharvest of pollock in those areas during the B season. In addition, any underharvest remaining beyond 20 percent of the originally specified seasonal apportionment in a particular area may be further apportioned to other statistical areas. Therefore, NMFS also is increasing the C season apportionment of pollock to Statistical Areas 610 and 630 based on the underharvest of pollock in Statistical Areas 620 of the GOA. These adjustments are described below.

The C seasonal apportionment of the 2016 pollock TAC in Statistical Area 610 of the GOA is 24,421 metric tons (mt) as established by the final 2016 and 2017 harvest specifications for groundfish of the GOA (81 FR 14740, March 18, 2016). In accordance with § 679.20(a)(5)(iv)(B), the Administrator, Alaska Region, NMFS (Regional Administrator), hereby increases the C season apportionment for Statistical Area 610 by 4,873 mt to account for the underharvest of the TAC in Statistical Areas 620 in the B season. This increase is in proportion to the estimated pollock biomass and is not greater than 20 percent of the C seasonal apportionment of the TAC in Statistical Area 610. Therefore, the revised C seasonal apportionment of the pollock TAC in Statistical Area 610 is 29,294 mt (24,421 mt plus 4,873 mt).

The C seasonal apportionment of the pollock TAC in Statistical Area 620 of the GOA is 15,404 mt as established by the final 2016 and 2017 harvest specifications for groundfish of the GOA (81 FR 14740, March 18, 2016). In accordance with § 679.20(a)(5)(iv)(B), the Regional Administrator hereby increases the C seasonal apportionment for Statistical Area 620 by 3,081 mt to account for the underharvest of the TAC in Statistical Areas 620 in the B season. This increase is not greater than 20 percent of the C seasonal apportionment of the TAC in Statistical Area 620. Therefore, the revised C seasonal apportionment of the pollock TAC in Statistical Area 620 is 18,485 mt (15,404 mt plus 3,081 mt).

The C seasonal apportionment of pollock TAC in Statistical Area 630 of the GOA is 19,822 mt as established by the final 2016 and 2017 harvest specifications for groundfish of the GOA (81 FR 14740, March 18, 2016). In accordance with § 679.20(a)(5)(iv)(B), the Regional Administrator hereby increases the C seasonal apportionment for Statistical Area 630 by 3,243 mt to account for the underharvest of the TAC in Statistical Areas 620 in the B season. This increase is in proportion to the estimated pollock biomass and is not greater than 20 percent of the C seasonal apportionment of the TAC in Statistical Area 630. Therefore, the revised C seasonal apportionment of pollock TAC in Statistical Area 630 is 23,065 mt (19,822 mt plus 3,243 mt).

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would provide opportunity to harvest increased pollock seasonal apportionments. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of August 29, 2016.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.